What if You Could Live Off 50% of Your Pay?

I’ve had this post halfway drafted in my inbox for longer than a year now, and I think it’s about time to put it out there,  haha… That’s what happens I suppose when you have 120+ ideas sitting in there :)

But yeah – can you imagine if you lived off only 50% of your income??  How much STRESS and FREEDOM that would open up for you?  I mean, I know it’s not possible for *everyone* to do since we’re all in different phases of our financial lives and what not, but it’s at least worth a few minutes of your consideration. Even to just formulate a plan on HOW to actually make that happen.

This popped up in my head today for two reasons. The first was because of a comment JMK made on our post the other year on always keeping a $100 buffer in your checking account. (If you still read the blog, JMK, I’d love to see how it’s been going!)

We’ve cut our expenses to the basics so that we can live on ~55% of our take home pay. This doesn’t include savings or things spend on rarely and can’t predict the timing (restaurants, clothing, household and car repairs, etc). Most weeks none of these things happen so all the excess after paying off the VISA gets swept out to our retirement accounts or an extra mortgage payment. If we had to buy new sneakers for the kids, repair the washing machine, or bought a new lamp, we simply transfer slightly less that week. When we want to take a holiday we just let the excess pile up for several weeks and then go. It’s a little unconventional but it’s a system that works for us.

Because we live on way less than we earn, we have a weekly opportunity to fund unexpected expenses or little splurges, but most of the time it all gets moved somewhere sensible. I find that by not budgeting for entertainment, clothing etc we don’t feel entitled – as if we’ve pre-approved ourselves to spent that amount without pausing to question whether we really need it. Instead there is no planned budget for these items and anything we spend is coming out of what would otherwise be available for the Friday transfer to savings or the mortgage.

Pretty sexy, right?  She’s oozing with freedom and the luxury of living life on her OWN terms!  I freakin’ love it. The second thing that caught my attention recently, was a show on Oprah the other month (yes, guys watch Oprah too!). They had this family on who was making bookoo bucks, but their daughter didn’t think they were doing enough to give back and somehow convinced mom & dad to completely change their lifestyle.  I can’t remember all the details exactly, but I do know they ended up downgrading their home and donating more money & time to charity, and it was all because they cut back on expenses and started living off of only 50%. (Update: Here’s the book on their story! The Power of Half, thx for finding it Lora!).

Now that’s obviously an extreme situation here, but I recall them saying it wasn’t that hard AT ALL to cut things out and learn to just spend less over time (I think it took them a year to get to that point?). Many of us are already trying to get to this level and what not, but it’s a great idea to keep in the back of your minds when you’re pouring over that budget or financial game plan of yours.

Another thing people do which is KILLER, is only living off one one *paycheck* and saving/investing/paying down debt w/ the other one (provided you’re married or living w/ a partner or gf/bf/etc). It doesn’t necessarily fall into the 50/50 category here, but the point is that if you could live off of only 1 person’s paycheck each month, you could do some serious upgrades to your financial life.  And if God forbid something happens to one of your jobs – like a lay off or demotion or whatever – you know you could at least survive w/ the other person’s checks (and hopefully it would be the larger of the two ;)).

Just different ways of saying “spend less than you earn,” and if you can do that at the 50% level you’re a rock star.Which I’m sure all of my lovely readers here are doing, right? RIGHT? ;)  I accidentally kinda fell into that once the Mrs. started attending grad school 4 years ago (wow time flies!), but I’d like to think it was possible even without that.  I can’t even imagine what’ll be like once she brings home a sizeable income again!  Even $30k or $40k would be a nice change from the $12k over the past handful of  years… something tells me, though, that our baby mohawk girl/guy around the corner may keep us on the current track for a bit longer ;)

Any of you living off of one paycheck right now too?  How about 50% of your income? Tell us all your secrets, we need more motivation!

