As a single guy or gal, you're responsible for your own monthly expenses. You have to pay rent, transportation cost, utilities, buy food and cover other monthly expenses. And sometimes, being single can strain your budget. But if you can live off half your income, you'll build a hefty cash reserve, and you might alleviate some of your financial headaches. Here are seven ways to live off half your income.
1. Automatically Deposit Half of Income into Savings
If you want to live off half your income, you need to make half of your income unavailable. Open a savings account with a bank, preferably an online savings which offers higher interest rates. When you receive your paycheck, automatically deposit half of your check into your savings account. With only half your income leftover for expenses, you're forced to live on less.
2. Don't Get a Car Payment
Now, if your car isn't reliable and you desperately need a new one, you might have no other choice but to get a car payment, unless you pay cash for a vehicle. But if your current car is working just fine, put off buying a new one. Make sure you keep up with the car's maintenance, which is crucial to extending the life of the vehicle. Driving an older car has its benefits. You'll avoid a car payment, plus you'll pay cheaper auto insurance and cheaper personal property taxes.
3. Live in a One-bedroom Apartment
To live off half your income, you need to simplify your living situation. I've known single people who've purchased large homes for themselves, or they've moved into two and three-bedroom apartments. If you want to keep your housing expense to a minimum, find a place that offers just what you need and nothing more. This might include a one bedroom home or apartment
4. Live at Home, or Get a Roommate
Another option is living with your parents and paying them rent every month, or get a roommate and split the cost of rent. Not only will you split the cost of rent with a roommate, but also the cost of utilities and food.
5. Ditch Credit Cards
Credit cards create unnecessary bills. I think it's smart to have one credit card lying around for an emergency, but don't get into a habit of using credit cards on a regular basis, unless you're in a position to pay off balances every month. Credit cards can increase the risk of credit card debt. And the more you owe your credit card companies, the harder it is to live off half your income.
6. Rethink Utilities
There are plenty of ways to save on utilities. Some people get rid of cable and stream their favorite programs using Netflix or another streaming program. Also, if you have a choice for energy or gas providers, shop around to find the cheapest rates. You should also shop around and compare insurance rates to make sure you're getting the lowest premium.
7. Cook Your Own Food
It might be easier to grab something to eat on the way home from work, but eating out three times a day gets expensive. Go to the grocery store, pick up fresh produce and learn how to cook simple meals for yourself. One meal might provide lunch and dinner for two days.
Living off half your income might seem impossible, but if you make a few sacrifices, it might work. You may also realize you don't need as much as you thought. What are other tips to help single people live off half their income?