A Millennial's Guide to Surviving on Less Than $20k a year

It totally blew my mind. During a recent conversation, a friend I've known since high school casually mentioned to me that he makes 50k a year, still lives with his parents, and has nothing in savings. I found myself incapable of making sense of the lack of logic in his statement. How can one make that much money and not have some left over to put into savings? Why is someone with a well-paying job still living with his parents? I know rent is ridiculous these days but it's not THAT bad! I felt like giving him some advice, but since he didn't ask for it I allowed the conversation to flow on to other topics. However, for you reading this, I wanted to share some of my own financial experiences. As a disclaimer, I do not have a degree in finance and have never worked in that industry, this is just me speaking autobiographically.

When I was 14, my parents put me in charge of my first savings account. It had about $300 in it and I was thrilled to be given this responsibility. I didn't have bills yet obviously, so most of this money went unspent as I soon starting collecting an allowance for chores. Relatives sent me money rather than gifts for my birthday and Christmas, contributing to my savings. By the time I graduated high school I had saved $6k. This is in spite of the fact that my parents wouldn't allow me to be employed during high school because they wanted me to focus on school. One of the first things I was taught regarding money was to know the difference between a want and a need. For example, due to societal standards, I need clothes, but I don't need to spend $100 on a pair of shoes when the $30 pair will work just fine.

I did have my share of pitfalls in my first few years of college, not all of which were directly my fault. When my first car, a hand-me-down, finally died and was cost prohibitive to repair, my father told me he was taking me car shopping. I starting looking for a used car, because they are cheaper than new cars and, with it being 2008 at the time, I thought maybe I'd need my $6k in savings for something else down the line. My father insisted that used cars weren't reliable and that I would be buying myself a new car from a dealership, end of discussion. I didn't have a credit history, so my father took out an auto loan while I put $3k down on a 2009 Toyota car. I would be spending 400 a month on car payments for the next 4 years. This would lead to my financial demise, temporarily at least.

When I moved out in 2010, my baby boomer parents insisted that finding a job would be easy. I suffered a loss of self-worth over my continued inability to find a supportive job whilst going to college full-time. I was living in a state with a high unemployment rate, a rate which was even higher among the age 18-30 crowd. Mom and dad refused to provide assistance and blamed me for having to move back in with them just two years after leaving. All my money was gone. I had sold most of my possessions to help keep me afloat but it wasn't enough. After 6 months of continuous verbal abuse, I left my parent's house once again, finding a room for $400 a month at a friend's house. My family and I remain estranged.

My luck began to improve soon after. I found a job thanks to a professor of mine and a second job from another company where several friends also worked. I often worked 6 or 7 days a week and got more creative with money. I got my groceries from food pantries when possible, and started attending school events where free food was involved. I stopped paying for haircuts and started doing it myself. I even went so far as to take toilet paper from the on-campus bathrooms so I wouldn't have to buy any myself. My freshmen year I bought all my textbooks new from the school bookstore, but by senior year I had learned how to get used textbooks online. And lastly, I rarely bought clothes at all, but when I did the clothes came from thrift stores. Within a few years, my feelings of shame disappeared when I noticed most of my peers doing very similar things to save money.

Two years ago, I was fortunate to relocate to an urban area in a different state with a higher minimum wage, and since then I find myself not worrying about money nearly as much as I used to. I still make less than $2,000 a month working two part-time jobs, but due to lifestyle changes I am able to pay all my bills and have some money left over to put aside into savings. I may not be rich, and I often have to do without, but I'm happier than I've ever been.

In short, here are a list of things I actively and currently do to save money and survive on less than $20k a year:

1.) BUDGET! I know exactly how much money goes out every month for bills, and I keep track of how much I earn.
2.) Do away with shampoo and conditioner. It's completely unnecessary. I just use water and it works fine.
3.) Only eat when you're hungry. And when it comes down to it, eating and cooking at home is way cheaper than eating out. Sometimes I just ignore my hunger, and instead of eating I'll drink water until I don't feel hungry anymore. This method has worked quite well for me. At age 28, I'm the same height and weight I was at age 15. For some reason I'm proud of this achievement.
4.) Pay more than the recommended amount on student loans. It may seem counter intuitive, but doing this will prevent you from paying too much interest in the long run and from paying more than what you originally owed.
5.) I'll wear the same one or two pairs of shoes and wait to buy new ones until the ones I have are literally falling apart.
6.) I don't remember the last time I went to a movie theater. Why pay to see a movie once when you can wait for it to come out on Netflix?
7.) Go to the library instead of buying books
8.) Find things to do that are cheap or free. If you're determined to find free or cheap entertainment you'll discover all sorts of things. Your options may be limited based on geography. I gotta admit I'm a little spoiled being in an urban area.
9.) Just because an item is "on sale" doesn't mean that you need it, or that it's a good deal.