***UPDATE*** Here’s a new post we did on this to better help with motivation if interested: Proof You Can Live off 50% of Your Income. Many of your comments below are featured – hope it helps! :)

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134 Comments

  1. Shondellclarke January 31, 2012 at 6:50 AM

    I love this post! I was living off of 50% of my income for quite some time. I’m living off of much less now, since my recent mortgage pay off. I gradually worked my way down to 50% and below that. The key is not to increase your expenses as your income goes up, and to get out of debt.

    http://www.callmewhatyouwantevencheap.blogspot.com

  2. Kim B. January 31, 2012 at 6:54 AM

    I will be doing exactly this while I’m on maternity leave (I’ll get 55% of my income for the last 35 weeks of leave, and that is taxable). While it’s not even close to 55% of our total household income, it’s still nervewracking. We’ve been preparing mentally and financially for this since I got pregnant. We’ve done things like source and stockpile free firewood (free day-long heat for the winter months using our woodstove instead of electric heat) and work out a budget that can be further slashed when the time comes.

  3. Valencia January 31, 2012 at 7:01 AM

    I am!! I have a RIDICULOUS amount of student loan debt and decided to sacrifice living on my own (moved back to the parentals’ house) to save money and pay off my debts. Half of each of my checks go completely to my living expenses (car stuff, insurance, food) and my outstanding debts (credit card and student loans). I’m feeling the buckle, but I’m realizing how much money I blew on stuff that I really don’t need! And it’s nice seeing my money owed numbers dwindle and my savings amount grow soooo much faster. I’m gonna live with these people until they drive me nuts, but at least I will have made some progress…lol

    1. j August 4, 2016 at 8:33 AM

      believe me your parents feel the same way…….u r damn lucky they are letting u stay

  4. Valerie January 31, 2012 at 7:17 AM

    I’ve recently set up a VERY rough budget to try and get an idea of my total income and expenditures for the next two years. I’m interning now, so I’m making a nice little pile of cash, but I don’t expect to be working full time again for another year and a half afterwards (gotta graduate!), so I’m trying to make sure I can spread that money around.
    As a student, my biggest expenditure is rent and other cost of living items. I have my direct deposit set up to only transfer the amount of my that plus an additional $100 for spending (for two weeks of time) and the rest automatically goes to savings. I honestly don’t even know how much it is, because in my mind, once it’s there, it’s untouchable! Setting up something like this isn’t doable for everyone, but as a single student with no one else to support, it works out pretty well for me!

  5. KC @ PsychoMoney January 31, 2012 at 7:35 AM

    Living off 50% has always been our goal since we graduated back in 2002. We did it for the first year, then we came close the next few years but didnt make our goal. Now with our investments we are doing over the 50% marker. I am laying it all out in my blog.

  6. Steve January 31, 2012 at 7:52 AM

    My wife and I were living off a single paycheck until we started our house remodel. That has caused us to use the second paycheck to pay off borrowed money. Not sure if we will recoupe our investment in the house in the future, but since we plan on staying here for at least another 10 years it should be OK. Besides, we now have a great kitchen that has the family talking and spending more time together. Cannot put a price on that!

  7. IntelligentSpeculator January 31, 2012 at 8:18 AM

    I think it’s a very difficult challenge to start living off of one income overnight.. What I have tried doing is having automatic payments to my savings accounts. Over time I increase those as a % of my income and eventually I will get there… slowly but surely:)

  8. Chris C January 31, 2012 at 8:23 AM

    I currently dedicate 35% of my income to savings/investment, however I actually only need between 25 and 50% of my income to live off of. (I work commission so my paycheck varies every month.) I typically dump huge sums of money into paying down/off my numerous student loans and/or car loan. The entire sum of my next paycheck (after the 35% into savings) is going to be applied as an additional payment to zero out my credit card and finish paying down a student loan.

    It feels great to knock out entire loans!!

