On Living Below Our Means, Reducing Bills, And Buying A House

Bride Gives Water To Homeless
Today, MrsHM and I locked in our interest rate at 3.125% for a 10 year mortgage with a 20% down-payment. In late May, we will move in and begin our monthly payments. MrsHM has a full-time gig, and we’ve decided that my work will be flexible, consisting of part-time jobs. We were pre-approved for a $250,000+ mortgage.

Instead, we bought a $135,000 townhouse after looking at all sorts of properties. We saw old homes, new homes, townhomes and single-family homes. One day, our real estate agent commented, “I don’t think you guys know what you want.”

Wrong. We just wanted to see what was out there. We knew exactly what we wanted:

– To live WAY below our means
– Something we could easily rent out
– At least 3 bedrooms
– A spacious kitchen
– Outdoor space for gardening
– Little or no grass to mow (What’s the point? I’d rather plant vegetable and fruit gardens!)
– Laminate or hardwood floors
– 2 bathrooms would be best (We ended up with 1 full bath and two half baths)

When I told my dad about considering a 30 year mortgage (4.0%), then a 15 (3.375%) and finally settling on a 10 year, he suggested that we stick with the longer term so we’d have the flexibility of paying it off later just in case ‘something happens.’ He also mentioned that interest rates are so low that it would be even better to invest money in mutual funds that pay a 10% return over the long run. He had some great points, and in fact, investing in something that will give us a 10% return may give us more money. But since we have a sizable emergency fund, for me what’s most important is to own the house as soon as possible. I know I am debt-averse to a fault. I don’t ever want to be in debt–for anything. Praise God, we are debt-free and in a comfortable position to save for our children and to help others.

Before we got married, MrsHM and I agreed that we would do our best to live below our means. Thankfully, both of us aren’t big spenders. We don’t have Starbucks addictions either. Sure, there is the occasional splurge, but generally speaking we only buy what we know we will use, and try to purchase used goods if possible. MrsHM came back a couple days ago with about 10 pieces of clothing from the local thrift shop. There is only one thing I don’t compromise on: buying mostly local/organic food. MrsHM is ambivalent on the issue and since I’ve made the case for our health, she is happy to comply (except she buys non-organic tomatoes, for some reason. I can’t wait to grow our own!). Outside of our needs (retirement, WarriorPrincess’ education, etc.), I would say our top priorities are charity and travel.

Sure, we could’ve bought that completely new, beautiful $260,000 house we walked into the other day, but why? To fill it with junk? Since we live in a college town it makes a whole lot more sense (for us) to buy two $130,000 houses and rent one out (and eventually rent the other one out too). We’ll be working towards building another down-payment and buying another rentable townhouse soon. The goal is to invest in assets that will pay for our luxuries– a lesson learned from Rich Dad, Poor Dad.

I’ve also become a bit obsessed with cutting down our utility bills and other costs of living. Here are a few examples:

1. Since MrsHM’s iPhone plan is covered by work, I decided to give up my cell phone and stick with a free land line provided by this gadget. I own a pay-as-you-go phone that stays deactivated unless I am traveling alone. Since we live in a small college town with super-friendly people (NEVER AGAIN, BIG CITY!), and it takes a maximum of 7 minutes to get anywhere, I’ve decided there is no excuse for spending $70-$80/month on a smartphone.

2. Comcast, our internet service provider, sucks. When they decided to mess with me, I fought back and won 4 months of free internet service, and $19.99/month service for the next year after that. I’ll explain how in a new post. With our free cell phone and free landline, our telecommunications bill comes to $20/month.

3. As soon as we move into our new place, I’ll definitely be putting in the new energy efficient light bulbs. Maybe we’ll even splurge and get these (if the price goes down!).

4. Our car has 135,000 miles on it. We will drive it until it dies, despite the urge to buy a brand-spanking new Hyundai Elantra. (It’s so pretty!)

5.  No TV = No Cable Bill.  We watch whatever we need to on Hulu, borrow movies from the library, and spend time playing board games.

That’s how we cut our costs and live below our means, how about you?  Any tips? Tricks?  Do you track your expenses?  If so, how?  Comment!

 Photo: A humble bride remembers others on the day before her wedding.


