You don’t have to be earning less than $30k per year to find that it’s tough making ends meet. Money Magazine tells the story of a family that struggles even though their household income is more than $150,000 – well above the average for most American households.
How do you earn $150k and still struggle with money? This is bad, very bad.
So how does America’s Cheapest Family do it on less than a combined $35k annual income?
Firstly, they don’t have any debt. No credit cards. No mortgage (although they did have but it only took them 9 years to pay it off) and no car loans. This goes against the very fabric of western society. Just take a quick glance at Everybody Loves Your Money’s recent post citing that the US National savings rate has hit a negative 1%.
Secondly, they spend minimally. They shop once a month and buy up big – well, as big as you can get for less than $400, even though they’re feeding a family of six. They keep a large freezer to store much of their shopping and buy unbranded products.
They don’t care much for extravagant labels buying predominantly from thrift stores and find extreme ways to save their money.
Could you do it?
I attend a camp that happens each year where students are given a set budget and have to navigate their way around the city over 3 days. The aim is to achieve a set of tasks but also spend the least amount of money. It’s incredible how creative these 16 year olds become when they’re faced with this challenge.
Part of being frugal is limiting yourself. Live within your means and rid yourself of any form of debt as quick as possible so that you can start going forward again.