How to live on $20,000 per year la gasolina lyrics


Picture this: You’re earning $50,000 a year but for one year you decide to stretch your budget to the max and live off of a meager $20,000. Let’s say that around 10 percent of your salary goes to taxes. That leaves you with $20,000 in savings – to do whatever you want to do with. An awesome 50 percent savings rate. But do you think you can live on $20,000 per year?

The Size of Your Family: Feeding a house full of teenagers on a low grocery budget? Probably not going to work – although with some creativity and bargain hunting skills it definitely can. It’ll be easier to pull off a low monthly food spending amount when there’s only 1-3 people in the household. (And no, I’m not insinuating that you kick your teenagers out of the house, just adjust your budget.)

Your Hobbies: You only have one life to live and I’m definitely in favor of the “spend your money to enhance your life approach.” With that said if your hobby is a money sucker it’s gonna be hard to stay on budget. You might be better off finding a low cost hobby.

Your Debt Level: In the $20,000 a year budget I include no debt repayment of any kind. But understandably, you might have a little or a lot of debt. If this is your situation I’d factor your retirement savings into the budget and use every penny you have left over to kill your debt. Seriously, kill it.

Your Creativity: Some people flat out don’t want to live on less and that’s perfectly fine. No judgment here! If you’re in a position where you’ve already done the heavy lifting and can afford to live the life you want to live, power to you. You deserve it. However, if you’re like me and you really need to save/invest more than this budget can help.

1. No one has to rent an apartment. You can do what I do: rent a room. I rent a room for $340 per month, all inclusive (utilities, WIFI, and cable TV included) in a nice, “safe” neighborhood (nowhere is safe). I pay $15.25 per month for $15,000 worth of renter’s insurance coverage. I also rent a storage unit for $29.00 per month.

2. No one has to drive an Infiniti. You can buy a certified used car for less than $10,000. Keep money in your pocket and your insurance rates low by not getting citations. Do not speed excessively; this saves on gas. Take great care of and maintain your vehicle this saves money. OR take public transportation, car pool, or bike, or even walk if feasible.

3. No one has to go out and spend $200 every weekend at the bar to have fun. Fun could be going to the park, the beach, the movies, window shopping at the mall, having a blockbuster night, inviting family/friends over for BBQ/board games, etc. It costs little to nothing to take a walk on a nature trail or buy a six pack and chill on the porch with your BFF.

4. Do not overspend on clothes, shoes, etc. No one has to wear Prada and Burberry. Bargain shop at TJ Maxx or Marshall’s for quality clothing at great prices. And if you are making peanuts, I don’t see why you’d be shopping every month. Only spend on clothing and shoes commensurate with your income. I know someone who spends a few thousand per year on clothes for THEMSELVES but they only gross $25k per year.

I always knew I was frugal but about 12 months ago I started tracking all of my expenses on a free iphone app called Wally. I tracked all of my income and every penny I spent. I am a single 40 year old with no kids and a paid off house and car. My monthly expenses averaged out to $1,600 a month and I was able to save $41,000 over the past 12 months. I don’t feel like I am depriving myself of anything. I have a nice older home worth about 140k and I drive a 13 year old car with 130k miles which I will probably keep until it has 200k miles. Sure I could go out and buy a new car or a larger house but I am content with what I have. If I stay on this path and keep earning around what I am now I should be able to retire by 50 with my paid off house and a million dollars in cash. Using the 4% rule I would be able to take out 40k a year to live off of but since I am perfectly content with living on 20k a year that will give me an extra 20k a year to save or spend. Plus when I start collecting SS that will cover most of my bills so I can travel or do whatever I want with the rest of my savings. The key is to be content with what you have and stop comparing yourself to others. Money is freedom. I would rather live a simpler lifestyle and stop working 15-20 years earlier than my peers than have all new things that don’t really make us happy anyway. Not having to wake up at 5am for work 5 days a week and being away from home 12 hours a day will make it worth it! Life of leisure here I come! 10 years and counting! Wish me luck! 🙂