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November 29, 2008


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It is true that if you are in the mindset of *needing* "just a little more", you really won't ever have enough. You can always have or want more. Sometimes, when I start thinking about how *perfect* things would be with "just a little more", I step back and look at what I have. And ask myself why I'm not already content. After all, it's not as if I'm lacking in the essentials of life.

Once you change your mindset from always needing more to realizing that you already have enough and become grateful for all that you have, that's when, ironically, you seem to attract more abundance.

Very true. The "just a little more" trap is alive and well. People only look at one side of the equation--income--and spend whatever they want. Then they "just need a little more" to be able to save and invest or fund the kids' college. It's all about priorities.

I wrote an article titled Saving Less is More Efficient Than Earning More detailing great reasons why you need to spend less rather than always try to earn more! (If you want to read it just click on my name)

There are people out there building great wealth on $40k a year because they know that spending less is more efficient than earning more and wealth depends only on a budget surplus, not an income amount.

I think establishing a saving mentality early is really important. My family has always saved approximately 25% of our salaries -- even when it felt like we were just squeezing by, fresh out of college, and making a combined $35,000 a year. Now that we make quite a bit more we continue to save at the same ~25% rate. While we save a bunch more we also have a much larger pool of money to live on and can sometimes make what feels like extravagant lifestyle decisions (fancy vacations, nice gifts) without the guilt of feeling like we're living beyond our means.

Without setting those early parameters I'm not sure we would have handled the lifestyle inflation as well.

I would like to point out that income is relative to where you live, in NY City $110k will not go very far. In LA, that puts you maybe middle-middle class, certainly not upper middle class. I certainly couldn't live on $40k a year, the mortgage on my 750 sq ft cottage is $30k a year. FMF, you live in a low cost of living area and it does affect your view of income and expenses.

Also, while I agree that cutting your expenses is key, to really increase your savings you should be both cutting expenses and increasing your income. You can control your expenses, but there is a certain floor you'll reach where you can't reduce further. In that case an extra $100 a month will help you get ahead.

I spent much of my life in LA. I think people who buy houses during the housing bubble there are crazy. Prices are way over inflated.

Having a huge mortgage because you live in LA is not an excuse for needing a higher income. If anything people should question your judgment for spending so much money on a 750 sq ft cottage.

We wouldn't have this real estate bubble if more people question whether or not the house is worth the price they are asked to pay. Now we are left with housing prices that are significantly depressed. Yet the houses are still too expensive to be affordable by the median income of the local population.

If you want to say FMF lives in a low cost of living area, then my question is why aren't you living there? It's your choice to live in an area where the local incomes couldn't really support the cost of living.

'Just a little more' ... great article!

My husband and I have lived on well over $100,000 a year, we now live on just over $20,000 a year and we have never been happier than we are right now. It's a change in mindset and when you 'get it' you'll never go back to mindless spending.

Great post and links within the post. I'm going to link to it today. Thank you.

I agree that the housing prices in LA were way overblown with the bubble. But we bought our house, in a nice area ten years ago and we make about 130K in a year and we are middle middle class. While we are working on trying to better with our money habits, LA is not a cheap area to live. However, we can't just pick up and move someplace with cheaper cost of living. We are close to my husbands parents, and our income would suffer. Even if we moved somewhere in Southern CA, you end up paying more in gas and such.

While I agree that people need to learn to live within their income and not fall into the trap of spending more than they make and always needing a little more, I think it is flippant to just tell people to move someplace better. For some people that might make sense but for others it is not a feasible option. Moving takes a lot of money, and an area that might have cheaper housing may be because it doesn't have good schools or be in a good neighborhood or near family.

The point being is that it is all relevant. We make decent money and work hard to save and improve our habits. In another location with cheaper housing, we would make less money and still need to have the same good habits.

we make over $200k/yr, but live on about $35k and feel like we live very well on the $35k. I guess if we were only making $35k after taxes, though, we probably wouldn't think so, despite it being the same amount.

It's all a matter of priority.