  9. Jackie Walters January 31, 2012 at 8:47 AM

    Two months after 9/11 occurred I quit my job to stay home with my 2 children without even thinking about the consequences. We went from a 2 income earning family down to 1. I had no idea where we were going to come up with the difference. On top of that we had just bought a brand new house.

    We did it though. It was tough. We cut back on everything from cancelling Satellite TV, the newspaper and magazine subscriptions. We didn’t go out to eat which saved on dining out and the cost of a baby sitter. I no longer had to pay daycare expenses or for the wear and tear on my car not to mention clothes for work.

    I cut coupons and made most of our food from scratch. I even washed out my ziplock bags. Vacations for us were walks on the beach or a picnic at the zoo.

    Fast forward 10 years. My kids are in school and I’m still a stay at home mom. We are debt free, have a 6 month emergency fund, our retirement account is fully funded at 15% as well as the kids college. We go on at least 2 nice vacations a year and life is good.

    Living on one paycheck or 50% of your pay can be done you just have to want to do it.

    Jackie.

    1. Mariann March 7, 2014 at 5:54 PM

      sounds great to me, a newbee to saving 60% of my income

      1. J. Money March 7, 2014 at 9:23 PM

        Way to go! :)

  10. Rachel @Balance and Blueberries January 31, 2012 at 8:48 AM

    I totally do this! And works out to about 50% of my income. I tally up all of my “must haves” (food, shelter, transportation), and add a bit of cushion (for rising gas prices, unexpected food purchases, trips home). And then the other stuff (clothes, vacations, etc) are all discretionary. If I have the money and want to spend it, awesome. If I don’t, I won’t. I’m a hardcore saver at heart, though, so this is easier for me than it might be for some others.

  11. Sarah January 31, 2012 at 8:49 AM

    @Valencia — we are in the same situation over here! My husband and I lived on our own for a year when we got married, and then when I was pregnant we moved in with my parents in the suburbs so we could pay down our debt quicker. We don’t have any CC debt, but we are drowning in student debt. Thankfully we live rent-free and eat a lot of beans and rice, so most of our income (around 75-80 percent) goes right into debt repayment. We live on way less than half of what we make, but we’re a small family and we don’t have any bills, so it’s not hard.

  12. Amy January 31, 2012 at 8:56 AM

    I *think*’ we’re doing this now; we just upped my husband’s 401(k) contribution to 50% of his pay (we get paid weekly) and we save more than his weekly paycheck. He makes about $31K – to max him out retirement wise is $28,500 (he’s over 50) so we might start doing that next year when our weekly allowance goes down. He’s 6 years older than me so we need to stuff his retirement accounts (he’s way behind). We can only do this because we have no debt at all and our fixed monthly expenses are about $1,000 (condo maintenance, power, home and cell phone, internet, food, gas, insurance)

  13. Molly (Mike and Molly's House) January 31, 2012 at 9:17 AM

    We did this over 2 years ago. We went from spending ALL of our money to spending only 1/2 of what we earned. We put one salary towards our debt and the other to our expenses. We both made about the same. In 7 months we had paid of $35,000 in credit card debt. Next we tackled our car loan and emergency fund. This past year we BOTH lost our jobs. It was not a time to freak out but to thoughtfully decide what we wanted to do next. It did put our savings plans on hold (or so we thought). When we looked at the end of 2011 we had still saved over $6,000!
    It sounds so easy when I type it out into these simple clean sentences but it wasn’t and it was. We have two teenage kids that we didn’t want to ‘scar’, there were times we wanted ‘stuff’, but we made cutting back into a hobby. That’s the best way I can describe it!

  14. Stephanie January 31, 2012 at 9:25 AM

    If we really had to, I’m pretty sure we could live off half our income without too much trouble. Right now we save somewhere around 25-30% of our take-home pay, so we wouldn’t have to cut expenses too much further to hit that mark.

