Living below my means, means…

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packet
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Living below my means, means…

Post by packet » Tue Nov 25, 2014 3:56 pm

Compared to most in the world, I’m very lucky. I can live below my means –and- enjoy the present.

I read it all the time around here, "live below your means"… of course, since it’s a big part (the biggest?) of being a Boglehead… however, whenever I read it, I can’t help but modify it in my head to, “don’t build up silly debt” or “don’t buy what you can’t afford”. I don’t define it as scrimping and saving my way through life, sacrificing the present, hoping for a brighter future. I save as much as I can, but more importantly, what I am comfortable with in balance with enjoying the here and now. The only thing I really work consciously at is not building up silly debt (it’s not easy).

I don’t mean to imply other posters mean anything one way or the other, just talking about myself here… :)

I have no idea if I’ll ever have enough money to stop working. But I’ll be darned if I get to that point only to look back with regret!

Thus, I’ll stay happy paying a ridiculous sum of money for the NHL package each year just to scream obscenities at my TV a few nights per week... while enjoying some tasty brews, thank you very much. :beer

Cheers and thanks for listening,
Packet

PS,
GO HABS GO!
:)
First round’s on me.

Set40
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Re: Living below my means, means…

Post by Set40 » Tue Nov 25, 2014 4:13 pm

You bring up an interesting question. I think it technically means spending less than you make, but is this what is really meant when others refer to LBYM? If so, it is leaving out so many other aspects of a healthy, responsible financial life.

What if you have an income of $100 but spend $99? I suppose technically you are LBYM, but your overall financial picture is poor. Do most people assume retirement savings, debt payoff, & emergency funds are included when they say LBYM?

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4nursebee
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Re: Living below my means, means…

Post by 4nursebee » Tue Nov 25, 2014 4:43 pm

LBYM means max 401K and roth 1st.
4nursebee

tbradnc
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Re: Living below my means, means…

Post by tbradnc » Tue Nov 25, 2014 4:45 pm

To me "Living below your means" means that over time as my income increases I don't increase my spending to match it.

I often tell people that my wife and I still have the same lifestyle we had when we were in our 30's (we're in our 50's now). That's LBYM to me.

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Hub
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Re: Living below my means, means…

Post by Hub » Tue Nov 25, 2014 4:58 pm

I think avoiding debt and saving a relatively low % of your income is just living at your means. LBYM to me means you're savings a % of money that could have really translated into a noticeably higher standard of living if spent. Anecdotally, I feel this starts to be true once you're saving north of 20% gross.

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Re: Living below my means, means…

Post by Crow Hunter » Tue Nov 25, 2014 5:01 pm

tbradnc wrote:To me "Living below your means" means that over time as my income increases I don't increase my spending to match it.

I often tell people that my wife and I still have the same lifestyle we had when we were in our 30's (we're in our 50's now). That's LBYM to me.
This is how I interpret it as well.

My wife and I save more and live less expensively now than when we were first married even though we make over 2X as much.

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Re: Living below my means, means…

Post by HomerJ » Tue Nov 25, 2014 5:08 pm

tbradnc wrote:To me "Living below your means" means that over time as my income increases I don't increase my spending to match it.

I often tell people that my wife and I still have the same lifestyle we had when we were in our 30's (we're in our 50's now). That's LBYM to me.
This.

When you get a raise, increase your saving by 50% of that raise, and your lifestyle 50% of that raise ($5000 raise, increase savings by $200 a month, and spending by $200 a month)

It only takes a decade or two for this to start making a huge difference... And the whole time, your lifestyle is increasing, so it's not like you are depriving yourself.

If you're really lucky, you'll get to a point where you have "enough", and there's really nothing more that you need, and suddenly you can save 100% of your raises.
Last edited by HomerJ on Tue Nov 25, 2014 5:23 pm, edited 1 time in total.

blevine
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Re: Living below my means, means…

Post by blevine » Tue Nov 25, 2014 5:11 pm

If you are not giving up something that you can live without, you are not LBYM !

That does not mean you must give up all that you can live without, but be selective.