Most of my friends and all my family live in California. Yet I moved from there to freezing Minnesota for career and financial reasons. I made the sacrifices. I could have chosen to stay in LA. That would have been fine as well but I would have understood that I sacrificed for being close to family.

Nobody told anyone that they have to move. Some of us are just trying to say the decision to live in a high cost of living area has the consequence of... ah, high cost of living.

Personally, instead of thinking "a little more" - I try to think, "a little less". I want to figure out ways to live on less, so that I'm not so dependent on my primary income. That way, if it shrinks or I want to chase a dream... I can!!!

I don't think people were complaining about the high cost of living in certain areas so much as pointing out that it is not ridiculous that people in those areas consider themselves to need higher salaries. Sure, if you live in rural Iowa and can buy a good-sized house for $100K and your big local restaurant is Bob's Diner where you can get out for $30 for two, you could live amply on $100K a year (assuming you could get it). But you ought to be able to grasp the concept that people living in areas where the cost of sharing an apartment in a modest neighborhood outstrips your monthly mortgage payment are going to need larger salaries to attain the same standard of living. That's not because they're wildly extravagant. It's because they pay higher costs for the same things--and in many cases, internalizing their costs rather than passing them on to the next generation. I live in a big city and I take public transit everywhere. I'm not out there driving two hours a day, blithely dumping the costs of subsidizing my "cheaper" living costs on the next generation and the planet. If people had to pay the actual costs reflecting the upkeep of our incredibly wasteful private-transit infrastructure, from the maintenance of the highways to the environmental damage to the costs required to maintain our access to oil politically, many of them would find that their "cheaper" lifestyles wouldn't be so much.

I disagree strongly, vehemently, and loudly. (The "loud" part comes from a Dave Ramsey rant in which he complained about broke people advising others about money - and audaciously being "loud about it.")

I live on a monthly income of less than $1,000. I pay $650 to rent a room in a house with nine people, $110 in medical expenses, and have a $135 student loan garnishment.

The only way I can reduce my expenses is to rent a cheaper room, but I am unable to do so as long as I am unable to accumulate the money necessary to move in somewhere else.

In my case, a little more income would allow me to save up that move-in money, which in turn would allow me to reduce my expenses.

I live in rural Arkansas, and I know a man who lives comfortably on 20k for himself, his wife and their baby.

We make over $250k/yr, but live on about $38K per year. We feel we are living OK to Good, but we are making SACRIFICES GALORE. We are in Chicago, but live WAY below our means. We follow the Go Green model on everything, including repairing everything to reduce carbon footprint......We are SAVING-SAVING-SAVING and carrying no debt.

All of you are right, but have a GOAL to get to our stage before age 50 so that when your kids ask for $35K per year of college tuitions you can afford it without compromises.

Apply for new credit cards every 3-4 months, and get $100 bonuses for spending on credit cards (but paying it off at end of 30 days). Open bank accounts, and get $150 from them (FREE). I am up for EVERYTHING that is FREE from any source including stores, banks, businesses, etc.

Frugal, Cheap, Cost-Conscious, Miser, Smart-Shopper, Super-saver, Aggressive-Buyer etc TITLES are OK by me since it allows me to Donate, Invest, Have a Bank Balance like none of my relatives/neighbors/friends. Bottom-line is "I've got the right attitude, and I am teaching my kids the same'.


Nothing new here:

"Annual income twenty pounds, annual expenditure nineteen
nineteen six, result happiness. Annual income twenty pounds,
annual expenditure twenty pounds ought and six, result misery."
Charles Dickens - 18th century

Poor Boomer - You need to get another job. You can make more than that delivering pizza's full time.

Sarah - Not sure how your post wandered over to public transit versus private transportation. Public transportation in the U.S. is a joke. It falls way short of most other countries in that there is minimal coverage. When in Europe, I use public transportation in most cases as it gets me where I need to go. Not here. The closest bus stop is almost 2 miles from the office.

