This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
A journalist friend of mine, Jeremy Nolais at the Metro (free daily) in Calgary, decided that he and his girlfriend would live solely off two minimum wage incomes for a month. They wanted to find out if the minimum wage was really survivable in Calgary. You can read his experiences at http://www.metronews.ca/calgary/blog/874283.
It turns out that living on less isn’t so bad. It simply requires a different way of thinking about acquiring the things you need. In Jeremy’s case, after his regular bills and commitments, he had about $100 each week for needs like food, fuel and entertainment. Partway through the month-long experiment, his work bag broke. So he put out the call on Twitter asking if anyone could donate a new one. This solved a problem for me, since I had a like-new shoulder bag in my basement that I didn’t know what to do with, and Jeremy appreciated not having to buy one.
Other situations can also be addressed without money. Instead of going out to eat at a fancy restaurant, a breakfast at IKEA costs just $1. Jeremy didn’t mention it, but there are cartoons to watch, too. 🙂 Instead of going to the barber, he had his girlfriend cut his hair. I do this too, but I refuse to impose the same rigour on my wife; she goes to an experienced hair stylist. A walk through the park can make an enjoyable date.
Jeremy found that a deliberate approach to grocery shopping was needed. First, eat something so that you’re not shopping hungry. Then, take a list to avoid impulse items; keeping a running tally of the cost also helped. He also found that it’s possible to buy almost everything on sale; if it’s not on sale, it can wait until the next trip. In this way, they spent just under $65 on food for two people for two weeks. I would add that food is one category where quality counts, so I buy the most fresh, least processed food I can, the prepare it myself (which I enjoy doing). I am still able to feed my family of five for around $500 per month. We very rarely eat out, but when we do, it’s generally hamburgers (which the kids love) at a place like Dairy Queen or Macdonald’s.
Jeremy also found that conversations about money became a part of their daily routine. It wasn’t necessarily comfortable, but it was necessary. He heard that most couples never discuss money until it becomes a problem. Personally, I don’t understand why money is a taboo subject, but it’s true that people seem uncomfortable talking about it. When it comes to the success that my wife and I have experienced, talking about money and deciding together what we’re willing to use money for has been a necessary component. Jeremy and his girlfriend gave themselves an allowance, about $40 each, which allowed them to spend on something they enjoyed without having to debate the cost with each other. This is something I highly recommend.
In the end, Jeremy was amazed that he and his girlfriend had managed to save $3000 over the course of the month (since they actually earn more than minimum wage). That’s the payoff. And that’s how I achieved financial independence. I didn’t live on minimum wage, but I lived on what I was already comfortable with, and didn’t allow my spending to increase in proportion with my income. When my income was very healthy, I still lived on a similar monthly spending amount as early in my career. This left lots of money to be used to pay down my mortgage (which was completed in seven years) and save toward my future.
Jeremy said that it was bearable, knowing that there was a definite end in sight. However, if he could keep it up for 15 years, he would have $1 million, by my estimate. What do you think of Jeremy’s experiment? Have you ever done this? Could you stick with it for 15 years in order to have $1 million?