I’ll have an update on the 7 Day Side hustle later in the week for anyone who’s wondering. Instead of talking about earning more money today I want to talk about the other side of the equation: living on less.
Could you happily live on a poverty budget? I think you could.
The federal poverty guideline for a family of 3 is $19,970 a year or $1,664 per month. I calculated my bare bones budget the other day and it came out to $610. Yes, I could live on $600 per month. It wouldn’t be ideal, but it’s doable.
A comfortable budget for me runs in the $1,400 – $1,600 range. Although, I’m not going to lie, some months I do spend more than this. Like last month for instance, when I had to buy school clothes and supplies.
But the point is you don’t need to spend a ton of money to be happy. There are cheaper alternatives to almost everything you use and love.
If you could just tweak your expenses and live on a tight budget for a year think of the money you could save!
Cut Your Biggest Expenses First: Housing & Transportation
Your housing situation will make or break you.
In order to really get your budget down you need to have a cheap place to live. But you also need to have a good, safe place to live.
If you live in an expensive city you really don’t have many options as far as this is concerned. You can look for a less expensive place to live but I doubt that you’re going to find anything comparable to living in the country in the Midwest.
Your other options are to stay where you are now and save up a large amount of cash to put down on a home or completely pay for a home. Or, if you already have a mortgage – pay that sucker off.
My plan is to save up a bunch of money to put down on a house. It will definitely take me awhile but I’m willing to be patient so that I don’t chew off more than I can handle.
The next is transportation. If you have a car loan, pay it off. If you have a gas guzzler trade it in for something more fuel efficient. If you are in the process of buying a car go for quality and price. You need something that will last for several years but you don’t want to break the bank.
Debt: Pay it Off like Your Life Depends On It
Should I say anymore?
In all seriousness debt is your enemy. It holds you back from living the life you want and it adds way to much stress. Get rid of it.
Consumer debt is unnecessary in most cases. The things you finance you don’t really need. There are some cases where credit cards might be necessary – like if you don’t have enough money to feed your kids, get to work, or pay for some other essential.
What about credit card rewards? They’re not worth it. You see if you’re living on a low budget you’re not going to spend enough money to make them work. All those people who are bragging about getting a shit ton of free vacations from their credit cards have 10-20 accounts open.
You have to be super organized and run your credit cards like a business if you want to be into “travel hacking” Most people don’t have the discipline to track that many cards. If you forget to cancel a card before the annual fee kicks in, don’t pay the balance in full, or accidentally pay your bill late you just cancelled out all of your rewards.
It’s too dangerous.
Quit using your credit cards and pay off all of your consumer debt. You’ll feel amazing when you no longer have to worry about paying a lender.
TV: Use Amazon Prime $99/Year
When I first moved into the trailer I had every intention of getting cable TV. I thought I wouldn’t be able to function without it.
Then I got busy. Weeks passed and I kept putting off calling Dish Network. And do you know what I discovered? Not having TV drastically boosted my productivity and my kid’s creativity.
In my spare time I was on the computer working on my side business. My kids played outside, colored, and read books. At night they’d get to pick one of their DVD’s to watch.
That’s all we really needed.
Then I discovered the Amazon Prime Instant Video section. Since I already had Amazon Prime this was a huge bonus.
Now my kids can mix it up and watch some of their favorite TV shows and I have hundreds of free movies to choose from.
With Amazon Prime you get access to tons of popular TV shows and movies for free, plus you get two day shipping, and are able to checkout one free Kindle eBook per month.
It’s a pretty great deal for the price.
Cell Phone: Use Republic Wireless $5/Month
I know people who pay almost $300 a month for cell phones and it just blows my mind. You can have a nice phone without having to pay that much money.
I had the opportunity to try out Republic Wireless last year and I was impressed. You see, republic wireless uses a combination of cell phone towers plus Wi-Fi to give you service. This allows them to offer plans at extremely low monthly prices.
My fear was that since I live out in the middle of nowhere that I wouldn’t have very good service. That wasn’t the case at all.
Right now you can get the Republic Wireless Moto X $5/month. Unlimited Data, Talk & Text.
Boom! Switch and you instantly cut back a large portion of your budget.
Insurance: Get Quotes Every 2 Years
As an ex insurance agent I can assure you that your insurance is going to rise a little every year. That’s how it works.
An insurance companies offers you a low rate to begin with but the longer you stay with them the more you pay. Unless you’ve changed your coverage (dropped a vehicle, removed a driver, lowered coverage, etc.) over the past year or two I’m willing to bet your insurance has went up.
