How to Live Surprisingly Well on Just $30,000 a Year
How is your quality of life? The truth is it’s very relative and largely based on the value you place on things, such as access to enjoyable hobbies, cost of living, good food, clean air, a quality education, or even the proximity to family and close friends. Some folks want to wine and dine in five-star restaurants, while others prefer to gather around a table with their loved ones and break bread. Living well comes in all shapes and sizes.
About 32% of Americans live in the lower-middle class, meaning they take home less than $35,000 each year. This begs the question: Can you live well on just $30,000 a year? The short is answer is yes. But figuring out a budget that will allow good living at a much lower income takes a little more consideration and intent.
Rent or mortgage
The general rule of thumb is you should spend no more than 30% of your income on your mortgage or rent, and that’s on the high end. The preference is 25%. A little simple math concludes your maximum per-month housing cost should be no more than $750. This means at a 4% interest rate with zero down, a home purchase of up to $85,000 is possible. That price would allow for plenty of wiggle room for the cost of utilities.
Food and eating out
We all must eat. And hopefully we can enjoy the food we put in our bodies. On average, we allot between 10% and 15% of our income each month to food. That’ll give you between $250 and $375 each month to spend on groceries. Although that might seem a little tight, you’d be surprised at how low your food costs could be if you meal plan each week.
Furthermore, taking advantage of local food banks can be crucial when sticking to a strict budget. And when it comes to eating out, it’s very important to search for inexpensive restaurants. Take advantage of discounts and coupons found on websites, such as Groupon.
Taking advantage of public transportation in your area will be a great asset in saving some cash. Because everyone’s town won’t offer free public transit, you’ll want to make sure you’re keeping the cost for transportation to no more than 15% of your income. That’s $375 each month — and a little less than the nationwide average. Bicycling and carpooling are great ways to save on the cost of your commuting needs.
Education and child care
In terms of childhood education, it’s important to know you are doing everything in your power to provide your kiddos with the best possible tools for success. Luckily, financial assistance and grants exist for lower income families seeking child care. Moreover, some of the child care facilities in your area might have good resources for financial aid, so don’t be afraid to ask. Otherwise, keeping child care within 10% to 15% of your monthly income might be difficult. If it’s possible for you and your partner to arrange opposite work schedules to prevent the need for child care, that will be a huge money saver.
In this day and age, it’s nearly impossible to be without a cellphone, let alone a smartphone. But as we all know, smartphones are expensive. Luckily, there are options out there to keep the costs lower, making it possible to keep this expense around 5% of your budget Companies, such as metroPCS and Project Fi, offer unlimited text and talk plans that include 1 GB of data each month for $30. Other companies, such as Sprint and U.S. Cellular, offer $45 to $50 plans with unlimited talk and text and 2 GB of data. Additionally, some providers will offer discounts for setting up autopay each month.
Who loves consignment shopping? Consignment and thrift shopping could almost fall into the entertainment category. It’s so fun to try on vintage garb, whether you buy it or not. In all seriousness, you’ll want to spend no more than 2% of your annual income on clothing and shoes. It’s inevitable that you’ll need new shoes and clothing from time to time, so be mindful on how you’re shopping. Clothing stores, such as T.J. Maxx, Ross and Marshalls, offer wonderful pieces for a fraction of the department store cost.
Entertainment can be free, but it can take some creativity and a little bit of research to find it. Always check in with your town’s website and local library to find the community calendars. Look for events, such as free concerts, children’s activities and theater shows. Furthermore, get creative by hosting a potluck or a day at the park for you and your friends to play lawn games and grill out. Be willing to pick up new hobbies and learn new things. Strive not to spend more than 5% of your income on entertainment.
Health and wellness
If there’s one thing that keeps us all living well, it’s taking care of our bodies. But sometimes it can get pricey to buy a gym membership or attend weekly yoga classes at a fancy studio. Check in with your library to see whether it hosts any free fitness classes. If practicing yoga keeps you in a good head space, try one of the numerous online yoga memberships, such as oneOeight, where you can access seemingly endless options for classes and guided meditations every month for less than the price of one class in a studio.
Even though it can be difficult to save when you’re on a tight budget, it’s still important. Socking away 10% of your income each month will get you roughly $3,000 in the bank each year, and that will add up. If you’re able to shave off spending in other areas, always throw that extra cash into your savings.
The traveler in you might be a little suppressed on a $30,000 income, so once again you’ll need to get creative. Exploring in your surrounding area will be the best bet. Spending 5% of your monthly income will give you $125, so try a monthly camping trip or two to nearby state parks. Websites, such as Groupon and Travelzoo, also offer surprising deals on activities and quick travel jaunts, so check for deals near your home.