Twenty years ago, I was downsized and found myself in a situation where we had a mortgage and two car loans not to mention several thousands of dollars in credit card debt. Even though I had a Master's Degree, I found it very difficult to find another job commensurate with my education. I worked 3 jobs at one time, each one paying $10/hour.
Fortunately, my wife's employment provided us with health insurance, and we used every bit of money we did not absolutely need to pay off our debt. I was also able to get a couple of consulting gigs that paid well.
Once all our debt was paid off, 5 years later, my wife and I vowed never to get into debt again. We made a budget and spent only that money which we needed to spend and no more. It was difficult at first, but later became fairly easy to follow the budget. We both took our lunches to work.
My wife and I like going to Myrtle Beach and found out if we check in Sunday and check out the following Friday or Saturday, that we save hundreds of dollars as Friday-Saturday have higher rates. Five full days at the beach is fine for us. We cook meals in our rooms and only go out to dinner once.
Another money saving tip that my wife and I discovered pertains to buying cars. Instead of buying a new car like we were doing, we buy year old cars that have been leased with low mileage. Several thousands of dollars can be saved and the car is like brand new. We both got 2015 vehicles in 2016 with under 1000 miles for $8-10,000 less than what we would have paid.
We buy what we need when it is on sale. I realize that sometimes, a washer or a dryer might crap out and that is when you use your emergency fund. Otherwise, we wait until it is on sale.
My wife and I have been debt free for 15 years and we have not missed out on anything.
Fortunately, my experience put me in a situation where I was a business consultant while working full time. I had arranged with my employer that I would take vacation if I got a consulting job. Half of all my consulting money was saved and the other half spent on a deck, above ground pool, a gazebo, and a hot tub. Our rationalization was that if we could not afford to go to Myrtle Beach, then we had our back yard.
When we downsized recently to a smaller home and yard, we made $50,000 more on the sale of our old house than what we paid for our new house. That money went into savings and was earmarked for the last car we will buy.
The money spent on refurbishing this new house came from the interest earned on our savings, so our retirement account was not drained.
We live off of Social Security and what we have saved. Our total monthly expenses are about $3,500 to $4,000. Half of that is Social Security. The rest comes out of savings. We got out to eat once a week and go to Myrtle Beach twice a year. The rest of the time, we are content doing things around the house. We go to the movies on Christmas day and cook a turkey for Thanksgiving.
We want for nothing, and we are not starving because the prices have increased a little.
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