Living on less vs. living well

As you may have noticed, my regular monthly expenses since I moved have dropped dramatically. (And a good thing too, since so did my income; between the lower salary, and aggressively contributing 25% of gross to my 403(b), my take-home pay is only about 55% of what it was. On the other hand, I don't have to pay off student loans with it -- I'm not really living on all that much less than I was before.)

Some of this was really intentional: I gave myself a food budget and have been mostly sticking to it, resisting temptation to buy vast quantities of cheese and take myself out for Vietnamese food when I'm too tired to cook.

Some of it, though, was partly just luck. It's cheaper to register, insure, and maintain my car here. And housing is really inexpensive. I made one big decision, though, that's helped keep it super low: I decided to live with a roommate. I've been paying $300 in rent plus half the electric bill, which has meant that in some months my housing expenses were only in the $325 range. With winter coming on, my December rent/utilities will be up to $350 (gasp!)

However, I needed to find a new roommate for the spring semester -- it's a long story, mostly not bad, just kind of a pain. I went and saw five places, after writing emails to about a dozen people. The first three were totally unworkable, for different reasons, but one of them was tempting, because it would have been very cheap -- just $275 a month including everything, with no electric bill. (The dealbreaker problem there was no real kitchen -- they have a toaster oven, microwave, and mini-fridge, but since a lot of my budget-balancing involves heavy cooking, I didn't think I could handle it. There were other problems in that situation too, though.)

I ended up going with a room that's $400, all-inclusive. So in the winter, it won't be much more than I would have paid here, although an extra $50 a month does add up...still, it feels like quibbling when I compare it to anything I ever paid in New York. My lowest rent there (to share a room) was $600, and that was nearly fifteen years ago, and in a neighborhood a long commute from my job. My highest rent was -- holy Jesus -- $1900, though that was when I was paying the whole rent on a 2-bedroom by myself for a few months when I didn't have a roommate. (This is why I had student loans, folks: I should never have taken that particular apartment. Moment of panic. I should talk about why I did it sometime.)

OK, but this is all a really long way of talking my way around to commenting on the posts about living on 50% of your income (or less) that J. Money and Cait have recently made. In particular, Cait does a thought experiment: What if we'd been told, all our lives, that what we should do was to live on as little as possible and save the rest?

For me, the answer is: I'd have a lot more money. I wasn't encouraged to be a spendthrift or anything, but nobody ever really talked to me about saving in a more than theoretical way. My parents have done pretty well, largely because their salaries got very respectable as they got older and, as many have noted, the period during which they've invested in their retirement accounts has been a very good one for the markets by historical standards. But they've never had a budget and I'm pretty sure have never said things like "I'm going to save 10% of my income" (or 20% or whatever.) They just have income, spend, and save what they don't use.

I always knew saving was something I needed to do at some point, after student loans and grad school, or for certain goals (like when I wanted to quit my first job out of college, I saved like mad for six months so I had enough to live on while I interned.) But the idea that you should save a percentage of whatever came in, even if your overall income was low, was totally new to me, aged 35, when I first started to look into money management earlier this year. Let alone the idea that you should live on as little as possible and bank the rest! In this case, right now, that would have meant I should've taken the $275 option, not the $400 one.

$400 is still a great rent/utilities cost, by American standards, and the room and house are much nicer than the two cheaper options I saw (and also nicer than the two more expensive options I saw!) But part of me is probably going to continue to have a nagging feeling that I should have tried to save the $125/month and live in the $275 place.... Honestly, I'd probably just have ended up spending the savings on getting takeout though. Or at least a big chunk of them. "No real kitchen" is my dealbreaker, it seems.