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Living on Less

Written by

John Hunter

in

,

I make $6.50 an hour. Am I poor? by Karen Datko:

In a matter of months, I went from a comfortable life with decent pay and health insurance to a $6.50-an-hour job with no insurance, no furniture and just enough resources to keep the wolf from the door. I no longer buy anything unless it’s absolutely essential. I spend $40 at the supermarket and make it last for more than two weeks. I never turn down a free meal. I’ve learned to graciously accept money, furniture, elk meat and encouragement from worried friends.

I am no longer proud.

Pride should not be tied to how much money you have. It is, often, but it shouldn’t be. If you act foolishly or you waste money or you act irresponsibly being ashamed is possibly reasonable. When you have extra money, you can waste some and not feel ashamed because you have some to waste. But when you are doing your best you should be proud no matter how much money you have. Buying more pairs of shoes, or fancy coffee or a new video game or the full cable TV package… is not what you should take pride in.

This article shows what can happen to your personal finances. I think it is wise to prepare for such eventualities by saving money and not taking on higher costs of living than are worthwhile. Spending some on luxuries is fine, but you should not just think of today. What will you do if you financial situation worsens? It is very possible, and while planning for it might not be fun, as adults we should do what is necessary even when it isn’t fun.

When I think about buying something, I think about how many hours I have to work to pay for it. That’s a sobering thought.

And a good one any time.

– I will not touch the small safety net I still have in the bank. It’s there for emergencies, like a new transmission if my old van needs one or a new gas tank. The patches on the old tank have lasted far longer than anyone thought they would.
– I will not touch my 401(k) and other retirement accounts. I’m better able to fend for myself now than I will be when I’m in my 70s.
– I won’t sell my house. It’s cheaper than rent and provides more old-age security.

Good ideas. And good planning to have saved for them when it was possible – something she should be proud of.

The last line of the artilce”

I no longer define myself by what I do for a living. On the flip side, I won’t base my identity on my income.

Related: Emergency Fund Levels: Is Household Behavior Rational? – Telephone Savings

Comments

2 responses to “Living on Less”

  1. How a Family Shed $106,000 in Debt at Curious Cat Investing and Economics Blog

    […] were key to making the plan work. Kandy and Russell eliminated discretionary spending. Kandy began buying generic food and frequenting thrift stores for clothing purchases. They stopped exchanging Christmas and birthday gifts with each other and their […]

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    […] Live Below Your Means One of the biggest mistakes people make is to live up to their means. They commit to all kinds of services they can afford at the time. But because Job instability is such a real and present reality, the loss of even a little bit of income suddenly leaves us living above our means. We need to adjust our lifestyle expectations to something lower than what we think we can afford. […]

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