What it means to me is having priorities, spending on high priorities that are meaningful
to my life, and avoiding spending on things that are medium to low priorities.
Sometimes it means giving up things people think are a must-have but not really a must.

Though I love sports too, I buy the minimum package of sports that my son and I can enjoy together
without going overboard (which means no NFL/NHL/NBA/MLB all access package).
If there are way more events than we can watch, why buy even more ?
When he goes off to college, will further reduce or eliminate cable TV and go for
Netflix and/or basic cable, no more sports at all.

I keep my cars longer than most people (in general maybe not compared to BHs),
and not luxury cars, but I do get a car with the features I want when I do buy.

If your means are very low, you may not be able to LBYM. Often the case when young,
so I agree with the comments above to try and reduce need creep. You don't need
more because you make more, over time. My cars are only marginally better
than what I drove 20 years ago, no mid life crisis Porsche for me !

There are things I spend more on that the minimum possible, because they are very
important to me, but many things i spend far less than many I know, and people probably assume
I can't afford to do so vs a choice to LBYM.

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Re: Living below my means, means…

Post by MattE » Tue Nov 25, 2014 5:21 pm

Agree with the last several posts. At some arbitrary but reasonable point you establish "We're comfortable and happy living on this much," and from there on out income increases are translated largely into savings increases rather than lifestyle cost increases. My wife and I have seen our take home income increase by ~55% over the last 4.5 years, but our monthly expenses have probably only increased by about 30%, with the bulk of that being driven by the difference between owning our house and renting the tiny 1 BR apartment we used to live in. The rest has been funneled into paying off my student loans early and creeping up on maxing our 401ks.

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Re: Living below my means, means…

Post by JDCarpenter » Tue Nov 25, 2014 5:23 pm

blevine wrote:If you are not giving up something that you can live without, you are not LBYM !

That does not mean you must give up all that you can live without, but be selective.

.....
I dunno. We don't feel like we are giving anything up that we want, or that we have the schedule to do. Maybe years of delayed gratification, combined with hours required for work have changed our "wants." The idea of buying a new car every decade, getting anything other than an entry level vehicle, or buying expensive clothing is simply not appealing; hence, we feel like we don't give anything up as long as we get a week of dive travel in every year.

(And, to be fair, our "Wants" post-retirement are a lot more than they presently are; we'll have the time then.)
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Re: Living below my means, means…

Post by packet » Tue Nov 25, 2014 6:41 pm

Set40 wrote:...technically means spending less than you make, but is this what is really meant when others refer to LBYM? ...
exactly... that's an impression i get very often, LBYM is only after maxing the 401/403, maxing the IRAs, maxing the HSAs etc.... then it's ok to either spend on yourself or invest in taxable, you pick!

it's a mighty and very worthy goal... but why can't we back off a bit on one or more of the above to cover some fun stuff now?

it's all about balance. yin and yang if you will...

cheers,
mike
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packet
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Re: Living below my means, means…

Post by packet » Tue Nov 25, 2014 6:49 pm

4nursebee wrote:LBYM means max 401K and roth 1st.

:) ... i wish!
tbradnc wrote:To me "Living below your means" means that over time as my income increases I don't increase my spending to match it.
I often tell people that my wife and I still have the same lifestyle we had when we were in our 30's (we're in our 50's now). That's LBYM to me.
why not increase your spending? more money, more "fun" (whatever that means to you), right?
this is an awesome way to increase savings, one i take advantage of as well... but...
HomerJ wrote:...When you get a raise, increase your saving by 50% of that raise, and your lifestyle 50% of that raise...
This this! Balance... this is what i seek! thank you. :)

cheers,
packet
First round’s on me.

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munemaker
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Re: Living below my means, means…

Post by munemaker » Tue Nov 25, 2014 6:59 pm

Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.

John3754
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Re: Living below my means, means…

Post by John3754 » Tue Nov 25, 2014 7:11 pm

Living below your means doesn't mean simply staying out of debt, if you have no debt but still live paycheck to paycheck then you are barely living within your means, not below your means.

ResearchMed
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Re: Living below my means, means…

Post by ResearchMed » Tue Nov 25, 2014 7:20 pm

munemaker wrote:Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.
No, actually, I don't.