To keep your car and homeowners insurance down you need to call and get quotes every two years. Call your agent and ask them to check around or fill out an online quote. (Just be sure you’re getting apples to apples quotes on your coverage.)
Food: Cook Yourself, Be Repetitive
I’ve finally kicked my fast food habit and it feels soooo good. Food is an easy budget category to lower which is why people usually start with it.
Instead of using coupons or creating a stockpile I think you should go with the basics. Find the meals you like and make them at home yourself.
It really can be that easy.
Clothes: Buy Sparingly, Shop Smart
I’ve always been on the plain Jane side of fashion. Then, after getting divorced I all of a sudden liked shopping again.
My Dad’s wife and I would hit the high end consignment shops about every other week. I filled my closet with awesome deals. Even though I went on a clothes binge I really didn’t spend that much money.
I have now tamed my clothes addiction. Honestly, I wear the same four or five outfits repeatedly.
For basics, like camis, underwear, or t-shirts I mostly shop at K-mart. For nicer stuff I shop at consignment shops or Thred Up. (You can currently get $10 to spend at Thred Up by going through this link. I’ll get $10 to spend too.)
Since I’m cheap I can get much nicer clothes at consignment shops than I could get for the same money at the bigger department stores.
Your Stuff: Take Good Care of It
Since you don’t want to be spending money all of the time you need to take good care of your stuff. This especially holds true to your more valuable items like your car.
Have the oil in your car regularly changed, get new tires when you need them, get a tune up when necessary and don’t put off making repairs. You want your vehicle to last forever. (I plan on driving mine for at least a total of ten years. I’ve been driving it problem free for six years so far.) When you perform regular maintenance to your car you’re protecting your investment.
Take care of your other stuff too. Keep your house clean and organized so that when you need something you can easily find it instead of running out to the store and buying new. Take care of your clothes and your kids clothes and shoes so that you can sell them when they’re no longer needed.
If you take care of your things you won’t have to replace them as often.
Focus On People Not Stuff
At the end of the day we all have one life to live. How do you want to live yours?
Do you want to accumulate a bunch of stuff so that other people can be jealous of you? Do you want to be a slave to your lenders for the rest of your life?
That’s no life to live.
Focus on people. We’re all going to die someday and the only thing that you leave behind is the people you love. Leave good memories.
Great post! I think being content with what you have, plus spending time with family is the key to a happy life. $600 a month sounds drastic, but it’s nice to think if necessary you could do it for a while.
Love this! And I love how low your bare bones budget is. The other day I overheard someone complaining about how they couldn’t afford anything. One thing that caught my ear was that they said their rent alone was $1,700 a month. In Missouri, that is a crazy amount to pay!
Health insurance is something that is important to me as well as housing. my med total cost close to 1000 a month if i were to buy out of pocket. I always have to consider that in any of my future financial decisions..
Great ideas and you don’t have to tackle all at once, lest you feel overwhelmed. Pick one get it done, then move to the next. Doing this strategy is better than doing the same old same old and not making any changes. Thanks, Alexa!
I agree about housing. That can be a tough one. I have yet to figure out a workable plan for myself. Maybe buying a duplex ?
it’s could to recognzie how low you can go for a month but maybe not every month in a row … you will have to buy underwear or tires for the car or something someday!
~ Christie
Wow! I love this post! This was inspiring and I love your idea of being ok with repetition on the food front. 🙂 I swear that’s critical to a healthy (small) grocery budget!
I love this post… especially because you emphasize that having NO debt is a huge part of living cheaply. I’ve read a lot lately about too about how important it is not to overbuy/overspend on houses and cars. Hubby’s and my cars are paid for, and rent is about 20% or less of our income (it would be less if we had fewer kids). Spending on these big ticket items doesn’t produce happiness in the long term. It’s better to have smaller, more frequent splurges (fresh flowers, books, lattes, whatever your thing is).
When I was a newly divorced single mom I found that I could live quite happily on less than $1200 a month.
Focus on people-enough said. If I didn’t have debt I would be able to live quite happily on about $1500-$2000. No problems.
I am in the process of selling my house and moving into an apartment. So excited! My costs will be cut in half and in one year I will be debt free and have a healthy savings account. I am looking forward to purging all that stuff I have accumulated. A simpler life will hopefully be a less stress and happier one.
I would love to see your breakdown for $600 a month. 🙂 I live at the poverty level and my barest possible is about $700 a month without living in my car. (Which I’ve been tempted to do now and again!) If you’ve seen some way to reduce my living expenses that I haven’t, I am all for it!