November 15, 2010

Living Like No One Else

Nathan and I have completed 10 weeks of Dave Ramsey's 13-week Financial Peace University. Nathan has gone through the class before and we listened to all of the audio CD's together before we were married, yet we're both still learning a lot going through the material again. The major theme of FPU is "Live like no one else so later you can live like no one else." If you live below your means in the short term so you can you save and invest, you will build wealth and be able to enjoy life and give freely. Debt is dumb!

This certainly isn't the way that the majority of Americans want to live. Erica at Newlyweds on A Budget wrote in a criticism of Dave Ramsey,
"But what’s the point of saving and living like a pauper if I’m only going to be old when I get to enjoy it? What good will it do me to have $5 million dollars when I’m 80 if I’ll be using a walker to get around and wearing diapers?"
Well, you can certainly enjoy the benefits of following Dave's teachings well before age 80. After Crystal at Money Saving Mom and her husband went through Financial Peace University, they had a paradigm shift in their view of money that allowed them to pay 100% down for their first home. Talk about financial peace!

Just how counter-cultural are Nathan and I in our spending habits? We definitely haven't lowered our standard of living to the absolute minimum in order to pay off debt and start saving, but I would say we make more sacrifices than the average couple with our income.

Ways we're living like no one else:
  • Over 40% of our take-home pay goes towards paying off debt. 
  • I work hard at couponing to keep our grocery budget as low as possible.
  • We don't eat out for lunch most days. I take a lunch to work and Nathan goes home.
  • We have only basic cable channels - no TLC or HGTV for me.
  • I very rarely spend more than $15 on an article of clothing and don't buy clothes that often.

Ways we aren't so much living like no one else:
  • I haven't cut up my credit card. I pay it off every month, but I'm still using it.
  • We don't live on beans and rice. We eat good meat!
  • We're using student loans to pay for Nathan's graduate school.
  • We go on dates to nice restaurants (not fast food) once or twice a month.
  • I get my hair cut at a salon every eight weeks. (This one kind of balances out though since I went more than two years without getting it cut.)
I guess you could say we're living fairly differently than most people, but we aren't as frugal as we could be. In the year or so we have left until we have to start paying off the student loans, we plan to pay off all other debt and save up an emergency fund of 3-6 months' expenses. We don't want to buy a house until we've paid off the student loans and can make at least a 20% down payment. Yes, this will take years, especially since we want to have children, but that's okay.

What do you think of Dave Ramesy? Are you living like no one else?


  1. Hmm, I like that quote. Derek and I have never realy listened to Dave Ramsey or done his program, but we agree with alot of what he says - my parents raised us kids encouraging to avoid as much debt as possible. We use our credit card and pay it off at the end of every month - it's just a little more practical for buying gas and stuff like that, and then we get the rewards from paying it off regularly too. :-) Other than that we have no debt right now though except our house, and we're really grateful for that!

  2. I thoroughly enjoy listening to Dave Ramsey (so much so that I listen to his podcasts 3 times a week... when I'm at work). Two of my siblings are on his plan... and it sure does work!
    Yes - definitely living like no one else right now. I am going through college debt free, living in the dorms (because my scholarship pays for it) even though many of my fellow majors are living off campus, I'm without a meal plan to pinch pennies, and I work 20 hours a week. I also go out to eat with friends, on average, once a month. This is how I'm living like no one else for now.
    Austin is taking classes part time in hopes of getting instate tuition for the remainder of his time here. Aviation is an expensive degree ($6800 for ONE class... and that's not including tuition!), but he works 40+ hours a week delivering pizzas (like Dave Ramsey suggests for fast cash!) and at an elementary school (via workstudy). He should be able to go this semester (his most expensive) debt free, which will hopefully be a snowball effect that he/we will be able to continue through the remainder of his college. He also doesn't have a meal plan, but he does live off campus with 4 other guys (making his rent+utilities 1/2 of what a dorm cost is, since he doesn't have a scholarship to cover that).
    We don't go to fancy restaurants. The last time we ate out for a special occasion was our 7 month celebration, back in May. We did eat Chick-fil-a in October, but with free coupons. Our combined food budget (we shop together and cook meals together) is $20/week.
    After we get married, we've already agreed to not owning a tv. Unfortunately, we will have to have two cars for the first year of marriage until I complete my internship. After that, we're hoping to downsize to one car. We will live in a one bedroom apt not far from campus. My income will go to pay for his school (since mine will be basically free at that point), and we will live off his income. As soon as he graduates, we'll attack the debt and begin saving... either for an adoption or for a house. We shall see!
    (And that was a really long comment... Sorry!)

  3. I agree, so many people are clueless about saving. They just buy junk on debt like clueless consumer sheep. Me and Marijo try to live on 40% of our income with about 20% each going to taxes, tithing and investments. We're blessed to have a large income so it doesn't hurt much.
    The other thing I think people do is buy houses to quickly. It's a good investment if you are going to be there awhile but otherwise it's a waste of valuable opportunity costs to money you could have had invested.



Let me know your thoughts on this. I love reading all my comments!