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#91 of 118 Old 04-04-2009, 07:51 PM
 
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I think that we *could*... maybe. My question is, where is the balance between saving money/ trying to live on as little as possible, and value? For example, I (like a lot of MDC'ers, I think) spend a lot more on groceries than I absolutely have to, because I buy grass-fed beef, organic dairy and eggs, etc. (etc etc etc.) If I stopped doing that and started going to Wal-mart for the absolute cheapest-per-pound stuff I could buy, it would cut our food bill drastically, but at the cost of going against my personal values. Similarly, I plan to SAH once our baby is born. In my case, it won't make a huge financial difference one way or the other, because what I take home = cost of daycare anyway, but even if I were making more $$ I'd want to, again based on what I value, what I think is important. Same thing goes for charitable contributions, tithing, etc. Basically, we all spend money in ways that reflect our personal belief systems.

Now don't get me wrong, DH and I still blow a lot of $$$ on trivial, frivolous stuff, that we could cut out easily (and will have to, once I stop working). And if it came down to it and we HAD to live off of $1,200 a month instead of $2,400, (e.g.) then I would do whatever it takes to do so-- what choice is there, then? But I wouldn't want to try to do that NOW, at the cost of everything that is important to me. I guess what I'm saying is, we don't live on 50%-- or 60% or 70%-- but it's not just because we spend mindlessly, needlessly. There is some thought involved, YK?

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#92 of 118 Old 04-05-2009, 07:33 AM
 
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Originally Posted by maryjane View Post
I read in the Suze Orman post that she recommended that people live on 50% of their income. I'm assuming she means take-home pay.



What about you? Could you/do you do it?
Nope. Our rent is 50% of our take-home pay, and the difference between our mortgage and rent we receive from our tenants (a house we own in another state) is probably another 10% of our income. So 60% on housing alone.

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#93 of 118 Old 04-05-2009, 08:05 AM
 
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I don't think we can without some major changes. The funny thing is if DH's pay (our only income) is cut by 50% we can still manage OK. The difference is we'd be hardly pay any taxes and will get more child tax credits with that income level. So 50% of his current pay will be a LOT more than 50% of his take-home pay.

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#94 of 118 Old 04-05-2009, 10:58 PM
 
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We could, but we're choosing not to.

Obviously some things would change if we were laid off. We wouldn't have to pay childcare anymore, and that's not something that we can cut out any earlier than necesary.

I'd have to stop giving to charity. We'd have to stop giving gifts - most of which are useful things that my sisters (who have lower income than we do) really use.

My daughter will be going to private school next year. I feel very strongly about the quality of education available at this school. As long as we're still working, we'll keep sending her to that school. We'll pull her out when and if we were to actually be laid off.

I also consider myself fortunate to currently afford to support local organic farmers. I consider that a useful way to spend our income.

We have 3-6 mo in savings, depending on how you calculate it. I know we ought to have more, and we are building that, but I'm not going to negatively affect other people (like our charities and local farmers) in order to do that faster.

We are prepared to cut down our spending to that 50% mark if either of our jobs were to be lost, but we have no intention of doing that prematurely.

I'm not sure I'm buying this recommendation to cut back to 50%. I think she should more realistically recommend that you try to set your budget up so that you could go to 50% if you had to. But a lot of things change when not working. Lower gas bills, possible lower grocery bills, lower child care bills, etc.

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#95 of 118 Old 04-05-2009, 11:31 PM
 
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If we bought a smaller house we could do it, but with this morgage we couldn't.
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#96 of 118 Old 04-06-2009, 09:11 AM
 
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Does this question pertain to still living the same lifestyle you are living now or include willing to scale down? Because here is my take on what I have been reading in this thread. A lot of people said they would have to get a smaller house and car with no payments. So I think the answer is that most could, but choose not to. We probably live on 60-70%. And that is with a mortgage and a car payment on my Jeep. DH and DD have cars that were bought out right. So yes, I could. I would just sell the house and move into something smaller, sell my car and buy one out right and take fewer vacations.

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#97 of 118 Old 04-06-2009, 09:44 AM
 
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Between DP and I we make 50k a year. Housing here is cheap (we currently pay $375 a month and our utility bills range from $40-$120 depending on the season) and I have no debt and DP pays about $400 a month toward his (car/student loan) so I don't see any reason why we couldn't.

I do pay about $500 a month to DX for his food, gas and bills so he can be a SAHD but we could always arrange working opposite shifts etc if we had to if I could no longer support him but right now that is not an issue.

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#98 of 118 Old 04-06-2009, 01:50 PM
 
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We are currently living on 40% of our total household income b/c DH was laid off a couple of weeks ago. We have saved aggressively for years and the only debt we have is our mortgage so it's not bad. Yet.
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#99 of 118 Old 04-06-2009, 02:07 PM
 
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I don't think it would be humanly possible.

Thinking....

