While $30,000 per year for one person is well above the poverty line, you can’t spend money frivolously if you want to make it work. There are a lot of tips and tricks you should know about if you’re going to make $30K a year work! Fortunately, in this guide, we’ll introduce you to a bunch of these useful tips. You’ll be living large on $30K a year in no time!
Save Your Money
An essential part of living on a small yearly salary is putting a portion of that salary away. When the paycheck you bring home every month is already on the small side, it’s all the more vital that you have money saved for activities, contingencies, and more. The amount you put away directly affects this quality of life.
The act of saving a lot of money itself will require substantial lifestyle changes, and we’ll go over more than a few of the changes you can make in the remainder of this article. For example, if you’re eating out every night, you’re spending far more money on food than you would be if you were cooking your own dinners every night.
As such, saving your money isn’t really the starting point – you’ll have to implement other tips in this guide to make it work!
Eat at Home
We used eating at home in an example in the paragraph above, and it’s an excellent habit to start with if you want to live on $30K per year effectively. The average American spends about $7,000 per year on food, and just under half of that is spent eating away from home. You could easily bring that number down by a few thousand dollars by merely preparing food wisely at home.
Think about how much a meal for one costs when you’re out to eat. The average purchased meal, be it fast food or sit-down style, costs $16. If you have multiple members in the household, that number goes up more based on each person, of course. Fast food tends to be a bit less, while sit-down meals tend to be a bit more.
On the flip side, eating at home with groceries you’ve purchased at the store usually costs about $4 per meal. Essentially, with each meal you decide to eat at home instead of going out, you’re saving $12 on average.
Of course, the above metric varies from person to person based on several factors, such as:
- How much food you eat with each meal
- Whether you prefer fast food or sit-down restaurants
- The price range of the restaurants you frequent
- The price of the groceries you buy
- Any sales, promotions, or bulk food products you take advantage of
However, as a general rule, it’s good to minimize your trips eating out as much as possible. You’ll want to have a decent stockpile of money saved for those special occasions with friends, family, or loved ones, so keeping spur-of-the-moment restaurant trips to a minimum is the best way to do that. Obviously, there are ways to minimize the money you spend on groceries, too, but that’s a whole different topic!
Reduce Your Debt
Debt is one of the biggest obstacles to living on a small budget. However, it’s nearly impossible to eliminate debt from our lives today completely. Things like student loan debt, car loans, and house mortgages are often considered everyday necessities to be a functional adult. However, there are ways to keep this to a minimum, too.
One great example is to keep your stockpile of credit cards (and, of course, credit card debt) as low as possible. If you’re careful with your money, it’s not truly necessary to even have a credit card at all, but most people find it very convenient to have one. Additionally, credit cards can offer helpful finance boosts if you can use them in a consumer-savvy way, such as cashback percentages and travel miles.
Try to keep the debt on your credit cards as low as possible, too. Always, always try to pay off the balance each month. Not only will this leave you with an excellent credit score, but it will let you start with a clean financial slate each month, too.
Credit card debt won’t be your only source of debt, however. Student loan debt is a particularly persistent form of debt that can plague people for many years. It’s good to try and pay off any loan debts you have as soon as possible (but only if it’s feasible, of course).
Home mortgage debt is an interesting thing to consider. On the one hand, in many places, a house payment can be equivalent to or even less than what an apartment payment is, especially if you can make a large down payment first. However, you also have much more to pay for on top of the house, such as homeowner’s insurance, utilities, and taxes.
A home mortgage is still a debt, but depending on economic fluctuations, you can recoup most or all of your investment when you sell your home, too. As such, the debt payments you make will eventually go right back in your pocket, even if you lose some of the value of the home. This isn’t the case with an apartment, even though you never go into debt.
If you can, it’s generally a better fiscal decision to purchase a home instead of buying an apartment for this reason. If you only plan to live in an apartment for a year or two, a flat becomes a much more fiscally responsible option, but the fact stands that all of the payments you make toward that apartment will not make their way back into your pocket when you move out.
Forego the Car
Another luxury that’s great to skip if you can make it work is owning a car. If you live in or close to a city where public transportation is common, you can save some money by not buying a car. Buying a new vehicle almost assuredly requires you to open a loan, which is another debt you’ll want to avoid.
However, it’s just not feasible for everyone to forego owning an automobile. To start, public transportation isn’t accessible in all cities, and even in places where it’s common, it can be slow, inaccessible, or unreliable. Some forms of public transportation, such as taxis, can also be cost-prohibitive in the long run.
If you live in a place where it’s possible, the ultimate arrangement is to walk or bike to work. Bikes are inexpensive and require minimal maintenance, but they’re a relatively fast means of human-powered travel. Of course, if you’re close enough or patient enough, walking or jogging to wherever you need to go is an option, too.
Of course, yet more difficulties arise when you don’t have a car besides just budget-based ones. For example, grocery shopping becomes much more difficult without a vehicle to carry all your groceries home. Unless you have some sort of backpack or trailer for your bike, you’re limited to purchasing only as much as you can carry back.
