How to Live Well on $10,000 a Year
Living Within Our Means
I am a full-time college student and the single mother of a toddler. We live on $10,000 a year. When I decided to go back to school, I had to find a way to live within meager means to better our future. When I made an account of my finances, I was confronted with $10,378 a year.
I recently read an article on how a single man could live on $20,000 a year—to me, not much of a feat. Another article described a single man who lived in an R.V. on $11,000 a year—although more impressive, that lifestyle is one that most of us can't manage.
So how do you live on $10,000 a year with a child? And what type of lifestyle must you live to achieve this?
First: Minimize Your Basic Expenses
My finances are pretty simple because I do not have many bills. Monthly I have rent, water, Netflix, and electric. That’s it. On an average month, these expenses run about $375 for rent, $50 for water, $8 for Netflix (streaming only), and around $75 for electric.
Now, I must say that I had to work to minimize these totals. By doing the things below, I halved my cost of utilities, sometimes even more than that.
- Be aware of water. Take quicker showers. Turn the water off while you brush teeth, lather, and wash dishes.
- Update your heating and cooling methods. I have those horrible baseboard heaters and a ten-year-old air conditioner. Got a newer model air conditioner for around a hundred bucks. Purchased small heaters for winter months, and I do not even turn my baseboard heaters on at all anymore.
- Change bulbs to more efficient LED ones. The light is better and the initial investment of $5 of so per bulb will be paid back in a month or so.
- Weatherize. Cover windows with plastic to prevent drafts. Caulk windows and update insulation. (For new houses, this is not needed, but I stay in an older apartment.
I also live in town and receive free Wi-Fi from local businesses.
Can We Afford Entertainment?
I just recently added Netflix to my expenses after a one month trial that made me a believer. My son is in love with Thomas and there are enough of those cartoons and many others so that we'll never have to worry about what to watch. The selection of movies is vast and so different. No, you do not get all the new movies, but what makes a movie any better when it first comes out anyway? Their suggestion program works well to find movies you never heard of, but will thoroughly enjoy.
We have basic, free T.V. I don’t understand the need for 600 channels; I have 6: FOX, PBS, NBC, and CBS. Not sure what the other two are, but they never have anything on anyway, so no need to mention them. These four channels cover about any type of show my son and I would want to watch. Funny comedy, sports, educational programming and news.
Other Ways to Have Fun:
- Get outside! Whether it be for a stroll, going to the park, hiking, swimming, or making snowmen. I mean really there is so much to do outside, a free asset most rarely use. If you have children like me, getting them out and wearing them down is never a bad thing. They have so much energy, let them use it without destroying the house and driving you crazy in the process.
- Go to the library. Enough said. Free DVD rentals, story time, activities for the kids, and thousands of books and audios.
- Go to the mall. I have one about 5 miles down the road and they are always having different community events and activities. Our local one has even has a new play environment and organized social events with other kids.
- Go to a museum. Whether for science, history, or art. Most will have special events that are free or excessive discounts at certain times: use them.
- Go to church. There are always activities going on at church: free movies, children’s play groups, and an array of social events. Have fun and fill your soul at the same time.
- Make things. We spend large blocks of time on arts and crafts. To lessen the cost of the supplies, I always buy them around the time kids are going back to school. I buy enough for the year and spend less than $20. The discounts at this time are great.
My son and I are almost always entertained. He has a weekly playgroup, two different story times, and a church class. The rest of the time we find local events and outdoor activities to keep us busy.
Although public transportation is available, I have to have a car. I own my car (8 year old) and I spend less than $40 a month on gas. To achieve this, I work locally where I can walk and I plan trips together to avoid wasted gas. With the prices the way they are, every trip cost money. Living in a small town, I walk to a lot of the places I go, my son enjoys the sun, and I enjoy the exercise. My car is insured and shopping around saved me hundreds a year.
Can We Afford a Vacation?
Blasphemy right? Wrong. I put aside $500 a year for trips. We take a road trip for about five days up north to where family lives. I even rent a motel room for a couple of those days and see the sights, but always with the budget in mind. Anywhere you go, take advantage of the free assets around you. This always being our summer trip, we take advantage of the beaches, parks, family time, and petting zoos and other activities that are discounted. Summer months are filled with festivals and fairs, you just have to find them.