Why not drive a used Yugo?
Why not live in a small apartment, or $150,000k home?
Why not take a vacation that is 1/2 as long as the one imagined above? Or stay at a Motel 4 (not 6 or 8)?

I don't get it about the Living BELOW one's means.
We've lived WITHIN our means, and that includes saving for the future/retirement/emergencies/etc., of course.

But especially as we've gotten closer to the "goal" (meaning, retirement and being alive and preferably healthy at retirement)... this gets back to the other recent threads about ENJOYING some of it.

Obviously, for those who wish to leave money/assets to heirs, that is a consideration, too.
But not all of us have heirs who need any money/assets.

I've mentioned here how we almost "waited too long" to take those vacations we saved for.
And others here have had less fortunate circumstances where it did indeed become "too late".

Well, yesterday, I got an unexpected medical diagnosis.
It is very possible that we might NOT be able to take our big holiday vacation.

And it is EXACTLY one year ago, to the day today, that we had to cancel last December's initial "big vacation" because DH had a sudden serious illness.
(His illness was far more serious than what I am facing; he may have had a permanent disability.)
At least we DID have that wonderful trip to Italy last spring, and DH had a wonderful time on his first cruise a couple of months ago.

In this case, we are pretty sure that the "worst" case will be a delayed trip, such that I'll be able to travel in the future.
Apparently, I'll find out on Monday if surgery is needed, or less invasive therapy.

I'll repeat: YOLO.

Why in the world should we live BELOW our means, at the "cost" of not having these nice experiences and memories?

RM
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packet
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Re: Living below my means, means…

Post by packet » Tue Nov 25, 2014 7:24 pm

munemaker wrote:Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.
OK... so where's the "living"?
all these are good choices... but...
- did you drive coast to coast in that Toyota to see the country (US example, of course)?
- did you get that 3-d/4k/curved screen/80 inch TV to put in that $250,000 house?
- school's a wash (you get what you give)...
- did i ask about that coast to coast ride?
:)

just poking fun of course ... :) ... cheers.
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Re: Living below my means, means…

Post by John3754 » Tue Nov 25, 2014 7:28 pm

ResearchMed wrote:
munemaker wrote:Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.
No, actually, I don't.

Why not drive a used Yugo?
Why not live in a small apartment, or $150,000k home?
Why not take a vacation that is 1/2 as long as the one imagined above? Or stay at a Motel 4 (not 6 or 8)?

I don't get it about the Living BELOW one's means.
We've lived WITHIN our means, and that includes saving for the future/retirement/emergencies/etc., of course.

But especially as we've gotten closer to the "goal" (meaning, retirement and being alive and preferably healthy at retirement)... this gets back to the other recent threads about ENJOYING some of it.

Obviously, for those who wish to leave money/assets to heirs, that is a consideration, too.
But not all of us have heirs who need any money/assets.

I've mentioned here how we almost "waited too long" to take those vacations we saved for.
And others here have had less fortunate circumstances where it did indeed become "too late".

Well, yesterday, I got an unexpected medical diagnosis.
It is very possible that we might NOT be able to take our big holiday vacation.

And it is EXACTLY one year ago, to the day today, that we had to cancel last December's initial "big vacation" because DH had a sudden serious illness.
(His illness was far more serious than what I am facing; he may have had a permanent disability.)
At least we DID have that wonderful trip to Italy last spring, and DH had a wonderful time on his first cruise a couple of months ago.

In this case, we are pretty sure that the "worst" case will be a delayed trip, such that I'll be able to travel in the future.
Apparently, I'll find out on Monday if surgery is needed, or less invasive therapy.

I'll repeat: YOLO.

Why in the world should we live BELOW our means, at the "cost" of not having these nice experiences and memories?

RM
Living below your means doesn't mean depriving yourself of all enjoyment or luxury in life. A persons means is relative to their income, if someone makes $40k in net income and spends $30k a year then they are living below their means, and if someone makes $600k in net income and lives on $400k then they too are living below their means.

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Re: Living below my means, means…

Post by ResearchMed » Tue Nov 25, 2014 7:31 pm

John3754 wrote:
ResearchMed wrote:
munemaker wrote:Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.
No, actually, I don't.

