Living on a minimal budget has nothing to do with how much money one has, but the ratio of expenses to income. It is easier to believe that someone bringing home $2,000 a month and spending $2,000 a month on related living expenses is living with a limited budget, it is harder to believe (but true) that someone who makes 1 million dollars and spends a million dollars on living expenses is someone living on a minimal budget. The cost of living to income ratio is the same, the figures just look better.
Very few of our readers is on the second bracket, so we will work with the more realistic figure of $2,000 a month and see how we can live below our means rather than meeting the full amount every month.
*- Housing –
This is a set amount that can be reduced by enacting two possible options: Get a roommate to share the cost of rent/mortgage and utilities (bank the difference and don’t look back). Or, move to a less expensive location, downsize and pay less (bank the difference and don’t look back)
* - Food –
A chunk of the budget goes easily at the checkout counter when people are not armed with a list that is stamped in granite (if it is not on the list DO NOT buy it). Plan meals for the week and only buy the ingredients that are absolutely needed for the week. When people do this, they see their food budget cut in half or more, especially when they cut out eating at fast food restaurants and bag their lunches and snacks for the week.
* - Utilities –
When the heat is on people turn on the air conditioning and that costs money. If at all possible, leave the home and spend time at the local library doing the computer work or reading that would have been done at home consuming electricity. The library is free, has wi-fi and is air conditioned.
* - Other savings –
Turn down the water heater.
Run the dishwasher only when full.
Turn off every light in the house when not in use.
Recycle cans and plastics, you’ll earn some cash back and help the planet.
Use only credit cards that give you cash back for paying your bills with them.
Shop with coupons for things you normally use.
Shop at the Dollar store for dishes, glassware and plastic containers.
Living within a minimal budget requires thinking outside the box to be entertained (Blockbuster vs. Red Box rentals for example). It also requires finding ways to keep as much of the living expenses down and banking the difference for future emergencies. It is not difficult to do once every expense has been accounted for and alternative ways to cut or eliminate the cost are implemented.