Three years ago we were forced to cut deep. We had been living beyond our means since leaving grad school. The recession nuked our biggest clients and our over-leveraged financial construct crashed as a result. We retreated to safe ground in a hurry while letters from creditors poured into our mailbox.  We had to cut costs, find ways to earn again, or declare bankruptcy.  With a shrinking economy and a negative cash flow, making more money became a tremendous challenge. And so we cut costs-with a meat cleaver.

We moved from a three-bedroom house to a one-bedroom apartment with no washer and dryer. We got rid of three bedrooms worth of “stuff,” including excess clothes, which we sold for cash. We traded a high-maintenance import car for an American truck. We spent on nothing that wasn't vital for survival, and if we did then it was probably just twice, and it cost 50 cents.

Today we enjoy living below our means. It's a huge source of serenity. Only there's a problem with this model, and it has to do with our means: they are still very limited.

Living like students

Right now our balanced budget allows us to rent a one-bedroom apartment in a mixed-income neighborhood of a mid-sized city in the Southwest.  It's convenient, close to many services, walkable, and quite trendy to boot (for the town, anyway). In spite of all of these advantages, rent is very low.  That's because we live in an apartment that's usually rented to students.

This is the cheapest rent we've ever paid as a couple, but the place is decent and well maintained. The landlords are friendly and responsible, not predatory slumlords, and in this we're very lucky. Our immediate neighbors are nice people, mostly in grad school or recently graduated. However, this isn't the best location for people over thirty.