Why not drive a used Yugo?
Why not live in a small apartment, or $150,000k home?
Why not take a vacation that is 1/2 as long as the one imagined above? Or stay at a Motel 4 (not 6 or 8)?

I don't get it about the Living BELOW one's means.
We've lived WITHIN our means, and that includes saving for the future/retirement/emergencies/etc., of course.

But especially as we've gotten closer to the "goal" (meaning, retirement and being alive and preferably healthy at retirement)... this gets back to the other recent threads about ENJOYING some of it.

Obviously, for those who wish to leave money/assets to heirs, that is a consideration, too.
But not all of us have heirs who need any money/assets.

I've mentioned here how we almost "waited too long" to take those vacations we saved for.
And others here have had less fortunate circumstances where it did indeed become "too late".

Well, yesterday, I got an unexpected medical diagnosis.
It is very possible that we might NOT be able to take our big holiday vacation.

And it is EXACTLY one year ago, to the day today, that we had to cancel last December's initial "big vacation" because DH had a sudden serious illness.
(His illness was far more serious than what I am facing; he may have had a permanent disability.)
At least we DID have that wonderful trip to Italy last spring, and DH had a wonderful time on his first cruise a couple of months ago.

In this case, we are pretty sure that the "worst" case will be a delayed trip, such that I'll be able to travel in the future.
Apparently, I'll find out on Monday if surgery is needed, or less invasive therapy.

I'll repeat: YOLO.

Why in the world should we live BELOW our means, at the "cost" of not having these nice experiences and memories?

RM
Living below your means doesn't mean depriving yourself of all enjoyment or luxury in life. A persons means is relative to their income, if someone makes $40k in net income and spends $30k a year then they are living below their means, and if someone makes $600k net income and lives on $400k then they too are living below their means.
I'm sorry if I didn't quite make my point clear about the quoted text.

WHY drive a Toyota if one can afford a Lexus, assuming one would prefer/enjoy the Lexus?
What is inherently "better" about driving a lesser vehicle? And in that case, why the Toyota, and not a beater?

That is the type of thinking so prevalent here that I don't understand.

If the savings are in place (retirement, emergency, etc.), then why the emphasis on "living on LESS"?

RM
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Re: Living below my means, means…

Post by hudson » Tue Nov 25, 2014 7:38 pm

Living below your means is a great idea!

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Re: Living below my means, means…

Post by packet » Tue Nov 25, 2014 7:43 pm

ResearchMed wrote:Why not drive a used Yugo?
Thank you so much for posting.

I (of currently good health, with no kids, an equally healthy and loving wife, and all sorts of guilt for having it so good) read your post and others... some not so bad and others worse (i apologize if this reads insensitively, i don't mean it to) and i can't help but thinking... i'm working very hard at learning to manage my finances by reading through these forums... why shouldn't i pay attention to the life's lessons too?

I agree... i want to live -within- my means... which includes today and tomorrow.
ResearchMed wrote:Why in the world should we live BELOW our means, at the "cost" of not having these nice experiences and memories?
thank you for putting to words properly what i have been trying to say all along.

Good luck.
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Re: Living below my means, means…

Post by John3754 » Tue Nov 25, 2014 7:43 pm

ResearchMed wrote:
John3754 wrote:
ResearchMed wrote:
munemaker wrote:Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.
No, actually, I don't.

Why not drive a used Yugo?
Why not live in a small apartment, or $150,000k home?
Why not take a vacation that is 1/2 as long as the one imagined above? Or stay at a Motel 4 (not 6 or 8)?

I don't get it about the Living BELOW one's means.
We've lived WITHIN our means, and that includes saving for the future/retirement/emergencies/etc., of course.

But especially as we've gotten closer to the "goal" (meaning, retirement and being alive and preferably healthy at retirement)... this gets back to the other recent threads about ENJOYING some of it.

Obviously, for those who wish to leave money/assets to heirs, that is a consideration, too.
But not all of us have heirs who need any money/assets.

I've mentioned here how we almost "waited too long" to take those vacations we saved for.
And others here have had less fortunate circumstances where it did indeed become "too late".