    But quite frankly, we NEED a specific budget for entertainment, otherwise one of two things would happen: I’d insist on us never spending any money at all on entertainment at all (because it isn’t in the budget) or I just wouldn’t track it and we’d squander all our money on stupid stuff because there wouldn’t be a limit. Setting a specific budget helps us spend a reasonable amount, so we don’t feel deprived, but we don’t go overboard either. ;-)

  15. LB January 31, 2012 at 9:31 AM

    Totally doing it. We were living on one paycheck even while paying off debt, but now instead of debt we use the money for school, retirement and savings.

    On the subject of checking account buffer, I use$1000 as my buffer since everything is automated and I work full time and school half time.

  16. Ellie January 31, 2012 at 9:35 AM

    Yup! I’m living on a 55% bills, 25% savings 20% all other spending right now. Once Student Loan is payed off this year, it’ll be a 50% 30% 20% scenario and I’m darn proud to have made it here!
    In 2005 I was on a 85% 0% 15%…hard work and giving up a lot of stuff worked!!!

  17. lorakathleen January 31, 2012 at 9:38 AM

    The family you mention has a book called “The Power of Half”. They downgraded to a smaller house and donated the other half to a charity that did work in Africa. It’s a quick, but powerful, read and I’d recommend it to anyone!

  18. Nick January 31, 2012 at 9:55 AM

    My rough breakdown of take home pay is 60/40, living off of 60%. Within a year or so we should be down to 50% based on a combination of increased income and decreased costs (we have a nasty second mortgage that we’re looking to murder this year). Living off of 50% of take home pay unlocks a ton of freedom.

    After our trial and aquittal for second-mortgage murder the goal is to cut a percent or two per year (i.e. living off of 49% of take home year 1 after aquittal, 48% after year 2, etc.). I’m a bit extreme, of course, but I’d like to reverse my current percentage and get get to 40/60.

  19. Jeffrey January 31, 2012 at 10:18 AM

    I’m living off about 55% of my income, too! My secrets are simple: just keep big expenses down. I live in a small apartment with roommates and I don’t own a car because I don’t need one. These two things save me hundreds every month. I still go out with friends and fun stuff like that, so it’s really not that hard for me.

  20. Sarah Fowler January 31, 2012 at 10:36 AM

    I live in an apartment with a roommate on about 2/3 of my income. The rest gets piled up in my emergency fund. I’m already pretty frugal and do “side hustles”, so to live closer to 50% would mean having to up my income substantially. The only time I’ve been able to do that was when I lived with my parents for a few months to get debt-free in 2010. Been debt-free ever since :-D

  21. Nicole @The Penny Frugalista January 31, 2012 at 10:53 AM

    @Jackie: I’m glad I’m not the only one who washes out the ziplock bags, haha.

    When we were renting an apartment, my husband and I were able to easily live on 50% of our incomes. But with a house and a 1-year-old, we need more of our income to pay the bills. Minus credit card payments (we had them paid off but need to do it again in the next few months), I’d estimate that we live on 75% of our income. I’d love to reduce our expenditures, but I think my husband would leave me if I tried to cut the cable TV!

  22. Kathryn C January 31, 2012 at 10:59 AM

    Angelina and Brads kids won’t have anything on the Mini Money. Really looking forward to the baby girl/guy mohawk pics.
    P.S. “OWN” = Oprah….
    (Oprah Winfrey Network)
    They should be paying you! :)

  23. Bobby January 31, 2012 at 11:10 AM

    Our next “strategy” in mutant savings is moving in with the ‘rents for six months after we get married and our house is being built.

    “What? You’re going to start your marriage living with your parents?”

    Welp, we’ll be living on only 20% of our income, saving up over $30k in straight cash. Wooooorth it.

    I’m out.

  24. Leah January 31, 2012 at 11:11 AM

    That really does sound like a dream! Right now, I’m planning a wedding so all of my monthly savings go right back out the door to fund that. Then I’ll be saving for a house, money which will be obliterated upon buying the house. Then there might be babies…

    I don’t forsee being able to save that high of a percentage for a looooong time!

