Several years ago I was sitting with a bunch of friends at a restaurant. Dinner was winding down and we were all stuffed.
My friend next to me asked me how I made so much money. I always had the money for everything, she said, and she was always struggling.
The bill came and everyone went down the list adding up their stuff. Before tax and tip mine was around $7. Hers was $30, more than four times what mine was.
She had two margaritas, an entree which she didn't finish, and an appetizer. I had three burritos a la carte, chips that were free, and water. I used to get the burrito plate, but then I realized that for less money I could get three burritos instead of two and not have the extra rice and salad that I didn't want.
That's why I always have money. I don't spend it stupidly.
For those who don't want to read this whole thing, here's the short version:
Figure out what you really want to do, and then figure out the absolute cheapest way to do it. Be creative. Think outside the box.
That doesn't mean to compromise on what you want to do, by the way. I'm not saying that. I mean to figure out what you REALLY want and going after that. Not the packaged "this is the good life" you see on TV.
I like the idea of a zero cost lifestyle. You save money up front to set yourself up, and then you make enough residual income that your lifestyle is never threatened no matter what.
Here are my monthly costs for when I'm in Austin:
That's about all I can think of. Added up that's $1070 per month. I eat perfect food that I love, live in the exact spot that I want to live, and I spend my free time doing what I want to do. And I'm taking care of myself so that I'm healthy and I will be frozen when I die.
That's not to say that I don't do a lot more than that (like travel all the time), but these are my base costs to be happy and comfortable.
If I was making half a million a year I wouldn't change much. I'd still be in the RV and I'd still be eating in the same restaurant every day. I'd spend more money on crazy adventures, but I'm not exactly lacking those now.
I make money in a bunch of different ways. A few hundred for writing for Gadling, another couple hundred for ads on this site, a few hundred for Conversion Doubler, a little bit more for affiliate links, and maybe a thousand or so for my book. Let's say I make $1800 total.
That's not a lot of money. In fact, I think that's below the poverty line but I'm not sure. I'm pretty sure that everyone reading this has the capacity to make that much money, and almost all of you probably make more than that now.
But... that covers my base expenses comfortably. And it's built into my lifestyle. I'm going to write whether I get paid for it or not. My book is all automated at this point. So you could say that the net cost of my base lifestyle is nothing.
That means that I can spend nearly 100% of my time doing whatever I want. I can work on other businesses to make more than a paltry $1800. I can take a month off and sit by the creek if I want.
And look what happens when I travel. I don't pay the $150 for gas or the $20 for water. I make $700 more than I need for my base expenses. That means that I have $970 for airfare and renting an apartment (or staying with a friend for part or all of the time), and I already have $750 for food once I get there and $50 for museum tickets or whatever.
I don't actually keep track of my budget like this. I've saved up money so if I'm off a little bit in either direction it doesn't matter, and I'm disciplined enough to not blow money on stupid things.
Getting here wasn't free, either, and I realize that. I had to spend around $20k to get the RV I really wanted and get it wired up with solar. But still, there are much cheaper RVs to be had that would be totally serviceable. I had the money to spare and knew that the one I bought would retain it's value well.
And of course, an RV isn't the only way to work all this out. It's just the one that appealed to me so I figured out the right way to do it.
I had to come up with ways to make my life generate income. I chose (or drifted towards) writing and such, but there are a billion other ways to do it.
The real appeal of the zero cost lifestyle is that it is incredibly liberating. You get your time back. You don't have to worry about getting fired or rent rates going up. Sure my book sales could dry up or something like that, but in worst case emergency mode I just cook for myself and spend $600 less per month.
Even if you aren't ready or interested in going hog wild like me, there are a lot of intermediate steps you can take to move in this direction. Here are a few ideas:
Check out the 4 Hour Work Week Dreamline Excel Spreadsheet version 2.0:
how on EARTH do you spend $750/mo on food??
I'm pretty broke, and this is one of my ways to find cheaper living, my current food budget is $50-100/mo. I don't eat great, but ok...lots of salads and fresh fruit. Even if I bought all organic, I couldn't spend $750 on groceries if I wanted to! Just curious.
Funny I ran into your page. My daughter and gradnson and I have been talking about buying an RV and parking it a campsite. Sort of a cheap version of a vacation home for poor folk. Then it evolved into a dream long held--just touring the country. My income is much less than your's, but I mae it stretch. Thanks for the postings. Gives me a lot to think about--and a nice dose of inspiration,
You have completely changed my world view as to what i thought was possible for living. I've always wondered how to cut the cost of rent and stuff, and never thought about an RV till now. I'd love to talk to you some more in detail about finding work as a writer and what it took to fully transition into it. Please when you get a chance shoot me an email, I'd greatly appreciate it.
