How To Live On $25,000 Per Year (And Still Pay Off Debt!)

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Can you live on $25k/year?

“Every millennial’s fav game: trying to figure out how your friends afford their lifestyle.” Have you seen that meme?

I find it so interesting seeing how some of my friends are capable of stretching $25k/year and how others can barely survive on $52k/year. Why is that?

I was recently talking to my friend Jack, who currently earns $25k/year on a stipend, yet still managed to pay off $10k in medical debt in two years and still eats out and takes his girlfriend out on dates.

And guess what? He does it all with no written budget or tracking system! You don’t need a complicated budget in order to meet your goals. In fact, here is an article about the easiest budget for beginners.

So how does Jack live on $25,000 per year? What is his budget breakdown? I interviewed him and am excited to share his story!

Related Content:

Meet Jack- A Millennial Who Makes $25,000/year

Jack is a full time student who’s currently on the G.I Bill. The G.I Bill awards him a living stipend and that, combined with his part time job, results in an income of roughly $25,000/year. His budget breakdown is below:

Income: ~$25,000/year

Age: 26

Job: Full time student on the G.I. Bill & part time job of $10/hour (10-20 hours/week)

Expenses:

Rent: $500 (He has a roommate)

Utilities: ~$110

Groceries: ~$230/mo

Car loan:~$340/mo

Car insurance:~$200/mo

Phone bill:~$80/mo

(Medical debt: $240-280/mo, he just paid it all off last month!)

Total Expenses: $1,460/mo

(Before August they were: ~1,700/mo)

Looking at this, he does not have much wiggle room after his expenses. In fact, he only has about $300 left over to spare every month so he had to be really on top of his spending in order to make this work. So how does he manage?

Do you budget?

I don’t have a written budget. When I got my first medical bill a few years ago, I felt overwhelmed but I calculated how much I needed to make to pay my bills and then I got my part time job!

Have you ever had a credit card?

No, owning a credit card is like standing at the edge of a cliff. The higher your credit limit, the higher the cliff is. The risk is just too high for me. I do not foresee myself getting a credit card in the future either. The only thing you need one for is emergencies but most people end up spending it on unnecessary items.

Read: How To Curb Your Online Shopping

What’s something you would like to spend more money on?

I would like to put more money away towards savings. That is my goal for this year now that I’ve paid off my medical debt.

What would be a comfortable salary for you?

Until I have kids I think $30,000 a year is plenty for me. Once I have kids I would like to make at least $50,000 a year.

Do you feel like you’re cutting a lot out?

No, the main thing I’m cutting out is contributing to my savings. Even if I made $10k/month I probably would still spend the same amount and save the rest.

What are your “splurges”?

Eating out, before the pandemic I would get takeout at least once a week.

Do you have any debt?

I just paid off $10k in medical debt this August! Besides that, my only debt is my car loan which I’m hoping to pay off this year.

What is your best money tip?

The fleeting joy you might experience from a night of fun, or going out to eat, or going on vacation is not worth the peace you get from financial stability.