Living on Half Your Monthly Income: Could You Do It?

Here’s an interesting mental exercise that grew out of a community dinner the other night. Would you be able to make do with half of your current monthly income? It’s not as obvious of a question as you might think, so just take a minute and imagine yourself with half of your current monthly income. Could you survive?

I took this to heart and got out a copy of my monthly budget. Next to it, I added another column. I then carried over my income amounts, but divided them in half, and I went through every category, trying to figure out where I might shave some money to make it through.

The biggest cut was in entertainment expenses, which I reduced by 90%; there are many options for free or almost free entertainment that I could look at if this were the case. I then started cutting away services: Netflix, cable, internet, and so forth. I chopped my clothing and hygiene budget as well; I could wear clothes many more times and Ivory or generic soap can get you clean. I also reduced my monthly savings by about 75%, but didn’t eliminate it, and I lowered insurance costs by looking at rates with higher deductibles.

I was able to make it under that 50% threshold. I would lose a lot of the luxuries that I consider an everyday part of my life, but I would still have a home, still have food on the table, and still have a wonderful family.

As I sat there looking at the modified numbers, I realized two things. First, I really do waste a lot of money. Many of the things that I view as services are really just forms of entertainment, which is sad considering the number of sources of free entertainment available. Second, I now have a nice checklist of places to work on my frugal willpower. Do I really need all of these services and expenses? Is it really cost-effective to have a relatively low deductible?

This exercise was simple, but it really opened my eyes to the fat that still exists in my own budget.

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  1. Matt says:

    Thats a great exercise; most of us go through life spending money not realizing that we could if necessary make due with far less. I think I might have to take your suggestion to heart and try the same exercise.

  2. Brian says:

    You bring up a great point: we can live on a lot less that we think. Of coarse, this is no way to live forever, but maybe for six, twelve, or twenty four months until a financial objective is achieved.

    I am impressed that you pulled it off!

  3. james, miami,ok. says:

    I have been trying to figure out how to retire on my disability S.S. but my job has no retirement program, and I`m almost seventy years old. Any tips would be appreciated because I expierence terrible back pain at work now.

  4. Scott says:

    Great idea. As I have been in school (college)for the last two years now, and out of work and living on GI BIll money for a year of that, I have gotten used to such a low standard of living that now that I have a job making over twice per month what my total expenses have been the last year or so I have every confidence of being able to build up some savings finally. The thought of actually having a 3-month safety net is awesome!!

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