Well, yesterday, I got an unexpected medical diagnosis.
It is very possible that we might NOT be able to take our big holiday vacation.

And it is EXACTLY one year ago, to the day today, that we had to cancel last December's initial "big vacation" because DH had a sudden serious illness.
(His illness was far more serious than what I am facing; he may have had a permanent disability.)
At least we DID have that wonderful trip to Italy last spring, and DH had a wonderful time on his first cruise a couple of months ago.

In this case, we are pretty sure that the "worst" case will be a delayed trip, such that I'll be able to travel in the future.
Apparently, I'll find out on Monday if surgery is needed, or less invasive therapy.

I'll repeat: YOLO.

Why in the world should we live BELOW our means, at the "cost" of not having these nice experiences and memories?

RM
Living below your means doesn't mean depriving yourself of all enjoyment or luxury in life. A persons means is relative to their income, if someone makes $40k in net income and spends $30k a year then they are living below their means, and if someone makes $600k net income and lives on $400k then they too are living below their means.
I'm sorry if I didn't quite make my point clear about the quoted text.

WHY drive a Toyota if one can afford a Lexus, assuming one would prefer/enjoy the Lexus?
What is inherently "better" about driving a lesser vehicle? And in that case, why the Toyota, and not a beater?

That is the type of thinking so prevalent here that I don't understand.

If the savings are in place (retirement, emergency, etc.), then why the emphasis on "living on LESS"?

RM
I live on far less than I potentially could because it gives me greater financial security and flexibility. By maintaining a high savings rate I will become financially independent sooner and will have the option to leave my high stress job earlier if I should choose to. It will also mean more security and flexibility for my spouse should something unexpected happen to me. I sacrifice on material goods now so I can have a more relaxed lifestyle, more time to do the things that I love, and greater financial security later.

I do not live below my means at the cost of having nice memories and experiences now, I do plenty of the things that I love to do now, I go out to nice restaurants and go on nice yearly vacations, I just spend a lot less than I potentially could.
Last edited by John3754 on Tue Nov 25, 2014 7:45 pm, edited 1 time in total.

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munemaker
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Re: Living below my means, means…

Post by munemaker » Tue Nov 25, 2014 7:45 pm

ResearchMed wrote:
John3754 wrote:
ResearchMed wrote:
munemaker wrote:Living below your means, means:
- driving a Toyota when you could afford a Lexus
- Living in a $250,000 home when you could afford a $500,000 home
- Attending to a state school when you could afford a private school
- Taking a domestic vacation when you could afford to vacation in a foreign country
- ....

You get the idea.
No, actually, I don't.

Why not drive a used Yugo?
Why not live in a small apartment, or $150,000k home?
Why not take a vacation that is 1/2 as long as the one imagined above? Or stay at a Motel 4 (not 6 or 8)?

I don't get it about the Living BELOW one's means.
We've lived WITHIN our means, and that includes saving for the future/retirement/emergencies/etc., of course.

But especially as we've gotten closer to the "goal" (meaning, retirement and being alive and preferably healthy at retirement)... this gets back to the other recent threads about ENJOYING some of it.

Obviously, for those who wish to leave money/assets to heirs, that is a consideration, too.
But not all of us have heirs who need any money/assets.

I've mentioned here how we almost "waited too long" to take those vacations we saved for.
And others here have had less fortunate circumstances where it did indeed become "too late".

Well, yesterday, I got an unexpected medical diagnosis.
It is very possible that we might NOT be able to take our big holiday vacation.

And it is EXACTLY one year ago, to the day today, that we had to cancel last December's initial "big vacation" because DH had a sudden serious illness.
(His illness was far more serious than what I am facing; he may have had a permanent disability.)
At least we DID have that wonderful trip to Italy last spring, and DH had a wonderful time on his first cruise a couple of months ago.

In this case, we are pretty sure that the "worst" case will be a delayed trip, such that I'll be able to travel in the future.
Apparently, I'll find out on Monday if surgery is needed, or less invasive therapy.

I'll repeat: YOLO.

Why in the world should we live BELOW our means, at the "cost" of not having these nice experiences and memories?

