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How my family lives well on less than 2000 dollars a month

December 2, 2013
Trinity's been thinking a lot lately about scraping things with knives since she got a real pocket knife from her Nanna & Papa for her birthday

Trinity’s been thinking a lot lately about scraping things with knives since she got a real pocket knife from her Nanna & Papa for her birthday

Ladies & Gentlemen!  Midgets & Nuns!  It’s time once again for your favorite game and mine…. SAGE WISDOM FROM A 9 YEAR OLD! In this week’s episode, we have the response to my attempt at bringing perspective to Trinity’s dilemma (not sure what the dilemma was any more, but that’s not the point).  Seconds after I mindlessly spouted the age old saying “There’s more than one way to skin a cat”, and after a moment of thoughtful reflection, she says “Well I guess one way would be to hold it down and scrape it with a knife?”.

Um, yeah.  That would do it.

Well, in a barely related point, today I’d like to talk about finances and how my family lives well on less than $2000 a month.  I want to say up front that I’m not suggesting anyone else adopt my budgetary practices (although it’d be nice if the federal government would at least try).  But there may be some principles here that some would find interesting, if not entirely helpful.  For sure, there’s more than one way to skin a cat, and more than one way to approach a budget.  So with that said, here it is.  How to be poor as church mice, basically homeless, somewhat unemployed, and live like kings!

Now if you know me or have read much of this blog then you already know that I kind of have a unique way of looking at things.  I have this habit of constantly examining my life and weighing my decisions against my values, and I find it entertaining to make ridiculous choices that stubbornly and dramatically reflect those values. I also do have one very distinct advantage when it comes to perspectives on money which is that I’ve never had much of it.  That kind of makes it necessary to find ways of interacting with the tiny amounts I get my hands on so that it goes as far as possible.  But I try real, real hard not to limit myself by this factor.  In other words, in my family we don’t say things like “We can’t afford that”.  Instead, we look at our values, see if something is a priority, and if so we find a way to do it.  Frequently this means cutting back in a less-important category.  Other times it means we ultimately decide this isn’t a high enough priority to pursue.  But what we don’t do is say something is very important and really needs to be done but we just can’t afford it.  It might be traveling to a family event, helping a friend in need, or moving in to a Rialta in order to be able to pay for it, but there is always a way.

So I figured it would be interesting for some folks to see how a typical month works out for us financially.  Real numbers, in the real world.  Last month (October) we tracked every penny we spent and it looked like this:

budget

A few notes on this.  “Clothes” was rain coats for the girls.  The classes were an anomoly, as was the fishing trip.  We had the hotel day because someone got sick.  And our gas was higher than usual because of some unusual work-related travel.  And about food?  Well, that’s kind of our one “splurge” category.  We could eat on FAR less than this.  On the other side, there are two categories suspiciously missing, which are health care and benevolence.  We have had major medical coverage but currently do not, and we usually do some strategic giving, but are just in a season where those things aren’t happening.  That said, with those adjustments we’d still be somewhere near the $2,000 mark.

euts

Community dinner with our good friends, the Euteneirs, in our RV

So that’s what we spend our money on.  And there’s sure some room for improvement.  I’m sure anyone could immediately identify some problem areas and a string of “yeah but’s”.  Even so, please at least give me credit for what’s NOT on that list.  Car payment (we only drive what we can afford to pay cash for).  Debt maintenance (No credit cards!  EVER!).  Therapy spending (Do you REALLY need ANOTHER pair of brown shoes?).  And of course, HOUSING (I realize I have a distinct advantage by living in an RV, but anyone can have a goal of not having a house payment, even if it take s a bit longer than a year to accomplish).  And the crazy thing is, we all feel like we live extravagantly.  We eat out a lot, enjoy lots of entertainment, travel a good bit, and spend lots of time with our community of friends.  So although our budget is somewhat small compared, for example, to what our government tells us is the poverty level, our net experience is one of comparable enjoyment and provision.

So whadayathink?  This is one post where I really would love to have some feedback.  Let me know YOUR strategies for accomplishing your goals with limited resources.  Shoot a few holes in my budget and let me know where you think I can improve it.  Let’s help each other re-imagine the issue of finances, thinking differently about our money and weighing whether our spending matches our values.  Thanks in advance for your thoughts!

hike

Entertaining yourselves on zero dollars often looks more beautiful and quite a bit more healthy than, say, 4 hours of Grand Theft Auto.  Here’s a shot from a recent hike to a waterfall.  I have no idea what Trinity is doing.  Xandra is trying not to fall off the railing. Carissa?  She’s just being cute.

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9 Comments
  1. Scott permalink

    Thanks for sharing! Great discussion, I love going through budgets and seeing how to make money into more than a thing I don’t have enough of into a tool for aligning values with reality. A few questions (to respond to in the comments, in an email, or over a good old-fashioned chat on the phone. Better yet, come visit us and lets talk over a beer!)–How do you guys approach savings for bigger/long term items, such as retirement, rv replacement/house purchase, car replacement, etc? Also, I am curious about health care, do you not have any health insurance or do you have some basic coverage? If you don’t have any, do you have health savings for major medical issues?

