Getting an income of $20,000 requires a high dedication to living. Living on $20,000 a year may be a big challenge for everybody. With an annual income of $20,000, the typical rent for a 1-bedroom apartment in 2020 was $ 2,078. This suggests that the tenant is in a position to eat most of your paycheck.
There are a couple of tips you can use to save money and live on $20,000 per year:
The Focus amount of cash to live on is $20,000
All you’ve got to try to do is to stay on budget with the quantity of cash you’ll earn. But that does not mean that you simply need to be a money-minded person. I just want to mention that you simply should focus only on yourself and save your money.
A glance at your expenses
Please keep all the receipts to show you a transparent picture of your spending habits. Today’s technology has made it easier for you, you can use an online app to see your bank and master card activity. Most of the banks can show you your financial performance and share a weekly spending plan.
What do you purchase when earning $20,000 per annum?
Some things, like rent, must be paid monthly, regardless of what. There are a variety of expenses, like food, which vary slightly but couldn’t be reduced by too much. However, there are other costs that you can consider to reduce your expenditure. Fixed costs don’t change from month to month, but it’s to be paid monthly, including rent, car loan, compensation, etc.
The overall costs that you cannot avoid include food, transport, utility bills, but you should be ready to reduce them to work on a budget that you can afford, and maintain.
Think about your housing cost
If you earn $20,000 per annum, then you may be eligible for rent assistance from the government. There are different types of rental assistance, for example, you can get a receipt for a fraction of your whole price. Other options are also to consider moving to a less costly area and therefore pay for the rent of an area that you can afford and live on $20,000.
Do not borrow money
This point is extremely important because debts are extremely dangerous. Also, be careful not to fall under the trap of getting a loan of a certain amount that you need to pay slowly because at the end of the day you will pay more money due to the accrued interest.
You can save yourself out of the situation by paying your whole debt once and for all. People that eliminate their debt fast end up making extra money in the end. So, if you have one then get rid of it soon.
Public transportation
If you reside in a neighborhood with public transportation, then you are lucky. If you’ve got absolutely no need for a car to move around, public transportation provides an economical alternative. In fact, it could save you thousands of dollars per annum.
Think about your clothes
Once or twice a year, you ought to need to buy a couple of clothes, like an additional pair of jeans, or a pair of pants, or a couple of shirts. Alternatively, you can continue keeping the t-shirts that you already have for a couple of years. If your job requires you to wear uniforms then you will be lucky. You may want to avoid the latest and trendy outfits but go for quality garments. You ought to shop at cheaper places such as charity shops.
Have transparent goals on how to survive $20,000 per year
You should set huge savings goals for yourself. You should also have an emergency fund. In order to check yourself out of a financial situation, you may need to set aside an amount that can get you out of a $10,000 financial crisis. It seems like a long process, but it’s not as complicated as you think.
Avoid bad habits
When we mention bad habits, we are talking about alcohol and tobacco. Alcohol will cost you tons of cash just like cigarettes. All through the year, a lot of people spend their money on alcohol and cigarettes.
If you’re in a position to stop it then you better do that because you will be saving yourself thousands of dollars. If you are addicted and find it hard to survive without them, then you can opt for nicotine gums or patches as you gradually stop. You can visit the doctor who will recommend other healthy methods that you can use.
Save on food
The best and most environmentally friendly products in the world that will not break your bank are fresh vegetables, fruits, tuna, whole wheat bread, spread, milk, and other products on the market that you can get at a really affordable price. Moreover, some wines taste good and don’t cost more than $ 5.
You may want to undertake the red wine, which can only cost you about $ 3 per bottle of wine. That way you do not have to worry about drinking and driving. After implementing these tips you’ll notice that you will save lots of money on food.
You can research and check if you’re eligible for Supplemental Nutrition because you do not have to be unemployed and to be hungry so as to be granted coupons for your grocery shopping. If you’re finding it difficult to buy the groceries, there’s a grocery or a bank in your town that offers home delivery and will be happy to assist you out.