  1. bajidc says:

    get books from the library instead of buying them
    listen to the radio (online or otherwise) instead of buying cds
    don’t waste veggies; make soup
    don’t waste bread; make croutons
    accept any and all hand-me-downs and then pass them along too
    go to the dentist once a year; contacts for a month (not for everyone, but *shrug*)
    cut ap’s hair myself and I only go to a salon about once/twice a year
    buy generic when it’s just as good as name-brand
    walk. everywhere. or else metro/bus. (BIG CITY, ZINDABAD!)

  2. hijabman says:

    baji– Re: library. Yup, we don’t buy books either. And I’ve almost given away all of mine, heh.

    Great ideas :) Except the big city one.

  3. Shaanu says:

    This isn’t a hurrah-I-made-it story. It’s just an alhamdulillah-we-manage (as of now) story: We are by no means big savers, but we live frugally. I would never cite our practices as exemplary but we don’t use cable; we tend not to buy retail (thrifting!) except when we hit the sales which is rare, and we don’t have designer addictions; we don’t have hobbies that entail much $$ (this isn’t so great, but oh well); we travel rarely despite angst; we live in a small town too AND we are not near a big city (so don’t brag) 😉 we do eat out quite a bit, but our fine dining = Red Lobster and mostly =Panera. We do have coffee addictions, sadly, but that’s about it. And then after 3-4 yrs of living frugally, we save up and spend it all on a $6k set of tickets to see the parents. We dont have emergency funds. We don’t have retirement/college funds. Neither of us has high-paying jobs, and neither of us is confident about her/his employment future. We are not in a position to buy a house anytime soon. We are in a position of soon to be underemployed or unemployed. We often wonder if we made the right career decisions in this economy.

    In other words, your charitable fund is good to know about.

  4. Salika says:

    Great proposals, I save on travel by expertly churning credit cards (see frugal travel guy), and have gotten to travel a whole bunch for free, both domestically and abroad. It’s taken a few years to build up the miles, but it was worth it if you only spend what you have and use autopay to pay the entire amount off every month.

  5. David says:

    Wow, that price seems unbelievable to us over here! :) What is the average wage there? I know the housing system tanked and so on, but how has that affected the job situation?

    We bought a place late last year for $430,000 (!!) with a 17% deposit, and that was one of the cheapest houses we could find that met all our (very minimal) criteria. We had to move 15 mins further out from the city, amongst other things, as that 15mins added at least $100,000 to the asking price – which is simply crazy!

    I’m really happy to see that we’re not the only ones trying to live below our means in this time where a person with 1 full-time income in Australia can somehow be offered a mortgage of close to $600,000 over 30 years. Studies here have shown that many people here can have up to 70% of their *combined* wages being eaten by their mortgage, which is terrible! We’re lucky enough that 1 income can essentially pay all of our bills right now (besides the odd 1 or 2), and the other is largely being saved.

    We’re lucky to have a good patch of garden which already had a lemon tree in place – we have so many lemons now we don’t know what to do with them. We’ve also got a large basil plant, and put in some mint and parsley which are thriving like wildfire. Considering a small pack of each sells for around $3 and lasts only a few servings, we’re very lucky. We also want to put in some vegetables and/or fruit once we’ve tended the soil more.

    When looking for a place, we looked at townhouses as well as actual houses, and found that the prices were largely the same (in the suburbs we were looking, anyway), so opted for the latter due to the larger land size and space. The grass etc. I don’t mind, we used it on top of the soil as compost and to keep the weeds at bay. :)

    We made sure to use energy efficient bulbs as soon as we moved in, and have LED bulbs in our living room and kitchen. We also switch off all plugs unless using things (besides fridge etc. of course), leaving nothing on standby, which reduces our energy outlay even further. I was enquiring recently about getting solar panels and the electricity company were shocked at our little consumption. The average household here consumes 24-25kW/h per day, apparently, and we only consume just under 8kW/h (which is still too much and costly for my liking). I don’t know how much sun you get there, but that might also be an option for you. Right now it’s still a huge outlay for us (around $1,500 or more), but if we go for it, then the solar should pay itself off over around 3 years and be good for hopefully at least 10-15.

    We also do all the usual stuff like buying generic foods and non-label clothes etc. And I use public transport as much as possible, as we’re around 15 mins walk from a train station. We don’t “eat out” much, and when we do, it usually entails eating something like Lebanese food or Malay/Thai etc., nothing with a major outlay.

