How I Live on Less than $40,000 Annually: Jen from Virginia

Readers: Welcome to the first installment of my new series featuring Len Penzo dot Com readers who make ends meet on roughly $40,000 per year — or less. Originally, I was hoping to run one or two articles per month, but the initial response has been absolutely phenomenal so I’ll be featuring a new story every Wednesday. At least I will as long as there are enough household CEOs out there who are willing to share their secrets for living on a tight budget! — Len

Don’t tell Jen that it’s impossible to live on $40,000 per year.

Hi! My name is Jen. I’m 35, and a single mom of two beautiful and very smart boys, ages 8 and 10.

I live in Staunton, Virginia. (Warning: If you pronounce it with the “u” then we know you’re not from around here.)

I work as a security guard/receptionist for a distribution center and make $19 an hour.

I’ve never been a big spender and usually just prefer to stay home with a good sci-fi book. However a few times a year I really enjoy going to concerts. In the last two years I’ve seen Linkin Park (my favorite band), Staind, The Lumineers, Dave Matthews Band, Flyleaf, Taylor Swift, Three Days Grace, Eve 6 and many others. Another hobby I spend money on every now and then is a subscription to

I divorced my husband three years ago after ten years of marriage. I walked away from the marriage with virtually no assets, barely any cash, no vehicle and no furniture. Most of our marital assets were his family’s hand-me-downs. We share equal custody of our sons. He covers them on his insurance, we split the costs of their medical bills, school fees including lunch money, and anything else we agree on like summer camp, piano lessons or recreational baseball fees. He also pays me an additional $250 a month in child support.

After we separated, I had to buy a vehicle; I bought a 2007 Chevy Uplander for $9,000 and paid it off in 40 months. I also had to buy furniture that I was able to pay off quickly.

I bought a terrific little 2-bedroom home last year for $99,500 with no money down. The seller paid the closing costs and my fixed APR is 3.875% for 30 years. The boys share a bedroom now, but the extra TV room in the basement could easily be made into an extra bedroom.

I did buy more furniture after getting the house. I still owe $2500, but aside from the house that is my only other debt.

Trust me, I’m not perfect. I know I could’ve gotten used furniture much cheaper elsewhere and saved the difference. I know my savings needs serious work.

Now that I’ve gotten more established and all set up, my savings is my current primary focus. Once my furniture is paid off, I will transfer the same dollar amount into savings to be designated for a future replacement vehicle that I hope I won’t need for a very long time.

I used to coupon (in the crazy fad way) but found that I was actually spending MORE per month in my groceries category than when I wasn’t clipping coupons. Besides, how much shampoo and pasta does a girl really need? I ended up giving most of the items away to relatives, friends and a family I didn’t know whose house burned down — so I guess I don’t regret doing it.

Here’s my budget breakdown for the average month:

My Monthly Pre-Tax Deductions

401k: $510
Health Savings Account: $204
Medical & Dental Insurance: $52 (Medical deductible: $1500, then 80% covered; $4000 maximum out of pocket.)
Fed & State Taxes: $350

My Monthly Take Home Pay

After deductions, my take home pay averages about $2400 per month. That includes child support and extra hours at work I can usually pick up here and there.

My Monthly Expenses

Mortgage payment: $600 (Includes property taxes and home insurance.)
Electricity: $65
Natural gas: $42
Cell phone: $70
Internet, Netflix & Amazon Prime: $90 (I’m a cord cutter.)
Water/Sewer/Trash: $36
Furniture loan payment: $200 (0% interest as long as I pay it off within two years.)
Lawn care: $140 (I have severe asthma and allergies so it’s unwise to do this myself.)
Groceries: $300
Dining out: $130 (Again, I know I’m not perfect.)
Doctor/Dentist/Prescriptions: $40
Car payment: $0
Gasoline: $125
Car insurance: $52
Car repairs, maintenance, taxes, etc.: $60
School Expenses/Lessons/Sports: $65
Life insurance: $13 ($50,000 term policy. My beneficiaries will also get one year’s salary from my employer if I die while employed there; that’s free.)
Clothing, hair cuts, and miscellaneous expenses: $30 (I’m very low maintenance. My work shirts are provided by my employer, and I wear them with jeans.)

