He asked if we were doing something wrong because it seemed like all our friends and colleagues had more money than us. I pointed out that we were the only one in our circle with a kid and we’re basically living on one income (I only work part-time so I can stay home with our son).

Fast forward to a month or so later when we got really serious about the house buying prospect and started crunching the numbers to see how much we had saved for a down payment. After seeing the figures, he was like, “well that explains why we have so much less spending money – all our money is in that savings account!.”

As it is, we closed on our (gorgeous, large enough, and great value) house today, and we still have way more than a year’s worth of mortgage payments in the bank as a cushion should he lose his job.

I’m not jealous of my friends and/or family members who have plasma TVs and Lexus SUVs. Those are their choices, and those things flat out don’t interest me. Some of those same people act like my husband and I are well off because we’ve taken a couple of big trips abroad. We aren’t rich in the least, but we don’t have a big house payment, and we don’t buy new cars every two years or the latest electronics. We like to spend our money traveling. Why would I be jealous when we’re doing the things that matter most to us?

I think you have to be a bit cold to feel smug or to feel any kind of joy from someone else’s financial distress. But then, being vengeful isn’t really my thing. You might feel pretty bad for rejoicing in someone else’s misfortune if you knew the whole story, and we never know what happens in someone else’s house.

It’s cheap and easy – none of the retirees care about what they drive or wear – they’ve already had a successful life.

I grew up in a house almost 4x the size of what I now live in with my family of 4.

I almost wanted to cry when reviewing my late mother’s records on what “the big house” cost her in terms of her income and savings – it would have been nice to have those funds when she got sick.

I can attest to this one because my husband is a lawyer, which “everyone knows” = rich. Trouble is, there are articles every year like “Top NY Firms Now Starting New Associates at $120K” or whatever. The top percentage (5%, maybe) of law school grads get the big-firm-6-figure jobs (and usually check their life at the door). The rest vary tremendously, depending on location, public or private practice, size of firm, and quality of life. My husband’s first job out of what is considered a very good law school paid 35K (1996).

There isn’t really any topping out, so if they’re any good, most lawyers will get to a good living sooner or later, but the title does *not* mean instant money (as many find out after borrowing heavily for it – but that’s another rant).

Actual comment from co-worker (we were both assistants at one of the big firms) right after I got married: “What are you doing still working?”

I’m not sure where that came from. We DO have a bigger house– six bedrooms– because we have a substially larger family– eight children, hopefully with more to come. My car is a seven-year-old passenger van with over 100K miles on it. My husband’s car is newer, but only because his 70K mile car was totalled by a drunk one night while parked at the curb. We replaced it with another used car. We take one vacation a year, which consists of buying plane tickets (the big expense) and then relying on family hospitality for a place to sleep. The kids go to public school. Meanwhile the neighbors have one work-horse car parked in their driveway, and one nice-looking luxury car. No idea what they do about vacations. Yet the neighbors decided we were “rich” so they shouldn’t have to pay for the fence we shared…

I’m not normally a vindictive person but I was secretly very pleased that they had run into financial difficulty. I had to pay more for the other house than I had originally budgeted and spent weekends doing most of the work on it myself because I didn’t have enough to do anything more than basic repairs.

Now I’ve got that off my chest, I too have done cleaning for people who looked like they had it all from the outside but were spending sleepless nights dodging creditors. One of the best things about frugality is being able to sleep at night. All I have to do now is make sure I don’t become too smug.

Today I earn about half of what I did previously, but I am saving far, far more money. On top of that, I find it much easier to resist spending on luxuries. I am sure the fact that the area I am living in is much more modest. And I’m sure the fact that many of the people I spend time with aren’t spending money hand over fist helps, but again the most fundamental change is in me, and my views on what is a “want” and what is a “need”.

I’m sure this book is very good at pointing out how the people around us can influence our habits to some degree, but we have to remember that ultimately we are still the ones responsible for our decisions on when to buy and when to put off a purchase, or how much to put towards savings.

Not everyone who owns a BMW or a Lexus is leasing it or even has a car payment. Not everyone who buys a great house is one paycheck away from losing it all. Conversely not every plumber or electrician driving a beat up truck is a closet millionaire (I would think most probably can’t afford a new truck).

I think there are plenty of folks who do okay even though they don’t live particularly frugally and get along just fine while being Average Accumulators of Wealth. Will they get rich or reach financial independence over the long haul? Probably not, though they’ll manage. Will they likely always be carrying some amount of debt? Yeah, but never really enough for it to become an overriding burden in their lives. Could they face serious finacial consequenses if something happens (job loss, hospitalization, etc.)? Sure, but then couldn’t many of us, despite our plans?

I place the bulk of my neighbors in that category, average wealth accumulators most of their lives carrying some credit card debt, possibly a car loan or two, and their mortgages, who will either get the frugal bug in their 50’s or with the kids out of the house really be able to stash the cash for the next decade or so as they feel retirement looming. They may need to work until they’re in their late 60’s or early 70’s, but more than likely the final sprint in the end will give them enough that they’ll be able to muddle through at some happy medium of retirement.

I think the biggest issue is, and always has been, focusing on defining what you want and your overall path to get there. If the neighbors grass is greener, you need to be honest with yourself if it’s because you’ve been spending most of your time checking them all out rather than tending to your own lawn.

On the other hand, if you know that buying the worst house on an expensive block is much better for your equity, you’ll be riding the added value all the way to the bank, if you are content with driving your 10 year-old beat up pick-up truck in the midst of your neighbors’ BMWs.

We lived in Santa Barbara, CA for several years, which means everyone instantly assumes you’re rich. What they don’t see is that nearly everyone under 30 lives with 4-8 housemates (often in bunk beds) and all that most people lead very simple lives because they spend so much to be there. It’s a whole city of “wealthy neighborhood” assumptions by outsiders.

And this whole thing reminds me of a commercial that I keep hearing on the radio from a local car dealership. It goes something like, “Imagine pulling up to your favorite restaurant in a new Honda or Toyota. ..NNNNow imagine what it would be like to pull up in a brand new Mercedes Benz.” I must not be their demographic, because the shallow assumptions about keeping up that they make tend to make me a little nauseous.