    Miss you guys, lets catch up soon!

    • Hi Scott! Thanks for “biting” on my invitation for someone to point out the very obvious problems with my personal budget so I can have a chance to respond. I was trying to keep the post short(er) so didn’t address these issues. But I’m happy to elaborate here!

      First, I should say that the book you gave me awhile back, “Your Money or Your Life” was an excellent resource and helped reinforce, if not fashion, some ideas discussed in the post. So thanks for that, and for anyone else, I would absolutely recommend this book.

      Secondly, I want to reiterate (and hopefully this was clear in the post) that I’m not trying to be anyone’s model for what a budget should look like. I am crystal clear that my October expenditures sheet has some major problems. My main point is just to have the conversation in a very transparent way. A perfectly excellent outcome from my perspective would be that someone would see what we’re doing, be inspired to modify it to reduce unnecessary expenditures and re-evaluate whether certain “must” items on their own expenditures sheet (not always the same as the budget sheet in that filing cabinet) could be reconsidered as “optional” or even counter-productive to stated goals.

      That said, on to your specific questions. If you saw the “Budget Sheet” in MY filing cabinet folder, it would indeed look different than my actual expenditures. It has lines for health care, savings, giving, car maintenance and so on. And as alluded to, there are some lines that are much smaller than we actually spent, such as clothing, gas, and food. I think it’s inevitable to have some discrepancy there, but the two sheets should certainly be understood as distinct and paid attention to and compared regularly (monthly would be ideal!). If you put money aside for, let’s say, car repair and clothing, there will be some months where you don’t use one but use more in the other. We all understand all of this. In my case, we “lived well” on less than $2,000 in October, but didn’t list money that was supposed to be set aside for different months. So in that sense, my post is kind of a complete fabrication not based on reality and full of, shall we say, hogwash.

      It’s also how I have been living my life for years.

      It’s also a train wreck waiting to happen, and I understand that.

      So what am I doing about it? Well, as you know, in my case I have spent the last 5 years since I left a job with good health care and 401(K) and all that pouring my soul into a coffee business. And while that business hasn’t generated a phenomenal monthly stream of revenue, it HAS generated enough for us to live “well”, given the adjusted expectations listed in my post. And I am very proud that we haven’t accomplished living well by living off assistance programs. Those are fine if they are needed, but I happen to believe our national definition of “need” is in need of some significant evaluation and subsequent adjustment.

      But I digress.

      The other thing my business is accomplishing – in addition to feeding my family – is building equity. At some point in the near future, I hope to hit the tipping point between pouring my guts into a business and sacrificing everything to build it, and experiencing the payoff of a business that has zero debt (this will happen for me in April!), throwing off a wage that will allow us to re-adjust our budget as we grow older and in greater need of health care, retirement, etc.

      As you could guess, I could definitely go on and on here, but hopefully this fills in a couple holes and answers some of your excellent queries. Either way, I am absolutely looking forward to having that conversation in person with you very soon!

      • Scott permalink

        Thanks for the Reply, I finally got back to this page to read it! Good stuff, it makes good sense. We are having a fun time reevaluating our budget this new year. It is so good to keep coming back to our money and asking if it is really being directed towards the things we value. Keep up the awesome work of living simply and Happy New Year!

  2. Wes Bartel permalink

    Don,
    Good post! When I look at all the money I wasted over my lifetime I could almost become depressed! Although I applaud a simple lifestyle, I think we need to keep a primary focus on why we choose to live simply. It’s primary purpose is so that we can be effective stewards of the resources God has entrusted to us!

  3. Our budget is the same, but add $500/mos for campground fees. We almost never eat out, our food budget is about $600+ month with family of three. No debt, house rented that nets $35/mos.

  4. I live & travel full-time in a Rialta also. It’s an 02-HD. I’m retired and travel by myself with my cat…My combined income SS, Rent, and Investment Portfolio is about $4,300/month….I end up living on about $1,200 to $1,500 without that being the goal.. I spend about $500 on fuel, that includes propane. I don’t deal with a food budget per se….I eat out when I want, and cook in when I feel like it. Many times this might just be a sandwich for dinner. Your food budget will be more simply from the number of people eating, then you have to see to it that the munchkins eat healthy meals. I can if I wanted, just sit down with a quart of milk and a pkg. of Oreo’s for dinner. While I don’t, I could…as responsible parents, you don’t have that option.

    If you’d like to email me privately, I can give you at least one suggestion for easily making some pretty good money with not a lot of effort, doing what you’re already doing.
    Travel & Live Safe….
    Denny

  5. Rhonda Norman permalink

    Just found your site. My husband and I are soon to be retiring, a little early hopefully and will be on a tight budget. Thanks for doing this blog. It is inspirational and shows it can be done.

  6. Where do you park so cheaply? Even our statAnd river authority parks are 20.00 a night.

    • We have never paid for parking. We only stealth camp on the streets. It’s a pretty unique way of living, but certainly does save the dough!

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