Could You Live on $12,000 a Year?
October 15, 2007 – 7:00 amI ran across this article that detailed one woman’s goal to live off only $1,000 a month this year. Not only does she plan to live off of it, but she’ll be also be tithing and adding to her savings account in the meantime.
My first thought was there is NO way we could possibly live on $12,000 a year. That amount alone wouldn’t even cover our mortgage.
So then I thought back to our very first home when we were newly married. It was a small 2 bedroom/2 bath duplex we rented for $425 a month. It was the perfect size for us back then, but 9 years later as a family of five we would have to seriously downsize in order to fit in the place again. (the “eat-in” kitchen barely fit a small kitchen table. We had to shove it against one wall and only used 3 chairs with it in order for it to all fit. There was no other dining area.). Anyway, I’ll imagine we live in a rental that only costs $425 a month and see if we could make it.
So based on an income of $1000 and a rental cost of $425 a month could we survive?
Rent $425
Utilities (water & electric) $125
Basic phone $25
Gas (for the car) $200
Car insurance $94.20
Food $450
Oh wait, we just went over the budget didn’t we? And I haven’t even gotten to clothing, car maintenance, doctor co-pays, cable TV, let alone entertainment and savings.
I really commend the author for choosing to live this way so she can finish her degree and improve her future. I’ll be checking back at the end of the year to see how she’s done.
What about you? Could you live on $12,000 a year?
5 Responses to “Could You Live on $12,000 a Year?”
I could do it if it were just me by renting a room and having no mortgage, at least in our area. I would skip the car and buy a bus pass for $50 a month for work. Apparently however she has $1200 a year in car insurance so she will need to buy gas,oil,possible repairs etc for her car. I would be curious to see how she does lol.
As for doing this with our family of 5, not a chance.
By Heather on Oct 15, 2007
Heather,
I think you are on to something. It’s one thing to be a single person who can live in a smaller apartment, or just rent a room. But I think it’d be a little tough fitting a family of 5 into one room.
I just noticed she spends more on car insurance than we do with 3 (1 is garaged and not driven though). We spend $94.20 a month.
By Momof3 on Oct 15, 2007
It would be hard to do in this area. Public transportation isn’t great, and housing is higher than most of the country. We lived on a little less than $20,000 a year the first year I was a stay at home mom, and that’s when we went into debt for car repairs! LOL
By Lynnae @ Being Frugal on Oct 15, 2007
We don’t have good public transportation here either. No buses, and to take a cab anywhere would be at least $10 just because of the distance.
By Momof3 on Oct 16, 2007
I guess it depends on your regional cost of living, and whether you’re living alone or with roommate(s).
Not too long ago I was going through a really rough time. This forced me to seriously examine my cash flow. I started tracking every single expense, entering them in a spreadsheet. It was tedious but I had nothing better to do (besides finding work). This allowed me to see where my money was going and help decide where and how much I was going to cut. I brought my expenses down to 1200/mo, which was comprised of 550 rent, 400 car payment, 50 for internet access and 200 for food. I lived a quiet life for several months but this allowed me to dramatically reorganize my finances, and most importantly shed a lot of stress.
Now that I’m back on my feet, I don’t live as frugally but I’ve definitely gotten into the habit of thinking about where my money goes. I’m not cheap, but I try not to get carried away either. I’m a programmer and a huge geek, so naturally I spend a lot on computer equipment. This used to be a problem, especially given the price of high-end components, but I’ve applied the same shopping rules to my computer hobby. I research, shop around, I even look at potential resale value, but most importantly I ask myself whether I really need this or not.
Now that my car is paid off, I’m quite confident that I could live on 1000/mo with a few adjustments. The biggest change would be housing, as I currently live in the downtown core where rent is artificially high, but I work less than a half-mile away. I could probably save a good 200-250 by moving to a cheaper neighborhood and taking public transit. I would definitely eat out a lot less. Other than that, I already live a semi-frugal lifestyle in that I don’t go out much, I get my entertainment from the Internet and from movies at home. I consult flyers and deals online for groceries and other common purchases, and I stock up when appropriate (you gotta love chest freezers!). A few minutes of research here and there can result in a hundred dollars saved per month.
By Bill on Dec 2, 2007