My Current Savings

I recently had to dip into it for a car repair, so I currently have just $500 in my savings account.

Closing Tips and Thoughts

Stay focused on your short-term and long-term goals and TRACK YOUR SPENDING! You don’t realize how much you spend in certain categories until you truly see it for yourself. Like Len, I track my spending with an Excel spreadsheet. Each year gets a new tab and each column is for each month. I’ve always been very good with numbers and I’m one of those weird people that actually enjoys updating it and balancing it with my checkbook.

After paying all of my monthly expenses, I typically have about $400 left over for unexpected things, entertainment and savings.

Tax refunds, which I have a love/hate relationship with, also get dumped into savings.

And I take advantage of the two months a year that I receive an extra paycheck to pay for my sons’ birthday gifts, Christmas, and a vacation — if I take one.


If you’re a household CEO who is successfully making ends meet on roughly $40,000 per year or less, I’d love to hear from you. Contact me at and be sure to put “$40,000” in the subject line. If I publish your story, you’ll get a $25 gift card!

Photo Credit: Carrie Vincent


  1. 1


    Jen from Virginia,

    You’re doing a super job living on your income. It’s not exactly the income one earns that matters but it’s mostly how you spend and what you spend it on. There are very many folks whose income is double or triple or more, when I sit with them and talk, they always complain about not having enough money.

    I gotta hand it to you, Jen, your kids will someday appreciate how their mom lived on the income that you did.

    Thanks for sharing your income and expenses with us.

    • 2

      Jen from Virginia says

      You’re very welcome and thank you so much for your kind words. It means a lot to me.

  2. 4

    Shavonne says

    I am very proud of you Jen. You are a strong, hard working, beautiful mother/friend. Your story is an eye opener for many single parents like myself. You did a wonderful job on this. Keep up the good work

  3. 6

    Bree says

    Keep up the great work, Jen! I agree that tracking finances is the key. It is amazing how much easier it is to manage finances when you know exactly where every last penny you earn is going.

    I have one question for you. How far is your commute to work?

    • 7

      Jen from Virginia says

      Thank you! Probably only 10 minutes door to door. I’ve commuted before and it really bites! I really feel for those that have to commute every day.

  4. 8

    Craig says

    I think you are doing a remarkable job. Just be sure to pay off that furniture loan before the 2 years is up! Those kind of loans usualy make you pay interest on the whole enchilada if you don’t!

    • 9

      Jen from Virginia says

      I sure will. Actually I’ve been paying extra on it each month to get it paid off even sooner. I should have it paid off 6 months ahead of time.

    • 11

      Jen from Virginia says

      I can’t remember all the details without digging out my file but it’s full coverage. Because I have my car insurance, life insurance and home insurance all with the same company along with no recent tickets or accidents, low mileage a year and all that they give me a pretty good discount.

  5. 12

    Renee s says

    Jen, you are awesome and doing a fantastic job providing for your two boys. You really seem to know what your priorities are and that’s great :)

    I know this series isn’t really asking for help or suggestions, per se, but I do see two things that you may be able to trim down a bit more. I don’t know the details, of course, but you could possible look into a no contract phone from virgin wireless (thats where I just got my new phone) or republic wireless and less than what you are paying now. Also, $90 for internet/netflix/amazon seems a little steep. I know that it varies depending on where you live, but I was able to lock in a $30 dollar rate for just internet. I have the netflix streaming and I don’t have amazon.

    Just some things to look at! I think everything else looks great and maybe once that furniture debt is knocked out you can start an IRA (roth or traditional).

    Thanks for sharing!!

