How we lived WELL for a year on $30,000 (a do-able yearly budget)
You’d be amazed how resourceful you can be when you have to — this is our story of how we set a yearly budget that was way less than years before. And we stuck to it!
How to Set a Yearly Budget That Works
A couple years ago when I was doing our taxes, I found something very unexpected and encouraging. We had gotten by on less than $30,000 that year!
Except that was the thing — we didn’t just get by, we lived well!
We ate real food, we did fun things with the kids, and had all of our needs met (and then some!)
We made a yearly budget, stuck with it, and it worked…even better than we predicted!
Our story
That year both my husband and I started businesses (read about how I started my blogging business here…it literally changed our lives!!) We planned for this the year before by building our savings and making changes to our spending habits.
We had expected our income to be lower than usual and we knew this would be temporary. However, seeing the actual number was a shock — it was lower than I would have guessed!
Interestingly, we never felt deprived and we didn’t even dip into our savings (aside from planned business start-up costs). We had lived on a much lower income than we had planned for, and we never even noticed until we started crunching numbers at tax time!
So how did we do it?
10 Keys to Our Successful Family Budget Plan:
I’ve included affiliate links for products and services that I love and use in my own life; disclosure policy available here.
1. Cash-only for purchases
First, we implemented a cash-only system for purchases other than monthly bills. Each week we set aside a certain amount of cash for groceries, toiletries, and extras. This provides a tangible “limit” because you can actually see exactly how much money you have at your disposal for the week. Anything leftover was rolled into next week’s budget.
It sounds simple, and it is! (That’s the beauty of it!) You’re much less likely to overspend when you have money in hand and that’s it.
If you’re really worried about willpower (and I totally get it…Target is my danger zone!) then don’t take any backup payment methods with you.
Tip: I LOVE rebate apps like Ibotta to earn cash back each time I went shopping for groceries or household items. Right now Ibotta also gives you a $10 bonus just for joining! CLICK HERE to check it out!
2. Cook your own meals (at every meal!)
Meal-planning alone saved us over $1400 a month and was a crucial part of a budget that worked. Plus, it’s much healthier than restaurant food or take-out! Eating real food has saved us a TON of money and it also helped me lose the baby weight! (Bonus!!)
I cannot recommend this enough — meal planning is easy to do (actually, it’s easier than just “winging it”) and the results were a game-changer for us. My first ebook details step-by-step what we did so you can implement this system in your own life and start saving right away.
Related: Read more about how meal planning changed our lives and saved us a ton of money!
3. Sleep on it!
Impulse purchases can drain your bank account quicker than just about anything else!
When I see a gorgeous pair of shoes or an awesome sale at my favorite store, I don’t buy right away. Instead, I wait until the next day and then ask myself if I really need that item I was eyeing the day before. Chances are, the initial excitement has worn off and I don’t really care as much as I thought.
4. Don’t let alcohol sneak into your budget
My husband and I aren’t big drinkers (actually he doesn’t drink at all these days), but I do occasionally enjoy a glass of wine and I know a lot you probably do too! Before we had our youngest, my husband and I used to go out a few times a month with friends to the movies or for drinks. We live in a big city, so a specialty cocktail or nice glass of wine can easily set you back $10 (or more…yikes!) It’s easy to see how that could add up!
Instead of going out and paying premium prices, we periodically invite our friends to our home instead. Buying a bottle or two of wine and cooking our own bites (see above) saves SO much money! If everyone takes turns hosting, then everyone saves! Alcohol and entertaining are just a tiny blip on our budget, but we still have fun!
5. Skip the gym
And by that I mean, “skip the monthly gym membership fees!” Both my husband and I work out daily at home and have gotten awesome results. It’s not important where you workout and you don’t need fancy equipment. What matters most is consistency and just doing it!
Our favorite workout routine Body Beast is a weight-lifting program and only requires a few sets of free weights. Instead of paying a steep fee every month for a gym membership you may or may not use, you can pay a one-time purchase price of a home program and then you’re all set!
Weight-lifting was the final piece of the puzzle for me in losing my baby belly — it won’t make you “bulk up,” but it will make you burn more calories all day long (muscle requires more calories to maintain itself!) If that’s not your thing, a power yoga routine will also give you amazing results and even brisk walking (pushing a stroller or carrying hand weights) will get the job done!
6. Pay bills on time…every time!
When my husband and I got married, some of the bills were in his name, so I let him handle them. Except that he doesn’t have the best memory for deadlines and isn’t super organized. I noticed that some of those bills were being paid late and we were getting stuck with a $10 late fee! (A total waste of money!!)
Since I am by nature a more organized person, I took over responsibility for paying all the bills. I put the dates in my daily planner just in case, though I have all of the due date memorized. (One of my blessings…or is it a curse that I think about bills that much?) If it makes it easier for you, automate your bill payments so you can’t forget.
7. Lower your energy cost
We live in Texas, and energy bills during the summer can be out of this world (in a bad way!) Even small changes, like setting the thermostat one degree higher can make a big difference to the bottom line.
Tip: If you live in a deregulated state, call your electric company and ask for a lower rate. Chances are they will oblige to keep your business. If not, go elsewhere!
8. Make your own coffee
When I worked full time outside the home, I purchased a premium coffee every day. Sometimes twice a day! It got me out of the office for a few minutes and gave me something to savor throughout the long workdays.
