The following post is by MPFJ staff writer, Melissa Batai. Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food. She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.
What’s the rock bottom salary that you can have to support you and your family?
If you’re like most Americans, your rock bottom salary is what you’re currently making.
Perhaps you scrimp along, barely making ends meet. You’ve paid your dues living on a low salary. As your income increases, you spend more, year after year, after year.
“After all, don’t you deserve to reward yourself with an SUV after years of driving a compact clunker? The tendency to spend more as you earn more is known as lifestyle inflation—and it can affect you whether you make five figures or seven” (Forbes).
If those of us on an average income have trouble managing lifestyle inflation, imagine that you’re a millionaire, and you’re surrounded by other millionaires. Would you be able to live off of a “typical” salary? Would you be able to resist the urge to keep up with the millionaire Jones’ next door who are spending their money, as the proverbial saying goes, as if there’s no tomorrow?
Think, for just a minute, about the challenge to resist lifestyle inflation when you have money. . .lots of money.
So is the case for Ryan Broyles, the Detroit Lions wide receiver who signed a contract for $3.6 million in 2012. Yet, he and his wife live on just $60,000 a year.
ESPN reporters, when discussing Broyles’ financial decision, share that “78 percent of NFL players and 60% of NBA players file for bankruptcy within 5 years of retirement.” The reporters go on to discuss the lavish spending of other pro players including Jalen Rose who spent $60,000 once on a cell phone. A cell phone!!
Yet Broyles and his wife (and new son), despite the constant financial temptation around them, are living on $60,000 a year, just $7,750 more than the median American income of $52,250 according to Business Insider.
If Broyles can live on so much less than he earns despite his surroundings, can you, too?
Simple Strategies to Live on Less Than You Earn
Before you complain that you can’t possibly live on less than you earn, think about the 78% of NFL athletes who also believe they can’t live on less than they earn. After all, they have managers, gardeners, personal assistants, trainers, housekeepers. . .They can’t possibly cut corners. Many of them are used to a certain lifestyle and have trouble imagining their lives without all that they now have.
Regardless of your current income, you, too, are used to your current standard of living. Changing it, imagining living on less, when all you want to do is to live on more, is difficult. So, start slowly. Don’t make all of these changes at once, or you’ll be miserable. Instead, slowly change over the next year or two.
Make a budget
I know; I know. Making a budget is about as pleasant as having a root canal. However, making a plan for your money helps you avoid the temptation to overspend. The best way to succeed is to make the budget realistic. If you currently spend $300 a month eating out, don’t drop that amount to $0. Instead, drop it to $250 this month, then $200 next month, then $150 the month after.
Stick to a budget
Once you make the budget, you must stick to it. There are thousands of ways that you can pitter away your money without thinking much about it. You might buy a candy bar and a pop when you get gas. Maybe you pick up a magazine at the grocery store checkout. If you find that you’re overspending, take a month to write down all of your purchases or track them on your smartphone. You may be surprised to see the many ways you’re leaking money.
Cut your grocery bill
Besides your mortgage or rent, groceries are often the second largest expense for a family. I’ll be honest, for our family of 5, we used to spend $900 to $1,200 a month. I bought all organic—meat, veggies, fruit, etc.
Over the last two years, I’ve whittled our grocery spending down to $500 to $600 a month. It’s not been easy, and I’ve had to give up some of my food preferences (like eating all organic). Instead, I found changes we can live with.
- We eat more bean meals now.
- We eat organ meat, which is still a challenge for me.
- We always buy organic for the dirty dozen, but I will buy conventional produce, too.
- We buy in bulk when items are at rock bottom prices.
- Most importantly, I learned to shop from the pantry and freezer, choosing to make meals based on what we already have at home.
I have always meal planned, but if you don’t regularly, start with this simple step. Make a meal plan. When it’s 5:30 p.m. and you have no idea what to cook for dinner, simply look at the meal plan and start cooking. You’ll save yourself a drive to the local fast food restaurant.
Another good strategy is to make some freezer meals, so if you have a crazy week, you will have food at home waiting for you.
Kick the dining out habit
I know how hard this is. I once had a blog exclusively devoted to dining out, so I know how convenient it seems to eat out and how enjoyable it can be. But you will save so much money if you don’t eat out or you scale back on the frequency of dining out. And I promise, after a while, you won’t miss eating out. And when you do dine out, you’ll enjoy it all that much more because it will be a treat.
Curb your entertainment bill
Entertainment costs many families quite a bit of money, but it doesn’t have to. There are plenty of low cost entertainment options.
- Get movies from the library or through a Netflix subscription.
- Have a family game night.
- Cook restaurant quality meals at home together.
- Attend local free events.
With some creativity, you’ll find that entertainment can become a very small line item in the budget.
Lower your utility bill
You can save money on your heating or air conditioning bill by making gradual changes to the temperature. We live in Arizona where air conditioning is needed six to eight months of the year. Last year we kept the air at 80 degrees. This year, we’ve kept it at 81 degrees. Next year we may try to raise it to 82 degrees. Gradually change the temperature you’re used to, and you can save money.
If you look at this list of cost cutting strategies and think, “If I do all of these things, I’ll have no life”, I just want to reassure you, you’ll have a life. You’ll have a good life; it will just be different than the life you’re currently living.
Think of Ryan Broyles living on $60,000 a year. He’s not hurting by living on that income, but I’m sure he’s not dining out every night, either. He’s certainly not living lavishly like his teammates. But he’s building for his future through his investments. You can do that, too.
How about you all? Do you routinely spend less than your income, or do you constantly feel like you’re trying to make ends meet? What is your favorite way to keep more money in your pocket?
Share your experiences by commenting below!
***Photo courtesy https://pixabay.com/en/piggy-bank-saving-money-young-woman-850607/
