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When we got married, we were broke and had to live without a lot (we could pay our bills, but no major luxuries). Over time, our lot in life improved. We spend more now, I guess, but not in proportion to our income. I drive a 1994 Toyota pickup that runs just fine. I could afford something very nice, but I wouldn't be comfortable throwing money away like that. We own a big old Victorian house that has two garage apartments on the lot. The income from them makes our big house the cheapest place we could find!
We know people who make less than we do, but buy new Mercedes or expensive boats. We have a 14-year-old Toyota and a 34-year-old sailboat. My satisfaction level with both of them is very high!
Tips: When you get a raise, continue to live as though you didn't get one. Save the rest. Have it diverted into a 401(k) if you can... all of it!
When you pay off a debt, continue to set those payments aside and build savings (or pay off other debts faster). Don't raise your spending level or buy new junk!
We use credit cards like cash. In other words, we only buy what we can afford, and pay off the full balance every month. We never pay interest.
When you put money in savings, leave it there. We last took money from savings 15 years ago -- to buy a house. But that's what we had been saving for. Since then, we only put money in. Never remove it. Now we're saving for early retirement.
Shopping for clothes? Fine, get good clothes. I do. But I have a limit of $10 for shirts, even designer label shirts. Department stores have clearance sales all the time. The best time to buy new clothes is when you don't need them. If you really need clothes, you have to pay the going rate. If you don't need them, stop by a store and browse. If you get a REAL bargain, buy it. Earlier this year I bought a nice $45 silk shirt for 99 cents in a department store. Don't pass up stuff like that.
To give you an example of my frugalityness philosophy: My sailing buddies buy these self steering mechanisms for their boats. They work great and are very convenient, but cost $400 - $500. Well, I took a different approach. I bought some odds and ends on ebay and Radio Shack, and I'm constructing a remote control unit that will steer the boat using the power window motor off an old Buick. Total cost so far, about $35. I could afford the high tech version, but I'm having a great time problem-solving and tinkering, and I'm spending a fraction of what the other guys did. Plus, I can warranty it for life, because the factory is in my back yard.
The people in my office always call me rich. They build new houses, buy new cars, and basically spend it as fast as it comes in. They always tell me I should let go of some of that money. But I really do live very well despite our spending habits, and I'll retire while they're still struggling to pay off their credit cards.
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