MONEY

Lessons in Frugality and Priorities

How to survive on half the money and still live a good life?

I recently read about how being in the 150,000 to 250,000 USD per year income bracket is “like the worst thing imaginable.” You’re neither here nor there. I get the point — you’re doing well but not rich enough to stop working.

Since I’m a bit of a budgeting master, I figured I’d give you some pointers so that you don’t embarrass yourself with such statements in front of people who live on one-tenth of what you make.

The problem with making good money

It elevates your desires and, consequently, needs through expenses

You are frugal while broke. Out of necessity, not choice, mind you. When your income increases, so does your lifestyle.

This is the trap!

More trips, more expensive stuff, better cars, homes, food, and habits. Before you know it, you’re making twice or thrice the money and still have nothing left at the end of the month.

You remain stuck in the rat race with no way out. I’ve been there and done that on multiple occasions. It sucks, especially if you’re now working harder and longer for it.

The solution

When your income increases, don’t upgrade your lifestyle immediately

Some of my wealthier friends lived for a decade like semi-homeless people and are sitting on millions now. They didn’t make millions in income but had a good salary. They saved nine-tenths of their income and invested it while living frugally. What can I say? I like hanging out with people smarter than me.

Is everyone on board?

No. Fuck that! I’m not saying you or I could or should take that path. First, if you’re poor, you’re not becoming a millionaire by saving money! More importantly, life is too short to sit on piles of cash while denying yourself everything you desire.

We have one life, and I, for one, prefer to spend it living, not waiting to die, while accumulating as much money as I can. You’re not taking anything with you to the other side!

I bet you didn’t see that one coming, did you?

Priorities and focus

When I was a youngster first earning money, my priorities were socializing and cars. Then, it was career and money until I burned out, and my life was turned upside down.

Today, my priorities are the following:

• Family — bit by bit, I’m losing the people I love as I get older. Each instance reminds me of how little time we have together and how precious it is. Family and love first — always!
• Free time — I’ve been trapped for too long in jobs with no way out and nearly died from stress, so I appreciate it more than most. When death knocks on your door, and your health abandons you, you realize how much time you’ve wasted.
• Adventures — I love to travel and enjoy road trips. This is my mana. It gives me life and fulfills me, especially with good company on a motorcycle. Without it, there is no life — for me. I would live on the road if I could.

There you go. These are my three priorities with regard to how I spend time and money.

What are your priorities?

Feel free to comment down below. I would love to know.

Being ruthless where it matters

• Cut out everything that is not absolutely necessary from your budget.
• Cancel all subscriptions and monthly payments wherever you can.
• Eliminate everything you can live without, but keep the things that mean the most to you.

Priorities, remember!

The why?

If you’re on a limited budget, whatever that is, you’ll have to make some compromises. It’s not fun, but it is necessary. Choose wisely!

If you know what is most important to you, you won’t have such a problem cutting out the rest. When you cut out five hundred dollars worth of silly monthly expenses, like subscriptions and downgrading on a few things, you can now spend that money on what you love the most! 500 USD monthly equals 6,000 USD in a year. That’s a decent travel budget, for example.

If I were to compare our lives with those of our peers — which I don’t do because comparison is the thief of joy — we probably spend about one-third to one-half of what they do. End of the day, we’re living a similar life, with fewer, less expensive things. That’s the whole raising your lifestyle along with your income thing for you.

The where?

We live in central Europe. This means we make half what the Western countries make while paying the same prices. Rejoice!

Our country’s average monthly pay before taxes has now risen to 2,500 USD on paper, which is about 30,000 USD yearly (per person). Statistics are full of lies, and this is one of them. About 80% of people have to make do with half that! With the rabid inflation, they’re not having fun. But the top 10% are ballin!

Everything in the shops costs the same as in other Western countries. Cars and homes are more expensive because life loves irony, but we do have good social services and decent healthcare coverage. That means you’re not left to die on the street if you’re broke or have to pay to have your baby delivered in a hospital. Unlike our North Atlantic friends, we’re not ruthless barbarians who spit on the poor and helpless!

The how?

First of all, I’m not telling you how to live your life

That’s your business. I’m using my budget as an example of what can be done. Nothing more, nothing less.

Take into account all your monthly outflows

Bills, subscriptions, and perpetual monthly payments. These are the silent killers because you hardly notice them, take them for granted, and they end up eating a large chunk of your income.

I have no subscriptions, apart from the essential bills I cannot avoid (home, kindergarten, internet…). There are no streaming services, gym memberships, gaming subscriptions, or food, book, or beauty packages either.

I made the mistake of researching what the most popular subscriptions are, and I can’t even believe the crap you all pay for. Netflix, I get. Ordering cut and measured food for meal preparations or surprise beauty packages, I do not. To each their own, I suppose.

