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Can You Live on $1,000 Per Month?

Maine Winter

Can we actually live on $1,000 per month or less?  Is it possible to live a good and happy life with that little bit of money?

I am not talking about what most people consider living, with the cell phones, data plans, cable television, 2 cars in the dooryard, huge house, etc…  I am talking about living a happy and fulfilling life.

I went for a walk with Prim this morning, our small dog and was thinking about this.  I am now sitting here writing this post and I will go through some numbers to see if it may be possible using our current budget numbers.  I may or may not be able to, but I wanted to see how close it would be.

I will preface this with I am going to base this on if you have gotten ready to live on very little, which means you did work and save enough for some basics, such as a paid for home and the very important emergency fund.  The paid for home can be simple, such as a tiny house or small home.  Actually I would expect to live on a small income, you would need an inexpensive tax payment and utilities or it won’t work.

Here is my breakdown:

  • Food monthly for a family of 3 – $400/month:  This is only the basics, which means you buy only healthy fruits and vegetables which are inexpensive or on sale.  We are not eating out, buying food the kids ask for, etc…  Meats need to be limited for meals or even eliminated to keep the cost down.  ~$400/month also may mean no coffee unless you get an amazing deal.
  • Taxes for us are about $250/month on a 900 square foot home in Maine.  Our taxes are very high here unfortunately, because the town has a lot of expenses.  Depending on your location this can be much less and in some cases be more.
  • Utilities again is a tough one.  Living in a cold climate has a huge impact on this monthly number.  For us it comes out to about $300/month if we cut things down.  Right now we have televisions with Netflix running, computers, and other appliances.  We also have the heat higher than if we were limiting our budget.
  • Phone bill – By phone I mean a Trak phone we can have on hand as a family and share it depending on if we were doing a road trip or at the house.  I do believe you need a phone in case of emergency.  The Trak phone is only $100/year to have, so we can say ~$10 per month.  If you chose a house wired phone, that would be about $25/month.
  • Monthly expense savings.  This is the bucket we put into savings in order to pay for appliances, roofing issues, or other incidentals that will happen each year.  At a minimum, we should be $100/month into this bucket to cover expenses.  This number may be a little bit low, but it only includes fixing issues, not getting brand new appliances or home improvements.  For those things we would need to increase our income for a period of time to save up for the additional expense.
  • Healthcare expense:  Using the website for healthcare if I put a family of three in the formula with a $30,000/year income it actually is free if you do not want a low deductible.  If you move up to $50,000/year it starts costing $157/month for coverage and scales up from there.  The cost basically depends on how much money you want to earn in a given year.  I put in a low income and then the median income for a family in Maine to get a gauge on what someone could see for expense.

This total puts us at $1,075 which is closer than I figured we could get to.  This is if we do not have a car and either walk or bike where we need to go.  Fortunately for us, we do live in an area where that could be possible.  If we had a car for local commuting with insurance our monthly cost would go up to about $1,200/month needed for living expenses.

I have seen videos where people are able to live off $500-$600/month, but that is by living mobile, in warm climates, and with low to no taxes.

Where we want to live and what we need to live are different.  We love our coffee, Netflix, Internet and other luxuries.  I also enjoy my work along with saving for a comfortable retirement.

This is a very healthy exercise for anyone to do in order to see where they are currently.  In order to figure out your current minimums you just need to identify the items, which are luxuries in the real sense vs. the must haves.  You also need to figure debt into the formula if you are still on the journey to eliminate debt.  The house payment would be an added monthly expense or a car payment if you still owe money.

We did fall a little short of the $1,000 question, but better than I thought it would be.  I was pretty happy with the result.

{ 9 comments… add one }
  • Cynthia December 28, 2014, 12:16 am

    I’m working on this!

    • Larry Chasse January 11, 2015, 3:32 pm

      Thanks Cynthia, It is a fun project to figure out our baseline.

  • Alex December 28, 2014, 1:01 am

    This exercise is important to maintain a budget and also to see where the money is being allocated.
    Children should be taught these skills early and often by reviewing expenses. The old school –
    “Money doesn’t grow on trees” isn’t very helpful. Thanks for sharing.

    • Larry Chasse January 11, 2015, 3:33 pm

      Thanks Alex, We try hard to instill this information in our kids as well. I wish it had sunk in earlier in my own life. 🙂

  • HappinessSavouredHot January 10, 2015, 5:10 pm

    I lived on that amount (by choice) for a time in my life. Interestingly, it was probably the best time of my life. Food for thought…

    • Larry Chasse January 11, 2015, 3:34 pm

      Thanks Happiness, I read an article last year correlating income vs. happiness and they found exactly what you stated. Once you have enough, more money did not equate to more happiness.

  • Rebecca Foxworth January 13, 2015, 7:30 am

    Just wanted you to know I just switched my father in law from Tracfone to Republic Wireless. The initial buyin was $99 plus tax for the Moto E smartphone, and a plan work unlimited minutes and texts and no data except wi-fi is ten dollars a month (just under $11 with taxes). It runs on Sprint, and we’ve been super happy with it.

    • Larry Chasse January 24, 2015, 3:03 pm

      Thanks for that information. Good to know there are options out there, which are not incredibly expensive.

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