@Ryan Pozzi
Frugality has been very good to us. We're moving down to around $33K a year for a couple with no kids. So first of all, it's a LOT easier when you're married and both agree that this is what you want.
Secondly, the expenses you need to go hardest after are typically not related to things that you would necessarily see as daily lifestyle pick-me-ups. The two largest expenses of the American household are housing costs and transportation. Do you have a car payment, like 90% of Americans? Well, you should go after that a lot harder than you should go after the latte you buy down at the corner ever Friday morning. Where do you live?
Since I'm something of the perfect example of that, let me tell you where and how I was living before I realized how much money I was throwing away. This isn't the first time on BP. When my mother and I moved here from Europe, my brother decided that the best place for my mother was a townhouse condo in a very nice part of my area. So we sold our house in Europe and moved in, buying the condo outright. At the time, the condo payment was something around $160/month. You go snow removal, trash removal, cable, exterior maintenance, and sewage expenses for that amount. You got access to tennis courts and a private pool. It seemed like a reasonable deal.
The years passed, my mother died, I got married, my wife bought my brother out, and I have still NEVER used to the pool. I have never played a game of tennis in my life. The condo is very far from my wife's work. I telecommute to my current W2 job, so it doesn't matter where I live. The TV in my house hasn't worked for almost five years now. The snow removal turned out to be a joke and not worth it -- they only do something when it gets heavy and then they do it grudgingly. Sewage costs have risen and risen because the whole development's underground infrastructure is falling apart. The HOA assessment is now up to $400/month, and I own this place outright. There was a "special assessment" last year of $2000 to repave the roads of the development.
Only an idiot would live here, my wife and I have long understood. This place eats money and gives us very little. What it did do for us starting out was give us a place that we could borrow money on easily, and we took full advantage of that. We have been working hard to GTFO since that realization, and we're succeeding, flexing our frugality muscles intelligently.
To get back to the car payment, my wife and I bought three RAV4s in six years, switching them out like furnace filters. Once we got on the financial freedom wagon, we finished paying off the last one, found a mechanic we liked, and now we're car-payment free.
The third biggest line item in the American household budget is food. We live within easy driving distance of two Aldis, and now do most of our food shopping there instead of the local overpriced supermarket chain and the even more outrageously overpriced Whole Foods a few minutes away. We have finally accepted that the only way we're going to get reasonably good food in our area for a reasonable price is to cook it ourselves, after years of trying new restaurants and being disappointed. About the only eating out we still do is a once-a-month outing to a local Chinese buffet. This, for us, has been a major lifestyle change that took time and work to get right, as well as a bit of investment in cooking equipment. But it's saved us quite a bit of money.
Credit cards! 60% of Americans pay interest on a balance every month. Is that you? If so, STOP! That's a wonderful gift you're giving yourself.
You can quickly cut expenses down to the bone and only eat dried ramen and drink coffee from ground you've run water through three times. That's what most people think about when they think about frugality. But getting to the cheapest possible food is not what you should be focusing primarily on, and doing it down to ramen and coffee is not going to be fun for you, as you pointed out. Look at your housing situation first, then your transportation, then go after low-hanging fruit like vampire-like outstanding personal credit, then think about how to change your food budget intelligently. Frugality takes time and analysis when it's done well, and it's done with a steady hand on your household budget.
What we're working on to finally get out of this housing situation is moving to a large duplex in another part of town and renting out the upstairs. I bought the duplex very cheaply and have been renovating it steady for quite some time now -- it would have been wiser to invest in something else or to carry out this reno differently, but the something else was an opportunity that did not come along and I was working within my skill set on the reno. When we're in the duplex, and this townhouse is sold off and our home equity loans are paid off, and our rental business continues to grow, my estimates indicate that we'll be down $42K a year from the lifestyle we once had, in the paid-off condo with the car payment and the out-of-control living expenses. Yes, we were spending $75K/year back in the day on some really, really didn't need.
If you want to understand how this process works better, I can't recommend @Scott Trench's book Set for Life and the BP Money Podcast enough. I only managed to read that pretty late in the game, however. The book that changed a lot of things for us, really did resonate with is, was Thomas J. Stanley's The Millionaire Next Door, which Scott frequently mentions is high among his own personal favorite finance books. Since reading that book, I've read everything Stanley wrote before he died, and it's all based around the same topic. His daughter has recently published an update on Stanley's research that'a also worth reading.
I am most definitely happier now with a wife I never but never fight about money with and a household budget we understand every single last little thing about, than we were back in the days when we were wondering where-oh-where $75K a month was going and why it was so hard...so very hard...just impossibly hard to get ahead with our W2 income muzzled as a wealth-building tool. We've also been pretty lucky (if not to say incredibly lucky) in our real estate investments at the same time, pumping our money into investments that makes money for us instead of liabilities that aren't good for our financial and personal well-being.
It takes time. But it's worth it. It's not easy, but every little win reinforces the last one.
