Dan Ymas

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How I Live On $20K A Year


Man walking on green grass field during daytime
Photo by Peter Geo.

I was talking to some friends from New York recently and they were complaining about how crazy expensive it is to live there.

They are three single guys sharing a two-bedroom apartment on the outskirts of the city and between rent and going out for lunch and clubs and drinks and this and that, they were each spending around $40K a year.

I nodded along as they said this––they made every dollar they spent sound like an inevitable expense––but alarms were going off in my head. 40,000 dollars?!

So when I got off the call I decided to check how much I had spent in 2019. This was fairly easy to do as I write down all my expenses in a spreadsheet at the end of each month––it was just a matter of adding up some numbers.


If you don't track your monthly expenses you can still quickly see how much you spent in 2019 by downloading all your credit/debit card transactions onto a spreadsheet.

Search "how to export transactions from <insert your bank's name>" to see how to do it for your bank.

The result? $20,700.

Here’s how these expenses broke down:

Rent$10,300My half of the rent for the apartment I share with my girlfriend. Our utilities get rolled up with the rent.
Groceries$3,300This is for both my girlfriend and I. ~85% of this was spent at Trader Joe’s and the rest at Walmart.
Travel$1,150In 2019 we went to Italy for 2 weeks (my girlfriend has family there so we saved on lodging) and took weekend trips to Portland, Vancouver, and Washington DC as well as spending Christmas holidays at my parents in Florida. My girlfriend paid some extra stuff in this category to make up for what I paid for groceries and car insurance, so we ended up even.
Dining Out$950We don’t eat out unless we’re traveling so this category could pretty much be rolled up with the Travel category.
Car Payment$2,000We got t-boned early in 2019 and my 2015 Ford Fiesta got totaled. As a result, we bought our first car together–—a used 2018 Kia Soul. We used the money we got from the insurance company along with a couple of thousand from each of us to pay for the Soul outright.
Car Insurance$1,000All of the insurance.
Internet$550The cheapest plan Xfinity offers in my area.
Health insurance$500A high-deductible health plan (HDHP) that I get through my 9-5.
Gas$350We don’t drive much except for hikes and day trips on the weekends. We usually walk to do groceries and take public transportation to get to work.
Other$600This mostly includes stuff bought on Amazon––protein powder, Christmas gifts, and some other random stuff.

Not too bad. Even with the $2,000 payment for the car, which won't be a recurring cost, I still managed to stay under $21,000.

So with my mind at rest on the subject of my annual expenses, I can now answer some questions:

Why track do I track my expenses?

First say to yourself what you would be; and then do what you have to do.

I think that your monthly expenses and your savings rate (i.e., the percentage of your income that you save) are the two best indicators of your financial health as these two factors alone determine when you will be financially independent (i.e., able to live off your savings without needing to make more money.)

Put simply, the higher your savings rate, the quicker you'll reach financial independence.

This table illustrates this concept well:

Working years until retirement based on savings rate

Image borrowed from Mr. Money Mustache.

And as I aspire to be financially independent by 35 rather than the more typical 60-70, I track my expenses and savings rate closer than most.


A higher income makes having a higher savings rate easier, of course, but there are also plenty of people with high incomes who spend their money as fast they earn it as if holding on to it burned a hole in their hands.

Without your expenses in check, you'll never be financially independent, no matter how much you earn.

How can I reduce my expenses further?

It is not the man who has too little, but the man who craves more, that is poor.

Rent is by far my largest expense at almost 50% of the total. This is in large part due to the city we live in (Seattle), which has a notoriously high cost of living (it's the 8th most expensive city in the United States.)

My girlfriend and I live in a one-bedroom apartment in the cheaper part of the city so really the only way to reduce this expense would be to move to a cheaper city and this is what we're planning on doing over the next couple of years.

Buying instead of renting would probably also save us some change in the long term.

Cutting out all travel would save $2K and I'm sure I could wrangle another $1K from all the other categories combined.

Assuming $2.3K annual savings from buying a house in a city with a low cost of living, this means I could get my expenses as low as $15,400 if I really needed to.

And even so, I would still be living better than 99% of all people in the history of humanity (access to clean tap water and a flush toilet puts me ahead of all born before ~1900 and easy access to groceries, shelter, and a relatively low risk of dying puts me ahead of all who had to live through WWI, the Great Depression, and WWII. Not to mention the great fortune of living in the United States.)

Truth be told, I like being frugal. I get a bigger kick out of finding ways to save than finding ways to spend.

I've been fortunate enough to have more than enough my whole life to realize that the joy of the latest gadget is fleeting and disappointing. And the clutter from years of accumulation only stresses me out.

Whenever I start to forget this, I think of this old family picture (circa ~1966) of my dad and his four siblings dressed up for my oldest aunt's communion.

The boys are wearing spiff suits, the girls long dresses. And in the corner of the picture, barely visible, is my grandma, hunched up and smiling, who had spent the previous few weeks sewing these suits and dresses herself.

Every time I see this picture I remember that the good life is cheap. It just takes opening our eyes and resisting the endless 21st century siren calls to uncover it.