{"id":53630,"date":"2019-03-18T04:15:09","date_gmt":"2019-03-18T11:15:09","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=53630"},"modified":"2019-03-23T12:03:55","modified_gmt":"2019-03-23T19:03:55","slug":"how-i-live-on-40000-annually-jason-from-maine","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id53630-how-i-live-on-40000-annually-jason-from-maine.html","title":{"rendered":"How I Live on $40,000 Annually: Jason from Maine"},"content":{"rendered":"<div id=\"attachment_53633\" style=\"width: 387px\" class=\"wp-caption alignright\"><a href=\"http:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-1.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-53633\" class=\"wp-image-53633\" src=\"http:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-1.png\" alt=\"\" width=\"377\" height=\"283\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-1.png 377w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-1-300x225.png 300w\" sizes=\"auto, (max-width: 377px) 100vw, 377px\" \/><\/a><p id=\"caption-attachment-53633\" class=\"wp-caption-text\">Jason and his dog, Sadie.<\/p><\/div>\n<p>My name is Jason, and I live in beautiful Plymouth, Maine. I&#8217;m 29 years old with no wife or children; I live a very comfortable life with my dog on less than $40,000 annually.<\/p>\n<p>I&#8217;m what many people consider frugal, some call cheap, and others call smart. I&#8217;ve always strived to limit my monthly expenses. I&#8217;ve also always maintained a positive monthly cash flow.<\/p>\n<p><span class=\"s1\">Growing up, my favorite part of the weekend newspaper was always the personal finance section.<\/span><\/p>\n<p>In 2011 I graduated college with a degree in business management. I worked multiple jobs the entire time that I was in college, striving to pay the tuition bills with cash instead of loans. I graduated with a total student loan debt of under $3000, which I&#8217;ve long since paid off.<\/p>\n<p><strong>My Income and Expenses<\/strong><\/p>\n<p>My gross monthly pay is $3033, which includes $350 monthly from a rental property that I own. The breakdown of my expenses is as follows:<\/p>\n<p><a href=\"http:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-3.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-53702\" src=\"http:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-3.png\" alt=\"\" width=\"528\" height=\"299\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-3.png 931w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-3-300x170.png 300w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-3-768x435.png 768w\" sizes=\"auto, (max-width: 528px) 100vw, 528px\" \/><\/a><\/p>\n<p>The largest line item in my budget is my truck payment. In 2017 I bought a new pickup truck. What a stupid idea! Im currently negotiating its sale to my employer, and once things are finalized I&#8217;ll pay cash for something more affordable.<\/p>\n<p>My food budget of $200 monthly includes pet supplies. I find this to be plenty, and could easily cut it back closer to $120 monthly should the need arise, but hey, what&#8217;s life without some level of luxury? I don&#8217;t typically eat out, though a few times a year I might order dinner on a Friday.<\/p>\n<p>I heat my house primarily with wood, with an electric heat supplement. I&#8217;m fortunate enough to be able to cut firewood off of land that friends and family own, and heat my house nearly for free.<\/p>\n<p>You might notice that I don&#8217;t have an entertainment budget. I belong to several community organizations that get me out of the house a couple evenings per week for almost nothing &#8212; if not free. Additionally, through these groups I&#8217;m able to participate in projects that help make my community a better place.<\/p>\n<p>Overall, I find what some may consider a tight budget actually allows for several luxuries. For example, it was only recently that I found myself in a financial position that allowed me to have internet service at home. Prior to this I used free wifi from different locations when I needed. The internet service was followed shortly thereafter by two streaming services. These are fantastic ways to waste a Saturday afternoon!<\/p>\n<p><strong>My Savings<\/strong><\/p>\n<p>My sinking fund is used to save up for the $1825 I owe in property taxes each year. I also use it to save for other bigger ticket items like tires for my vehicle, and a new riding lawnmower (because push-mowing my two-acre lawn was getting old). I&#8217;m currently using both my sinking fund (in excess of my anticipated tax bill) and house-project money for a tile-surround for my wood stove, as well as a new tile shower in my bathroom.<\/p>\n<p>I keep my sinking fund money in a bank in the next town over. I don&#8217;t have a checkbook or debit card for the account, so I actually have to go into the bank when I need this money. That considerably reduces the temptation to spend it on things that its not intended for.<\/p>\n<p>I also make monthly contributions to my Roth IRA. In addition to this, there&#8217;s a pretax deduction from my paycheck of $303, that goes into a traditional 401k. My employer is kind enough to match $91 of that, bringing my total monthly retirement contributions to $791.<\/p>\n<p><strong>My Housing Arrangements<\/strong><\/p>\n<div id=\"attachment_53635\" style=\"width: 353px\" class=\"wp-caption alignright\"><a href=\"http:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-2.