CNN profiled Holly Ordway, creator of SpendingWisely.com. Basically, she saves as much money as possible without a strict budget. She and her husband manage to live on only $30,000 of their six-figure household income.
It’s easy for people with a high income to tell others how simple it is to save money and spend wisely. What’s harder is trying to save money while taking in significantly less income. The article doesn’t say where she lives but I’m willing to bet it’s not the New York Metropolitan area.
I like one of her ideas: Diligent saving allows you to splurge on some times you really want. For her and her husband it’s the home theater and 200-plus DVDs. (She opted for a rewards credit card rather than cash back.)
She says, “Being frugal is all about making good choices with your money.” The problem with that is that there are so many people who can’t save money from paycheck to paycheck with just the basic expenses to take care of. What’s the advice for them?
The answer must be, “Find a better-paying job.” Good luck with that.
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9:43 am (reply)
That’s all relative, too, because it depends on what kind of lifestyle you want. Personally, I like my cable TV, and I enjoy reading magazines. We don’t live in an area where you can ride a bicycle to places you want to go, so that’s kind of out. I like going out to dinner and going out with my friends. So, yes, if you choose to live like a hermit, you can live on very little money. If that is what is important to you, that’s fine. Just seems to me that there should be more to life than saving for the end of it.
12:11 pm (reply)
Sometimes what people think is a basic expense is actually a ripoff that’s costing them money. If you run the numbers and you’re genuinely in the hole-you need to fix it, ASAP.
Example: They are leasing a car; a well-meaning family member gave them a universal life insurance policy that’s really horrible; they are charging everything on a rewards card that has a 2-cycle daily balance calculation, putting money on credit cards with high interest rates, and so on.
Even moving $20 a paycheck into a savings account automatically would help.