I do pay for a few yearly subs for my work. Unavoidable, I’m afraid, but I could easily spend fifty times as much! It takes some serious acrobatics to avoid paying for everything, but if you’re on a budget, you don’t have a choice. Warm up, stretch, and start bending! No, not that way!

It is estimated that Western families spend up to 200 USD on monthly subscriptions on average. Add to that the family budget for internet, TV, and phones, and you’re probably looking at another 200 USD each month.

I have a smartphone that does all that the best iPhone does but at two-tenths of the cost. I pick the cheapest mobile operator package and the same for the home internet. If I was careless with just these, I’d be throwing an extra 200 USD monthly out the window.

I don’t drink alcohol, and I don’t smoke or do drugs. Considering the cost of these things alone, I should be rich! I’m not. Still, I think I save between 200 and 500 USD on avoiding these nasty habits alone, not to mention the future costs of screwing up your health and mentality.

Sell (or don’t buy) the expensive car. You can drive just fine with an old piece of junk. Mine is an old, rust-infested Honda with a gut-wrenching number of miles on the clock. It gets the job done, starts every morning, and takes me where I want to go in relative comfort and safety. It’s worth nearly zero. If I wanted the same kind of car, brand new (I do), that would cost me about 50,000 USD or effectively 1,000 USD per month, which is half of all our income! Insanity.

I also have a motorcycle, which would typically fall under the “cut” section, but you’d have to kill me before you take my “baby” from my cold, dead hands! And then I’d come back and haunt you in your dreams, you bastard!

I ride less frequently and an older bike, but I still get to enjoy what I love most. Would I want to have a brand-new bike five times its worth? Hell yes! The difference between my fourteen-year-old adventure bike and a brand-new one is the cost of a trip around the world. Priorities!

I should add that you’re not saving money only when buying these old machines. You’re also saving it on insurance (basic only), servicing (local mechanics), and financing (interests). Not to mention, you just don’t care what happens to them, and there is immense freedom and ease in not worrying about your things.

Own your things, don’t let your things own you!

Yes, I hear you, green brainwashed cheerleaders in the back. You could also ride a bicycle. Some can, others (we) can’t. It depends on a million factors.

We rent an apartment. If I were to buy the exact same apartment, I would be paying more than twice my rent! Maybe someday, when people stop praying to Real Estate Jesus.

Ownership also costs more in other expenses, which are not visible at first glance (repairs, taxes, personalization). Besides — you don’t really own anything. Stop paying the bills and see what happens!

The ultimate money saver is naturally to live with your family or other people and share the expenses. The problem is some of us aren’t built for that and are okay with losing half our income in exchange for inner peace and freedom. Again, priorities.

I keep bugging my girlfriend that I want to move into a van and travel full time, like a little gypsy family (nowadays called “van lifers”), but she’s not buying it, damn it! I reason we could enjoy full-time traveling as a family while working remotely and seeing the world for the exact same cost we now pay to sit at home. She remains firm and unconvinced. Something about home, safety, and comfort. Women! Am I right? She’s probably right, though.

We sparsely eat and drink outside, but since we enjoy it, we do splurge occasionally. By splurge, I mean choose a cheap option that also tastes good. You only live once, remember! But no massages, pools, theater, concerts, or the rest of the cultural pleasures.

As I’ve mentioned, adventure travel is a top priority for me and, by extension, for my family. It was easier and cheaper when I traveled solo or when it was just the two of us, but it’s still fun and doable. It takes more planning and compromising to stretch our budget further, though.

• Avoid airplanes as tickets for a family add up, and drive to your destination.
• Choose camping, if you enjoy it, instead of hotels.
• Cook your food, rather than eat out.
• Don’t pay for any touristy shit. You’re not missing anything.
• Pick south or east instead of north and west when choosing your destination.

There, I’ve just saved you two-thirds of your travel budget. I spend about 1,000 USD per week while traveling, all expenses included for a family of three. It’s not easy, but it is doable! Any less, and you’re not getting very far, you are sleeping in the bush and losing weight on the trip.

Travel has become expensive, I could easily spend five times as much and hope to one day be able to.

I was going to make this short and sweet

I failed. I’m sorry. The idea was to show you that with some planning and compromises, you can stretch your budget a lot further and remind you that you don’t need to upgrade your lifestyle the minute you get a raise at work.

To consider myself a well off middle class, I would require about three to five times what I make right now. Since that is currently not my reality, I choose to prioritize and make the most of it. We do what we can with what we have! I may not be rich, but I’m a millionaire in (free) time. Priorities!

My advice is simple — focus on your priorities and cut all else mercilessly

This way, you still live a good life, albeit with some compromises, and have time to enjoy it. Or, you know, be responsible and invest your money like a grown-up.

By the way, the rich folk are right. It’s easier and probably smarter to earn more than it is to spend less. Do with that what you will. I ignore it, haha.

Goodbye, friends, and may you never have to compromise on your priorities!

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