Living on Less Than $25,000 Per Year - Is it possible? Advice? - Page 6

Quote:

Originally Posted by Jenny Penny 

While my husband makes about $58K per year, after state and federal taxes, 401k (10%), health insurance, and medical flex spending account (which we put in $2,500 each year and routinely run through it by June 1st/or $96.15 per paycheck), he brings home $1300 per two weeks and we live comfortably and could definite could cut out more.  We put down 20% on our house, so our mortgage is lower than normal.

 

Monthly Expenses (from $2600 take home/mo)

Mortgage/Property Taxes/Home Insurance - 1050

Electric - 150

Garbage - 46 every three months (dh's brother shares service with us because our can is so big and pays the other 46)

Water - we have a well

Auto insurance - 115

Car - One paid for, one 150/mo for two more years.

Gasoline and auto maintenance -  300

Cell phone -  120 (two phones, one date/other just texting and phone)

Food/Household Supplies - 350

Student Loan - 160

Medical payments - 50

Netflix - 9

DSL - 55

$2500  that other $100 goes to anything else that comes up during the month...and something always does :)

 

 

I got a part-time job this year that brings home $500 per two weeks.  This pays for our extras we never did for the previous 8 years I stayed home with my kids.

 

Monthly Extras (About $1100 take home/mo)

Gas 200 ---this includes driving to my 25 hr/week job plus extras of driving to farther away parks and lakes we couldn't go to in the past

Savings 200

Haircuts 60 just 3 of us girls, dh's is buzzed at home, we went as long as possible between haircuts in the past, so nice not to have to "worry" about squeezing these in now.

Chiropractor 70 (we have health insurance, again, nice to be able to maintain our health to prevent medical issues)

Family Pool Membership - 45

Clothing - 50 - we are blessed to get tons of hand-me-downs that are barely worn.

Entertainment - 100

Orthodontist payment for DD2 - 100

Instrument rental for DD1 - 58

Tithe - 120 (dh is not a Christian, so only my income is tithed)

 

Hardest part about going back to work is maintaining our current lifestyle and not "upgrading" to what the Joneses are doing.

 

What doesn't this include....cable/satellite, eating out more than once every two weeks, convenience food (most meals are homemade and we make bigger portions to take leftovers in our lunches), eating out at lunchtime, deserts/junkfood/packaged snacks, cool new cars, going out to movies, vacations (unless it's to a friend's house and we eat-in), new furniture...really "new" anything.

 

It includes a lot of gardening and baking and time at home together as a family versus lots of time out spending money.  It's all worth it not to be bound to working if I decided my kids needed me home more with them.  I think less can be done by families with a smaller income as you can see if we cut out our DSL, cell phones, paid off our newer car and our student loans.  Jen

This seems a bit more realistic for my area.   (Although, utilities, internet, and vehicle fuel expense are a little more here.)  As you can see, even cutting this budget by:

700 - renting an apartment or house for 350

150 - car pmt (assuming you could sell this car and buy a less expensive car with the money left after paying it off)

60 - assuming you can have one cell phone for half of what two costs, even if it means giving up the data plan which is about what one costs here with no data plan

9 - netfilx

55 - DSL (only use the free wifi or the library when you need internet)

200 - savings (please note that I do not think it's a good thing to give this up, but just being realistic for a tight budget)

45 - haircuts (go every three months, trim at home in between, or go to a beauty college)

70 - chiropractic (I have never been, so I guess I just don't understand the benefits)

45 - pool membership

100 - orthodontist (most orthodontal work is not completely necessary, even if there are preventative benefits)

58 - instrument rental

100 - intertainment (again, I know that this is nearly impossible, but there are parks, libraries, festivals, and free movies in some towns that provide free entertainment)

120 - tithe (I would keep this in the budget, but I know that many non-christians don't understand the importance, so we will cut it just for the comparison)

___________

1712 - total per month cut from this budget

The original budget was for 43,200 per year.  Cutting all these extra's still comes to 22,656 per year, so I guess it can be done.  But that doesn't leave ANY room for entertainment, emergencies, or savings.  Not sure how long someone could stick to a bare bones budget like that, considering that it isn't going to get better by eventually paying something off.  All of these bills would be ongoing. For me, I need to see a light at the end of the tunnel.  Now, if Jen's family can live on that budget and still bring home 44,400 per; it would be easier to stick to it, since they could see the savings building up.  For someone who only makes 25,000 per year, it would be extremely difficult.  I know I could very easily be in that situation, and I applaud everyone who is hanging in there and making it in those circumstances.

We're blessed to have salaries that more than provide for our needs, but I believe we could do this based on our current spending habits. We are debt free except the house so that helps tremendously.