This may seem to be expensive, but imagine how often milk and other food go bad in the fridge or what number of times you have found leftover foods in the fridge that you did not eat the next day after cooking.
Here are a couple of ideas on the way to economize on food and avoid waste.
- Check the expiry dates of the products at the shop before buying.
- Wash and clear out your refrigerator once a week to get rid of rotten and expired food and keep track of new and old food items.
- Create a food menu for every week. Make an inventory of the required ingredients and when you get to the store, only buy what’s on the list.
- Limit the consumption of snacks and drinks. Additionally, it’ll have little or no nutritional value but will only be quite expensive.
Create a record to solve issues monthly $20,000 per year
With this new budget, you will not have time to try it so you will end up spending or saving extra money as you continue to learn to live on this budget. If you’re on a limited income currently, you would like to control your money regularly so that you can practice with future budgets.
At the start of the month check your savings and expenditure of your money in the previous month and improve on areas you feel you can do better in managing your finances.
Entertainment
Some of the simplest entertainment options that you can get are cheap including television, radios, books and novels, CD and DVD, videos. Moreover, the Internet has an endless supply of interesting articles, videos, and audio. Most of this content is free and therefore you will only need around $15-25 to pay for your Wi-Fi. Outdoor activities such as playing basketball, softball, hiking, gardening can also contribute to your leisure activities.
Do you have insurance to survive on $20,000?
If you are employed then it is easy for you to visit the doctor and get medical help from a proper hospital because your employer will cater for the bill. If you get sick or hurt you can’t afford to travel to the doctor when you are living on a budget, luckily your checkups are going to be free if you’re working as an employee for a big company.
Savings for emergencies
If you don’t have any savings or any debt that you pay for every month then you should attempt to save at least $5,000 for each month which provides you with security to settle in and put down your deposits.
What about retirement?
Believe it or not, you may require to have a retirement career before you even retire. You can follow your passion and ambitions of becoming a writer for instance. Writing after retirement may help keep you busy and also get you some funds in the process.
Trying to measure on $20,000 a year
When you eliminate stuff, you will realize how little you really need to live while saving money. It is all about prioritizing what you actually need in life. It is hard sticking to a strict budget once you do not have a reason to do it. You will be happy once you accomplish your goals on how to live on $20,000 per year
Cooking meals for yourself
Eating in a restaurant will replenish your money such that you will not have any money remaining for more food during the week. You can be happy by eating healthy foods which are often the most cost-effective, and they are versatile enough to be within the range of cuisines that you may want. These foods include:
- Fruits and vegetables
- Tomatoes and beans
- Brain bread
- Tuna
- Eggs, milk, or natural yogurt
- Oatmeal
- Natural Herbs as spices
Buy recycled furniture
Saving a lot of money is a good feeling. If you’re able to pack up and restore old household items that are slightly old and have been used for a short while then you can save a lot of money compared to buying new household items. Don’t ignore the marginally worn or dirty items.
Be prepared to exchange items with other people who might need them. This means that you will be capable of replacing old items with new items in your house without having to pay a cent.
Buy items in bulk
You’ll save the top dollar from your “significant expenses” if you purchase multiple items directly. You can refill on toiletries, food, and cleaning supplies online or in supermarkets to reduce your expenses little by little. Be aware, however, that you simply may have to pay more beforehand to order the products in bulk compared to when you are just buying two or three items.
Cut down on habits like smoking and drinking
Spending just $ 2 each day on coffee translates to about $ 60 a month, or a minimum of 5% of your annual income. Cigarettes are even more expensive. At the end of the day, saving money and living on a tight budget requires a lot of sacrifices you’ve got to seek help on how to scale back these unnecessary costs. Some tips you can consider include:
- You can start by cutting the budget for smoking and drinking by half for a start and you can go on from there.
- Find different and cheaper habits if possible. Whenever you get a craving (smoking), complete your new habit (taking a trip around the block) for a change.
- When you view smoking as a dangerous and hazardous habit to your healthy life then it might be easier for you.
