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. (Note: cost of living can vary greatly depending on location, so some areas may need more or less.)

For housing, find a decent place near your work that is big enough for 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, you may be able to watch it on your computer using the internet. Also you can get free trials for some of the top streaming services such as Netflix and Hulu.

For food, 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.

For haircuts, look into getting a pair of electric clippers which are great for doing your own haircuts at home. I have been using Wahl clippers for 10+ years and it is one of the best investments I have made in terms of saving money. The clippers only cost about $20 and will save literally thousands of dollars over the years from not having to go out to salons or haircut shops for hair cuts.

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 and State Farm. 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 this 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. You may even qualify for Medicaid if your income is under a certain amount each year.

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 at sites like Amazon and eBay and you can often avoid taxes and get free shipping. For local stores, check dollar stores and thrift stores for the best deals.

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. I use the Chase Freedom card which offers 1% back or more on all purchases. 

Living like this, you won't get to eat at fancy restaurants often, drive expensive cars, or travel the world, but you can have good living conditions 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. 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.

    2. 59 years old. Laid off/retired. I live in Ventura. Pension is $509 a month. I own my house. No debts. Assistance and food stamps. Not working, I no longer have to spend $300 in gasoline to get to my job; no longer spend $300 a month on fast food either (I worked at night). It's a matter of prioritizing. At the end of the month...compared with when I was working - LESS is more. I have more left at the end of the month, just by staying home. And to quash any badmouthing about my 'assistance' I worked for 40 years and paid taxes for that is a deserved return on my investment.

    3. Lol. prioritizing right... sure prioritize not getting healthcare, not having children and come on there is no way you are paying rent.

      As for you having worked for your assistance. Maybe you did, but given that your pension is only 509 a month chances are you are taking out more than you put in and maybe you left economy in ruins for your children.. the ones that are actually paying for your assistance.

      don;t be a selfrighteous delusion prick.

  5. I'm on disability and get around $17,000 a year, this is for 2 people. Try to find the best used car you can, run it till it's dead. Try to keep your driving local. Do your own maintenance if you can and don't get comprehensive insurance. Driving around to yard sales is worth the gas, at yard sales you can get just about all the things you need. If you live in a cold area and have a fireplace get a fireplace insert, this makes heating the house affordable. Yes, turn off every thing that you aren't using and hang up your laundry outside, if you work reducing your bills they will be far smaller. Try to adopt the attitude that living cheaply is good for you and the planet. I get free food from the food bank and take pleasure from making and preparing food. Get a cheap bike and learn how to maintain it, that way you can tour around and get exercise. Hiking, walking, exploring, climbing, running, swimming, biking and many other types of fun are free for the taking. Go for it!

  6. Renting a bedroom with a shared bathroom will run you $900/month plus utilities in Santa Barbara. Landlords require 3X monthly rent as a deposit up front and require you to earn at least 3X rent. You'd need to earn $33k just to avoid being homeless. I'd say, to live VERY modestly (no cable, no vices, no entertainment, no eating out) you'd need to earn at least $40k in this area. To live a "middle class" lifestyle (mortgage, kids attending a decent school, taking at least one vacation per year, etc.) you need to earn at least $250k/year.

    1. i would move to some place with a less cost of living Santa Barbara to ritzy for low income try backersfield

    2. Not all areas of Santa Barbara are 'ritzy'. Also, you have to consider that places like Bakersfield can end up costing more money...when you have to travel to other areas to get goods and services not available locally.

  7. GO STEALTH! Look up stealth vans on YouTube. You can make a nice "one room" quarters on 4 wheels. MANY people are doing it, even those who don't have to for financial reasons. It's a whole movement these days. What you do is buy a recently used cargo van from a company (companies keep good care of their fleet and sell them regularly in order to keep maintenance costs down by buying new ones). It may be beat up on the inside a little. But buy a white cargo van with no side windows. As time goes by, you will have saved enough to put solar panels on your roof and have enough electricity for a small fridge, fan, LED lights, TV and even AC/Heating (by budgeting the battery charging). People put in a little galley that has a sink and a way to hook up to external water sources for when you're in an RV park or near other water sources. But otherwise you'd carry your water in gallons under your counter. Depending on size, you can fit two people in one.

    Check out stealth vans on YouTUbe. You'll see a range of guys who are just starting out looking scruffy and roughing it. And you'll also see married couples (young and old) who have really slick set ups with blogs and a whole big deal about it.

  8. I live cheaply by continually but slowly travelling round the world, I live on about 8000 usd a year, Southern Europe and Asia I find very cheap, it's much cheaper to travel than to live in New Zealand where I come from, I might start living in a boat as I miss having a home sometimes, in USA you can buy a take you anywhere small yacht for less than 7000 2nd hand, I would never pay rent or buy in most western countries, accomodation in the west is usually what kills an affordable life, live in vehicles etc, if you don't like work that helps a lot, if you like work you should just train up to get high paid work.