N.U.T. #3 – I live below my means.

In the not too distant past, there used to be a fairly tried, true, and tested piece of advice for financial stability. If you wanted to be financial stable, all you had to do was live within your means. Or, as my favorite double negative phrase of all time says, “DON’T BUY CRAP YOU DON’T NEED WITH MONEY YOU DON’T HAVE!”

Just a few short years ago, this timeless piece of advice was enough to keep just about anyone in just about any financial situation above water if they were willing to put it into practice. Sure, sure… there were and still are other more sophisticated financial axioms for people who really wanted to get ahead, but if you just wanted to be financially responsible, all you had to do was live within your means.

And up until sometime in late 2008, that was good enough. But then the markets crashed here in the U.S. and around the globe, and like most pieces of conventional financial wisdom, the idea of living within your means went from being a great financial axiom to being not quite enough. In fact, after 2008, most people (myself included) stopped believing in the idea of financial stability completely.

With the events of the last few years as context, I (likely along with millions of other people around the world) started reevaluating my finances a little over a year ago. My big financial rule used to be, “Give 10%, save 10%, and live on the rest.” Which was, for the most part, all well and good, but I’ve decided to take it a bit further.

My N.U.T. in this area today is that I will not only live within my means, but I will also strive to the best of my ability to live well beneath my means. My current goal, as long as the emergency fund that my lovely and talented wife and I set up remains full, is to give 20%, save 15%, and live on the rest.

We’re not quite there yet, but we have been taking steps to get there and we’re on the right path.

Since trying to put this plan into action, I’ve mentioned it to a handful of people and I’m usually met with the same questions.

The first thing people ask me is why we’re not saving more than we’re giving. My answer is that we want to be financially responsible, but that we don’t want to be hoarders. We have an emergency fund if something big comes up, and if something happens that requires more money than what we have in our emergency fund, our budget still has a lot of margin in it. Though not ideal, if our family is in a crunch, we can always redirect some of our giving back into our monthly budget as long as we keep giving at least our original 10%. I’d love to save more, but I won’t do it at the expense of people and causes that I think are a lot more important than the Mitchell’s having a large nest egg at retirement.

Once I’ve explained that one, the second thing people typically ask me is what exactly we do to get to the point where we can live on 65% of one income. After all, I make a good living, but I’m still fairly close to the median income of everyone else who lives in my city. My wife is a therapist and she sees a few clients each week, but for the most part, her main focus is staying at home with our daughter as much as possible. I tell you that about our income to say that the answer to living beneath our means is not, “more income.”

For us, living beneath our means is fairly simple. It means we live in an older house that is smaller than what we could actually afford in a neighborhood that, though it is perfectly safe, is probably not as desirable as one we’d like to live in. It means not having cable T.V., and since we never had it to begin with, we don’t even feel like we’re giving anything up. It means cutting out coupons before we go grocery shopping. It means cooking all but a few of our meals at home instead of going out five nights a week, which (on an entirely different subject) is also apparently really good for our marriage and our family. Living beneath our means also means that we don’t buy crap we can’t afford with money we don’t have. With the exception of our mortgage and a tiny bit of student loan debt, we don’t buy things on credit unless it’s to get the miles on our Southwest card, in which case we pay it off each month.

Those few simple things and the fact that we make and keep a budget each month are really the only things we do to live beneath our means. Sure, our life probably seems a little less extravagant than some of the other people our age and older, but we’re not exactly living the monastic life either. We still take vacations. We have two cars that were both manufactured within the last decade. We both have (stupid) smart phones that we probably don’t need. We still go out to eat with our friends when the occasion arises. We still rent movies. We still buy new clothes, though if I could find a consignment store that sold stylish men’s suits, I’d be all over that puppy. There are probably some things that we go without that other people enjoy, but quite honestly we enjoy our life, all of our needs are met, we’re able to set aside some money for the future, and we’re able to share some of our blessings with others. Are we perfect with our money and do we always get this one right? Nope. In fact, if you know me very well, you know that I’ve made my fair share of dumb financial decisions, but I don’t let those things hold me back. Every day is an exercise in financial discipline and I know that if I make a mistake today, I can always start trying to fix it tomorrow.

I know I kind of went all over the place with this post, but to tie it all together, I believe that a big part of being a man means simply being responsible with what you’ve been entrusted with… and money is no different than anything else. For most men (though I know there are probably a few exceptions) living beneath your means is not only possible, but probably closer than what you might think. You may have to make some sacrifices to get there, but if this is a N.U.T. that is important to you, the things you give up really won’t seem like sacrifices for very long.