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#100 of 118 Old 04-06-2009, 02:15 PM
 
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Looking at my budget we would have to be COMPLETELY debt free for us to live and save for car repairs , replacements , home repairs etc to live 50% of DH's income. 50% would be close to what his mom will get with early SSI . :P

I think her number is from having each adult with a full time income. living off 50% of that. So no SAHM's in this figure I suspect.
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#101 of 118 Old 04-06-2009, 02:25 PM
 
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We DO live off 50% of our income. We made/ make MANY sacrifices. Now we are benefiting from it tremendously. We also pulled all our retirement savings out of the stock market 3 years ago.

We bought a house in a supposedly less than desirable neighborhood (housing projects within a mile) and don't buy anything unless we truly need it. His salary has gone up over the years so we do have some luxuries... satellite TV, occasional takeout, and recently some new clothes... but generally we are super frugal.
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#102 of 118 Old 04-06-2009, 02:31 PM
 
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Originally Posted by A&A View Post
yep. Suze Orman doesn't live in the real world.
When DH made 30k/ yr we lived on 20k. When his salary went up to 50k we lived off about 30k (we weren't saving aggressively at the time but we were making double/ triple payments on our mortgage). Now his salary is six figures but we have kept our expenses around 30-40k, so we actually live on less than half his salary.

Living on less than 20k a year is going to be difficult. We live in NYC which is a very high COL area. But we bought a cheap house before the real estate bubble and never took out a home equity loan or refinanced. We paid off the mortgage instead.

We live in a minority neighborhood near a housing project. When we were house hunting we quickly realized that houses in minority neighborhoods were half the cost of houses in white neighborhoods. The ugly truth is a lot of white families aren't willing to move to neighborhoods like mine but we have had no problems and have saved a ton of money.
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#103 of 118 Old 04-06-2009, 02:45 PM
 
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The ugly truth is a lot of white families aren't willing to move to neighborhoods like mine but we have had no problems and have saved a ton of money.
I'm sorry but this is HIGHLY offensive.

If half your income is a living wage then its a different story. Half of our income is not..esp after taxes.
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#104 of 118 Old 04-06-2009, 05:22 PM
 
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Before we both got laid off, we lived on about 55% or so of our income (good thing too! LOL!). The one thing that really bumped that over was when our van finally gave out last summer and we ended up with a new car payment.
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#105 of 118 Old 04-06-2009, 05:59 PM
 
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Originally Posted by avendesora View Post
We could, but we're choosing not to.

Obviously some things would change if we were laid off. We wouldn't have to pay childcare anymore, and that's not something that we can cut out any earlier than necesary.

I'd have to stop giving to charity. We'd have to stop giving gifts - most of which are useful things that my sisters (who have lower income than we do) really use.

My daughter will be going to private school next year. I feel very strongly about the quality of education available at this school. As long as we're still working, we'll keep sending her to that school. We'll pull her out when and if we were to actually be laid off.

I also consider myself fortunate to currently afford to support local organic farmers. I consider that a useful way to spend our income.

We have 3-6 mo in savings, depending on how you calculate it. I know we ought to have more, and we are building that, but I'm not going to negatively affect other people (like our charities and local farmers) in order to do that faster.

We are prepared to cut down our spending to that 50% mark if either of our jobs were to be lost, but we have no intention of doing that prematurely.

I'm not sure I'm buying this recommendation to cut back to 50%. I think she should more realistically recommend that you try to set your budget up so that you could go to 50% if you had to. But a lot of things change when not working. Lower gas bills, possible lower grocery bills, lower child care bills, etc.

Aven
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(Except our daughter is no where near ready for school)

We've discussed this because if either of us were to be laid off (which fortunately isn't likely), our income would be cut by 50%. We don't currently live on 50%, but we could if circumstances called for it.

Semi-crunchy Mama to three happy, healthy girls - T(6/08), A (12/10) and B (12/10)
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#106 of 118 Old 04-06-2009, 06:38 PM
 
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I know we can, because we are doing it now. We both used to work until I got fired.

We also bought this house with only one of us working, so we even qualified for the loan and everything.

Could we live on 50% of just DH's paycheck?

Live . . . barely . . . yes. We would have to cut the internet and anything else we could shave off the budget. I can also put my Discover card and student loan payments on hold, but it would be temporary at best. Somebody has to work full time at a minum of about $10/hour for us to make it comfortably. Half that would be less than minimum wage, so hopefully we will never be THAT bad off.
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#107 of 118 Old 04-06-2009, 06:49 PM
 
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Hmm, this is an interesting question for me. Because we have a kind of unique situation the answer to this isn't cut and dry for us. It would be very very difficult to cut our expenses to the point that they would only be half of what dh makes. But, we have what we call the "house account" that is set up for any housing expenses like repairs renovations, etc. So if things got tight, we could pay our mortgage out of that for a while (probably a couple of years if no major repairs came up), which means that we would be totally fine if dh's hours got cut or something and he was only making half of what he does now.