While living without a car is a difficult situation to swing, it has many undeniable benefits. For the nature-lovers out there, the most obvious benefit is saving the planet. Fewer cars mean fewer greenhouse gases and less consumption of fossil fuels, and while this isn’t necessarily a budget perk, it’s a nice one regardless.
Of course, the money saved by not having to pay for a car is important, too. While a monthly car payment might not seem like that much in the grand scheme of things at first, think about how much money you must put into the ownership of the car for a minute. In addition to your monthly car payment, you’ll also need to pay for things like:
- Routine maintenance and care
- Car insurance
- Emergency repairs
- Fuel
- Licensing and inspections
If you do already have a car, resist the urge to upgrade to a new one when the next best model comes out. Depending on how much you drive, you can drive a reliable car for more than a decade easily! Shiny, new, technologically-advanced cars are always tempting and fun to have, but they’re not friendly on a tight budget.
Rent Out a Room
If you have a home that supports it, you also have the option of renting out one or more rooms of your home. Depending on where your residence is located, you may be able to charge a pretty decent range for this rental. Of course, the more desirable the location and the more private the room (i.e., does it have a kitchenette? A bathroom?), the more you can rent it out for.
Even if you’re only renting out your room for as little as $300 per month, this is an excellent way to lessen the impact that paying for your mortgage has on your yearly salary. Do be careful with renting out a room, though, as bad tenants can cause damage to your home and hurt your budget that way.
If you don’t have a room to rent out, you can get creative with other rentable spaces in your home, too. For example, if you have a large garage, you could rent out a permanent parking or storage space to someone for a few dollars per month. If you have a large basement with plenty of space, you can do the same thing.
Conquer Clothing
Clothing is another hurdle that many consumers have trouble with. It can be challenging to hold onto your unique style with a tight clothing budget. This same concept extends to things like hair styling, makeup, and accessories, too.
Of course, the easiest way to save money on clothing is to buy new things as little as possible. Try to buy clothing that’s long-wearing and durable, but still inexpensive, and it should last you for years. While you might be tempted to upgrade and refresh your wardrobe regularly, keeping content with the clothes you have is the best way to save money.
However, if you really can’t resist the urge to reboot your wardrobe, there are still a few things you can do. If your clothes are in good shape, you can resell them, for example. Do keep in mind that this strategy is less feasible for uncommon clothing sizes and well-worn clothing, however.
Another excellent way to reduce the cost of your clothing is to shop at secondhand clothing stores. If you’re a savvy secondhand shopper, you can even find designer brands for sale for impressively low prices. What’s available near you depends heavily on where you live, however.
If you do find that you’ve outgrown some of your clothing, whether it be emotionally or physically, you can consider donating it, too. While this won’t put money in your pocket right away, you’re permitted to deduct the fair market value of each item from your taxes at the end of each year. This is a much easier way to receive some value back for your clothes than selling them.
Phone and Internet
In today’s connected world, an astounding portion of our monthly budgets goes to our phone, internet, and television. Today, it feels challenging to live without access to a smartphone or the internet, but there are ways to adjust the amount you’re paying for them.
In the USA, there aren’t too many ISPs (or Internet Service Providers) to reliably choose from, especially if you live in a rural area. This limits your options a bit. However, a great way to save some money is to resist the urge to buy a service bundle; most ISPs offer television, internet, and phone bundles for a competitive price.
In today’s world, it’s no longer necessary to have a home phone, since most of us work primarily from our smartphones anyway. Unless your ISP offers cellular phone plans (which many, like Verizon and Xfinity, are beginning to do), it’s generally a good idea to skip the phone plan.
Reneging on a TV subscription is an even better way to save a few dollars. Cable and satellite TV plans are expensive, and with so many streaming platforms available today, it’s arguably unnecessary, too. Many smaller-scale streaming services exist to bring you curated channel plans, too, for when there are channels that you just can’t live without.
Overall, if you can get by with a simple internet subscription plan for your home, you’ll be in excellent shape from a budget perspective.
Find a Roommate
This is similar to renting out a room in your house, but a bit different in that you’ll be renting out the whole “house” instead of merely a room. A roommate might sleep in the same bedroom as you if you only have one, or they might stay in a separate room of the house. Roommates generally split the costs on a residence equally, where someone renting out a room to someone else will pay the home-related bills from their own pocket instead.
Finding a roommate is a bit of a contentious option. Roommates are common in multi-bedroom apartments, but not as much in multi-bedroom homes because of ownership reasons. There’s also the issue of finding a reliable roommate who you get along well with, and one who will treat your residence with care. If you’re not keen on sharing your space with another person, this is also not a good idea. However, if you can make it work as well as tolerate their company, this is a great way to budget your expenses further.
Rethink Your Purchases
This is the most obvious of the budget-saving tips on this list, and it’s one you probably thought of already. However, we’ll reiterate for you anyway: think before you buy! As human beings, we’re prone to making impulse purchases that might not always be something we need. Take the time to really think about whether you need to purchase something before adding it to your cart!
For example, did you find a clothing item on sale at the store that you really like the looks of? Consider what other things you might have at home before grabbing it. Do you have anything that’s similar to it already?
