Escape the 9 to 5 is a series talking about why and how I am preparing to leave my 9 to 5 job. Given the fact that I am not financially independent, and yet I already wanted to leave my 9 to 5. In order to make this work, it really comes down to lifestyle design. Living below your means being one of the most important.
The lifestyle and habits we are used to
Live in a big house with white picket fence and drive nice cars. These are the two most common things that people look up to. However, people that find themselves having a hard time with money often times have too much house and car. Have you heard of the term “$30,000 millionaire?” It describes people who drives nice cars, live in fancy places and eat out at nice places all the time. Basically they live like millionaires but they over spend and sometime max out their credit cards.
Most Americans are spenders. The average savings rate for Americans are only about 5%. Which means there’s a big chunk of the population that lives pay check to pay check. When people lost their jobs, which happened in 2008, many people were no longer able to afford their monthly payment on their homes, which leads to foreclosures and economic recessions.
We are constantly bombarded with advertisements to keep up with the Jones all the time. How many car commercials do you see a day? What about home improvements and all the cool gadgets?
The question to ask is, do you really need to drive a new car every 2-5 years? There are so many people who spend up to 40% of their income on housing. (Housing affordability is an issue in many cities, but that’s a separate topic). In addition to other bills, that really doesn’t leave a lot of room for other things.
Living below your means is not for everyone
There’s nothing wrong if you spend every last dime on your check living life to the fullest. Heck, I could get used to driving a very nice car and living in a big house. Eating at famous restaurants with fancy cocktails all the time could certainly be great too.
But at the end of the day, I chose my freedom being the number one priority.
- able to live on my own terms and pursue my passions
- not having to sit at a desk working 9 to 5 at a job I don’t feel passionate about
- able to spend time making more meaningful connections and experiences.
How I Live below my means
I bought a primary home for myself simple because I got fed up of my crazy neighbor downstairs. Thus I wanted a place where I would have no one above or below me. Due to my lifestyle, I didn’t want to move away to the suburb as I liked to be in the city. Plus the homes in the suburb were quite expensive.
Most importantly, I didn’t want to incur lifestyle inflation by living in a big house. To be honest, I wouldn’t even know what to do with the space if I had a 2000+ square foot house.
It was a win win win. I get to be in the city which is close to everything, no neighbors above or below me, and a fairly low monthly payment on my mortgage. Low monthly payments also allows me to save more money and invest elsewhere.
Older (yet very reliable) car
I definitely thought about buying a new car. With all the new features and sleek looks, what’s not to like?
However, when I looked into how much it would cost to buy a new car versus my old 4Runner that’s completed paid off, the answer was apparent. Not only would I incur a new monthly payment of $250-$400, my insurance cost would at at least tripled. This would bring a total of additional payment of $400-$550 a month! I would much rather spend that money traveling.
Plus the more I drive my 4Runner, the more sentimental value it brings me. I have so much memory, both good and bad, all happened in this vehicle: The trip to the smoky mountain when I first met my girlfriend Sara; when I carried a 40-foot ladder on the top of the SUV for my summer house painting job; when I turned on 4-whee-drive to rescue Sara in the snow are just few of the many memories.
Eat out less
I have cut the amount of times eating out over the past few years.
When I first started going on company-paid trips, I was like a fat kid in the candy story, eating and trying everything restaurants I could. But after a while, it became less fun and I ended up a bit overweight.
It also helps that I enjoy cooking. Not only is it way healthier, it is also cheaper.
You may think that I eat or drink out very little, but that’s not necessarily the case. I still eat out on a regular basis, just not everyday. Restaurants are no longer just places where I go and fill up my stomach. Instead, I treat it as an experience every time. When you eat out less, it makes it feel more special when you do go out rather than somewhere you just go a grab a bite. Just like going to an upscale restaurant, which I still do occasionally.
The best restaurants are hole-in-the-wall, mom-and-pop shops in my opinion. I love trying ethnic foods. You know you are at the right spot if you are the only foreigner there. These are the places that you can have an even more intimate experience of the cuisine as well as culture. The best part? They typically don’t cost too much.
Travel doesn’t have to be expensive. When you plan your travel well, your dollars could actually go very far.