I haven't heard this advice directly, only read about it here, so I'm not sure of the context. I agree that if we're talking about severence packages and living off unemployment for a while, etc, then it would likely be necessary to slash your expenses in half or as much as possible. If the idea is cutting the budget in half in anticipation of the what-if's, I agree with others that have said maybe that's not that great of a goal. I mean, I think in times like these we should all know what our priorities are and what can be cut out of the budget immediately in case of job loss or something, but some people don't have anywhere left to cut, and even if you can cut back, as long as everything's paid and you're putting something into savings/retirement I don't really see it as necessary, unless you think there's a pretty good chance you'll be laid off and want to save aggressively to prepare or something.

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#108 of 118 Old 04-06-2009, 09:37 PM
 
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Not really. DH took a 20% paycut this year. We still are saving. I am not sure if you mean 50% gross or net. We put the max in to the 401K and IRA. That adds up to close to 20% our income. Then we put 10-20% in to savings each month and dh recently took a 20% paycut. So...if you are talking about living off of 50% of the next, probably not. 50% of the gross, that is pretty much what we are doing.
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#109 of 118 Old 04-06-2009, 11:22 PM
 
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No, we couldn't. It just wouldn't be possible for us, since we are already cutting corners everywhere we can.

Lauren
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#110 of 118 Old 04-07-2009, 12:16 AM
 
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If we paid off all our debt, and really cracked down, we probably could do it. However, I've lived off that amount of money before - with only one child - and it was brutal. I have no interest in going back to living like that. I'm totally for putting money away for the future, but not to the point where I can't enjoy anything in the now. I want to be able to buy my kids some strawberries without putting my budget in a tail spin. I want to be able to put the kids in swimming lessons. I want to be able to sing in my choir. I couldn't do any of those things on 50% of our income...not even close.

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#111 of 118 Old 04-07-2009, 12:19 AM
 
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Originally Posted by meowee View Post
Living on less than 20k a year is going to be difficult. We live in NYC which is a very high COL area. But we bought a cheap house before the real estate bubble and never took out a home equity loan or refinanced. We paid off the mortgage instead.
That definitely puts you in a good situation. We don't live in a good neighbourhood (it's not terrible, but it's not great). We pay over $17,000/year in rent. There's no way I could pay for food, clothing, etc. for a family of 5 on $3,000/year - just couldn't do it. Half our income would be more than that, but it would still be a huge undertaking, and not sustainable for more than a few months, or a year, at most.

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#112 of 118 Old 04-07-2009, 12:21 AM
 
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We are (not on purpose!), and no, we can't. At least not if we want to pay our mortgage and our bills and still eat.
Doesn't help that our mortgage is nearly half of DH's take-home pay; and it's still one of the lower mortgages for this area. We were lucky and got our house right before everything started going up like crazy 5 years ago.

Hoping things get better soon.
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#113 of 118 Old 04-07-2009, 12:58 PM
 
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Yes, we have done it before. It isn't pretty though, it was peanut butter for dinner most nights, but it was doable.

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#114 of 118 Old 04-07-2009, 01:23 PM
 
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If we paid off all of our debt we could, definitley. Until then we are just making it. Its amazing how much our debt squeezes out of take home income. My goal is to pay off all but the van loan this year. So hopefully by next year we will be living on half.
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#115 of 118 Old 04-07-2009, 05:09 PM
 
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My DP and I do bills separately, so for my portion (rent, cell phones, gym, car, student loans, insurance, sitter, gas, garbage, and groceries), I spend 75% and 25% goes into savings.

However... this is only because I generally work at least one day of overtime every two weeks. Without my overtime I'd be at closer to 100% without a lot I could cut out.

Thankfully I love my job and it doesn't appear that the overtime will dry up anytime soon. I am intentionally working OT so that I'll have the extra $$ to put in savings as I'm thinking of buying a house soon~ish...

So yes, I could do it. But man it would suck. :/

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#116 of 118 Old 04-07-2009, 06:28 PM
 
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I do not think I can but I would be up for the challange
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#117 of 118 Old 04-07-2009, 06:44 PM
 
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Our regular bills and food and gas are about 2/3 of DH's pay, the rest pays on debt and covers emergencies and maintenance stuff. There's nothing left to cut out unless we want to eat really lean and have no internet, or sell the house and rent a rundown 1BR apt in a high crime area. Not gonna sacrifice that far because she says so, sorry.

Our area is like 21% below avg cost of living and income is 200% of fed poverty level.
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#118 of 118 Old 04-07-2009, 07:10 PM
 
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I'm sure we could if we really had to, but thankfully at this point we do not. It would be very, very bare bones here if we did have to live on 50% of DH's income. We have no debt and live on about 75% of it for regular expenses. We are frugal in most areas, except that we feed our family mostly local organic food.

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