The Impact of Living Simply
- 1. How to Live Simply A Comparison of Two Families
- 2. The Jones vs. The Simpletons
- 3. The Lowdown Jones ? College Degrees ? Married at age 25 ? Both currently work ? Total annual income: $48,000 ? Monthly Income = $4,000 Simpletons ? College Degrees ? Married at age 25 ? Both currently work ? Total annual income: $48,000 ? Monthly Income = $4,000
- 4. The Houses Jones ? House Cost $200,000 ? 20% Down = $40,000 ? Mortgage- $160,000 ? 5% Rate for 30 Yrs. ? Bought House 1 year into marriage ? Monthly Payment = $858.91 ? Not including taxes & ins. Simpletons ? House Cost $125,000 ? 20% Down = $25,000 ? Mortgage - $100,000 ? 5% Rate for 30 Yrs. ? Bought House 3 years into marriage ? Monthly Payment = $536.82 ? Not including taxes & ins.
- 5. Transportation Jones ? Bought 2 new cars every 5 years ? 2 cars at $15k each = $30k ? $30k at 6% for 5 years ? $579.98 total monthly payment Simpletons ? Bought 2 used cars every 5 years ? 2 cars at $7k each = $14k ? $14k at 6% for 5 years ? $264 total monthly payment * Please note that I’m not advocating for car payments here, simply giving a comparison.
- 6. Eating Out Jones ? Dine out 8 times per month ? 4 times at an expensive restaurant ? Avg. meal = $100 ? 2 times at moderate ? Avg. meal = $50 ? 2 times at modest ? Avg. meal = $25 ? Total cost per month = $550 Simpletons ? Dine out 4 times per month ? 1 expensive restaurant = $100 ? 1 moderate = $50 ? 2 modest ($25 each) = $50 ? Total cost per month = $200
- 7. Vacations Jones ? One expensive vacation per year ? Average cost per year = $4,500 ? $4,500/12 = $375 per month Simpletons ? Two vacations per year ? One with family = $1500 ? One simple one= $500 ? $2,000/12 = $166.67 per month
- 8. Entertainment Jones ? Expanded Cable and Internet Package = $150 ? 2 Movies Per Month = $30 ? Golf 2x Per Month = $100 ? Total Monthly = $280 Simpletons ? Simple Cable or No cable & Internet Package = $50 ? 2 Movie Rentals per month = $5 ? Golf 1x per month = $50 ? Total Monthly = $105
- 9. Shopping Jones ? Clothing $50 ? Groceries - $500 ? Items for House - $50 ? Miscellaneous personal items = $200 ? Total Monthly = $700 Simpletons ? Clothing $20 ? Groceries - $300 ? Items for House - $20 ? Miscellaneous personal items = $60 ? Total Monthly = $400
- 10. The Comparison Joneses ? House: $858.91 ? Transportation:$579.9 8 ? Eating Out: $550 ? Vacations:$375 ? Entertainment:$280 ? Shopping:$300 Simpletons ? House: $536.82 ? Transportation:$264 ? Eating Out: $200 ? Vacations:$166.67 ? Entertainment:$105 ? Shopping:$400
- 11. The Comparison ? Simpletons Spend Less Each Month: ? House: $322.09 Less ? Transportation:$315.98 Less ? Eating Out: $350 Less ? Vacations:$208.33 Less ? Entertainment:$175 Less ? Shopping:$300 Less Total = $1,671.40
- 12. The Potential Impact ? $1,721.40 Additional margin ? Save/Invest $1,000 per month ? At 6% in 10 years = $162K ? Paid an additional $200 towards mortgage each month ? Home is paid off in 17 years (13 years earlier) ? Gave rest to their church- $500 ? In 10 years they’ve given over $60,000 ? Doesn’t include paying cash for cars or education savings ? All by the age of 41
- 13. Savings Growth Over 30 Years $0.00 $200,000.00 $400,000.00 $600,000.00 $800,000.00 $1,000,000.00 $1,200,000.00 Year1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 *Plus a Paid Off House
- 14. The Key? It’s the small daily decisions to say no that allow you to live simply and stay free for the long haul.
- 15. Learn strategies like this and others by taking the Realign Class. Click HERE to start today.