Anon--because many places where cost of living is cheaper are rural, semi-rural, or sprawl settlements. People who choose to live in cheaper areas are thus very often shifting substantial costs onto the much-hated-and-maligned government and their fellow-citizens, who have to bear all the costs the sprawl lifestyle imposes on us. People living in the expensive cities are doing much less of that.


Please back that up with some kind of research as it is easier to argue that cities have a much higher cost burden. Take a look at the city tax rates for both New York and Chicago as a start. Cities have a much higher crime rate (per capita) and as such, require more services to deal with this. Perhaps you city dwellers are burdening the rest of America with your costs.

I am with NCN, we are trying to always improve how we look at money and how we can do better and save a little more or do with a little less. This blog is one of the ways I try and learn better habits than I got from my parents.

Edmund, you made my point. You made choices to move to a different area for "career and financial" reasons. For my family if we moved to someplace with a lower cost of living, it is highly probable that our careers would suffer. Now if once of us had a job offer that improved one of careers to the point of compensating for the other, then it would be something to consider. You had to weigh the pro's and cons and base your decisions on that. For us, we are close to his parents to help them as they get older and are looking to move my mom to a lower cost area that is nearer to us.

The point being that it is all relative and the best way is to challenge your financial ideals and see how you can do better or in this case with less.

I think Kenny is trying to show of by copying what I wrote in writing he makes $250k and lives on $38k since I wrote we make $200k and live on $35k. j/k. we live in a high rent area as well, but we aren't sacrificing galore. global warming to me is a sham (yeah, yeah), so i'm not spending extra money on something that doesn't maintain the green stuff in my bank acct (suze orman has a very good position on this it's on a clip on cnbc website). with that said, we do recycle, we do use compact fluorescent bulbs, etc, but we don't go crazy over the point that we won't ever recoup from the expenditure. seriously, $35k which I guess is around $48k before taxes is a very good living for us. we don't scrimp, and it suits our lifestyle. the biggest difference is that if we want to get something that busts $35k, we have the cushion to do so. so despite us living on $35k/yr, psychologically it is much different.

@poor boom: I'm amazed you are spending $650/mo on rent while living with 9 other people in the house. that seems way high.

Anon said:

Poor Boomer - You need to get another job. You can make more than that delivering pizza's full time.

Um, I don't have a car, and certainly cannot afford one. Ond I don't even have a license - several years ago I had an extended hospitalization and my car (parked at the end of the driveway furthest from the street, with two other cars parked directly behind it cxloser to the street) received a number of tickets (expired tags). I didn't even know about the tickets until they had defaulted, so now I owe several hundred dollars have a suspended license until the tickets are resolved.

Poor Boomer,

What are you doing to try to make more money? Pizza delivery is just one example. There are so many other things out there. It just takes some effort.

I spend WAY too much time on Craigslist looking for oppoertunities to make money. Even so, people jump on desirable opportunities within seconds, and if you respond an hour after it was posted, you're too late.

I am doing virtual piecework on Amazon Mechanical Turk, unfortunately, so fat I've made less than $1.50 per hour.

Also I'm doing manual piecework stripping catnip leaves from stalks. I don't yet know what this amounts to per hour because the pay is based on weight of DRY leaves - I'll find out in a few days, but I doubt this will come to more than a couple dollars per hour. Oh, and the catnip gig requires a TWO HOUR city-suburb bus ride (two buses and a train) each way.

Yes it sucks but that is life when you are poor and old and unskilled.

It's a good story about needing a little more, but I think you need to know more about the situation before you apply it. There are places in the United States where $150,000 doesn't get you buy. And there are circumstances where you can't pick up and move (military comes to mind).

Usually there are better moves that could have been made in the past, but you have to live in the now and deal with current circumstances. So if you made a mistake and took a big mortgage and are underwater by a lot and can't get out, it's clearly a case where you need more income. Lowering expenses doesn't always work.

Poor boomer,

Sounds like you fell into a rut! You write well, and your education garnishment and the fact that you are on this site tells us that you're intelligent. There are jobs are out there, but you won't find them on Craigs list.

Tim said:

Alas, it's a GREAT business model if you own a house.

