When I started Crash Dad, I knew that one of the posts I wanted to do was talking about the value of living modestly. Today I saw a thread on this Dad Blogger Facebook group I recently joined that felt like the perfect prompt to write about this subject.
During college, I took an accounting class with the incomparable Norm Nemrow (more on his story in future posts). The class was almost all video recordings except for 8 in person classes. In just a few of those classes, Norm had more impact on me and my future life (financial and otherwise) than pretty much any other professor ever.
One of the principles he taught me in these few in person classes was the value of living modestly. Since we were college students, he framed it in a really interesting way. He told us that as college students we had something incredibly valuable: we could live on nothing! He then suggested that when we graduated from college and got our first job with a real paycheck that we not go crazy and grow our spending to meet what we were making. Sure, we didn’t have to keep eating Ramen noodles every day, but we shouldn’t change our lifestyle to meet our new salary.
The key concept he was teaching us was to live modestly!
The concept of living modestly has literally transformed my life in so many good ways. The value of living modestly is great in at least two key ways. First, when you live modestly, you are able to save your excess earnings. There’s an amazing security that comes with having a chunk of change in the bank. At first, those savings will be there for you when emergencies arise (car breaks down, A/C breaks, water heater dies, visits to the doctor, etc). Those unexpected expenses come, but over time you can build up a savings that handles those emergencies while still saving for the future.
The second benefit to living modestly is you don’t need as much money to live. I would have never been able to quit my job if our lifestyle had grown to match our salary. We would have had no savings, and my blogs would not have been making enough income for me to quit my day job without a drastic reduction in how we lived. Instead, because we lived modestly, my blogs covered 75% of what we needed to live. Our savings covered the other 25% we needed to live which meant we had ~15 months for me to grow the blogs to cover 100% of what we needed to live. I’ll do a future post that dives into these numbers more, but I would not be a full time blogger if we didn’t choose to live modestly. At least not without drastically changing our lifestyle. Instead, we were able to quit my day job and become a full time blogger with really no change to our lifestyle.
The freedom of job flexibility is something that can’t be understated. I’m not saying you have to quit your job and become an entrepreneur like me. However, living modestly might mean that you could change from a job that pays well but sucks to one that pays enough but is great. Options like this make life so much better.
Unfortunately, the opposite is far too common. Instead of living modestly, most people are living beyond their means. The impact of living beyond your means is the exact opposite of living modestly. Don’t get sucked into the trap. I know it’s tempting, but it’s a choice you can make that will change your life for good or bad.
If you can’t tell, I’m really passionate about this topic. You can be sure I’ll be writing about the benefits of living modestly a lot more in the future. I have a lot more examples of how it’s changed our lives.
What do you think of the concept of living modestly?