Don’t let your lifestyle creep up on your income

When I started my blog a little over six years ago, my husband and I made about $70,000 per year. To many people, that seems like a lot of money. After taxes, the mortgage payment, and our debt payments we were barely getting by. Now, we make more than twice that. You wouldn’t know it looking at us because our lifestyle hasn’t changed much. We haven’t allowed our lifestyle to creep up to our income.

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It is so tempting to increase lifestyle when income rises. When we first started working, we did allow our lifestyle to creep. We bought new cars and nice things. We lived the way we thought we were meant to based on the income we made. If we could afford the payments, we could afford what we wanted.

After I was diagnosed with cancer and beat it, we realized that stuff did not make us happy. Security and weathering future storms made us happy. Having each other makes us happy.

We still live in the same house. My husband still drives one of those new cars we purchased in 2002. We don’t have a car payment. I do the majority of my grocery shopping at Aldi and PriceRite. We didn’t have cable TV for years and the only reason we have it now is because the cable company offered it free for one year. When that year is up, we will go back to our rabbit ears. We don’t buy expensive clothing, although we each have a few pairs of decent shoes. We actually rarely buy clothes at all.

Our monthly expenses are very similar to what they were six years ago, except for items that have increased in cost significantly like food and gasoline. We have actually cut back on a number of things and because of the debt we have paid off, we have fewer required monthly payments than we did six years ago. If our income dropped back to 2008 levels, we would actually be much better off than we were back then.

Even though we have an excellent income, we still live like we are broke. As far as we are concerned, we are still broke. We still have debt. We have a slightly positive net worth, mostly because of our retirement savings and the debt we have paid down. We still have a lot of work to do.

When our debt is paid off, we will increase our lifestyle a bit. My husband would like to eat more steak. We would like to travel. We will save up some money to buy my husband a (slightly) better car. We would also like to save more and give more. We would like to have more time to pursue our dreams.

We have purposely lived well below our means to achieve our goals. We do not feel deprived. We are happy with our progress and happy with our lives. We have everything we need right now and we can see the light at the end of the tunnel.

A much shorter monthly bills list

I was cleaning around the house today and I came across our original monthly bills list. This was probably put together in November 2013. I thought it would be fun to go through the list and cross off the bills we no longer have. I was really impressed how much shorter the list is now.

a long monthly bills list

 

As you can see, we’ve made quite a bit of progress in the past 9 months. We paid off two debts. We cancelled a number of subscriptions. We also are making enough money with our side projects to pay for the webhosting. Those items combined are a savings of $678.88 from our monthly budget. That amount even amazes me.

The vast majority is due to debt payoff, but we still managed to cut $62.29 worth of services out of the budget. That might not seem like a lot, but in a year, that is almost $750. That’s more than my auto insurance each year!

I challenge you to look at your monthly bills list to see where you could cut back. I’m eyeing that Sprint bill. Our contract ends in November and I have a feeling we are going to look into no contract alternatives.

Are there any bills you could cut back on? How much could you save?

Why I’ve never been so happy to be $99,604.91 in debt

Why would anyone be happy to be $99,604.91 in debt? That is a tremendous amount of debt. Yes, I know and today I’m doing a happy dance about it.

Last week, I was paying bills after we got paid. I logged into my husband’s student loan account to make a large extra payment. After the loan payment, the amount due was less than $3,000. I started running some numbers in my head. Then I started logging in to check my balances.

  • Husband’s student loan: $2,776.48
  • Home equity line: $46,937.24
  • Combined student loan: $49,891.24

Total debt remaining: $99,604.91

We owe less than $100,000! We owe less than six figures. Now we only owe five figures!

Over the last few months, it’s been harder and harder to stay focused. It probably doesn’t help that I keep getting cruise guides in the mail. It also doesn’t help that all we have left are large debts. There are fewer quick wins to keep the momentum going.

Seeing this was just the recharge I needed. Having to pay off $220,000 worth of debt is a long road. When we first started, it was a huge mountain that I never thought we could climb. The weight of it was unbearable. There were times I didn’t think it was possible.

huge mountain to climb

Then we started to hit milestones. Each small debt was another milestone. Paying off the credit cards was a huge step up that mountain. Paying off the car was another. As the debts got larger, there were fewer milestones and it got harder to stay focused.

This is a marathon. Going below $100,000 was the energy drink I needed to keep running after my legs and back are sore and I just want to get in the hot tub on a really big cruise ship.

I’m hoping to pay off the last of my husband’s student loan this month, then it is going to be a while until we get the next debt paid off. I’m going to be tracking $10,000 milestones to stay focused. The debt free date is getting closer. I can’t wait to reach the finish line. Until I get there, I’ll just listen to this:

Do you track milestones while getting out of debt? If you’ve paid off a lot of debt, how did you stay motivated?

I want to go on a cruise

It is cold here in Connecticut. Really cold and windy, with blowing snow. Weather like this makes me think of escaping to somewhere warm. I start to think about sitting on the deck of a cruise ship, drinking something fruity. I want to go on a cruise.

Photo from the upper deck of the Norwegian Epic, looking out into the Mediterranean.

Photo from the upper deck of the Norwegian Epic, looking out into the Mediterranean.