If you didn’t know, I consider our family to be in “limbo” in regards to our living situation and I’ve been kind of hating it. Currently my husband, me and our 2 kids live in a 2 bedroom/2 bath slightly over 1000 sq ft condo in Los Angeles waiting to upgrade and move (waiting on a job opening). Since about the time my first daughter started walking (already 3 years ago now!) I’ve often lamented about the lack of space and felt envious as people around us upgraded and moved on to bigger and nicer homes. Though our situation and goals are not the same as any of the people described in the article, reading the article I suddenly felt grateful to be in our small condo even with a toddler and baby and all their stuff (if you have kids you know how much stuff kids and babies require!). While most of the tactics are pretty extreme as promised by the title not to mention somewhat illegal (which they coded with the word “secretly” i.e. So and so saved money by living “secretly” in his office for over a year) it was inspiring and refreshing to read about people who think outside the box and go against rampant consumerism and found their own way to live and save a lot of money in the process, the opposite of what the majority of people are doing. While we definitely are still planning on upgrading as soon as possible, it also reminded me too that while we’re in “limbo” we’re actually saving quite a bit of money which would otherwise be going to a crazy mortgage + HOA + property taxes and all the other hidden costs of buying and owning a home. I estimate that once we move into a home we’ll probably increase our monthly expenditures by ~$2000/month, that’s $24,000/year that could be going into saving and investing, vacations and one of our most important goals, front-loading our retirement, which is to try to save as much as possible for retirement to allow us to save less or even take breaks from saving for retirement later in our life. It also makes sense to us to front-load since time and compound interest allow us to save less overall if you start early vs. if you start saving later in life. If that doesn’t make sense to you skim my post on Is It Ok to Excuse Parents from Saving for Retirement Til The Kids Are Grown?
Here’s the article on business insider entitled 11 people who have gone to unbelievable lengths to save money. By reading through the article, you can kind of gather that the biggest cost to most people is housing, since 9 out of the 11 people/couples discussed in the article had basically drastically reduced their housing expense by living out of a van or truck or boat and in one example buying a dilapidated home for $13,000.
Housing does account in general for about 30% of a person/family’s living expenses. In parts of California, it really isn’t uncommon for a person/families to be spending 40%+ of their expenses on housing. I know plenty of people who are house poor and easily spending 40% or more of their take-home pay on their housing costs.
The other somewhat common thread I noticed reading through the different “extreme” scenarios is that almost everyone is young, as in their 20’s, maybe early 30’s? but definitely in their 20’s when they started living this way. That makes sense to me because as I have stated before about myself, I also sometimes wished that I had lived a little more frugally in my 20’s when living extremely frugal like this would’ve been more tolerable. I doubt Brandon (the guy who lives in a big van in the google parking lot) would want to live “inside the box” in his 30’s and definitely not in his 40’s or 50’s, though to be fair I haven’t read any of his blog so maybe he does! It seems most of these people are doing extreme things like living out of a boat or RV to save money because they have future plans for that money, not necessarily because they want to live like that forever. Maybe with the exception of Mr. Money Mustache who still seems to be comfortably living on $25,000/year for him, his wife and son, though currently I think he’s making significantly over that. But if you make $300,000/year, do you really want to live like you only make $30,000/year for the rest of your life? While I’m all for living within and even below your means, at some point I imagine most of us would like to enjoy the money we saved and invested.
Looking back on my finance life, while I don’t think I would ever choose to live in a van or boat to save costs, I could’ve definitely chosen cheaper housing through my school years. One of the best years of my college life was living with 5 roommates (6 of us total) in a two bedroom apt and paying only $350/month in rent. Not only was it the cheapest year for me it also was the most fun. I should’ve lived like that all 4 years and maybe even throughout grad school.
So what’s the most extreme thing you’ve ever done to save money? Share with us in the comments below!