Let’s assume that the item you want is a sweatshirt. How many sweaters do you already have at home? Do you have this color or pattern already? Does it have a different feel or fit than anything else you own? Essentially, could you substitute something you already have for this item and still be happy?
This is especially true for shoes, which can be prohibitively expensive! You really only need one pair of each of the following, purchasing new options when they wear out:
- Work shoes
- Exercise/outdoor shoes
- Seasonal shoes (i.e., sandals, winter boots, galoshes, and whatever’s most appropriate for where you live)
- Formal shoes
- Everyday shoes
If you can find multifunctional shoes, that’s all the better for your purposes! Not only will this let you downsize on your things, but it’ll allow you to save money when you need to buy new ones, too. Try to find shoes that match as many different outfits as possible, since you’ll be minimizing the amount you own. This same principle can be applied to clothes.
Thrifting for shoes is another great option, too. Shoes are a bit of a less desirable option to go thrift shopping for, as not everyone has good-smelling feet or good foot hygiene. However, if you don’t mind the thought of wearing a pair of shoes that once belonged to someone else, this is a great way to save money, especially on expensive brands!
Free Activities
When you live on a tight budget, it pays to do more things that are free. While many activities have entrance fees, ticket fees, and more today, there are plenty of fun things you can do for free, too. If you’re planning to hang out with some friends, for example, try suggesting a movie night in instead of going to the movies. If you must go to the movies, consider eating beforehand or bringing your own snacks instead.
More free (or near-free) activities that you can consider include the following:
- Visiting the beach
- Walking in the park
- Driving to and exploring a new city or state
- Visiting a national park
- Hiking or camping
- Board games or card games
Couponing
If you’re interested in saving some money while living on $30K per year, the chances are that you’ve heard of “extreme couponing” before. Extreme couponers invest significant efforts in finding coupons to help them save money on everyday necessities. While this can be difficult to do with food due to its perishable nature, other household goods are very easy to coupon, such as:
- Soaps
- Paper towels and toilet paper
- Disposable plates, bags, etc.
- Hygienic products, such as razors, feminine supplies, etc.
- Canned fruits and vegetables
- Air fresheners
While extreme couponing (and even non-extreme couponing) can result in some excellent savings, keep in mind that it’s a significant investment of time and effort. You may be better off devoting your time to working more and making more money rather than spending hours looking for coupons, but this depends on the individual and their diligence to the practice.
Family Size
If you’re living on only $30K per year, it might be a good idea to keep your family small for the near future. This doesn’t necessarily apply to meeting a significant other, especially if they provide their own source of income, but children, on the other hand, do not. Raising one or more children on $30K per year can be a bit of a stretch for anyone.
While when, how, and if you have children is entirely up to you and no one else, it’s generally a good idea to do so only when you feel financially secure. It’s undeniable that children are costly, and this can hit a small yearly budget pretty hard.
If you’re sure you want children, consider the idea of adopting an older child instead. Teenagers and adolescent children tend to see far fewer adoption opportunities than young babies, and they may be able to find a job to help pay for their own necessities in relatively short order, too.
Buy in Bulk
As a one-person or two-person family, it can be tempting to purchase food in small quantities for the worry that it might go bad before you can finish it. However, this is the wrong mindset to have! Many different food items (read: many, but not all) cost much less when purchased in larger quantities.
For this, your freezer is your friend! The freezer is a great way to keep fresh food tasting good for many months – especially meats. Meat is an excellent item to purchase when it’s on sale, freeze, then thaw the day before you’re ready to cook it.
A surprising amount of foods are freezer-friendly. Many vegetables can go in the freezer either before or after cooking, and some prepared meals can go right in the freezer, too!
Meal preparation is a trend that’s started to gain popularity and steam thanks to its convenience and money-saving potential. With meal preparation, a person buys bulk food in order to cook a large amount of a particular meal all at once. Generally, if you’re keeping these meals in the fridge, you might make enough for about a week, or if the meal is freezer-friendly, you can make much more.
However, buying in bulk doesn’t just apply to food, either! Things like clothing, Tupperware, pens, home supplies, and much more cost less when purchased in large quantities. Of course, it’s never a good idea to buy more than you need of something if you’re never going to use it, but if you do think you’ll put it to use in relatively short order, you should give it a shot!
The Premade Problem
Pre-made grocery items, such as frozen meals, prepared salads, and pre-assembled sandwiches tend to be much more expensive than their separate components. As such, it’s generally a good idea to resist purchasing these prepared meals as much as possible.
Not buying prepared meals relates back to buying in bulk, too. If you’re in the mood for chicken soup, for example, instead of buying a can that’s good for one serving, you can purchase all of the components and create a large pot of soup for as much as or less than buying cans. Of course, it’s always a good idea to do the math before committing one way or the other, as sometimes sales and deals can make buying prepared meals worth it.
There is a line to draw between the time that it’s worth to prepare your own meals and the cost savings involved with them, however. For example, you might spend an hour or so making a large pot of chicken soup, but if you can make $15 by working an extra hour, it might be worth it to buy that can of soup and use that time to work instead.