However, when I decided to quit my job and stay home with the girls, I switched to making my own. My Nespresso machine might have been a bit of an initial investment, but each cup of coffee I make at home costs less than half of what my daily Starbucks used to.
I don’t totally deprive myself — I still treat myself occasionally — but maybe once a week instead of every day. The savings is so worth it! (And I love my Nespresso just as much!)
9. Make clothes last longer
Over-washing and washing in hot water can wear your clothes out faster. I wash all of my clothes in cold water on the delicate cycle. (Cold water saves a lot of money in energy costs too!) The only things I use warm water for are whites or heavily soiled items (like the baby bibs). I also re-wear items that aren’t dirty or I didn’t wear for very long, like jackets and sweaters.
Related: 5 Laundry Myths That Cost You Time AND Money
10. Be gracious
I do have to admit that my mother in law buys our diapers and toilet paper — it might sound like a funny thing to do, but it’s her “thing.” She enjoys providing these things for our family and actually gets upset if I buy them on my own.
I was raised to be very financially independent, so at first it was odd to me to accept what I initially saw as “handouts.” But I learned to be gracious and say “thank you” when someone does something nice for you. My mother in law truly wants to do this, so I accept her generosity and I am thankful for it.
More of my my helpful family finance resources:
- Read more about how we saved $10,000 in one year with these surprisingly simple ways to build your bank account fast!
- How did I turn my blog into a 6-figure home business? CLICK HERE to read the first step of starting a blog that could change your life!
Do you have any unusual budget tips that have worked for you? Share them below — I’d love to hear them!
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I implemented an allowance for both me and my husband. When we were first married it was so easy to overspend. Now we live on his income. We own our vehicle’s, so we have no car payments. We grow a garden and harvest a lot of the veggies for use throughout the year. We have three kids so every August is a tight month. However learning to budget and get on top of the bills has helped us immensly.
Yes! So important to prioritize bills and plan ahead for months when spending more is a necessity (like for school clothes/supplies). Thanks for sharing Connie!
The big three expenses for most people are home, transportation and food. Without addressing the first 2 it is hard for me to decide if I should be impressed by your year’s expenditures.
A $30000 a year budget for a family who has their house and vehicles paid off and who doesn’t have to commute is unspectacular but would seem impossible for someone who has a mortgage, car payments and commuting cost
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I would actually be very impressed by someone who had their house paid off by 30! 🙂 Housing is still our #1 expense. We also have one car payment. I work from home, but my husband drives to work.
A quick google says that the average mortgage payment for the average 30 year old American is $950 and the average car payment is $503. You note that you spend about $600 for food. If you add those up and multiply by 12 you get more than $24000 so you can understand why other average 30 year olds might be looking at their own budgets and saying “If we only spent $30000 a year that would leave us less than $500 a month for other necessities like property tax, utilities, insurance (car, home, life and health), other car expenses (fuel, registration and maintenance), gifts and charity.”
I suspect that the real explanation for your relatively low budget is not the (comparatively) nickle and dime expenditure cuts mentioned above but on the earlier decisions you made about the really big ticket items i.e. housing and transportation. And that might be worth a blog article. In the meantime I can recommend the Flannel Guy’s well illustrated article on the subject. http://www.flannelguyroi.com/the-trimurti-of-household-budgeting/
(P.S. We didn’t pay off our mortgage by the time we were 30 but, with 2 children and one very average salary, we did pay it off in less than 8 years.)
Hi Barb- You are correct in your assumption that we made conscious decisions regarding housing/cars. One: we live in a very expensive area that has been going through a real estate boom over the past few years. We actually decided to rent until the market drops back to reasonable prices. So property taxes don’t figure into our budget.
Conversely, we do not lease vehicles and instead pay as much down at purchase time, and then pay them off as soon as possible. A $500+ car note is not what I would consider a responsible buy — that would be over the budget for sure!
When our income was at the level in this article, we did get subsidized health insurance (neither of us ever worked in industries that provided this benefit). Now that our businesses are both running, health insurance is a MUCH MUCH larger part of our budget. Living on a lower income than what we were used to absolutely took dedication and discipline, but it IS possible.
I just wanted to add that I have a dog that I absolutely love to spoil but she can only eat lamb. I don’t mind paying for the food but the treats were ridiculous. I found another brand of lamb dog food with meaty center for like $20 for a big bag. I give her 5 in the morning and 5 in the afternoon. She doesn’t notice it’s not really a treat because to her it is different than her original food. I have saved so much money doing this and we’re both happy
Not sure I would consider this a budget tip, but it is a GREAT idea. Though for sure work it into your budget every month. Every payday buy a $25 gift card. To Walmart or Kmart…somewhere that doesn’t depreciate over time. Then tuck it away in your safe and forget about it. If you get paid twice a month like most people do you will have $600 worth of gift cards at the end of the year (CHRISTMAS!). If you can’t afford to do it twice a month, then do it one paycheck a month. That is still $300. Of course if you have things come up like weddings and birthdays through out the year you have an instant easy gift. If you have a paycheck that is just not as big as you expected it to be then you have a little help with groceries. This is a great system.
That’s a great idea! Thanks for sharing! (I might try your gift card system in the weeks leading up to Christmas!)