Most PFP readers know that I save over 50% of my income.
It is the single biggest reason I have been able to transform my financial situation from hopeless to beautiful in a shockingly short amount of time.
And I bet some of you assume the reason I can save half my take home pay is because I make a crazy amount of money. And then proceed to make excuses as to why you can’t do it. Well, I’m here to tell you that’s simply not the case.
As the title of this post suggests, I routinely live on roughly $30,000 a year. But here’s the thing.
It makes me so happy.
Wait, what?
How is this possible? How am I not miserable or dying inside? How is it that the less I spend, the better I feel? Shouldn’t it be the opposite?
I live in a beautiful area of Chicago, I travel a ton, I go to concerts, brunch is my jam, I spend time with the people I care about, I am growing constantly and I pretty much feel as though I own everything I could want.
Maybe this all sounds crazy to you, but it’s really not.
How it’s possible
It all really boils down to one fundamental belief.
I inherently believe the best things in my life do not cost much money at all.
Hanging at the beach, playing ultimate frisbee, going for a bike ride or run on the lakefront, walking through a forest preserve or in my own neighborhood, going to a meditation or yoga class, catching up with a friend over coffee, cooking a delicious meal, listening to my favorite music, reading a great book on my balcony or at a park, having friends over to watch stand up comedy on Netflix and laugh our asses off.
These things cost very little and make me happy. I love the simplicity in my life and it feels so good to not constantly desire more things to make it better.
And here’s the best part. If I were to ever shift gears in life by changing cities, my career, or attempting to build a business, I could do this rather easily since I don’t need a huge amount of income to live happily. This opens up a whole world of possibilities.
Living on less provides the freedom, flexibility and courage to live the life I want.
That’s the main reason it’s all possible for me, but let’s get granular here. I want to walk you through several of my own strategies to live on less and more importantly, why each one makes me happy.
I have zero debt
This one is so huge. Once I was able to defeat my student loans, it opened up so much freedom and flexibility for me, and not just financially. Becoming debt free resulted in a major upward launch in my well-being. I finally felt I controlled my finances, instead of constantly feeling like it controlled me.
Debt is dangerous. Not just to your bank account but also to your mental health. Life gets harder when you owe someone else money. The more you owe, the harder it gets.
Make life easier. Pay off your current debts as fast as you can and once you do, think long and hard before bringing it back into your life.
I make 90% of my meals
A few years ago, I did a happiness assessment. I took a hard look at everything I was spending money on, and very deliberately asked myself why I was spending money on it. Was it:
A: Due to laziness or some insecurity I had?
B: To please others?
or
C: Genuinely bringing me joy?
If I answered A or B, like taking Ubers everywhere, or ordering a beer at happy hour when deep down I didn’t want to drink, I could take action to cut it out of my life completely. Because none of these things made me happy.
If I answered C, I brainstormed ways to reduce that cost like moving from a more expensive gym to a less expensive one. But if that compromised my well-being in any way, I would happily continue to spend money there.
At that time, I had been going out for lunch nearly every day, but didn’t have a clear answer for it on my happiness assessment. So I decided to make my lunch for a week to test it out. Once I realized my happiness was unaffected, I decided to bring my lunch to work every day and have done so ever since.
Not only is it significantly cheaper, but it’s so much healthier as well. And instead of wasting my precious lunch break waiting in the crazy long line at Chipotle and bringing the food back to the office, I use that free time to go on a peaceful walk.
I like going out for lunch during special occasions, and I happily join friends for dinner or brunch on the weekends, but the overwhelming majority of my meals are made at home. And as a side effect, I have actually gotten somewhat decent at cooking.
Savings Tip 1: Crock pots are an easy and delicious way to make meals that can last you a whole week. Get yourself a crock pot and some glass Tupperware and you are set in this department.
Savings Tip 2: Instead of buying fresh meat and vegetables, consider shopping in the frozen section. Not only does frozen food basically last forever, but research shows that frozen food can be healthier since the nutrients are essentially locked in the food. Start making friends with your freezer.
I don’t have a car
One of the biggest decisions I made was choosing not to renew the lease on my Toyota Corolla. I just didn’t drive it nearly enough to justify the monthly lease payments, the gas, the parking, the insurance and then the title, licensing and all the other fees that come when renewing a lease.
And considering the average car is parked over 90% of the time, it’s a hard thing to justify for a lot of people.
Instead, I walk almost everywhere (rain or shine) and I absolutely love it. It’s built in exercise during my day, it boosts my mood, and there is a level of confidence that comes from not having to rely on anyone or anything to get me where I want to go.
Otherwise I happily ride my bike or take an Uber pool or a train or bus if needed. There are even inexpensive options like Getaround, (the Airbnb for cars) if you need to take a trip. Today’s world makes its easier than ever to go car-less.
I am so happy I did not renew that lease.
I live with a roommate
Having a good roommate has been a big positive in my life, and it doesn’t hurt that they substantially cut down on housing costs and utilities. Sure it would be nice to live alone sometimes, but I really enjoy having someone around.
I cut cable
Comcast cost me $2,400 a year while Sling TV costs me $300 a year without any drop off in my happiness. Coupled with Netflix, I don’t miss cable one bit.
This was the most seamless of all cost savings to implement.
I travel lean
If you haven’t read the post on how to travel for free, here ya go.
Simply put, I don’t need to live like a king while traveling. I just need a warm bed to sleep in after exploring all day.
This mindset has done wonders for my traveling experience and allows me to go on so many more trips than I could if I demanded fancy hotels and eating out three meals a day.
Airbnb is a wonderful thing, especially if you utilize the private room feature. This means instead of renting out the entire place, you occupy a private room and usually the host is there when you are. I love this because not only is it significantly less expensive, but it allows me to get to know someone in a new city and I usually get great insight into what to do (and what to avoid) during my visit.
For example, my Airbnb host in Boise voluntarily drove my friend and I around for over an hour to show us the entire city and took us to the perfect spot to catch a breathtaking sunset over the mountains.
If you’re travelling internationally, consider staying in highly rated hostels. Hostels are very, very inexpensive and they are a wonderful way to meet incredible people from all over the world.
And instead of going out for every meal, I love to mix it up by shopping locally. You can find ridiculously inexpensive healthy foods at local markets.
I learn for free
I absolutely love learning, and personal development is a huge passion of mine. With access to the library, Netflix documentaries, YouTube, podcasts and online courses like Coursera, it is entirely possible to obtain any type of information or skill you want for pretty much nothing.
This is how I grow. The possibilities are infinite. Pretty cool, huh?
Start living on less
I’m not special. I’m not crazy. I’m just a normal guy living a little differently than most people. And happier because of it.
What ideas come to mind for you? Maybe you have other ways of reducing costs that I don’t. For example, I will happily spend slightly more money on groceries for whole organic foods because I prioritize my health over just about anything else.
I’ll also pay handsomely for a personal development course or a coach if I believe it will greatly enhance my quality of life because my own growth and well-being is extremely important to me.
Spending money is inevitable, but the key is to spend it thoughtfully on what you truly value.
I’m not saying you have to implement each of these strategies if they don’t bring you joy, but hopefully this gets your mind thinking of ways to significantly lower your cost of living while simultaneously boosting your happiness.
This is truly a win-win. Get creative and have fun with it.
It’s time to stop making excuses for why you can’t and start imagining all the ways you can.
If I can do it, believe me, you can too.
The Personal Finance Playbook 