RM
Living below your means doesn't mean depriving yourself of all enjoyment or luxury in life. A persons means is relative to their income, if someone makes $40k in net income and spends $30k a year then they are living below their means, and if someone makes $600k net income and lives on $400k then they too are living below their means.
I'm sorry if I didn't quite make my point clear about the quoted text.

WHY drive a Toyota if one can afford a Lexus, assuming one would prefer/enjoy the Lexus?
What is inherently "better" about driving a lesser vehicle? And in that case, why the Toyota, and not a beater?

That is the type of thinking so prevalent here that I don't understand.

If the savings are in place (retirement, emergency, etc.), then why the emphasis on "living on LESS"?

RM
This thread is about what it means to live below your means. If you are spending at your full potential, then you are not living below your means. I did not say anything is better about driving a lesser vehicle. I said it is an example of living below your means.

If you can pay cash for a Toyota but have to finance a Lexus, in general you are probably living at your means but not below your means. Nothing wrong with that. One way is not necessarily better. It is a philosophy that is different than the Boglehead philosophy.

As far as why not drive a beater instead of a Toyota, living below your means is all relative to your means, i.e. what you can afford.

For most of us, living conservatively gives the ability to max out 401k, IRA, , 529 plans, etc.
Last edited by munemaker on Tue Nov 25, 2014 7:48 pm, edited 1 time in total.

ResearchMed
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Re: Living below my means, means…

Post by ResearchMed » Tue Nov 25, 2014 7:47 pm

hudson wrote:Living below your means is a great idea!

Image

http://www.thedacrons.com/eric/dogtown/ ... cester.php
Not seeing anyone here (or pretty much anywhere on BH) defending "debt" (except maybe mortgage, but there's disagreement there, of course).

What's wrong with someone driving that Lexus mentioned above (rather than driving a Toyota) if they can afford it?


Why live BELOW one's means, rather than WITHIN one's means?
We cannot take it with us...

RM
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Re: Living below my means, means…

Post by dumbbunny » Tue Nov 25, 2014 7:47 pm

Living below my means means that I will check Goodwill first before I shop at Nordstrom. Repeat for other consumables.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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Re: Living below my means, means…

Post by John3754 » Tue Nov 25, 2014 7:55 pm

ResearchMed wrote:
hudson wrote:Living below your means is a great idea!

Image

http://www.thedacrons.com/eric/dogtown/ ... cester.php
Not seeing anyone here (or pretty much anywhere on BH) defending "debt" (except maybe mortgage, but there's disagreement there, of course).

What's wrong with someone driving that Lexus mentioned above (rather than driving a Toyota) if they can afford it?


Why live BELOW one's means, rather than WITHIN one's means?
We cannot take it with us...

RM
There's nothing WRONG with driving a Lexus if you can afford it, but some people who can afford a Lexus CHOOSE to drive a Toyota instead. This allows the person to have a higher savings rate, which gives them more financial security and opens up options like retiring earlier or leaving more to family once they pass. Can you really not understand why someone would choose to spend less money than they potentially could in order to have greater financial security for the future and/or retire sooner and/or and leave more to their heirs?

ResearchMed
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Re: Living below my means, means…

Post by ResearchMed » Tue Nov 25, 2014 8:02 pm

John3754 wrote:
ResearchMed wrote:
hudson wrote:Living below your means is a great idea!

Image

http://www.thedacrons.com/eric/dogtown/ ... cester.php
Not seeing anyone here (or pretty much anywhere on BH) defending "debt" (except maybe mortgage, but there's disagreement there, of course).

What's wrong with someone driving that Lexus mentioned above (rather than driving a Toyota) if they can afford it?


Why live BELOW one's means, rather than WITHIN one's means?
We cannot take it with us...

RM
There's nothing WRONG with driving a Lexus if you can afford it, but some people who can afford a Lexus CHOOSE to drive a Toyota instead. This allows the person to have a higher savings rate, which gives them more financial security and opens up options like retiring earlier or leaving more to family once they pass. Can you really cannot understand why someone would choose to spend less money than they potentially in order to have greater financial security for the future and/or retire sooner and/or and leave more to their heirs?
Take your argument to an extreme: Why not drive the cheapest possible car, live in the cheapest possible home/apartment, etc.

