Time was when you could actually work a minimum wage job full-time and get by. Two jobs, and you could raise a family. Nowadays, it's nearly impossible, but some people seem to be making an attempt at living under the median line. The movie The Pursuit of Happyness is an example of what persistence can do to move you from having nearly nothing towards being such a success that someone makes a film about you.
I'm not sure if someone will make a movie about Donna Freedman, but people are writing about her decision to intentionally live on $12,000 per year. She seems to be not only coping but in control. Is it really possible? As someone who did it on about $10,000 a few years ago, for about 3 years, I'd say it was possible then, and still might be so today, but only in some cities. You'd have to give up anything that wasn't absolutely essential. It's not necessarily enjoyable, to be honest, but if you eat properly, you can at least maintain your health.
Here are some tips, if you find yourself in a similar position or just want to save money for a trip or investment or what have you.
- Immerse yourself in frugal-mindedness.
Screw people who call you cheap (you know who you are). This is the only way to cope. If you can't achieve this state of mind, forget about living on the cheap. - Mend clothes and reuse, or wear layers.
At home, I wear longjohns/ thermal underwear with ripped jeans. Why not? The pants are still wearable and no one is going to see me except family and the dogs and cats. The #1 rule of frugality: use what you have for as long as possible. - Be a coupon clipper.
Master the art of coupon clipping, but only save coupons for items you actually use. Don't start buying something different just to "save" money. If you can't find the regular weekly flyer, ask a store/ supermarket clerk, as there's usually a stack on hand somewhere. Rule #2: save whever you can, but only buy what you need. - Buy only on sale and double up.
I used to buy quality oxford shoe knockoffs at $32 apiece when department stores sold pretty much the same for $50-90. I would buy 3-5 pair and alternate their use. They'd last years like that because they had time to breathe after a day of use. Had I not, I probably would have had to buy 6-7 or more in the same time. It's a small savings, but it does add up when you're on a budget. - Give up meat or reduce quantities.
I'm not proselytizing on being a vegetarian (I used to be one, but am not currently). Meat protein is generally more expensive than vegetable protein. Though you'll have to learn some new recipes. The two most suitable cuisines are East Indian and Chinese, and combinations inbetween. Food and rent are likely your two biggest expenditures. When you're budgeting $12,000/yr, obviously every dollar counts. - Buy from the farmer's market.
I've been to big ones and small ones and they always have prices to beat supermarkets. Sometimes, at the end of the business day, vendors will take offers on what's left. Freeze any portion you don't need. I also find some Asian markets to be very affordable. I lived in an area where there was a new Farmer's Market 30 feet from an Asian market. Every Saturday morning, I'd take my Friday night tips and buy all my groceries for the week, then make dishes that would last a few days and thus reduce the cost per meal (as well as prep time).
- Go to the food bank.
Or if that troubles you, if you have a weekday where you can help out, volunteer in a soul/soup kitchen. You can do some good and a get a free meal at the same time. Some soul kitchens are also food banks, and you could take a few canned or dry goods at the end of your volunteer shift. - Share a dwelling.
Sometimes, that's not an option, but if you can sub-lease part of your living space, you could save close to half your rent. It's either share, or live in an infested place in some cities. Or move in with a family member. I prefer living on my own, so I had given up my cable TV and cell phone for a while. I didn't need them, and the Employent Centre down the street offered free voice mail and 1 hour of Internet access daily. Now, of course, I must have my Internet. - Make it yourself.
Need a bookshelf? Many hardware/ lumber stores have scraps that they will not only cut to your measurements but also deliver to your home. You just need a measuring tape, some good nails, glue, a hammer, and maybe a few small clamps. At the least, hammer, nails and tape. You can also by perfboard kits for shelving which are easy to put together. Not as fashionable, but you're being frugal. - Haggle.
In some countries, it's expected. Not so much in the USA, but you can sometimes get away with it. The worse that can happen is that the seller will say "no". They might also look at you funny. See tip #1. Haggling for smaller prices works at flea markets and garage sales. You develop a sense for where you can haggle. - Go to flea markets.
You can find a lot of "gently used" items in great condition at large flea markets. Beg a friend to drive you and go early. If you also find some bargains that you can fix up, it's worth it. (You could even fix and resell.) - Use VoIP.
Why pay for long distance when you can make some calls either for free or for a lot less than with your regular phone company? If you have access to a computer and the Internet, some options to explore are Skype, SightSpeed, Jajah, and Gizmo Project/ GizmoCall. Some of these only require a computer to register; you can use a regular telephone after that. - Watch TV online.
Can't afford/ don't want to buy both a TV and computer? Depending on where you live, you might be able to watch most of your fave TV shows online. There's also free IPTV (Internet TV) software like Joost and Babelgum, which are not yet available to the general public, but will be. - Take free courses.
Donna Freedman mentioned that she chose her current situation and went back to school. But why pay for courses when they're free at the Open Courseware Consortium and at various universities. - Double up on laundry.
Buy a few extra items of clothes (on sale or at bargain stores of course) and take longer between laundry sessions. Remember, every dollar counts. - Get the most for your money.
This weblog IS about online savings accounts, so I always include such a recommendation. It may be unlikely that you are saving much at your income level, but if you've become frugal-minded, you might find you can squirrel away 5% into an online savings account. Removing it from easy access means you're less likely to spend it. Remember: compound interest!
Of course, these tips haven't taken into account that you might have a dependant, in which case you might want to budget some life insurance. Now just because you are getting by on a budget doesn't mean you can't earn some extra money once in a while. Here are a few ways to earn a bit extra that are ideal for a frugal mind:
- Make it yourself and sell it.
One artist I knew would bang together special tray-like art frames with 1x4" pieces of used wood and make "found art" with various objects and glue. I doubt she spent much money on them, and her pieces were between $150-350 each. She was very good at what she did, employing a skill similar to scrapbooking. She did sell a few pieces per year, after local cafes displayed her work. Making found art is also considered a therapeutic activity. - Start a blog.
If you have reasonably good communication skills and access to the Internet, consider starting a weblog. Be somewhat focused. By doing so, once your site has been established sufficiently, you may qualify for services such as PayPerPost, ReviewMe , SponsoredReviews or LoudLaunch to get paid for reviewing an advertiser's product or service. A frugal-minded person is often an ideal candidate for writing consumer reviews. Some people are earning as much as $1,000/month with such opportunities, though most people probably don't. Your blog could even be a pf (personal finance) blog and you could slap on some Google AdSense or Chitika ads for possible future revenue.
- Be an online tutor/ advisor/ personal coach.
Sites like Tutors Without Limits offer a great framework for earning a bit extra by tutoring students around the world. You set up your profile on their site and use the free Skype VoIP software to hold audio/ video tutorial sessions with one or more students. Payment is with PayPal, though not all countries are represented yet. A similar service is through Bitwine, which is an addon (plugin) for Skype, though it's not just for tutoring. If you don't have regular access to a computer, you might consider Ether. - Mystery shopper.
Some stores hire people to shop and report back on the behavior of store clerks as well as scan for shoplifters. The frugal-minded shopper will likely enjoy this. I can't pretend to know where you start to find this sort of work, but I suggest you ask around at large department stores.
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