My wife and i made a decision when we've got married to live 'below' our standard of living. Best decision ever, we actually are able to enjoy life more because we can afford things now and are not constraint by excessive debt making the bank or someone else rich (our debt actually service us...). I've just turned 40, my house is paid, I own other property, I have a healthy share portfolio, loads of financial flexibility, etc.. The way I've done it is roughly as follows: (1) Time that i did not own a house, I've slowly accumulated a decent deposit, which gave me negotiating power for obtaining low interest rate when I've bought my house (in 2010) (1) Always bought second hand economical cars and stayed away from expensive cars as this is 'money down the drain' (2) Business travel miles @ AA rate is re-invested in share portfolio, which is quickly accumulating towards my next replacement car... (3) Extra money (Tax claims, bonuses, etc.) put back in home loan/shares. Saving in installment is re-invested in shares (4) Installed solar geyser, etc. Savings in bill are re-invested in shares. This and other economically green ideas also helped to reduce the impact of inflation ensuring that my 'buying power' remains healthy. (5) When I need cash for purchasing next car, i will simply use my own reserves BUT pay myself back with interest...(in stead of paying the bank interest i will pay myself the equivalent amount) (6) Risk mgt: increase insurance excess - saving in installment re-invested, but accessible if needed (past 5 years since i've done this , this was never needed, but it is there if i do need it) (7) Optimised tax (note not avoiding tax) - use pay tax consultant each year to identify opportunities to leverage tax benefits (all done above board), etc. Tax claims re-invested. (8) etc. etc. Simply be wise with ones money and listen to advise from people like Simon and others At the end of the day i have spare money to take on higher investment risks, enjoy hobbies & holidays, etc. Yes i do earn a good salary, but it is not excessive. Many of my colleagues are earning the same or even more than I (and with their spouses working) are struggling financially as a result of making wrong financial decisions, being wasteful, not prepared to make sacrifices, live way above their standard of living, etc. Hope this is insightful/useful to some.