My first job out of college was with AmeriCorps making almost $9,600 per year (after taxes). Living on $800 per month was definitely challenging and it really taught me how to budget my money and live frugally. Here’s what I learned.
1. Find a cheap place to live… with roommates. At $800 per month, you can’t afford to have a high rent. Find a place that has cheap rent or rolls your utilities into the cost. Even then, you may still have to live with others to make it even cheaper. Living with others can also bring the utilities bill down since you split it multiple ways. You can also split costs on toiletries, cleaning supplies, and every day items like paper towel and toilet paper.
2. Drive a beater. You can’t afford a high monthly car payment, so buy something for super cheap that you won’t have to make monthly payments on (besides car insurance). Just make sure it’s in good enough condition to last you a while because you also can’t afford to pay for new car parts either. I drove a 1990 Corsica (18 years old at the time) that I got for free from my grandma. It was old and loud and rusty, but it only had 90,000 miles on it and I didn’t have to spend any money on monthly payments.
3. Minimize your drive or lose it altogether. The closer you live to your work, the less you’ll have to drive. That means you’ll spend less on gas and won’t be slamming miles on your car. Another option is to live close to public transit and get rid of your car altogether. It may seem like an added cost having to pay for a monthly transit pass, but you won’t be paying for gas, a car payment, or car insurance.
4. Go generic. From clothing and food to prescription drugs, I bought the generic brand. I went from paying $60 per month to $10 per month by switching to generic prescriptions. I was also able to save a ton of money by buying generic groceries since the store typically offered more discounts with their own brands.
5. Take advice from Macklemore. Shop at the thrift store for anything and everything – from housewares and furniture to clothing and accessories. Most thrift stores have special sales days when certain colored price tags are a certain percentage off. Make sure to mark those days down in your calendar for an extra discount!
6. Save your credit for emergencies only. If you don’t have the cash to pay for it, don’t buy it. Living on $800 per month does not give you much wiggle room to be paying monthly credit bills. You also want to have enough money available on your credit card if an emergency does arise and you have to pay for something you can’t afford at the moment (i.e. car repair, hospital stays, etc.).
7. Get creative with your side hustle. There are many ways to earn extra money on the side. Along with finding random freelance opportunities online, I also entered writing contests, which paid out up to $200 if I won. I used my location in a college town to my advantage and tutored various students to earn a few extra bucks. and, since needles didn’t bother me and I was always happy to donate blood, I donated plasma twice a week to make an extra $40 per week.
If you can’t tell from above, a few of these tips require a little research. By taking the time and effort to find cheaper living options, you could save hundreds of dollars each month, making that $800 income a little more livable.