And there is nothing WRONG with preferring to drive a Toyota instead of a Lexus, if that is what one wants to do.
(We have a single car, 10+ years old. We travel in luxury accommodations nowadays - and just HOPE that we will be able to continue!)

We have "enough" financial security, and DH does not want to retire, period.
Heirs are provided for by other family in ways far beyond what we could ever contribute.
But even if not, we don't feel compelled to leave assets to heirs who are not in need, while we have places to go, experiences to experience, the very things we've saved for... and we also have enough for our other needs.
(We just pray that we won't actually have "those other needs" for a while yet...)

At a certain point, one *has* financial security.
If someone wants to drive a Lotus and can afford it, so be it. Not our particular choice, however. But we DO have "other" choices.

RM
This signature is a placebo. You are in the control group.

gwrvmd
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Re: Living below my means, means…

Post by gwrvmd » Tue Nov 25, 2014 8:06 pm

In my opinion LBYM means saving/investing 15% of your gross income. If you do that you can do anything you want with the other 85% and you still qualify as a LBYM Boglehead. When raising kids you can go down to 10%
and still qualify. Qualifying should be based on a % of income. For lower incomes you may be limited to a Toyota, at higher incomes the other 85% may allow you to include a Lexus.........Gordon
Disciple of John Neff

Admiral
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Re: Living below my means, means…

Post by Admiral » Tue Nov 25, 2014 8:11 pm

Life is for living. You might get hit by a bus tomorrow. Plan for the future, but enjoy the present. Don't wait to visit Macchu Picchu until you're too old to make it up that mountain.

My $.02.

John3754
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Re: Living below my means, means…

Post by John3754 » Tue Nov 25, 2014 8:16 pm

ResearchMed wrote:Take your argument to an extreme: Why not drive the cheapest possible car, live in the cheapest possible home/apartment, etc.
Because I don't want to take it to an extreme, I don't want to drive the cheapest possible car, I don't want to live in the cheapest possible apartment, but I do want to live below my means. For me it's not difficult to find a happy medium; I drive a reasonable quality car, live in reasonable quality housing, go out to nice dinners occasionally, and nice vacations every year. However, I also maintain a high savings rate by not having a million dollar house and multiple luxury cars while living paycheck to paycheck like most of my peers do.
ResearchMed wrote:We have "enough" financial security, and DH does not want to retire, period.
Well, I am not you or your DH, I don't feel that I have enough financial security and I do want to retire early, therefore I choose to live below my means and I'm happy trading some material goods now in order to reach those goals. I don't understand why this is even an argument.

ResearchMed
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Re: Living below my means, means…

Post by ResearchMed » Tue Nov 25, 2014 8:23 pm

John3754 wrote:
ResearchMed wrote:Take your argument to an extreme: Why not drive the cheapest possible car, live in the cheapest possible home/apartment, etc.
Because I don't want to take it to an extreme, I don't want to drive the cheapest possible car, I don't want to live in the cheapest possible apartment, but I do want to live below my means. For me it's not difficult to find a happy medium; I drive a reasonable quality car, live in reasonable quality housing, go out to nice dinner occasionally, and nice vacations every year. However, I also maintain a high savings rate by not having a million dollar house and multiple luxury cars while living paycheck to paycheck like most of my peers do.
ResearchMed wrote:We have "enough" financial security, and DH does not want to retire, period.
Well, I am not you or your DH, I don't feel that I have enough financial security and I do want to retire early, therefore I choose to live below my means and I'm happy trading some material goods now in order to reach those goals. I don't understand why this is even an argument.
The "argument" is, for example, because some BH'ers state that one should not drive a Lexus, but should drive a Toyota instead, without any attempt to take into account any sort of "affordability" factors.

That's the live BELOW your means, rather than live WITHIN your means.
Even while we were more in "serious savings mode", we didn't stop enjoying a few "nicer" things, and what is "nicer" for one person may not be at all desirable for someone else. It's that judgmental tone here.