The second trip is usually taken closer to home, but I like to include a night in a hotel. Make a couple days of it and travel to a surrounding county for some local festivity or activity that may interest you or your child. This year we are going a couple counties over for a train ride and to go to the zoo. I know when we get there, there will be parks and other fun free activities to discover. Look at life as an adventure, you will be surprised what you can find.
To save money on these road trips, I always use a few tricks to save money:
- Fill up in states with lower taxes on gasoline. As a rule, certain states are just cheaper and some states are always higher no matter what. In my travels, Kentucky, California, New York, and Indiana have all had higher gas prices.
- Fill up outside of a big city. The towns surrounding the larger cities will still have competitors to keep their prices low, but gas stations out in the middle of nowhere are going to be 20 to 30 cents more a gallon.
- Drive 55. This is the speed for best gas mileage, so drive slower. Even on big trips, another hour in time can result in a penalty in your tank.
- Bring your own snacks and drinks. I carry a cooler with ice and drinks and plenty of fruits, veggies, and different snacks for the little one. Gas stations will rape you with their prices.
- Choose hotels 10 miles or more from a metropolitan area. It is kind of like gas prices—you want some competition, but not the big city prices. A lot of people feel the need to book ahead. If the discount is worth it, go for it. I never do.
- Take advantage of coupons and activity flyers. You may find a free activity or discounts on local attractions. Explore wherever you are.
I spend about $50 a week on groceries. I cook all of our meals and I take advantage of sales and discounts. I do not cook more than me and my son can eat cause I can't afford waste. Before going to the grocery store for my weekly trip, I make a menu for the next week and make a list accordingly. I do not skimp on food—we eat whole, healthy, home-cooked food. The less processing your food has, usually the cheaper the price.
Insurance, Daycare, and Other Expenses
- Health Insurance: My son is insured through his father and I pay less than $50 a month with a pre-diagnosed condition. Shop around and find a plan that works for you. No, I am not covered for everything, but I feel confident in what insurance I do have.
- Daycare: I used to pay $600 a month on daycare. When I did the math, the money I spent transporting myself to work and daycare took up most of my check. After a bad experience with my son’s daycare, I finally made the decision to go back to school and find a way to stay home with him till he went to school.
- Education: I go to school online, where extra costs are not added. I do not have to go to class everyday, so I do not have to put my son in daycare. Some online schools are even going with full-time flat rates, where you can maximize your class load to be done quicker and save money. I have added another class so I am at 16 credits a term and that will shave $9,000 in tuition and almost 6 months off my degree.
- Household Expenses: Household goods are bought weekly to save an extra trip. I buy most at the dollar store, however I buy certain products name brand. You have to decide where you want to spend an extra couple of bucks for the name brand when the product is actually better. With hair past my waist, I cannot afford off brand supplies, so bath and beauty is one area I will splurge a bit. I do not have more makeup than I can use and I buy when I need. This is the theme of my life. I do not stress over these decision because deep down I already know. I don’t feel like I am missing out on anything, I just choose what priorities are important and go from there.
- Clothing: I am always looking for great deals on clothes. My son is steadily growing and I take advantage of clearance sales everywhere. I typically do not buy clothes unless they are at least 75 percent off. I usually buy clothes after Christmas—around mid January the savings really get up there. I have been known to go to consignment shops for various items, but with clothes and shoes I always keep an eye open. I refuse to pay full price when I can pay less at another time. Saving money in this category is achieved by simply buying when things are on sale, not when you have an urge for something new.
- Little expenses: Daily coffee and fast food lunch add up immensely and do not make us any happier. Maybe as a treat, but every day is a waste. I need to finish my education, and living within my means makes this possible. I still have vices that waste my money like smoking; however I was able to cut the cost by 65 percent by just rolling my own.
We live in a world run by money and materials. Yes they are needed, but really, to what degree? I stopped buying and started living and I have never been happier. I do not feel like I live much differently than most, I just stop and think before I buy.
Know what you have to work with and then budget accordingly. No, I do not have savings, although I do put aside as much extra money as possible for a rainy day. Whether it be car repairs and maintenance, dentists visits, or any other unforeseen expense, they will happen, so I am a bit prepared. This is not forever, but for now it is just fine. With my degree will come more money and I hope to keep the simplified approach to save enough to put my son through college. I have found my goal and am going for it, now go find yours, just go for it and make it happen.