How to save half your salary and still wear Prada

Living on half your salary could be a necessity: paying down debt, student loans, or hospital bills. Retirement, vacation homes, or the Orient Express may be just the incentive you need to save more.  Regardless of your reason, living on half your salary is much easier than you think.  All it requires is a commitment and disciple.  Easier said than done, but discipline brings empowerment and taking control of what you spend (or even what you eat) is always worth it!

For those of you who know me, debt free is the way I like to be.  It's not always possible 100% of the time, but making better choices is always possible all of the time.  Every step you take towards being free of debt reduces stress on you, your marriage, and your life.  The more disposable cash you have after you pay your bills, the more you feel as if you are rolling in money.  Whether you choose to dispose of the extra cash or save it, is all up to you.

First things first, write down what you bring home after all of your deductions, taxes, etc. (after you have maxed out all of your retirement or stock options....this only hurts once).  Divide by 2, that's your number. A third of that number goes toward your mortgage, rent or living arrangement (for us, even utilities).  Utilities and car payment are a third.  Food and spending money are the last third with food being the bigger share.  Here's where it hurts.  If your mortgage totals more, sell your house.  If your utilities or your car is way over budget, cut them.  Cable is a luxury, smart phones are toys (when we all have internet), and new cars lose value the day you drive them off the lot. Regardless of how painful this sounds, there is no greater feeling than freedom. 

In case you don't know me well, I do practice what I preach.  When Justin and I married, we payed off huge loan, payed off all of his student loans, and a year later paid cash for a used truck. Fortunately, he had no credit card debt and paid it off every month.  I haven't had credit card debt since I was 26.  Credit cards do serve a purpose and I can't live without it (especially in Europe where debit cards don't exist). However, if I don't have the cash, I don't buy it.  It took a lot of convincing and explaining, especially in regards to "low" interest. We saved every penny of bonuses and salary increases for the last three years.  It's the only way would we even consider taking half the salary to live in Europe and pay more in taxes. Nest eggs give you security and give you freedom.   Yes, we did sell our house.  Yes, we do not own cars. That is a personal choice.  Every household here typically has one car. Oh and now,Justin is completely on board and loves this lifestyle. 

Most people deal with savings (and disposable cash) in the exact opposite manner.  They ask themselves how much can I possibly afford on a house.  Then, they spend that AND 10% more on a house they love.  I'm all about enjoying what you have and value in life, but not when it makes you stressed every month.  Then, they subtract rent/mortgage and think of every possible thing to spend more money. Sometimes, they go beyond that monthly paycheck and spending even more - credit.  If there is anything left, they save it (maybe).

 Once you make the choices to spend only half and you act to start lowering your bills, it's liberating.  Imagine having half your salary to pay off your debt.  You can pay off everything in a short amount of time and quickly get to the fun stuff.  Next, take a year to save.  Then, when you have no debt and a nest egg, you can begin imaging all of the possibilities for your disposable cash.  Here's when Prada steps on stage or maybe a new boat.  Whatever suits your fancy as long as you pay cash for it!

I'm not the first person to mention cost per wear, but how many times do you actually think about it when you are shopping. I think about it a lot and I plan my shopping trips just like I plan my budget. Classic pieces that get frequent use deserve designer prices.  Trendy pieces = H&M or Old Navy... I call it disposable clothing.  It is only meant to last the season. Not everything in my wardrobe is expensive, but I have saved enough to buy what I want, when I want, IF it will get worn a lot.  Winter boots, go all out.  As soon as I make it back to Frankfurt, I'm buying a Ferragamo down coat.  Winter here lasts forever and it's cold! If I wear something everyday, I buy to last.  I spend a lot on jeans because I wear them everyday (sahm).  It's all about you and your lifestyle.  It doesn't mean you will have money to spend a lot on everything or even a brand new wardrobe, but disposable cash will give you money to spend.  Especially if you keep in mind, it's more about saving.

If you work very hard to eat nutritional food, when your cheat meal comes you don't necessarily go crazy.  You worked too hard to undo your entire week.  Discipline and control are interesting concepts.  The more you practice them, the better you get at them.  Oh wait, isn't that everything in life? 

None of these thoughts are my ideas! Everything I learned about saving and spending I learned from my parents. Well, everything but the Prada...

a side note to Justin to see if you are still reading my blogs...
Here's what I want for my birthday:
http://fashion.telegraph.co.uk/article/TMG3478528/Prada-luggage-makes-it-all-the-way-to-Australia.html