Living the Good Life on $10,000 a Year

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It seems that most people feel they have ‘money problems’. Unless you’re actually unable to work for some reason, you have serious medical expenses or several kids, chances are you could be either making more money, or spending less (or both), and still live the Good Life. It’s all about priorities.

My idea of Living the Good Life is travel, adventure and freedom. It’s also about leisurely mornings and late-night reading sessions, and time with family and friends. It’s having a flexible schedule with plenty of time off to do what I really love. Your definition may be a private jet, a personal chef or a brand new Mercedes, in which case this post might not be for you, but who knows. If like me, you value your time and experiences over material goods, you can probably afford more than you think.

During my college years and even after, I made around $12,500 annually through teaching after-school Spanish classes and nannying. Sometimes less, sometimes a bit more. A good $2,500 of that went to taxes, as I was self-employed, leaving me with around $10,000. I could have worked more, but I was studying hard and I wouldn’t have had as much freedom and time for adventure.

I was lucky, as I didn’t have to pay for college. I chose a State school and lived with my parents until I was 21 for frugality’s sake, but eventually I moved out. I also traveled for 3 months every single summer for years, on my own dime, often alone as none of my friends could “afford” it. I chose not to have a credit card until after college, so that was never a temptation.

Here are what my finances looked like:* 

Available Monthly Income = approximately $1,100 for my 9 working/studying months of the year.

  • Renting a room in a shared house: Between $250-$350/month for only 9 months out of the year, with utilities included. Yes, good deals like that can still be found, or made! Maybe not in the nicest or most central places, but it’s all about priorities and street smarts. I always found great rooms, and great people to live with, so it never felt unpleasant. I built communities with people. Ever considered doing a garden, cooking or cleaning trade? Managing a house for someone in exchange for low monthly rent? Getting a big house and renting out rooms yourself? Subletting your room or house religiously whenever you’re gone, for a profit? Going to visit Grandma for a week? Depending on where you live, rent your room out for $300 and make some quick and easy cash. Big event over a long weekend in your city? Go crash with a friend or parent while you get someone to stay at your place for $75/night. There are so many possibilities, some which include not having to share your space if that’s important to you. Own a house? Partition it off and make a mother-in-law apartment to rent out. All of this is much easier than people think.
  • Cellphone: No cellphone for much of this time. Otherwise, $45/month (lowest plan). These days, $15/month on a prepaid plan.
  • Insurance: $0, on my parents plan. Later, I went without insurance for a time before getting a $60/month plan with Washington Basic Health, for low-income people like me, or a cheap travel insurance while abroad.
  • Groceries: $200/month. I grew some of my own veggies at times, never splurged on fancy drinks (or practically any alcoholic drinks-  kick that habit and watch your savings grow!), rarely went to restaurants, or stuck to the cheaper ones.
  • Beauty and Fashion: virtually $0 on makeup or jewelry, $0 on hair (one $14 haircut every 8 months and one cheap tube of mascara every 6 months), $0 on mani/pedi or skin products, and relatively little on clothing (and never anything expensive).
  • Car: $0, no car. Maybe $20 to my mom for borrowing her car every now and then, or to help out a friend who owned a car. Why have a car when practically everyone you know has one? And they’ll be happy for the gas money anyway. It’s not mooching: when I have owned a car (or motorcycle), I always let friends borrow them, completing the circle.
  • Furnishings: Craigslist Free section, one trip to Ikea using some leftover money.
  • Miscellaneous: about $150-$250/month for extras depending on rent cost. Things like that Ikea run, dog food or occasional vet bill, $35 climbing gym membership some of the time, coffee, gifts, a cheap movie, and quarterly bus pass. No new books or magazines! It’s called borrowing from the library or a friend, or going to a cheap used bookstore once a month. I stopped snowboarding, as it wasn’t high enough on my list of priorities.
  • Savings: Usually over $300/month, give or take = nearly $3,000 for my summer trips. $1,000 for a plane ticket, and usually $2,000 for spending. I chose countries based on cost. Europe, Australia and Africa were too expensive or remote at the time, so I stuck mostly to places in Asia and Latin America where my dollar went far and I could afford to have tasty meals out and not worry financially. I stayed in hostels, sometimes splurging on slightly more expensive places like a sand-floor cabana on the Caribbean (more recently, Couchsurfing for free). I also never paid for my Seattle room while gone, but would instead sublet it, often making a few hundred extra bucks.I’d put my cellphone on hold, so I had no bills.

Did I live a boring or hard life with all that frugality? You tell me: For 1/4 of the year, for years, I was out tromping around in places like Iceland, Guatemala, Belize, Thailand, Mongolia, China, Peru… The list goes on. Between the ages of 18 to 22, I had traveled to 17 countries, and to over 20 U.S States. By the time I was 28, I had been to 30 countries. It wasn’t country counting though- I had deep experiences in these places and would travel to some countries multiple times. I never wanted to “reach” a certain number. I wanted the experiences: Riding camels in the Gobi and bareback horses on the border of Siberia and Mongolia with nomads, volunteering with old folks and indigenous kids in Argentina, taking 15 teen Girl Scouts to Costa Rica to learn about sustainable living, seeing old neighbors and friends in Brazil, falling in love with the Icelandic moonscape while camping and trekking on glaciers. I created memories and experiences I will never forget. I was a ‘backpacker’, but so far removed from your average half-drunk city-hopping party kid wasting money on booze and shopping sprees.

The only difference between me and peers was that they felt poor and I didn’t. The more they had, the more they spent. They didn’t go anywhere, worked unsatisfying jobs, but had the latest and greatest cellphones, cars, brand-name clothes, and of course, credit card debt. While they were busy working and spending, I had time to go on mid-week hikes, enjoy my school breaks without working a ton, spend time with my family and friends, spend hours at my favorite cafes studying, take weekend camping trips, stay in shape, host fun parties, work in my garden, and so much more.

But was that my end-all final goal to make so little and spend so little, forever? Of course not. These days I make more money, and actually save money. I own a rental property that is currently funding my travels (and helping my savings grow), and I hope to have more in the future. I still travel, and have temporarily reverted back to semi-employment and heavy travel, just for the fun of it, because it’s become a priority again.

Now imagine yourself living off a similar budget to my college days, but working a normal 9-5. You make $40,000 a year after taxes, but only spend $10,000 of that and save the rest. In three years, you will have saved $90,000 (hopefully it won’t be sitting interest-free in your savings account). You now have enough to accomplish much more than I did in college. You could keep on working and saving and investing for total financial independence, travel for years, or buy a house. Suddenly you have so many more options, and a newer sense of freedom by not living paycheck to paycheck.

Figure out what makes you truly happy and cut out the waste to get it. You’ll find that living The Good Life is far less expensive than you thought.

*Disclaimer: I am notoriously bad at math, and these are rough figures to give a general idea of what my expenses looked like.

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6 thoughts on “Living the Good Life on $10,000 a Year”

  1. Thank you for sharing your adventures, pictures and thoughts!!!! I have enjoyed “traveling and learning with you.”
    You are a true inspiration!!!!
    Kip-Ja

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