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-53635\" class=\"wp-image-53635 size-full\" src=\"http:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-2.png\" alt=\"\" width=\"343\" height=\"462\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-2.png 343w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2019\/03\/40k-JasonFromME-2-223x300.png 223w\" sizes=\"auto, (max-width: 343px) 100vw, 343px\" \/><\/a><p id=\"caption-attachment-53635\" class=\"wp-caption-text\">Jason&#8217;s house.<\/p><\/div>\n<p>Very astute readers will notice two things in my budget. First, there isn&#8217;t a line item for a personal mortgage. That&#8217;s because I don&#8217;t have a mortgage on the house that live in. I also don&#8217;t make a profit on my rental property. This is for two reasons. First, I mortgaged the rental property to purchase my house, financing the loan for 10 years; I view this as being no different than had I financed the house and not had a mortgage on the rental. Second, I have a fantastic tenant who takes care of the place and pays his rent on time, every time. I don&#8217;t mind accepting a little less for someone like him.<\/p>\n<p>In 2015 I purchased the fixer-upper that I currently live in. I&#8217;ve been improving it and making it as nice as I can afford to. The pay-as-you-go plan certainly takes longer, but I don&#8217;t mind. I find that having the extra time allows me to plan exactly how projects will progress, and think through any problems that I might run into.<\/p>\n<p><strong>Closing Thoughts<\/strong><\/p>\n<p>My financial life is really nothing spectacular; I never had any sort of inheritances or lottery winnings.<\/p>\n<p>I&#8217;ve made some <a href=\"https:\/\/lenpenzo.com\/blog\/id618-nobodys-perfect-my-10-dumbest-money-mistakes-part-1.html\" target=\"_blank\" rel=\"noopener noreferrer\">stupid money mistakes<\/a> &#8212; but who hasn&#8217;t? For example, I recently bought a pickup truck that cost way more than what I should have spent. I was in a position where I didn&#8217;t have a working vehicle, and a few of my coworkers had just purchased new trucks. I was a little envious and bought a brand new truck for myself. From this I learned that its easier and cheaper to not pay attention to what other people have, and be happy with what I have.<\/p>\n<p>I made my first big money mistake in 2011; I had a small retirement account of about $3000 invested entirely in an S&amp;P 500 index fund that I cashed out during a period of hard times. I didn&#8217;t clear $2000 after taxes and penalties. Since then, the S&amp;P 500 has gained quite a lot of value. From this I learned several things. First, I learned the importance of having an sufficient emergency fund. I also learned to look for other sources of money before cashing in invested assets. Most importantly, I learned about the power of compounding. Assuming a 6.5% annual return, that decision will end up costing me $48,000 by the time I retire.<\/p>\n<p>Everyone has their own priorities about money &#8212; and I try not to judge people&#8217;s priorities &#8212; but I often find myself thinking to myself when some people I know make fun of <strong><em>my<\/em><\/strong> financial choices: <em>Weren&#8217;t <strong>you<\/strong> complaining about not having any money last week?<\/em><\/p>\n<p>I&#8217;ve chosen a lifestyle where I live within my means, contribute some to my future self, and spend a little today on luxuries.<\/p>\n<p>***<\/p>\n<p><em>If you&#8217;re like Jason &#8212; a household CEO who is successfully making ends meet on roughly $40,000 per year or less &#8212; then <a href=\"https:\/\/lenpenzo.com\/blog\/id20157-wanted-readers-who-make-ends-meet-on-40000-annually-or-less.html\">I&#8217;d love to hear from you<\/a>! Contact me at <strong>Len@LenPenzo.com<\/strong> and be sure to put $40,000 in the subject line. If I publish your story, you&#8217;ll get a $25 gift card, or an American Silver Eagle!<\/em><\/p>\n<p style=\"text-align: right;\"><span style=\"font-size: smaller;\">Photos: Courtesy of Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>My name is Jason, and I live in beautiful Plymouth, Maine. I&#8217;m 29 years old with no wife or children; I live a very comfortable life with my dog on less than $40,000 annually. I&#8217;m what many people consider frugal, some call cheap, and others call smart. I&#8217;ve always strived to limit my monthly expenses. [&hellip;]<\/p>\n","protected":false},"author":186,"featured_media":53633,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[480],"tags":[],"class_list":{"0":"post-53630","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-frugal-living","8":"pmpro-has-access","9":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How I Live on $40,000 Annually: Jason from Maine<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lenpenzo.com\/blog\/id53630-how-i-live-on-40000-annually-jason-from-maine.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How I Live on $40,000 Annually: Jason from Maine\" \/>\n<meta property=\"og:description\" content=\"My name is Jason, and I live in beautiful Plymouth, Maine. I&#8217;m 29 years old with no wife or children; I live a very comfortable life with my dog on less than $40,000 annually. I&#8217;m what many people consider frugal, some call cheap, and others call smart. I&#8217;ve always strived to limit my monthly expenses. 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