Yet, oddly, on the "Splurge" thread, folks are mentioning all sorts of "luxuries", the things they themselves prefer. It's almost a bit strange that these are on the same Forum.
That's the point. What is inherently "wrong" with a splurge, be it a more expensive car, or not trying to purchase used clothing before heading to a shop selling new clothing (assuming one can *afford* it)?

RM
This signature is a placebo. You are in the control group.

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munemaker
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Re: Living below my means, means…

Post by munemaker » Tue Nov 25, 2014 8:26 pm

ResearchMed wrote:
John3754 wrote:
ResearchMed wrote:Take your argument to an extreme: Why not drive the cheapest possible car, live in the cheapest possible home/apartment, etc.
Because I don't want to take it to an extreme, I don't want to drive the cheapest possible car, I don't want to live in the cheapest possible apartment, but I do want to live below my means. For me it's not difficult to find a happy medium; I drive a reasonable quality car, live in reasonable quality housing, go out to nice dinner occasionally, and nice vacations every year. However, I also maintain a high savings rate by not having a million dollar house and multiple luxury cars while living paycheck to paycheck like most of my peers do.
ResearchMed wrote:We have "enough" financial security, and DH does not want to retire, period.
Well, I am not you or your DH, I don't feel that I have enough financial security and I do want to retire early, therefore I choose to live below my means and I'm happy trading some material goods now in order to reach those goals. I don't understand why this is even an argument.
The "argument" is, for example, because some BH'ers state that one should not drive a Lexus, but should drive a Toyota instead, without any attempt to take into account any sort of "affordability" factors.

That's the live BELOW your means, rather than live WITHIN your means.
Even while we were more in "serious savings mode", we didn't stop enjoying a few "nicer" things, and what is "nicer" for one person may not be at all desirable for someone else. It's that judgmental tone here.

Yet, oddly, on the "Splurge" thread, folks are mentioning all sorts of "luxuries", the things they themselves prefer. It's almost a bit strange that these are on the same Forum.
That's the point. What is inherently "wrong" with a splurge, be it a more expensive car, or not trying to purchase used clothing before heading to a shop selling new clothing (assuming one can *afford* it)?

RM
Most of those so called splurges are pretty modest.

Grt2bOutdoors
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Re: Living below my means, means…

Post by Grt2bOutdoors » Tue Nov 25, 2014 8:56 pm

Sacrifice! Deferred consumption, putting off today for some future point down the road.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

InertiaMan
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Re: Living below my means, means…

Post by InertiaMan » Tue Nov 25, 2014 9:06 pm

Maybe we need an Efficient Frontier for living below one's means. Instead of returns vs standard deviation, we can plot enjoyment/fulfillment/comfort versus spending. Then we can all find the sweet spot of living optimally below one's means.

As an early-retired 51 year old, I already regret some of my frugalness in younger years. Its recently begun to dawn on me that I'm unlikely to ever spend all my money. That's a good feeling, in that it feels secure/safe. But I also wonder if I'd have served my own quality of life better by choosing slightly better homes to live in, or opting for more hotels rather than camping during travel (certainly I'd have lost fewer girlfriends along the way!). No major regrets here, just modest what-if's.

I agree w/ some of the other posters here: saving for retirement should not be a race to see who can sacrifice the most. With reasonable income, one doesn't need to live like a monk to "live below your means." The real "offenders" on this measure were always obvious to me: the wife who wanted a $3000 refrigerator because the two year old $2500 was no longer the best in the neighborhood, the first-year-out-of-school technical salesperson that buys a $45k BMW and cannot even get the full 401k employer match as a result, the co-worker who buys a 5000 sq ft house and three cars and a boat that is rarely used, simply because he qualifies for the loans.

I agree w/ a post early in the thread: once you can save around 20% of gross, you've entered into the realm of LBYM. Going further than that is fine if you value earlier retirement over current pleasures, or if you want more safety margin, or if your earning power simply exceeds your tastes. But if you don't hate your job and may work until 60+ anyway, then once you hit a responsible figure of 15-25% of gross, IMHO there is little point in comprehensive self-sacrifice to maximize every last % of savings.

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