Two people own the house and rent rooms to seven others. (The two largest bedrooms are occupied by couples.)

What makes it work is they rent the rooms by the week, which draws in poor people like me without enough money ($1,000-ish) to move into a monthly rental.

There is high turnover but it never takes more than a few days tops to fill a vacancy and keep the money rolling in.

Is this a great country or what?

There may be jobs out there, but as an older (50+) person with nothing that could be remotely considered career-related experience, nobody's interested in hiring me when there are qualified applicants half my age.

For one thing, I can claim to have skills (e.g. 'write well'), but since none of my menial jobs have ever entailed use of these skills, there is nothing on my resume to interest employers.

There is a huge gulf between being able to do a jobv - or even being able to do a job very well - and being able to GET the job.

Poor Boomer,

You really need to look into more things. Take a job at a supermarket or retail store that will allow you to move up into a department manager. What about warehouse work, UPS, etc.

My son makes more than you stocking shelves.

Poor --

Why don't you start blogging for a bit more money? ANYONE can do that....

Can you write just a little more on this? If I had just a little more information, I think I might get the point...

Poor boomer seems to be the same person that has been posting similar comments for awhile on other blogs, just under a different name. Always an excuse for why his situation is hopeless and there is nothing he can do about it. My mortgage is more than $650 - a shared house with 10 people should be a fraction of that.

Anyway, we also make about $110k and we do take home "just enough to get by" but that is because we save about 50% of our income before we even see it!


I am sorry about your situation. I was in a similar one, as a single mother in a rural-type/small town area. I worked full time plus but with rent and such had about 30 dollars for gas and groceries with a small daughter to feed for two weeks. We managed but it was very hard to do more. There were no second job opportunities, it was a college town.

The only good thing about that time in my life was that it taught me to do much more with much less. But there wasn't even five dollars at the end of the week. However, with your writing skills, there are many places on-line that are looking for good content writers. Are there skills in your past you can write well about? Even your age can be a benefit, more web sites are catering to seniors.

Tim, we did energy efficiency on our house for a couple of reasons. I do believe in global warming but our house was a fixer upper and as we fixed up we upgraded. My gas & electric average $35 per month, while my neighbors are up to $400.00. We even have air conditioning, but I am pretty cheap about when we turn it on.

I used to fall into this trap when I was younger. Then I realized I didn't need half the crap I already had and it cost a lot to maintain, so simplification was in order. Now I probably live on less than 10 years ago, plus I make 3 times as much.

Those people that say you can't live on $100k or more are deluding themselves - no matter where you live - NYC, SoCal or wherever.

Off topic - even if global warming is a sham (which I don't agree with, BTW) - why is it a bad idea to conserve resources? The world is only so big - no one can argue that eventually we WILL run out of certain things. I'd like to keep as much of that for my kids, their kids, etc. as possible.

I meant to say before my mortgage is less than 650 for a 2000 sq ft house.

Boomer - $650 is way more than you should be paying in a house shared by that many people and the owners may be taking advantage of you. They probably set the rent so that the mortgage is covered even if there is only 1-2 tenants. They should be basing it on how many actually live there, even if that means adjusting it monthly. You can look up how much they paid for the house and estimate what their mortgage payment is. Add in utilities and divide by the number of tenants living there. It's probably reasonable for them to mark it up slightly (maybe 10%) for their trouble and risk. For every $100k they borrowed at 6%, their payment would be $844. So on a $300k house the payment for each of 9 people should be less than $350 not counting utilities. If you don't have a career or family tying you to a particular area (and if you do, you should either be making more or getting family to help you out), then move.

I think the point about cost of living variances is the cost of living in cities like NYC and LA are very high, and even though the salaries are higher, it's not enough to make up for it. I live in a rural town and we make about $110,000 together and live on about $30k. Lets say the same standard of living in NYC would cost me $70k. To have the same amount available to save, we would need to make $150k, about 36% more. This is unlikely.

