Would you benefit from doing exactly what you have described above regardless of your wife’s employment status? A year ago, I was making way more than I needed to live and I played around with the idea of pretending I was unemployed and making all of the drastic cuts that would come along with that and banking a ton of money. But, in the end, I did not do it. Now, I have just bought a house and cannot even consider playing that game.

My big breakthrough was the use of laddered cds, suggested by a friend who had worked as a bank-teller. The nature of the cd forced savings, we could ladder them so we would have enough money coming due when we thought we would need it. At the time, interest rates were pretty nice so we were getting a nice predictable (albeit tiny) income just from having money.

We also were good at picking up free food (thank goodness for MBAs and their copious leftovers) and picking up additional income streams (being a test subject can give a little extra cash). A couple years we had free housing in exchange for work.

If we had to do it now, we’d definitely consider TIPS as a vehicle rather than just laddering CDs because we have much more money than we did back then. Converting large lumps of money into a regular predictable income stream is key. Extra money beyond living expenses can continue going to the stock market for longer term stability.

And you are SO RIGHT about “hyper-frugality”. I’ve ended up selling or giving away much of my stuff that I’ve accumulated over 38 years, and now I’d down to just the amount of things I absolutely need for my freelancing, plus a few books and a handful of DVD’s. Everything fits into one room, so I can rent a room from someone which is much cheaper than having an apartment or even an efficiency.

It’s stressful, really. And definitely not very easy to save very much long-term. Still, I try to put away a little bit into permanent savings with every paycheck I do get.