In my quest to get out debt and build financial independence, I have come up with a plan to live on half my income! Yep, that’s me plus two teenage children, living in Austin TX on $2782 a month!!
You might think that living on this small sum is leaving us feeling deprived. But it really hasn’t. We rent a 4 bedroom, 2100 sq. ft home. We eat delicious food, have reliable transportation, and find ways to entertain ourselves that don’t cost money. Living well beneath my income in 2018 means that I could potentially pay of about $30,000 in debt this year!!! AND, using a few passive income strategies, and accounting for work bonuses and maybe even side hustles, I plan to get that number closer to $50,000!!!
Want to know how my budget breaks down? I don’t mind sharing…
Eating out 60
Car insurance 124
Car fuel 120
Cost of Driver to pick up my kids from school 200
2 cell phones 150
Total Budget- $2782
Total income- $5567
Now you might be saying, wait a minute…$100 for food- for 3 people? Yep. I’ve discovered a fantastic way to subsidize our food budget by using cash back I earn through a site called BeFrugal.com, which means the only food I need to buy is fresh meats and produce. I buy these at Aldi, and it costs me less than $100 /mo.
You might also be wondering how I have 2 cell phones and three members of the household. To be honest, I am fortunate because their dad pays for one of the kids’ cell phones.
You’ll see there’s a small amount for eating out ($60) because I refuse to create financial trauma in my kids’ lives just because I’ve decided I want to get out of debt. My kids get treated to fast food one night a week. But ONLY one night!
You’ll may notice there’s no budget for clothing. That’s because I’ve found a way to sell our old clothing so that we can purchase new items!
There’s also no budget for entertainment outside of Netflix. The thing is, we have hobbies. I create art- and sell it. My daughter makes earrings. My son is glued to his video games (lol- we’re working on changing this one) . I’m currently working 60 hrs a week between my job and school, so right now, I really don’t have any time to be “entertained”! BUT if I want to eat out with friends, or join coworkers for a Happy Hour, the money is coming from some passive income streams I’m developing- not from my monthly budgeted funds.
So what’s missing? Well, I didn’t include any of my debt or savings in this budget, such as my car payment. This is how the rest breaks down…
401k – 500 post tax
Emergency savings 500
Car Payment 423 but I pay 500
Medical Bills 200
Personal Student Loan 50
Credit Cards 673
Total spent on saving, investing, giving, and debt repayment $2783
Okay, so it sounds like I’m really on-track, but what you don’t see is that in one year, I will need to begin paying $1600/mo on my student loans!! Clearly, the only way I’d be able to find that money in my budget is to stop saving, investing, and giving. I’m unwilling to do that. So, I’ve been finding ways to create more income. Currently, I work 40 hours a week, plus I’m doing a 20/hr per week UNPAID internship which will end in August. So to earn extra income, I will need to find passive ways to make money. Here is what I’ve tried so far…
I’ve taken in a roommate (my 24 yr old nephew) $400/mo
I’ve opened checking accounts that offer cash bonuses – $500 earned so far
I’m earning cash back at BeFrugal.com for purchases made for my office -$200/mo
I pay for nearly everything on a cash back credit card – $30/mo
I sell prints of art that I’ve made -$100- $500 occasionally
I get cash back for groceries through Ibotta app – $60
So far I am averaging about $600 per month with these passive income streams!
Now, if I pay off my credit cards and car this year, I’ll add $1173 back into my budget. If I add the additional $600 in passive income, I’ll be set to begin paying my student loans next March- while simultaneously building wealth!!
I am a Woman with a Plan!
I challenge you to see what you can cut from your budget so that you can live well within your means. Still don’t earn enough? Then it’s time to take on a side hustle or look for opportunities to earn passive income. You can do it Mama! I believe in you!!