Friday, August 10, 2012

Living on less than $10,000 a year

Is it even possible to live on a small amount of money in today’s world?  I was asked this question recently by someone when I told them of my plans to reduce my expenditures to just a few hundred dollars per month. They couldn’t seem to grasp the fact that there are a lot of people in this world who live on very little money already and are not completely miserable.

But what is misery? Is it being unable to drive the newest, shiniest, gas guzzling car on the road? Or is it slaving away at some job you hate 40+ hours a week so you can pay for that new, shiny gas guzzler? All things in life are relative and you have to decide what is important to you

Food, water, clothing, and shelter from the elements are pretty standard items on anyone’s short list of necessities. Once those needs are met though everything else is merely icing on the cake. So do you think you could provide those necessities for under $10,000 a year? Sure you can. If you paid $600 a month for rent that would leave you $2800 for everything else.

Rent a house or apartment (all bills paid) and take in a roommate or two that can help out with the rent and you can easily cut your housing expense to $600 or less. That leaves $233.33 a month for everything else. Purchase a good used bike for a hundred bucks or so and your transportation needs fall to almost nothing. $233 a month is certainly enough money for one person to eat on for a month. If you’re really frugal in this area then you should be able to cut your weekly grocery expense down to $35 a week or less.

If you can do that then you’ll have nearly a hundred bucks left over for other things you want or need. Buy a cheap prepaid cell phone from the dollar store for $20 and purchase minutes when you have the extra money and conserve minutes when you don’t. Buy most of your clothing from thrift shops and yard sales.

Keep track of your expenses so you can see where the money is going and make adjustments as needed. A couple of years ago I was living in a large metropolitan area and I kept track of every cent I spent over the course of a few months. I was able to reduce my monthly expenses to just over $500. I met those expenses by working odd jobs in my spare time.

You probably think that I was miserable but I really enjoyed myself. I worked less than twenty hours a week at times that were mostly convenient for me and the rest of the time I spent exploring the city. It was more like an extended vacation to me than some poverty stricken existence.

Now let’s say that you can find a way to reduce the cost of most of life’s necessities to near zero! Do you think that you can live a pretty decent life on $10,000 a year? Remember, everything else is just icing on the cake and $10,000 can buy a hell of a lot if icing. It might seem impossible to reduce your expenses in this area to almost nothing but it is entirely possible.

If you traded in your car for a good running van and converted it to a “mini” motor home all you would pay for is gas, maintenance, and liability insurance. If you didn’t drive around all day then you could get by on two or three hundred a month-not including food. Check out the web sites, Cheap RV living and Cheap green RV living for plenty of good info about this lifestyle as well as articles about converting a van into a home on wheels. You can find links to these sites on my links page.

Living in a van seems a bit extreme to most people however so if this isn’t for you start your search now for that perfect little place you can call your own. Buy a cheap-ass piece of land somewhere and a cheap-ass crappy trailer. Pull your trailer out to your land and set up camp. If you can pay cash for the land and the trailer your rent dilemma is solved. If you can’t get the money together to pay cash for a chunk of land then pay it out. Don’t go into debt long term however.

In fact if you have a lot of debt right now you should work as hard as you can to eliminate that debt because that’s a disaster waiting to happen. Pay it off as fast as possible and implement a “cash and carry” policy in life. Look for ways to reduce or eliminate monthly bills and you can live pretty damn cheap!


  1. Nightshift here....Good post. Another option, one I am fond of, is if zoning allows, build a small cabin. You could build one pretty cheap that would be better than a old camper. Basic features and upgrade over time.

    I will be building about a 12x20 cabin with a sleeping loft on the back of my property as a fall back, separate parcel so I can maintain it if things collapse.

    Still a big fan of a small motorcycle for transportation. Opens up a larger job market too. Nothing wrong with a bicycle unless you are far from work. I'm 14 miles from the nearest gas station.

    Lots of money can be saved on food too. You just have to simplify. $35 a week is doable, probaly even cheaper. A couple of chickens will make breakfast and give you some security from food shortages.

    I like vans and if you had some junk land you would not get hassled parking. Search "Vandwellers" for more sites.

    Alas, I have a wife and kids. I have downsized to a paid for 16x80 and only owe on the land. I have room for my adult kids to move home if needed. Wife wants to build a house but we have different ideas.

    Good luck with getting the place full time livable. Looks like a decent area. Did you ever get that Scooter? LOL

  2. Nightshift, no haven't got the scooter yet. Still researching and I'm now leaning more towards an on/off road bike (enduro) for my main transportation needs. I'll probably post about scooters and small motorcycles pretty soon but right now I'm trying to pay off a small debt that I have. Shouldn't be much longer though.

    Once summer is over I'll be in a better position to resume my plans that I covered in earlier post.

    As for the small cabin, I think that is a great idea. Travel trailers are pretty damn good for simple, cheap shelter that you can move into right away. It shouldn't be your ultimate goal however.

  3. The used trailer/junk land option is much better than the $600 rent option which ties you down and prevents, or at least delays you from getting onto your own piece of land. Most rental situations require first month's rent and a deposit (usually equal to a month's rent) up front. That's $1,200 that would be much better spent getting off grid. Take the $1,200, get the trailer, and make your first payment on a piece of junk land. Poof! No more rent. If you actually have $600/month available for rent, you can usually pay off a reasonable piece of junk land in less than 6 months.

    Most junk land sources require no qualifying or credit check and there is generally no early payment penalty. Just make your down payment, pay transfer fees, and start making payments. Although the contracted monthly payment might be low, maybe only $100, I recommend paying as much as you can every month till it is paid off. Not only will your land be free and clear in a only a few months, but if you fall on hard times, you can slow payments to a trickle for a while until you are back on your feet.

    Don't get greedy and buy more than a minimal piece of land. Better to get off grid and debt free than to have the perfect spot. You can always upgrade at a later date, and after a few months living the life, you will have a much better idea of what you really need.

    I guarantee that the first day you wake in a place you actually own free and clear, no matter how minimal, you will be grinning ear to ear. It is a mind bending experience.

  4. Hey Tex! Almost forgot. If you are having withdrawal pains (in Texas is it spelled "with-drawl"?) from scooters as you contemplate an off-road bike, why not consider a motorized bicycle... as in a standard bicycle with a little gasoline engine kit. I have a mountain bike and I picked up an 80cc motor kit on ebay for $100. It makes tooling into town 7 miles away pretty easy. Most of the time I just ride it as a pure bicycle since I like biking, but I can remount the kit in less than an hour. I added a $50 craigslist yuppie bicycle "kiddie" trailer that I can load up with 50-60 pounds of supplies on serious shopping trips. I'd use it for commuting if I weren't retired since unlike a car or conventional scooter or motorcycle, if the engine breaks down I can still pedal the thing with relative ease. I've put over 2,000 miles on the little motor and it's still running like a top, getting something well north of 100 MPG (never really checked). I've thought about getting some spare parts, but at <$100 for the engine alone, I figure I'll just buy a new one every couple years and use the old ones for spare parts. Another cost saving factor with this setup, at least in my state (Washington), is that motorized bicycles have no insurance or registration requirements.

  5. About dollar store cell phones: You must keep re-buying every month or lose your minutes. Best deal I've found is 200 minutes for $15 at The phones so happen to be sold in a dollar store :-) You can set it up for automatic renewal (called "Easy Minutes") on a Visa debit card that comes free with many bank accounts.

  6. That is, $15 for 200 minutes per month. No other per-month charges. Look into all the other prepaid phones, you'll see you can't beat that.