@Edmund - moving is not much of an option. Mr M works in Hollywood making movies and commercials, he would have a hard time finding work elsewhere. Knowing how to correctly splatter blood for a gore scene isn't gonna get you a job in Iowa. Also, he's lived in LA all his life and the rest of the country is not ready for him. Trust me, I'm doing you a favor keeping him here! All of our family lives here and I've built up my career in this market. I get paid big bucks for my reputation, I'd have to start over in another town. Plus my job is designing mass transit, not much mass transit in little town USA. Anywhere I go has to be a major city.

I'm not whining about the cost of living here, I just wanted to point out that the minimum income they give is an average that varies based on where you live. I think the $40k given is considered poverty level in LA, that's all. Kudos for those who live in cheap areas, consider yourself lucky. Plus, if we all moved there it wouldn't be cheap anymore would it?

LC said:

Poor boomer seems to be the same person that has been posting similar comments for awhile on other blogs, just under a different name. Always an excuse for why his situation is hopeless and there is nothing he can do about it. My mortgage is more than $650 - a shared house with 10 people should be a fraction of that.

The owners charge what the market will bear, and they claim that they have never had an unpaid vacancy. (It's common for a room to be vacant for a few days, but the outgoing tenant presumably paid for a full week.) I've been here 8 months and I've never seen a room vacant for a full week.

They claim their mortgage pmt is $2000. They have health problems so the rent is pretty much all the income they currently have. I'm guessing they recently refinanced and that's why the mortgage pmt is so high; they had some huge medical bills.

Yes I agree I am being played but I don't know what I can do about it. If I'm making excuses, why don't you tell us what you would do? Blogging sounds good but I need money NOW so I have to go do menial piecework for chump change.

Well said. A little self-control with spending goes a long way.

A little self-control with spending doesn't go very far on a poverty-level income, and won't make you wealthy.


You could look into joining the Peace Corp or AmeriaCorp programs.

Both would give you living allowance and/or housing, medical insurance and a stipend or lump sum payment afterwards towards your student loan debt.


I always love how people talk about not being able to "make it" on a low income in NYC or other "high cost of living" areas. Now I'm not saying that say under $40,000 it's easy but pretty much if you are over that it is not "too" difficult it's just about trade offs. Yes you are not going to be living in Manhattan or probably in a single family house but you can live in a safe neighborhood with good schools you just are in a small(er) apartment, co-op or condo. In Bayside, Queens (the northwest corner which is a great neighborhood where the schools are equal in quality to those in the suburbs) you can still get a 2 bedroom co-op for under $250,000. Now if you have 2 kids they don't get their own room and they are probably not going to have every toy on the face of the earth because of storage issues, but oh well. If you throw in that you don't really need a car it gets even cheaper, no insurance, no parking, no car payments. Instead there is the mass transit system. I could be in Manhattan in less than a hour taking a short bus ride to the subway for $2 each way. (There are monthly unlimited passes that make it cheaper.) A grocery store was two blocks away so no car needed for that. (in the same block as the grocery store was a sushi place, an italian place, a chinese place, a greek diner, a kosher deli, a dunken donuts, 2 pharmacies, and an icecream store.) Also none of these place were all that more expensive than those in other areas of the country.

We have a saying. People when given a mountain of gold would ask for just one more mountain.

So true... we felt like we were "just getting by" when both my husband and I were working - because we didn't have any "extra" money and lived more frugally than most of our peers. That was because all our "extra" money was actually going towards our student loans & mortgage.

Now that we're on one income (about 2/3 of what we made on 2 incomes), we know what it is to be just getting by. We're cutting costs more severely than before, and cut our loan payments down to the minimums. I'm not sure where else we can realistically cut. I guess I'll have to get some kind of part-time job... one that pays me more than I'll have to pay the babysitter.


Do you live in San Francisco by any chance? You sound like the poster Minimum Wage, the serial complainer who would never take any advice but just mope like Eyore on Sesame Street. You want to cut your rent in half? Share the room with someone like you did in college. It may be very inconvenient but after 12 months you will have $3.5K saved up, a good start to make your next move.

-Big Cheese

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