Maria and I are blessed in so many ways. We live debt-free, we are able to afford the occasional weekend getaway, we live in a comfortable condo in a very nice town, and I think we can all agree that Maria stays pretty well dressed. But we didn't get here just by pulling out the credit card; we worked at it. One of the ways we gained control of our finances without adding to my law school debt was by going without certain things. Things that many people would consider normal. As Dave Ramsey says, “Live like no one else now so that later on you can live like no one else.” In that spirit, we wanted to share with you a few of life's little extravagances that we live without so we can reach our financial goals at a faster pace.
I drive a 2010 Ford Focus and Maria drives a 2009 Pontiac G6. And guess what? We've owned both of them outright for years. Maria paid off the auto loan for her previous car several years ago and immediately started saving up for her next car. She paid cash for the G6 in 2013. I bought a used 2009 Focus with a car loan in 2010 (before I met Maria), but that loan was the first debt I paid off after Maria and I started dating. She was so proud of me when I told her about my plan to pay off the car loan and I did it. That was even before we watched FPU together.
So, not only are we driving cars that we own outright, but we fully intend to drive those cars until they have to be replaced. By “have to be replaced,” I mean they are costing us more to keep running than it would be to buy a “new” car. And by “new” car, I mean we will buy a used, but new-to-us car. When you look at the numbers, it makes no sense to buy a brand new car or to lease a car. Used cars aren't as shiny or as exciting to purchase, but they are reliable and are so much more affordable. Especially if you start saving now and pay cash for your next car.
Cable or Satellite Television
This one is becoming very common, but Maria and I cut the cable cord. We watch Netflix, Hulu, and broadcast TV. That's pretty much about it. Granted, it's pretty easy for me; I'd much rather read a book than watch TV. Maria, however, struggled with this one for a bit. She has adapted to watching everything live or streaming it later, but it took her a little while to get used to it. She missed the convenience of DVR. But not having a cable bill saves us hundreds of dollars a year, so we're more than happy to do it.
If there's one daily indulgence that Maria and I have, it is coffee. But rather than spending $5 every day at Starbucks, we make ours at home or have the free coffee at the office. And if you think about it, that $5 a day per person adds up. There are about 240 working days in a year, so we're talking over $1,000 in a year. We will gladly keep that money in our pockets and only treat ourselves to Starbucks every now and again. Lately, Maria has even debated saying goodbye to her Keurig machine and making coffee “the old fashioned way” in the morning before she goes to school. The jury's still out on that decision, though.
This one is really more Maria's area of expertise. Frankly, I couldn't even tell you what a manicure cost. What is it, like $20? $30?
So, I just looked it up, and I guess I was fairly close. But people seriously get a manicure a week? That's crazy. I'm sure most of you get them more like once or twice a month. But even at that more reasonable level, you're talking $500 or $600 per year on manicures. Maria saves a ton of that money by painting her nails at home. Honestly, I think she's only gotten manicures a handful of times in the three years we've been together and one of those was for our wedding.
**A note from Maria: I will admit that manicures are one of the hardest things that we do without. I enjoyed a few manicures after Rob put this gorgeous ring on my finger … and then we did Financial Peace University and got really strict about our budgets. I always have polish on my nails and a part of me misses getting my nails done. But we choose our priorities and spend our money accordingly. And if I can use an $8 bottle of Ballet Slippers nail polish to help us get there, I'm ok with that. Especially if it gives me an excuse to watch a few episodes of Friends on Netflix while I wait for my nails to dry.
Don't let Rob's tone bother you. He's a guy. And he's the first to admit that he doesn't get it :)
We don't own a home right now, for a few reasons. The main reason is because we have decided to save as much as we can before we buy a house. Dave Ramsey advises everyone to put at least 20% down on a house and get a 15 year mortgage. When we created our financial plan in 2014, we envisioned renting for a year while we paid off the debt and started saving. We still haven't reached that 20% goal, but now we kind of have our sights set on a bigger goal, so we will keep right on renting. It might sound a little crazy to you, but after we payed off $180,000 in student loans and a $70,000 mortgage, we really aren't to eager to go right back into debt. Renting works for us and gives us the time we need to save for that huge down payment.
Neither Maria nor I have credit cards. I've never owned a credit card and Maria closed her last credit card account not long after we completed Financial Peace University together in 2014. To us, they're just unnecessary and represent potential danger if we miss a payment. I've done just fine without them and Maria rarely used hers. Yes, she enjoyed her share of T.J. Maxx gift card rewards, but you have to spend so much money to earn them anyway. The point of getting our finances under control is not to increase our spending. And we get along just fine without those rewards. Besides, we spend cash so much, we have a coin jar which creates its own rewards.
UPDATE: We got quite a few comments, both on this post and from friends and family, about credit cards being critical to having a good credit score and getting a good mortgage. Maria and I decided to follow up with another post to explain our views on credit scores and how we plan to buy a house.
We also aren't members of a gym. Maria and I both know from experience that we do not stick to a regular workout routine. So why bother with a gym membership that we 100% know we will not use? Heck, gyms are designed for people to not really use them. Planet Fitness intentionally markets to people who work out casually because they want the members who don't show up very much. And I, for one, would be exactly that person. I hate working out. I might (might!) use an elliptical if it were already in my house. But that's a stretch. So we save a couple hundred dollars a year by not joining a gym.
The Bottom Line: Spending Less than We Earn
Those are just a few of the things we do without, though I'm sure there are others I'm not really thinking about. I will say that we do allow ourselves some extravagances. Those are mainly food related and fashion related (for Maria). But we make sure to budget for them properly before we splurge on nice foods and clothes.
At the end of the day, we spend less money than we earn; all our bills are paid; and we still have extra money to save. Dave Ramsey would be proud.
I'm sure some of you have awesome tips for making room in your budget or extravagances that you live without. We would love to hear how you keep your living expenses down in the comments. And if you're currently working your way out of debt, we would love to hear about that, too, so we can cheer you on. Our world is filled with so many messages encouraging people to drive themselves deeper into debt, let's share the conscious efforts we make to get (and keep) ourselves out of debt.
Stay on Track with Our Debt Free Chart
If you are working to pull yourself out of debt, download our editable “On Our Way to Debt Free” chart. Maria made this chart for us when we first started our journey out of debt with Dave Ramsey and it helped keep us motivated along the way. The PowerPoint file is customizable to suit your financial goals. Click the image below to download your free chart.