Here's another topic about saving greenbacks...
How do you control your personal finances? Here are some general rules and a few things I have done in my life to get ready for a (hopefully) early retirement:
Live below your means: Even though I was a fairly well paid executive, I lived in a $60,000 city house for 4 years, driving an old and reliable Honda Accord. Once you establish a certain level of existence, its rather difficult to go back down. Moving up slowly is easy, enjoyable, comfortable, and relatively stress free
Cars: I have only owned cars that I could pay cash for. I started out with a $900 Oldsmobile Cutlass, and now have a 06 Subie. You should only buy a new car if you are silly rich
Houses: Dont buy what the bank approves you for. Being house poor is one of the most uncomfortable situations you can put yourself in. And if you lose your job and have little equity in your house, you could lose it all. I fix up houses as a side business, and am on my 7th property. I have made just enough profit on each one to own my current home outright. This takes time (1-2000 hours per year), but a great way to build equity and eliminate your largest bill (not to mention avoiding hundreds of thousands in interest debt)
Keep possessions to a minimum: Have a few really high quality items around you that make you happy be it a really nice guitar, cooking set, flat screen TV, whatever floats your boat, but dont let your possessions own you by having too much. Ask yourself of each item you own: Do you love it, need it, or does it make you money? If not, you can probably give it the boot
Buy from the Internets: I buy almost everything online. Shop at the mall, but hop on Amazon, etc to buy. I save around 60% on annual purchases (electronics, clothes, shoes, etc.). Always browse Woot, Dealnews, Pricegrabber, etc. for things you need
Insure yourself properly but cheaply: Always be insured (house, apartment, car), but shop around! Few people make more than one or two calls to insurance agencies. Spend 4-5 hours once a year to see how you can reduce this large annual cost
Feed yourself well but simply: I only spend around $160/month on food. Always look at the per pound cost and compare brands. Avoid red meat (except bacon) and other luxury foods that you dont really need. Also shop infrequently. I shop once every 4-5 weeks and freeze much of what I need. This cuts down on gas and car wear and tear as well
Retirement planning: especially now, pump the heck out of your 401k and Roth accounts. The markets may go a bit lower, but averaging your cost basis on domestic and emerging market equities over the next 18 months will pay off handsomely over the next 10-20 years. Always invest at least to what your company matches for your 401k. If you can, max it out. I contribute the maximum $15,500 per year to my 401k and the full $5,000 to a Roth IRA
How do you "feed the pig"?
How do you control your personal finances? Here are some general rules and a few things I have done in my life to get ready for a (hopefully) early retirement:
Live below your means: Even though I was a fairly well paid executive, I lived in a $60,000 city house for 4 years, driving an old and reliable Honda Accord. Once you establish a certain level of existence, its rather difficult to go back down. Moving up slowly is easy, enjoyable, comfortable, and relatively stress free
Cars: I have only owned cars that I could pay cash for. I started out with a $900 Oldsmobile Cutlass, and now have a 06 Subie. You should only buy a new car if you are silly rich
Houses: Dont buy what the bank approves you for. Being house poor is one of the most uncomfortable situations you can put yourself in. And if you lose your job and have little equity in your house, you could lose it all. I fix up houses as a side business, and am on my 7th property. I have made just enough profit on each one to own my current home outright. This takes time (1-2000 hours per year), but a great way to build equity and eliminate your largest bill (not to mention avoiding hundreds of thousands in interest debt)
Keep possessions to a minimum: Have a few really high quality items around you that make you happy be it a really nice guitar, cooking set, flat screen TV, whatever floats your boat, but dont let your possessions own you by having too much. Ask yourself of each item you own: Do you love it, need it, or does it make you money? If not, you can probably give it the boot
Buy from the Internets: I buy almost everything online. Shop at the mall, but hop on Amazon, etc to buy. I save around 60% on annual purchases (electronics, clothes, shoes, etc.). Always browse Woot, Dealnews, Pricegrabber, etc. for things you need
Insure yourself properly but cheaply: Always be insured (house, apartment, car), but shop around! Few people make more than one or two calls to insurance agencies. Spend 4-5 hours once a year to see how you can reduce this large annual cost
Feed yourself well but simply: I only spend around $160/month on food. Always look at the per pound cost and compare brands. Avoid red meat (except bacon) and other luxury foods that you dont really need. Also shop infrequently. I shop once every 4-5 weeks and freeze much of what I need. This cuts down on gas and car wear and tear as well
Retirement planning: especially now, pump the heck out of your 401k and Roth accounts. The markets may go a bit lower, but averaging your cost basis on domestic and emerging market equities over the next 18 months will pay off handsomely over the next 10-20 years. Always invest at least to what your company matches for your 401k. If you can, max it out. I contribute the maximum $15,500 per year to my 401k and the full $5,000 to a Roth IRA
How do you "feed the pig"?
