How I’m Budgeting To Live Off Of Less Than 30% Of My Take Home Pay

April 10, 2017

I’m currently budgeting to live off as little of my take home pay as possible.  I’ve recently gone through a budget/expense overhaul and dramatically reduced my monthly payments in all areas.  I’ve decided to put my debt behind me once and for all.  The best way I’ve found to do that is to live like a college student and keep my expenses at a tiny percentage of my budget so I can throw as much as possible at my debt.  I’m still in my 20’s which is the best time to continue living like a college student to get rid of debt.  I let lifestyle inflation creep up when I was living in DC so in a way I’m reverting backwards.  Below I’ve detailed the three major buckets I’ve downsized.

Housing / Utilities 

The biggest challenge of any budget is keeping housing in check.  Getting that down freed up a ton of extra money to go towards debt payoff.  I downsized from a $1,200 a month one-bedroom apartment to a studio that costs $600 a month.  Housing is extremely important to keep low because its the largest expense in most budgets.  It’s hard going from a huge space to something smaller and less fancy but it’s worth when you sign that rent check each month.

Naturally my utilities will be lower in a smaller space than a large luxury apartment but there are some sacrifices that come with downsizing.  For example, I don’t have a dishwasher or washer/dryer so I have to go to the laundromat to wash clothes.  I didn’t even have to do that in college so let the adventure begin! I save a little on drying because I use drying racks at home which are also better for your clothes and helps them last longer.  My apartment also doesn’t have air conditioning which is another sacrifice in the name of debt payoff.  Lastly, I don’t have cable! I got a basic internet package for cheap and called it a day.


Another large expense is transportation. In almost every article I read there’s always a suggestion that you walk to work if you can to save money.  While that’s a good thought, the opposite actually worked for me.  I was able to walk to work from my old more expensive apartment but now I have to drive which actually saves me money.  Filling up my gas tank 2x per month ($50) and paying for a parking spot by work ($45) comes to $95 which is still lower than the $125 I was paying for the garage parking spot at my old building.  I drive an old beater, which I paid cash for, so I’m not phased about putting more miles on it.

Groceries / Eating Out 

I recently read an article about eating out being the largest money suck in American’s budgets.  I can attest that it was definitely the largest non-essential item in my budget before I went all cash.  Restaurant meals are more convenient and definitely tastier than anything I can make at home, but that had to change.  Cooking at home and brown bagging lunch are the only ways to make a dent in the black hole that is eating out.  I’ve gone from spending anywhere from $300 a week on groceries and meals out to $30 a week on groceries and no more than $50 on restaurant food.  Even the $50 is usually just drinks at happy hour.  How do I spend so little on groceries, you ask? Well, I do live alone so that’s the #1 reason, but a huge factor is discount store shopping at places like Pricerite.  I try to make simple cheap meals like tuna sandwiches, oatmeal with fruit, and veggie stir fry with brown rice, for meals during the week.  I don’t usually buy cuts of meat unless it’s a special occasion and get my protein from cheaper sources like beans and peanut butter.  I also have fruit and pretzels or crackers around for snacks which are always affordable.  If I want something a little more out of the ordinary I’ll pick up a frozen pizza and some ice cream for a weekend night but only from the grocery store.

Those are my major expenses buckets and how i keep them so low.  Total they add up to only 28% of my take home pay!  All of the above categories add up to about $1,300 and my take home is $4,600 so that’s 28%!! This obviously frees up the rest to go towards debt repayment.  The hardest part of living this way for me is having friends who are doing the opposite and buying the big houses and nice cars.  It’s hard not to be jealous and fight off comments all the time about my lifestyle.  I know that I’m doing the right thing for my situation by striving for debt freedom.  My dream means sacrificing now so I can reap the rewards later.  How do you keep your expenses so low?




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