{"id":42833,"date":"2017-06-12T05:15:54","date_gmt":"2017-06-12T12:15:54","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=42833"},"modified":"2024-02-08T15:28:30","modified_gmt":"2024-02-08T23:28:30","slug":"how-i-live-on-less-than-40000-annually-nick-from-iowa","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id42833-how-i-live-on-less-than-40000-annually-nick-from-iowa.html","title":{"rendered":"How I Live on Less Than $40,000 Annually: Nick from Iowa"},"content":{"rendered":"
\"\"<\/a>

By carefully managing his budget and cutting unnecessary expenses, Nick lives very comfortably on less than $40,000 while still saving $8500 annually for retirement.<\/p><\/div>\n

My name is Nick. I’m 25 years old and single with no kids. I work in radio, with a salary of $40,000. I also have side gigs that add an additional $5000 of income per year.<\/p>\n

In 2014 I received my bachelor’s degree in mass communication. After I graduated, I was left with about $23,000 in student loans and a $7500 auto loan — but I’m happy to say that I paid off the last of my student loans in March and now I’m debt free!<\/p>\n

I’ve always been financially responsible; I grew up that way.<\/p>\n

I hate wasting money too! I’ve always liked finding ways to save. It helps that I’ve never been a materialistic person.<\/p>\n

Since my first job at 14, I’ve always kept track of my paychecks and made sure that I never spend more than I can afford. I tracked my account balances during college, and then began budgeting religiously after graduating. Since then, I’ve tracked every penny I’ve spent or earned.<\/p>\n

Expenses<\/strong><\/p>\n

I currently rent an apartment, so I don’t have any property taxes; my monthly rent and utilities come to $1100.<\/p>\n

In 2014 I bought a used car; it’s a 2010 Ford Focus that I paid off last year.<\/p>\n

I’m still on my parents’ health insurance plan. When I turn 26 next year, I’ll get insurance from my employer; depending on the plan I choose, it will cost between $0 and $50 per month. I also have a life insurance policy<\/a> through work; it’s a free benefit that’s good for twice my salary.<\/p>\n

\"\"<\/a>I typically spend $300 per month on dining and other entertainment. I enjoy NASCAR and I’m also an NFL fan, so I watch them on television — but I attend a few events per year too.<\/p>\n

I enjoy board games, but my guilty pleasure is going to the casino with my friends! I’ll usually bring a bankroll between $40 and $100. When my bankroll is gone, I’m done for the night. I track all my winnings and losses to ensure I don’t exceed my entertainment budget.<\/p>\n

Savings<\/strong><\/p>\n

To handle unexpected financial emergencies I have ten months of expenses currently saved up. I’ve been saving for retirement too. I contribute the maximum $5500 per year into a Roth IRA; I also contribute $3000 annually to a 401(k), which my employer matches.<\/p>\n

Closing Thoughts and Tips<\/strong><\/p>\n

I use a spreadsheet to manage my finances<\/a>. I track everything including: savings and checking account balances, income, budget, net worth, loans (when I had them), retirement accounts, and more. By doing so, I can easily verify that the income from my full-time job covers all of my expenses and savings.<\/p>\n

I took advantage of side gigs to help pay down loans quicker — and now that those loans are retired, the extra income boosts my savings.<\/p>\n

If you find yourself struggling to make ends meet on a tight income, I recommend focusing on these three areas:<\/p>\n