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Living on Less in the US

I’ve decided to get up and leave and live in Spain. That’s one way that I’ve managed to lower my lifestyle expenses. Since I can earn my money from US customers, I get to still enjoy a high location-independent income and spend in a cheap economy.

But that’s a drastic way of living an affordable lifestyle. My recent time in Los Angeles taught me that there it’s possible to live on less anywhere in the US.

The biggest eyeopener was that a busy lifestyle or one that’s overly convenient can drain your cash flow; all the money you’ll earn, no matter how high, it can all easily go towards paying for your commute, food, entertainment, and all the other traditional expense categories.

Living on Less in the US

When you’re going at it alone it’s tough to make these decisions. If you’re a single person and have to juggle all of these financial decisions, it’s draining.

And if you’re the breadwinner in the family, you might be making all of the financial decisions alone. That’s tough – it’s hard enough to keep your focus on your career.

So, to live on less in the US you really have to do a lot of planning. Sure, you have to give up some things, but our lives sometimes become so busy that we make automated decisions. We don’t really choose our spending categories, they are just conveniences which crept into our lives.

Even in an expensive city like Los Angeles, it’s possible to drastically cut your spending. It’s possible to live on far less than the average Angelino.

Cost of Working

There is a cost to being employed full-time. The advantage is that you’re maximizing your income based on some arbitrary 40-hour work-week.

First of all, who said that my body and mind can handle the same workload as yours? Also, my work style is entirely different from yours – what drains me may not drain you. Our efforts and attention to detail might be quite different.

Somehow we’ve all decided to work full-time. Fine. And for those who aren’t working full-time, your admin work, your call schedule, all of it adds up to far more than 40 hours a week.

Don’t forget your commuting time. Your time needed to arrange your work schedule – all the planning and picking up shifts and juggling the different schedulers from different employers.

You’ll also arrange everything around your work schedule. You’ll arrange your travel, your living locale, your choice of transportation, your clothing, and dining choices around your work.

We live our lives based on our work schedule. We don’t work around our life schedule. Maybe this is a subtlety to you, but give it a decade or two and you’ll know what I mean.

Planning Your Spending

If you can be really intentional with your spending, you can keep so much more of your money. And you can have so much more free time. Which means that you can live your life more… whatever that means to you.

Now, if you’re saving all your money and putting it in a fucking checking account – dude, what a waste! Banks intentionally design such conveniences because they are banking on our laziness and confusion, hoping we’ll park a ton of cash in low-yield accounts.

There is no reason for a high-income medical professional to be earning less than 4% a year on the majority of their savings.

So, before planning your spending, make sure that you have a plan with the money you’ll save. Don’t make banks richers, don’t squander wealth.

Next, sit down with a pencil and paper and decide on your top 5 categories which should be:

  1. housing
  2. food
  3. transportation
  4. health
  5. debt

Any more categories than this and you’re risking inflating your household spending. A lean budget is an ideal way to live on less in the US.

Intentional Spending

To live on less in the US you have to be quite intentional with your spending. Convenience is built all around us to help us part with our money.

Sadly, most of the shit that’s advertised to us is useless garbage which ends up in landfills. From cars to how homes are constructed to electronic equipment, planned obsolescence has taken a dump on our environment and flushed our budgets down with it.

A time will come when you can be a little less worried about spending. You can loosen the purse strings and focus on more important things in life.

But in your wealth building phase, in your wealth accumulation phase, your savings and your spending should take the majority of your focus. You don’t want to end up poor. You don’t want to be in debt 10 years from now. I don’t see the freedom in that.

The Impossible Budget

Everything I’m able to do today is because I was able to hack my spending. I spent the majority of my working career in San Diego, CA. A rather expensive place.

I had a nearly 80% savings rate for a long time, even though many said that that kind of spending would decrease my quality of life.

#1. Housing

Everyone said it’s impossible for me to spend less than $1,500 on rent there. I paid $825.

Some of us can move back in with parents. Maybe we can find roommates. Or we can buy a house and rent out spare rooms. So many ways to achieve a lot housing budget.

As for living in a studio, it’s not the end of the world. Bedrooms are overrated. When your extra $1,000 a month goes towards paying off your student loans, you’ll appreciate this point.

#2. Food

Groceries aren’t expensive. Beans, rice, fruits, and veggies. For a 170 lbs dude like myself I would need maybe $200 in the US to get the 2,000 calories I need per day.

As for dining out, if that’s the only way you can see your friends, dunno, I’d argue that you might need new friends. But, to be more PC about this, you can always meet them and skip the food and just have a drink.

It’s the dining out, eating at work, eating on the run, the drinks, and the dessert and appetizer which zaps the food budget.

Worried about offending your homies, tell them you have severe food allergies and are on a strict elimination diet.

#3. Transportation

Even if you’re spending $30 per day on Uber, I would bet that it’s going to be cheaper than you owning a car.

The reality is that you don’t need to use Uber daily. You can live closer to work. You can take public transportation. You can bum a ride with friends who value your company and prefer to own a car.

One less car on the road is also good for the environment. It’s less risk that you’ll cause a car accident. And not having a car is much better for your health.

#4. Health

Health is not the same as health insurance. Sure, you can go pay for health insurance but know that the US medical system is designed around disease, not health.

Want to stay healthy, you have to prevent disease. Our modern societies are already designed to be quite disease free when it comes to infectious shit. Your taxes go towards the sewer system and public health which ensures that.

You can pay cash for most things which would commonly cost 10x if billed under your insurance. Sure, if you’re mauled by a tiger or run over by a race car – you’re toast. But that might be the case regardless of insurance.

#5. Debt

What’s the biggest expense physicians have? Nope, you’re wrong, it’s taxes. What’s the 2nd biggest expense? It’s usually debt.

If you can pay off all of your debt, especially the student loan debt, you’ll enjoy the kind of freedom that’s unrivaled. And you’ll free up so much more cash to invest or spend on more meaningful things.

So that’s it, that concludes my recipe for living on less in the US. It might seem like a pipe dream but people have done it and they have managed to hack a far better quality of life.

It’s not something your financial advisor will teach you. It’s not something your parents will teach you. And our educational system, well, not a chance.

I believe that if you want to have the most opportunities in life you must maximize your resources. Time is a resource and money is a resource – so are friends and health. Most of it is completely within our control as citizen of one of the most progressive countries in the world. I don’t want to waste that.

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