Sunday, October 23, 2011

How to Live Well on $15,000 a Year

I have seen a few articles about people who live on a small amount of income.  I too don't make lot of money, so I thought I would share my tips for how to live well on a low income.  Here are some of the ways I manage to make it work.

For housing, find a decent place near your work that is big enough for what you need.  If you have a family, obviously you will need more space, but try to stick to only what you need.  If you are thinking about buying a place and having a mortgage, make sure the payments, assessment, insurance, and taxes are low before deciding to live there. You will need to do all the calculations ahead of time to factor in all expenses and income to make sure it is an affordable option.

What about monthly bills?  For electric, make sure you limit your usage.  Only turn on lights when and where you need them.  Avoid running the air conditioning/heating when you can get by without it.  Unplug things you don't use very often.  Use the new kind of light bulbs that use less energy. Same goes for water in that it should be used sparingly by avoiding long showers and running the water when it is not needed.

For internet, shop around for promotional rates from all available suppliers.  You should be able to get a good deal for a year.  If they raise your rates, call them up and haggle with them or switch to another company to get another promotion.  If you want to cut out internet expenses completely, see if there are any free WiFi connections near your area.

For TV, use standard antennae to get the basic channels.  It is free and there is enough good programing on the main channels to get by.  If there is a show you really want to watch that is on cable, watch it on your computer using the internet.

For food, you should avoid going out to restaurants or even buying fast food.  Get most of your food from the grocery stores.  Compare all the stores near you to see which ones have the best prices for the items you want.  Get familiar with sale prices verses regular prices.  Try to buy things when they are on sale.  Use coupons if you find them for the things you are going to buy.  Check discount stores such as Wal-Mart and Target for general grocery items as they tend to have good prices. Here are some of the best foods on a budget as well as easy and healthy meal ideas.

If you need a car, get a used car and make sure you are not overpaying on insurance.  If you are a good driver, often you can get by without comprehensive insurance. Shop around to get the best deal by comparing different insurance companies.  I personally have had good luck with Geico.  If possible try to pay off the car early to avoid paying interest in the long run. This tip also goes for the mortgage although that one may take time to pay off.

For health insurance, if it is not provided by your employer, you will be able to get it through the Affordable Care Act at .  There are plenty of plans to choose from and you will get a credit to lower the cost each month if your income is not that high.  Here is a review of this program.

Avoid entertainment expenses.  There are plenty of free activities to do or ones that don't cost a lot of money.  Personally, I don't go out a lot, so most of my entertainment is from tv and computer.  Other options include going to a park, walking, bike riding, going to a library, a free museum, or a public concert.

Whenever you have to spend money on things, for example clothes or household items, research them to find the best prices. If you know what you want, look online and order it.  Often the best prices can be found online and you can avoid taxes and shipping costs in some cases.

You can use a credit card to buy things but make sure it is paid off in full every month to avoid paying any interest.  Often you can actually get cash back rewards for certain cards just by making normal purchases. Here is a review on one of these rewards cards the Chase Freedom cash back card.  

Living like this, you won't get to eat at fancy restaurants often, drive expensive cars, or travel the world, but you can have a nice life without having to earn a lot of money.  Always try to spend less than what you take in so you have a profit each month. Over time it will add up and you can start to buy nice things and live even better!

Do you have any tips for frugal living? Feel free to share them in the comments below. 


  1. I don't own a car, and only rarely do I miss it. I am so tight I squeak when I walk! I don't spend money on anything I don't "need" and have learned to ask myself when I see something "Do I need that?" If you do that on a regular basis, you will really spend a lot less.

  2. the only way you can live this cheaply is with NO DEBT--cut up all credit cards--that's right ALL. I have a debit card where all my purchases come out of my bank account. I can use it on line to buy cheaper things as well as SELL cheap things--one affects the other. I no longer need to file my taxes and since I don't buy anything new except food (haven't figured out how to buy used food yet), I don't pay sales taxes for stadiums, etc., therefore, nothing to declare. of course, living this cheaply you can hardly own the dwelling you live in, therefore, I rent and do not have the luxury of raising a garden or raising live stock--that takes lots of overhead, maintenance, property tax, etc, etc, etc. Instead I sell junk at flea markets making just enough to buy fresh produce from farmers markets, buy fuel and pay car insurance. I have a pre-paid cell phone that costs about $50/year (free long distance calls at night)cable TV, what??? why pay when you can get FREE broadcast with the same amount of commercials or watch PBS--eating out? I sit on my balcony!

  3. Connected IsolationNovember 12, 2011 at 9:45 AM

    So do you make all of your income from selling things at the flea market? You are still supposed to report all income when you do your taxes.

    Credit cards are ok as long as you pay them off. Set up automatic payment from your bank and it works the same as a debit, except it gives you a little more security if your card gets stolen.

  4. where do you live? in the slums of Detroit?
    I live in Southern California and there is no way one can live on 15K a year. The house I inherit from my mom is modest but that has a $3,500 tax rate a year (and growing) and food is costly!
    Because California exports most of it (thus it imports what is sold and that raises the price - duh) I am not against taxes, just the wasteful usage of our taxes - then the medical costs for seniors - there has been no cost of living raises for Social Security (for the most part) in over a decade. I do all the things in your article (and more) but it is a losing game. Look at the things that go on (like the bogus Monopoly game at Albertsons) - which makes for higher prices of food - I would rather have lower food prices than a chance at a non-existing prize! America needs more laws to protect it's people from scams - then maybe they can afford to live on 15K a year. Crazy are people who think 15 K a year is a real income - even if you own your house outright.

    1. Connected IsolationApril 29, 2015 at 8:52 PM

      You are right, certain areas definitely have a higher cost of living so that is something to consider especially with the property taxes. But yes it is hard when expenses keep going up while income does not.