(if the case happens that you get a million requests like these, i understand no biggie)
After hanging out with you guys, I came back to Canada and came to a similar conclusion. I went pretty badly over budget in Thailand, and decided I had to budget big time. So I started doing it, and realized that I was MISSING NOTHING.
Most of the time, I was just spending money to be lazy. I was paying extra money to eat out or buy prepackaged food - yet I LIKE COOKING. And then I spent more money because I was bored and "didn't have anything to do".
Anyway.... I was actually so inspired that I registered "brokeasslifestyle.com" on a whim. I think that was probably a waste of $10... :)
I'd really like to see how you'd live life with a LISO and kids. Though I suppose you wouldn't do that, as a LISO and kids would be impediments to the life you want to lead (and its a valid argument).
But your stated costs of "rent" and "power" are disingenuous. Sure, you don't pay recurring costs for those things, but you had upfront costs that you're glossing over.
I agree with you though. The yuppie suburban life usually gets me down. Why does my house have two TVs with digital cable package and two TiVos? Cause we're yuppies, and suckers for convenience. (Just last week the kid carped at me for removing HBO because it was $30 extra a month.) And we're probably the least egregious yuppies out there -- but yuppies nonetheless. We need to live in a big place. We need to have cable and TVs and etc. We have to have Starbucks three plus times a weekend. We have to make and eat (or waste) too much food. Because that's the Goal of Life, right? Sigh...
2. Start writing about things youÃ¢â‚¬â„¢re an expert in. This will develop your writing skills and start building up a body of work that you could use for a book in the future. If youÃ¢â‚¬â„¢re a good writer, start writing for a blog you like.
This part of the post just gave me a huge idea for something I can write about. I have spent a lot of time on MoxieLifestyle.net writing about travelling and what not, but I only do it twice a year and I'm not really an expert in it.
What I am an expert in is electronics, I sell them for a living. I sense a new electronics blog coming soon...
Great article. I live in Philadelphia with a budget of $900 a month and my house is in a center city, great neighborhood. I make art w/ very cheap materials. Also, if u make no money - in the state of PA you are able to get free health insurance. I eat well, I dress well and I ride a bike, so I'm skinny too. T.V. SUCKS!
Interesting post. Since I'm trying to create a sustainable, fairly passive income myself (and need to figure out whether I can live off it), this was great to read.
However, I think leaving health insurance off the list makes for an inaccurate figure. Sure, you healthy lifestyle will save you from a lot of sickness(but certainly not all), but it doesn't make you invunerable to accidents. Get hit by a car, and you can say hello to a lifestime of debt and medical bills.
This also assumes that you don't have a family, but since that is a lifestyle choice in itself, thats perfectly excusable.
I myself I am shooting for a $10,000 a month passive income by this time next year. More than I need for sure, but savings like that at a young age will help me out greatly.
After a long day in the sun at the 2010 Crossfit Games in LA, I've flopped into my Aeron in the RV, which is parked near my old stomping grounds in Hollywood. I found an amazing parking spot right near the Farmer's Market that has no street cleaning and is always empty at night. You'd be surprised how important things like street cleaning become when you live in an RV. Anyway, I don't have enough energy left to pull myself out of my chair, so it's time to tally up the survey results from a couple weeks ago and share what I learned.
This one was totally unexpected. Around a third of the people who responded said that they want more Life Nomadic. To be totally honest, I didn't know people were that interested in it. The site, when it was separate, never developed the same sort of following this site has.
Saving money is my hobby. I'm relatively good at it, but am not among the best. This is usually the case with things I enjoy. Never world class - but top 10% of comparable people. (This doesn't mean I'm in the top 10% of saving money, but probably among the top 10% of people who've spent a similar amount of time and effort saving money). Blame my scanner nature.
Score the big wins
As with any skill, I find it easy to save big on a few items, and basically ignore 80% of nominal "categories" or "items".
Think about your monthly budget, or enter it into a spreadsheet or tracking web app if you must (really?). For me, the biggest wins are extremely obvious. I spend 25% of my post-tax paycheck on rent. I spend 15% on my car. I save around 50%.
I could be saving 50% more if I spent absolutely nothing. Of those 50%, 80% are spent on rent and car. Meaning any optimization I do on any other bill is probably a waste of time. The difference of me not spending a dime on food versus just buying whatever I feel like (which I do currently) is less than a quarter of my rent. Moving to a slightly cheaper place would make up for huge splurging in any other category like phone, magazines, groceries, or restaurants.