In Jim Yeager’s book, The Ultimate Cheapskate’s Road Map to True Riches, he states that earlier in his marriage he had it in his mind that if he made $40,000/year, he would be “set.” He states that while he had a mortgage payment, he and his wife were actually living off of this $40,000/year comfortably and saving the rest of their combined income. Now that the mortgage is paid off, they live on approximately $30,000/year.
My question to you is, how much could you comfortably live on?
For us, we are currently living on approximately $45,000/year. We had 3 debts at the beginning of 2010 that totaled $25,120.85. We currently owe $14,377.10 and moving in the right direction! Once our debts are paid off (freeing up $800/month in payments!), I am pretty confident we could live off of $35,000/year. Once the mortgage is paid off, $30,000 should be a comfortable number for us. To clarify, I am referring to $30,000/year gross, not net.
How would we do it? I hate to admit this, but our debt is our biggest money leach. Second would be our utilities (though we are trying to cut back.) Third would be our mortgage & property tax (we do not have an escrow account). Fourth would be “the farm.”
What are your “money leaches?”