    • 13

      Jen from Virginia says

      Thanks so much for the advice, Renee. Actually last December I attempted to switch to Straight Talk to cut that bill down. I regretted it immediately. I couldn’t get the phone to work, dealt with the worst customer service ever and also found out after the fact that you can only browse the net, check emails and such when you’re using your own WiFi. If you try to use the 3g or whatever you call it, they will lock your phone for the rest of the month. I decided it wasn’t worth all that trouble.

      As for internet, we don’t have many choices around here. I have it listed above as $75 which will be the normal rate in Oct when my promotional rate runs out. I’m actually only paying $35 right now. If there’s a cheaper one here I’m all for it.

      I already have plans for when I get the furniture debt knocked out. I plan on saving for a replacement vehicle. I’m currently saving 15% in my 401K and then my employer adds a 3% I think, so I feel comfortable with that amount. After building up a year’s coverage of expenses in my emergency fund, I will then start saving up for the boys’ college funds. So much to do!!!! I appreciate all your advice though. Thank you so much for taking the time to write me.

      • 14

        Frank Waleczak says

        When it comes time for your promo to end, call them and ask for customer retention. You should be able to sign up for another 1 or 2 years at whatever the current promo is

        • 15

          Jen from Virginia says

          Will do! Comcast’s promotions don’t typically last quite that long but I do regularly check for promotions. Right now as far as I know, the only 2 companies in my area that offer internet is Comcast and nTelos. It would be nice if we had more choices. nTelos does not even offer promotions beyond first signing up, well at least they didn’t when I used to work there.

    • 16

      Len Penzo says

      I know this series isn’t really asking for help or suggestions

      If you’ve got suggestions or questions, please let us know! The comment forum is a great way for everyone to share their tips.

      I know I appreciate them.

  6. 17

    Sal says


    After looking over your expenses, the one that stands out is your car payment (or for you, a lack of one).

    Most people who struggle can blame a lot of their trouble on them.

  7. 21


    From starting off with not a lot, you have done an amazing job . Yes you know of areas you could improve, but don’t feel bad about eating out occasionally, everyone needs treats or life becomes too monotonous.

    • 22

      Jen from Virginia says

      Thanks, Amy. I really need to lay off though especially since I’m participating in a weight loss challenge at work. I need to do better for my team (The Chunky Monkeys)!!! Probably not a good thing that our team name just reminds me of ice cream. Hahaha.

  8. 25


    Thank you for showing you don’t need more to live well Jen. I am impressed at the low cost of your house, didn’t know VA had such cheap houses.

  9. 30

    Renee B says

    You’ve done an excellent job budgeting on your salary, and while I agree it’s possible to live on $40,000 per year, I don’t think it’s a good long term solution. Unexpected expenses do occur and when you have every penny budgeted it’s really hard to pay for those unexepected expenses. Our unexpected expenses over the last year have been a kid with appendicitis ($6,000) & husband’s job loss. Thank goodness we had an emergency fund to fall back on. But on $40,000 per year, it’s nearly impossible to build that back up right now. There is no way I could feed my family of 4 on $300 per month with two growing teenagers. What if the transmission goes out on your vehicle? Where would that money come from? And the $30 per month for clothing and hair cuts for the family? I couldn’t do that even if I shopped at goodwill and cut my kids’ hair myself (which I have done). As I said you’re doing a great job now, but those expenses WILL increase as your kids get older. I don’t know…for me living pay check to pay check (as you & I are both doing) sucks and I hope not to have to do it for long. Life was much easier when my husband and I were EACH making $40,000+. I like to know we have a cushion in the bank for all those unexpected things that DO and WILL come up.

    • 31

      Jen from Virginia says

      Yes, I agree it can be very hard if something unexpected happens. That’s why I’m focusing on my emergency fund now. Luckily, after paying my expenses I still have $400 left over to work with. Slowly I’ll build that savings up. $40,000 a year in my area is actually pretty good and honestly I don’t see myself really making much more than that. I could earn up to $2 more an hour at work but then I’ll be topped out until there’s a cost of living raise. I agree that the boys will get more expensive as they get older and I don’t look forward to it. I do cut their hair myself and their grandparents usually buys them lots of clothing on birthdays and Christmas so I rarely have to get them anything with the exception of shoes. They are always needing shoes!