By month, we pay:

Mortgage: $960

Home insurance (we pay in yearly sum, but this would be if paying by month): $38

Home taxes (not escrowed but  by month it would be): $158

Grocery: $200 (2 adults and 7 year old) Yes, we really keep it in this range!

Car insurance for 2 vehicles: $47

Internet: $40

Dish: $45

2 Tracfones: $17

Water and sewer together: $45

Electric for home: $50 (average)

Gas for home: $75 (average)

Gas for 2 vehicles (low mile commute but we have 1 gas guzzler): $160

Health co pays, prescripts, etc (we don't have any chronic illnesses/ongoing prescripts, so this is an avg by month): $50. Health premium is taken out pre tax.

Clothing avg per month for all 3: $50

Total: $1935

Now, we also have the following that aren't factored in above:

Son's karate tuition monthly

Baseball fees and equipment as needed

Cub scout fees

After school care since we are a 2 income family but if we just had one person making $25K, we would eliminate the child care

School lunches when he chooses to buy (free lunch qualification if on 25K?)

Eating out and general entertainment

Vacation funds

Gifts for others as needed

Savings -- retirement, general, and 529

Home repairs and improvements

Car repairs (knock on wood, nothing big in a long time!)

Other things I know I'm forgetting!

While I think we could make it work, it certainly would change HOW we live. I'm sure we would cut the dish network and the expensive karate tuition. Although we have a very modest clothing budget, I'm guessing we'd cut it down even further. Not sure if we would even be able to put $ into savings. Eating out and general entertainment, we'd need to get creative. Home improvements not so much, but repairs would need to be addressed. Same for car.

While in graduate school, I lived on a stipend of $900ish per month. I still had rent (but with roommates), utilities, car payment, insurance, gas, etc. It was tight since I had to pay so much for books and other fees, but I did it. I know it's not the same as when you are a family, but I learned that if you HAVE to make something work, you will. I ate out maybe 1x/month. I was lucky to have a lovely wardrobe already, so my clothing purchases were pretty much ZIP. I admire those who do make it work and know that it takes discipline and creativity!

We did it for years when dh was in the Army, but we didn't pay housing. We were not on assistance. Many many many people live off of minimum wage, which is lower than 25K, so it is doable. Not pretty, but doable. 

By "living on less than 25,000 per year" I would assume that we are talking about actually staying within that budget.  I do know of people who have gotten by making that or less than that, but at the same time lived on credit cards getting themselves in so much debt that they eventually had to file bankruptcy.  Others have used public assistance for food, heat and energy bills, and medical care to supplement what they are making and/or recieve nice gifts from generous family for furniture and entertainment.  We do what we have to do to get by, and if that is the only way, then that is the only way; but as far as a study to see if it is actually possible to live on that amount of money, I would assume we aren't talking about going farther in debt or using public assistance.  That is the only way we can really know for sure what needs to be done on both a small scale (our part as a consumer) and a larger scale (government, large corporations/firms, places of employment, etc.) to make this a better place to live.  Not that I am complaining.  I love our country, but we always have room for improvement.  It's good to know the real state of things, so that we can see where improvement is needed.  That is why I love following this post. :)

I think anything is possible.. We don't have cable or luxuries like that and we live on less that 39k a year. We make more than that but we are paying off our mortgage with any extra.
 

we need it for a number of years and had about 5 or 6 children we raise our own and garden and can, freeze and preserve . we blessed to own our home and we have our animals

Time to bring back some "weird" memories...

This was 11 years ago, but... 

My summer before my second year of college my then-husband walked out on my son and I, kiddo was 3 (I was through a special program where I took a specific set of classes while working part time and after I got my degree it would put me into the training program at work, very math and science intensive, mostly 4 credit classes).  For that year, I did not receive any child support or any government assistance.  I was able to up my hours to 30-35 hours a week from 20.  However, I got a big "raise" when I had changed jobs to start the program and was making almost $16 an hour.

Gross pay was just about $25k for that year.  I paid health insurance from my check, also paid toward retirement, so take-home pay was quite a bit less.

Mortgage payment= $597 (included escrow)

Daycare =$4k a year (ouch)

Garbage= about $8 a month (went to every-other-week pickup)

Electricity = $50 a month (summer was about $90 a month for ac), so glad to live in the PNW where electricity is cheap (they are raising rates though)

Natural gas = $50 a month (did an equal pay plan)

College = $100 a month or so (got a scholarship and federal grants/loans to help the burden)

Food = $200 a month maybe?  I did, and still do, almost all cooking from scratch

Water/Sewer = $70 a month, base price

Phone = $26 a month

Internet (needed for the classes I had to do on-line because they didn't fit my schedule) = $50 a month

Car = paid off, insurance was about $70 a month?