Travel hacking is part of my equation. Travel hacking is essentially the art of collecting as many frequent flyer miles, hotel points and others to fund part if not all of your travels. Mainly through credit card signup bonuses, and it is more common in the US. Over the last few years I have accumulated a fair amount of points that cut down my travel expenses significantly.
I also utilize Airbnb and hostel when I travel. Airbnb is a very intimate way of learning a new culture, especially if you can interact with the host: My host in Croatia greeted me with his home made wine; the Mormon mom in Seattle who’s married to a Japanese man, cooked me a full Japanese breakfast with their wild caught salmon; I had my first mead from the host in Austin that he grew in his garden. As you can see, the list goes on and on. Hostel is a great way of meeting new friends while traveling. The best part? You will now have a place to stay when you visit their country!
Focus on experiences rather material goods
I believe we live in moments. Great memory will live with you forever rather than material goods. More and more I am focusing on experiencing new things rather than buying whole bunch of stuff I don’t need.
Born and raised in the huge city of Taipei, I was never truly exposed to a lot of nature until I moved to the US. One of the most memorable experiences being my girlfriend Sara’s brother Chris took me to this fishing trip in the middle of nowhere Kentucky. We had to trek through freezing water that was as high as our waist before arriving at this beautiful cave deep in the woods. Not only did I catch my first fish ever, the whole experience was something I’ve never had before.
The benefits of living below your means
More money saved means more options
I obviously am taking the extreme by leaving my 9 to 5. But simply by living below your means and save more money, it would allow you to have more options.
That one special present you’ve always wanted to buy your wife or kids? The family vacation you’ve been putting off due to money? The business you’ve always wanted to start? Whatever it is, you may now have the option to do it.
Having gone through many layoffs in my careers, I saw many people were so stressed because they live pay check to pay check. It is especially worse if they have a family with kids to feed. I personally think at a minimum everyone should have that rainy day fund. The peace of mind it provides is simply priceless.
You can focus on what matters more
In the consumer-driven lifestyle we live in today, we are constantly hunting for the next thing to buy. We are always bombarded by advertisements telling us that the car or fashion we have is outdated and we need new ones. When we are always keeping up with the Joneses and comparing ourselves to one another, we would never have enough. It is a constant race that never stops.
When you are always working to keep up with your lifestyle that doesn’t make you necessarily happy, then the vicious circle will never end. By identifying the part of your lifestyle that makes you happy, and living below your means on the part that doesn’t make you happy, you may find yourself focusing on things that actually matter more to you.
The YOLO ( you only live once) attitude is an interesting one. In my case, I knew that I would regret it if I didn’t leave my 9 to 5 and explore what the world has to offer. Since I only live once, there are so many things I want to do and experience and I don’t want to let time continue to slip by me. During this process, I am able to see what matters more to me. For instance, I want to travel more and have more meaningful relationships with my friends and family rather than being caught up in the rat race.
Simpler and Happier Life
I came across the Minimalists recently. The Minimalists was born out of the fact that they simply weren’t happy, even though they have achieved everything that’s supposed to make them happy. i.e. six-figure salaries, luxury cars and big houses. By removing the excess things in their lives, they were able to make room to focus on what matters more to them. Which leads to a simpler and happier life.
The reason I mentioned the Minimalists is that I found similarities with living below your means. Minimalism doesn’t mean getting rid of everything and having less and less things. As a matter of fact, minimalism focuses on making room for more: “more time, more passion, more experiences, more growth, more contribution, more contentment.” as the Minimalists put it.
I am fortunate enough to have everything I need. Struggling to come up with a birthday present for me, Sara actually donated $50 to an animal shelter as my birthday present which made me very happy. Having a dog of my own, the fact that the $50 donation would be able to help more animals in need, makes me happier than anything she could’ve bought me.
Living below your means doesn’t have to be boring. As a matter of fact, it helps me to identify what matters more to me and enables me to make more meaningful relationships.
The added benefits of living below your means helped me to build up some financial cushions that is helping me to finally take the leap of faith of leaving corporate America.
YOLO, what is it going to be for you? Comment below.