  10. 32

    Jeannette says

    Jen, I am so proud of you. I always knew you had a strong and smart head on your shoulders. You have come so far. Goes to show if you wanna do it you can. Keep facing the challenges of life ,you will come out the winner. Life can be tough but the more you have the more you want. Looks like you are fulfilling your wants and needs and with your determination you have no choice but to win. So, so proud of you. good luck and keep up the good work.your friend ,

    • 42

      Jen from Virginia says

      Thanks, Lance! I agree, it is pretty here as I’m sure The Statler Brothers would agree. And the even voted us as the #10 Best Small Town in America (2012)!!!!

  11. 47

    LaVaun says

    Way to go Jen. What an inspiration you are to those who have had to “change the plan” in life. The truth of your story is motivation to us all.

  12. 49

    Mary Ann says

    Our son lives on just about $26,000.00 per year, with occasional small bonus checks. He lives with a girlfriend who contributes only $250 towards their $900 per month rent. The rent includes utilities and cable and internet.He uses a 2004 car we gave him with 140,000 miles on to to drive 30+ minutes to work every day and back, so his gas bill is high. He tries to put the max into his Roth IRA and keep some money aside for emergencies. (He has an 8 month emergency fund and he has no student loan debt, as he is lucky we paid for his college education.) He lives very simply. He can do this because he lives in New Hampshire, where there is no state income tax and no sales tax. His only problem will be when it comes time to make big car repairs or buy another car.

    • 50

      Jen from Virginia says

      That’s really impressive Mary Ann! You should be proud which I’m sure you are! I think it would be cool if he submitted his story because I’m sure many would be interested in reading it. Hope you’re having a wonderful 4th!!!

  13. 51

    Jon says

    Hi Jen, great work. Once you have 6 months emergency fund, suggest you start investing in dividend stocks to create long term wealth. Loads of great websites for this – check out DIvidend Mantra for eg.

    Also check out Mr Money Moustache – almost as good as Len !

    Message from across the pond (UK)


    • 52

      Jen from Virginia says

      Thanks so much for the tip, Jon. I admit, the idea of investing in stocks on my own intimidates me……a lot. Thanks for the websites. I’ll definitely have to check them out when I’m closer to being ready for that step. :)

  14. 54

    Annie says

    I am really impressed that you are a single mother and taking responsibility for your life. You are so lucky you get to save 510 dollars in retirement and have money left over to save. It goes to show that if you are responsible with money you earn you will be in a better position. Have you considered taking online classes and have your company pay for it so you can move forward with a higher income? Just a thought if you had time. Anyway, great awesome job. Wish you the best.

    • 55

      Jen from Virginia says

      Hi, Annie. Thank you so much! Actually yes, I have thought about it. My employer offers a reimbursement program and I already have 2 years under my belt with a local private college from my younger days. I have no real passion for one thing at the moment which I think is critical when pursuing more education and a new career. You need that hunger to stay motivated and to keep those grades up.

      I went to college in the hopes of becoming an accountant but in my 2nd year I had a change of heart. I still love crunching numbers and enjoy reading personal finance articles for an hour a day which gave me the idea of pursuing personal finance counseling. Both my English and Psychology Professors were wanting me to switch from accounting to teaching (which suits pf counseling) but I wonder if I have too much anxiety for that. I’ve also had several people tell me I should go into writing. “Me? A writer? C’mon, you can’t possibly be serious?!” I tell them. I’ve even had interest in learning more about computers with no real concentration in any particular area yet. So you can see I’m a bit all over the place.

      Also, considering the current state of the job market I wonder if I would be putting myself under unnecessary stress by going back to school. We hear daily about all the recent graduates who can’t find work. And here’s the thing….I LOVE my job! I’m very happy here and have no desire to leave. Maybe once my boys are older and if I still have a interest in personal finance counseling I could pursue it part-time.

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