Life was pretty simple in college. Wake up, eat, go to class, eat again, go to class, eat again, homework, friends, video games, and then bed. Maybe there were a few more things in between, but in general it really was that simple. Life was easy, life was also fun, and aside from thinking about tuition, life was cheap! There were hardly any expenses beyond food, drink, and entertainment — and all were minimal.
We are used to this lifestyle. Perhaps we don’t know any differently yet, but we enjoy it too. Therefore, one of the most basic principles that my wife and have I adopted in these months right out of college is to continue living like a college student. Our idea is to take this principle and make it a big influence on our budget. We are already used to a lower income lifestyle — and lower consumption. And although we are now making the big bucks with our first real jobs, we did not want to become the typical American family by always spending what they made. That isn’t the path for us.
There are too many stories in the news about people living paycheck-to-paycheck and just making ends meet. It’s sad — and I have real empathy for them. I also don’t want to become like them. So this feels like our first real opportunity to break out of that mold and go a different way. As I’ve been reading several personal finance books, rental property books, and online resources, I keep hearing a phrase repeated over-and-over too: “I wish we would have started a lot younger.” Reading this countless times, it clicked in my head that we have a real chance to do what all these other people had only wished to be able to do. Save and invest as much as possible while young. We’re young, right? Yes! The path to achieving this is to keep things simple — to continue living like a college student for a while longer.
The thought is to at least keep up this idea until we have our own real home. Not a duplex, but our first single family home. Until then we will use this opportunity to keep expenses low and start saving as much as possible. And perhaps we will continue it longer, or as long as we can stand it. We aren’t going to live in squalor, but we aren’t going to go out and buy every “new thing” as soon as it comes out. That means no new flat-panel plasma TV. Our 32″ tube TV is just fine. No new car. Our current ones are just fine. We certainly didn’t need these things in college to enjoy life, so we don’t need new (or upgraded) things now.
With this principle at our side, our monthly budgets have started to look really good. This is the most money we’ve ever had — and we continue to earn good paychecks each and every month. It has been more-than-enough to cover our basic necessities, several fun items, and plenty for savings. But we’re trying to prevent “excess” in any categories based on our “live like a college student” principle. We’re keeping it simple. I haven’t shared our budget yet, but I intend to dedicate a future post to it and will go into each category with much more detail. The quick summary is our gross income is $8,493/month and our savings is $4,042/month. That puts our overall savings rate at 47.5%. The point is we are putting this principle into action now, and I hope our future selves will be glad we did.