Gas = one or two fill-ups a month, when I worked in-town it was 7 minutes away, when I had to do a rotation to the out-of-town locations we carpooled

Cable = $0, I still don't have cable to this day, but having streaming options like Hulu, etc has made that much less "painful" the last few years

Clothes for DS = $10-$20 a month or so, all second hand except shoes.  He always grew fast, he hit 6 feet tall before he turned 14

Honestly, it sucked.  I would never want to do it again.  When my refrigerator broke I kept my food cold in an ice chest (fortunately I had a large freezer that still worked, so endless supply of ice).  When my washing machine broke I did my laundry in the bath tub.  I was at school or at work all but Sundays, and Sundays I spent studying (looking back, I should have dropped my straight-As, but I didn't want to).  I learned to stock up on everything when it was as cheap as I could get it (I miss Albertson's, they had some good sales, but they shut down here a few years ago).  Of course, with no fridge I could only stock up on shelf-stable or freezable items.

Could I do it again?  If I HAD to.  Daily expenses actually wouldn't change a whole lot, I still live pretty frugal.  However, I'd have to sell my property (about 9 acres in the boonies, where I'll eventually build a house).  I would have to give up travel (I love to travel).  I still have a paid-for car but would likely sell my pick-up and have to go back to borrowing one when I needed to.  My mortgage has gone up to almost $1000 since I sold the old house and bought the one I'm in now, but I could still pull that off.  Electricity has actually gone down, this house is more efficient than the old one was.  No more paying for college, etc.

I've been living on less than $25,000/year for almost 4 years now.  In fact, I make quite a bit less than that even.  My salary was cut in half when I was laid off and now that I have a job for the last 2 years, I make about the same amount.  It IS a possibility.  And really, I have had to cut back in some areas, but we have just about everything we had before.  

I DO NOT buy second hand anything, just watch for awesome sales and hit the clearance racks as I did before when I made alot more.  It is a possibility in my area.  I have my own house, taxes, utilities, gas, car, satellite, phone, cell, high speed internet (And that IS a necessity now-a-days).  It's me and my 3 kids (15, 12, 3) and we have a dog and 3 cats.

I think some of that depends on the cost of living where you are living and the mortgage payments that you have.

definately possible... is it easy... no. it is not.

we are doing it on less than that with a family of 5. (was not planned... is nothing we would have ever thought we would be doing.. but husband became disabled with MS a couple of year ago, unable to drive and work anymore)

we weren't making a 'lot' more than that before he got sick. and we were already couponing, shopping yard sales and goodwill for clothes and household items. so, cutting back even more was/is a challenge. it is hard. but it can be done. you really do learn to live within your means. especially if you don't have any other choice.

luckily we purchased our house back when we both were working and bought one that we could afford the mortgage if only one of us was working. it's not fancy or huge. but each of the 3 kids has their own room. we have a yard for the kids to play and room to garden. we pay less than $700 including escrow.

we no longer put into retirement, college or any other savings. we have no vacation fund but do lots of daytrips and our kids love going hiking, to parks and the beach etc.

we have assistance for healthcare, and low co pays for scrips and such. without this.. having 3 kids...would be very challenging making ends meet.

we don't buy a lot of gifts. we bake gifts and try to do other things that don't need to be 'purchased' .

we grow some of our own food, shop by sales and coupons... buy less pre-packaged meals. eat out hardly ever.

we used to (for example) get pizza take out with a coupon ($20) . then went to store bought ($10) and now often make our own for about $5...

shop at church sales, yard sales and goodwill... look on freecycle for things we might need so we do not have to buy new.

we have the least expensive internet. we do have dish and cell phones. we have thought recently about getting rid of dish, and are looking for a less expensive cell plan.

some things are a fixed amount (mortgage, car pmt, house/cell phone, internet, etc) but we try to spend less and cut back what we can for utilites and gas, food, clothes, etc.

the internet is a great resource for free things to do with the kids. hikes, activites at stores such as home depot/lowe's, etc. we bring our own drinks and snacks as often as possible on family outings and save a lot of money that way.

for places where we know the kids might ask for us to buy them things when we are out, we try to plan ahead. for example.. 4th of july parade/fireworks -  we bring our own snacks, drinks, glow sticks, etc... 

redbox - we love redbox. family movie night with air popped popcorn. under $2.00 vs.. what? $50.00 for movie out and popcorn? lol

for now to try to make some extra money i sell things i am not using around the house on ebay and such for extra money.  i have taught couponing classes. my husband has done a lot of our home repairs and has done some bartering and sidework.

we have a yard sale each spring or summer and clear out kids unused toys/books/clothes and stuff around the house that we are not using anymore..

we have one credit card and it is for emergencies only. it was paid off until our vehicle broke. now we owe on it for the parts my husband needed to get it running again. i am paying it off slowly, but paying more than the minimum.

we just try to live simpler each month.

i think this is a great thread... i look forward to reading others ideas of how they make it work...