On Living Below Our Means, Reducing Bills, And Buying A House
Instead, we bought a $135,000 townhouse after looking at all sorts of properties. We saw old homes, new homes, townhomes and single-family homes. One day, our real estate agent commented, “I don’t think you guys know what you want.”
Wrong. We just wanted to see what was out there. We knew exactly what we wanted:
- To live WAY below our means
- Something we could easily rent out
- At least 3 bedrooms
- A spacious kitchen
- Outdoor space for gardening
- Little or no grass to mow (What’s the point? I’d rather plant vegetable and fruit gardens!)
- Laminate or hardwood floors
- 2 bathrooms would be best (We ended up with 1 full bath and two half baths)
When I told my dad about considering a 30 year mortgage (4.0%), then a 15 (3.375%) and finally settling on a 10 year, he suggested that we stick with the longer term so we’d have the flexibility of paying it off later just in case ‘something happens.’ He also mentioned that interest rates are so low that it would be even better to invest money in mutual funds that pay a 10% return over the long run. He had some great points, and in fact, investing in something that will give us a 10% return may give us more money. But since we have a sizable emergency fund, for me what’s most important is to own the house as soon as possible. I know I am debt-averse to a fault. I don’t ever want to be in debt–for anything. Praise God, we are debt-free and in a comfortable position to save for our children and to help others.
Before we got married, MrsHM and I agreed that we would do our best to live below our means. Thankfully, both of us aren’t big spenders. We don’t have Starbucks addictions either. Sure, there is the occasional splurge, but generally speaking we only buy what we know we will use, and try to purchase used goods if possible. MrsHM came back a couple days ago with about 10 pieces of clothing from the local thrift shop. There is only one thing I don’t compromise on: buying mostly local/organic food. MrsHM is ambivalent on the issue and since I’ve made the case for our health, she is happy to comply (except she buys non-organic tomatoes, for some reason. I can’t wait to grow our own!). Outside of our needs (retirement, WarriorPrincess’ education, etc.), I would say our top priorities are charity and travel.
Sure, we could’ve bought that completely new, beautiful $260,000 house we walked into the other day, but why? To fill it with junk? Since we live in a college town it makes a whole lot more sense (for us) to buy two $130,000 houses and rent one out (and eventually rent the other one out too). We’ll be working towards building another down-payment and buying another rentable townhouse soon. The goal is to invest in assets that will pay for our luxuries– a lesson learned from Rich Dad, Poor Dad.
I’ve also become a bit obsessed with cutting down our utility bills and other costs of living. Here are a few examples:
1. Since MrsHM’s iPhone plan is covered by work, I decided to give up my cell phone and stick with a free land line provided by this gadget. I own a pay-as-you-go phone that stays deactivated unless I am traveling alone. Since we live in a small college town with super-friendly people (NEVER AGAIN, BIG CITY!), and it takes a maximum of 7 minutes to get anywhere, I’ve decided there is no excuse for spending $70-$80/month on a smartphone.
2. Comcast, our internet service provider, sucks. When they decided to mess with me, I fought back and won 4 months of free internet service, and $19.99/month service for the next year after that. I’ll explain how in a new post. With our free cell phone and free landline, our telecommunications bill comes to $20/month.
3. As soon as we move into our new place, I’ll definitely be putting in the new energy efficient light bulbs. Maybe we’ll even splurge and get these (if the price goes down!).
4. Our car has 135,000 miles on it. We will drive it until it dies, despite the urge to buy a brand-spanking new Hyundai Elantra. (It’s so pretty!)
5. No TV = No Cable Bill. We watch whatever we need to on Hulu, borrow movies from the library, and spend time playing board games.
That’s how we cut our costs and live below our means, how about you? Any tips? Tricks? Do you track your expenses? If so, how? Comment!
Photo: A humble bride remembers others on the day before her wedding.