Low Overhead is another way of saying keeping your expenses and bills low, especially the fixed ones. As my father says, “low overhead wins.” Of course, as a kid, I never bothered to listen. My parents could have been Charlie Brown’s teacher at times…. wa wa wa wa wa. However, once I entered the “real world” and started making money and paying bills it didn’t take me long to realize that he was super f***ing right. (BTW, I was a good kid and always minded my parents, it’s just sometimes I didn’t fully appreciate their words of wisdom). Moving on.
As I mentioned in a previous post, low overhead saved my ass after being fired. I suddenly lost my mediocre paying job and was forced into a poor paying job, literally $10/HR. Even though I was only taking home $750 checks per 2 weeks, with a PhD mind you, I was able to get by and not touch my savings, but I wasn’t really able to add to it either. Here’s how I did it:
1) I resisted buying more house than I needed. This was the first time I had bought a house and I enlisted my parents help. My mother wanted me to buy a nicer house that was about 20k over my price range. She persisted and I resisted and eventually found a house I was happy with and within my budget. My payment is about 450 dollars per month, less than most people pay in rent.
2) I still bought more house than I can use, I bought a 3 bedroom house, so I added a roommate. The rent covers the majority of my mortgage payment and splitting bills is always a plus.
3) I have spent a lot of time improving the energy efficiency of my house. Many months my bills are 50 or less for electricity.
4) I drive old vehicles that are fuel efficient, I ensure 2 vehicles (quite a luxury I know) for 600 dollars a year.
5) I also have the added benefit of a girlfriend who is a very good cook and meal preps for me. Not only are her meals better than the restaurant but we split food costs.
6) I ditched cable, got rabbit ears and I really enjoy listening to NPR now. I don’t think I will ever have cable again.
This was a tough 8 months of my life before I landed back on my feet but I was able to do it because I don’t have much overhead. Now I have two jobs and I’m planning on adding a third in the summer. My savings account is growing and I’m investing all my money from my second job. What did you give up when times got hard?