    Our money is hard earned and deserves to be spent on what we *want* to spend it on, not thrown away!

  6. S. says:

    David’s right -you are v blessed w your housing prices. Australia’s are astronomical. Our v humble 15 year old 3bedroom Place with crappy carpet, no AC and sharing a block with 2 other town houses (also ages from the city) is valued at $500,000. God bless America 😉

  7. hijabman says:

    S./David: Definitely blessed with housing prices. We are in southwest Virginia and don’t live in a major city. Another reason I won’t ever move to a big city again. Like I said we got the small townhouse for 135K. It was just appraised for 140K. Generally, our town was not hit very hard by the housing crash– if anything it just leveled off.

    In our town, “As of the census of 2010, there were 42,620 people, 15,342 households, and 4,777 families residing in the town, of which 23,895, or 60%, were college students. The median household income was $22,513 and the median income for a family was $51,810 in 2010.” – Wikipedia We are above the median.

    David, it’s great you can save one income and use the other for your needs/wants.

    Salika, I don’t feel like I have the stamina to keep jumping from credit card to credit card to get the bonuses– so I just stick w/ a United card, and we put everything on that, maintaining a pretty good balance. A good portion of our air travel is covered. I’ve also been told you can just call cc companies and ask them to waive the yearly fee (if any)

    Shaanu: ouch re: the 6K to see the parents. Does either your or hubs work offer a matching 401K style retirement fund? One thing that helped me, re saving was to start at 1% (so you really don’t feel it) then creep to 2% etc. You’re always welcome here btw.. :)

  8. Ziyad says:

    Kroger gas points are the best way to save in bburg for me. They have gift cards for everything in the world from Target to Red lobster to Amazon and when you buy a giftcard from Kroger, you get 4x the gas points, so if you’re gonna spend $25 anyways, then you get 100 pts=10cents/gallon off gas. And if you plan it right and use the giftcards on everything you buy, you get tons of discount, last month I got all my gas for less than $3.00 a gallon :)

  9. hijabman says:

    Ziyad! Are you sure its 4x the gas points? And does it apply to kroger gift cards? If so, I’d buy a couple kroger gift cards to cover the cost of my grocery bill the entire month :)

  10. Amal says:

    Salams! I do the gift card/gas points thing from the Kroger here in bburg too. I looked it up a while ago to see if points accumulate on Kroger gift cards and this is what they say on their website:

    Points accumulate in every department except fuel, Kroger gift cards, postage stamps, lottery tickets, Western Union, money orders, transit passes, fees, phone activation, sales tax, Ticketmaster, alcohol, tobacco, and any products prohibited by law.

    How awesome would it be to get the points on fuel! haha.

    Also, the 4x the gas points is during certain times. Usually around holidays and they’ll last for about a month. I usually stock up on gift cards I know I’ll use during those times. When its not the 4x the gas points, its double, which is still pretty good!

  11. Abdul Hadi says:

    As Salamu Alaikum,

    Im not sure if i missed the point here, and Im not sure If i totally missed the point here, but it interest and “APR” haraam and constituted as Riba?

  12. hijabman says:

    I don’t believe interest is forbidden. I believe usury/loan sharking is more of an appropriate term for riba

  13. Abdul Hadi says:

    Well stated argument, can say I agree with the point the brother was making, but nevertheless I respect his take, and your take. I believe this boils down to the “dollar” currency as well as the term ‘the disadvantaged.’ Seems to me if you aren’t the system, you fall under the term of ‘disadvantaged’ because 99% of us can’t pay 100k flat cash for a home, but who says a home really cost, at the end of the payments 500K? or even that initial 100k? And also to play around with the dollar, and to say, its value decreases, so interest in this sense is nothing but fair trade is something i would also argue. The Prophet (saws) said it will come a time when everyone is in riba. and if someone says I am not, then surely the dust of riba will affect him.


    this brother states… “The first and most important step is something you can do right where you’re sitting now. Make the intention. In your heart believe that gold and silver are real money, and that flat money is a userous fraud. The next step is to educate yourself and other Muslims around you about these important subjects. Share this information with others. Copy it and distribute it. Locate and read The Gold Dinar and Silver Dirham: Islam and the Future of Money by Imran N. Hosein”

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