How To Do Life

Fresh ideas about career and personal issues

How to Be Happier Than a Millionaire on 20K a Year (Really)

Spending wisely can allow you to pursue a career you’ll love. Read More

Right on the money, literally!

Excellent article, Marty. It is very, very possible to live on much less and be happier. Getting out of the office and into a home job has allowed me to not only do what I love (marketing & writing), but also travel and visit with kids, grandkids,and friends.

A few encouraging ideas to consider:
1) there are MANY lonely people with large houses who are open to having families live with them - I moved my wife and last/youngest child into one such home and have lived this way for one year now, cutting my housing expenses from $2,000+ down to $600 monthly. I even know of a family of six living with a divorcee...worked out great for both parties.
2) there are many dollar theaters out there where, if you are patient, you can enjoy first-run movies for $2 or $3 per viewing - cheap and gets you out of the house.
3) Trader Joe's also has a great Riesling for $4
4) For those concerned with health insurance and medical care, there are actually doctors out there who, (gasp!), enjoy helping people and will only charge $40 or less of an office visit - some with incredible credentials and experience. (Most doctors ARE in the business of helping others...they are fighting the expensive insurance/medical system to stay afloat) Bottom line - you CAN get quality medical care at greatly reduced prices.

Those of you who want less stress in your lives and more enjoyment - I highly recommend making the jump.

Future planning?

Is there any thought about retirement planning/investing/saving for one's old age in this budget? I see no line items setting aside any money for a cushion/emergencies or for retirement and old age.

What about that?


No, there's no budget for retirement investing at 20K a year. Nor an emergency fund. The point of the article is that many people take a job they dislike but pays $80,000+ because they feel that's the minimum they need to get by. You don't need to do that. And indeed, if you've learned to live on 20K, when you're old, social security will pay you roughly $20,000 a year, I believe.

Until you get sick

Sounds great, until you get sick or your child does, or you need a root canal, or you got in a car accident, or you needed some food, or you have to drive the car and need gasoline/transportation...

This is a nice idea, but let's not romanticize poverty and below-living wages. You do a disservice for those people who do struggle to make it with a family on 20k per year.

the items you mention

The budget includes insurance. And indeed, Kaiser covers dental for just another $25 a month. Sure, unexpected expenses such as a car accident cost more. The point is that it's possible to live decently on little, thereby freeing you up to do a career you'd enjoy more, even if it pays less. Many people feel they can barely get by on $100,000 a year. This article merely questions that.

You cannot buy security in

You cannot buy security in many instances. What if you make 100k and get a bad disease. You may lose that job. I spend so much on car and life insurance, so silly. And if you are living on 20k it is pretty easy to have six months of living expenses saved.

I loved this article. I am paid quite well at my job and I spend it all. This article is going to change how I operate and maybe I can put myself in a position to ditch a career that is truly soulless.

This is take home pay

Of course, the $20,000 would be take home pay for about $21,000/22,000 gross or so, depending on SS/Fed/state/local taxes. It's amazing how little one takes home after deducting tax witholdings and retirement contributions. The higher you make, the less effect it has on normal living expenses. But, people tend to fill the "normal" with higher and more expensive things.

The point is to live well below your means, enough where you can save for retirement and have an emergency fund. You really have to try and ignore the massive marketing machine and not get influenced by family and coworkers ... peer pressure (i.e. speaking of bond traders, I was reading where it is expected to keep up with a certain lifestyle when you work in those types of areas).

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Marty Nemko is a career and personal coach based in Oakland, Ca. and the author of 7 books. 

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