Living on Less Than $16,000 a Year

I want to clarify my living expenses before I get too far along here. First off, these are my living expenses -- they don't include my wife's. Although since quitting my regular job to take up writing, my wife now makes more than I do, I still contribute half of almost all shared expenses. Therefore, since my wife and I split our common living expenses and family entertainment, and I track all my personal expenses, I can provide you with a much more detailed breakdown of my costs than I could of both our expenses since I don't track what she spends upon things like lunches at work, cosmetics, clothing, medical expenses, and things of that nature.


The total I'm providing here is pretty much half of what our total family expenses were (not factoring in income taxes), minus health insurance (I cover the costs of childcare for our three-year-old since I work from home, and in turn my wife covers health insurance through her employer sponsored plan), the car insurance for the vehicle my wife drives to work, and my wife's personal expenses.

Here was my portion of the family expenses from June 1, 2009 to May 31, 2010.

Home Costs

By far and away the greatest of my personal expenses are those related to our home. We purchased a home three years ago, choosing a 15-year mortgage for its shorter duration, lower interest rate, and its ability to decrease the amount of interest that we pay over time. This however, makes our payments much higher than what they would be with a 30-year mortgage.

Our $1752.48 regular monthly payment is broken into bi-weekly payments of $876.24 for 26 periods a year. In essence this factors in an extra monthly payment each year in an effort to reduce the duration and interest of the loan. This amount also includes our property tax and homeowners insurance which is escrowed through the bank. My half of this expense for our home was $11,391.12 for the year.

Add to that total repair and maintenance costs of $2198.34. This amount included a $500 back porch awning repair, $160 for replacing cracked bathroom and kitchen tiles, $96 for repairing several sections of our front sidewalk, $1365 for a garage roof replacement, and assorted items like mulch, caulk, paint, lawn seed, etc. My half of this total was $1099.17.

For the year, my half of all home costs came to $12,490.29.

Utilities

Over the last year, we've reduced costs such as phone, cable, water, and energy. During the 2009-2010 period in question however, we were still getting to know our home, our utility usage levels, and the best ways to cut them.

Here were our totals for the year:

Water/sewer/trash -- $487.40

Internet/cable -- $1126.87 (we later cut this amount in half after seeing the ridiculous year end total)

Phone -- $692.87

Electric -- $659.98

Natural Gas -- $607.33

Our total utility costs for the year were $3574.45, which meant my half equaled $1787.23.

Food

My wife and I are great at finding deals, shopping at discount stores, and stretching a dollar. It's no different when it comes to food. We don't eat out a lot, eat in moderation, use coupons at the grocery store, and even grew our own garden in the summer of 2008. Working from home helps keep temptation to spend on fast food down for me, and my wife packs her lunch for work most days to keep from spending money on lunches out or in the employee cafeteria, although she does splurge occasionally.

Our total for the year was $1540.58, my portion of which was $770.29, which also includes half the food costs for our three-year-old son at the time. It really is incredible what using coupons, watching for great deals, and buying in bulk during sales can do for a food budget.

Entertainment, Clothes and Miscellaneous

I'm relatively lucky in the fact that since I work from home, my work attire often consists of pajama bottoms and a t-shirt (sweatshirt in the winter). Therefore my clothing costs are fairly limited, and what I do buy -- as well as many of the items we pick up for our young son -- are resale shop items from a store in a nearby affluent neighborhood (shhh, they have name brand items at cut-throat prices, but don't tell!). My mother-in-law almost fell on the floor the other day when she saw what was a $40 to $50 pair of boots that we had bought for my son -- barely worn -- for 75 cents!

We didn't take a big vacation during this time period (having vacationed in Florida at my wife's family's place earlier in the year), although we did attend the Indianapolis 500 with friends, staying at their house over the weekend, which saved the cost of what might otherwise have been a $300 to $500 a night hotel room.

That being said, my share of the costs for entertainment clothes, and miscellaneous items was only $487.14 for the year. This included the price of new contact lenses, office supplies (since I'm a writer), birthday and Christmas gifts, and a small donation to Haiti relief fund after the earthquake there.

These purchases brought my total for the year to $15,534.95. It's amazing what you can do when you split costs with someone else and watch your dollars closely.

More From This Contributor:

5 Great Personal Finance Blogs for the Everyday Person

Increasing Productivity, Increasing Profits

Save Big Money With These Everyday Household Items

Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is at the reader's discretion.