  25. Jen @ Master the Art of Saving January 31, 2012 at 11:36 AM

    We live off of 1 paycheck, but it’s the only paycheck. I would love to get to the point where we keep our living expenses under 50%, that would totally rock. We could save, invest and plan so much easier. I’m kinda curious now if it’s possible to do right now…hmmmm.?

  26. Good Cents Savings January 31, 2012 at 11:40 AM

    Wow. I am so unbelievably impressed and inspired by all the people actually living on 50% of their income. And none of you sound miserable either! :) I am going to take a serious look at my budget to see what that would mean for us – not sure I can get there right now, but time to start taking some steps in that direction!

    And I hope everyone who is making it happen by living with their parents are super appreciative of their awesome and selfless folks. I think breakfast in bed for mom and dad is in order!

  27. Kevin @ Thousandaire.com January 31, 2012 at 11:52 AM

    Between my retirement savings and how much money the government takes out of all of my paychecks, I feel like I’m already living off 50% of my gross income.

    1. FrugleBugle January 17, 2015 at 9:46 AM

      Kevin,
      Do not be discouraged – you can reduce your expenses. The key is to consider it
      “yours” to take out – just as Uncle Sam considers it “his” to take out.

  28. Trinnie January 31, 2012 at 11:53 AM

    We live on about 75% of our paycheck(s). I’m surprised and super impressed by how many people are living off of 50%. I wonder if we could do that…it would be an extra 25% savings. hmmm….you got me thinking…

    I keep saying this and I really, really need to take advantage of my access to financial advice and just make some decisions. We need to have more $ invested, whether IRAs, CDs, whatever. We have too much in liquid accounts and it’s upsetting me.

  29. Jennifer Lissette January 31, 2012 at 11:56 AM

    When my husband and I started out on our financial turnaround three years ago, we were bringing in a six figure income and still netting out negative each month. Since then, we’ve paid off a ton of debt ($171,000 to be exact) and for about two years we cut our expenses to the bone.

    Between keeping our frugal habits, paying down our debts and my husband hustling at work, our regular spending accounts for 32% of our gross household income. We have an eight month emergency fund and all the extra income goes to retirement, targeted saving and paying down the mortgage. If an unexpected expense comes up, we simply tap into the excess.

    As an aside, my husband and I are constantly wondering about members of the family who make half of what we do and have twice as many luxuries. It’s hard not to get a little jealous when my mom is taking quarterly getaways with my cousin instead of me. I have to remind myself that while I may not physically have a lot to show for the sacrifice, on paper things are starting to look pretty damn good.

  30. Kristin January 31, 2012 at 12:04 PM

    I’m doing this right now. I am a student getting my master’s degree in engineering sponsored by a company. While I’m away, they pay my tuition, books, and half of my previous salary. Moving 2000 miles across the country, my rent went up slightly but my utilities went down. I am also able to walk to class instead of drive 25 miles round trip, so I have been saving a lot in gas money and car maintenance. Over the last 6 months, I’ve spent almost exactly what I’ve brought in as take home pay. I haven’t been able to save much in liquid cash, but I’m still contributing to my 401k and I’m not going into debt, so that’s OK with me!

  31. Jeff@goodmoneysense January 31, 2012 at 12:05 PM

    While the idea of living off only half of your income and having the safety of the other half in times of financial trouble sounds wonderfully liberating and secure, the crushing costs of college and of living in general these days often makes that impossible. The lesson is clear: live frugally when you are able to prepare for the day when that becomes an impossibility.

  32. Jeff @ Sustainable Life Blog January 31, 2012 at 12:44 PM

    I can live on about 55% of my check right now, and use the rest to pay debt, but lately i’ve been purcashing wedding stuff. When I get married this summer, my wife and I will live on 1 of our checks (the smaller one) so we will be living on less than 50% of our income!

  33. Jeff January 31, 2012 at 12:47 PM

    My wife and I try to live like we are still in college and we spend off an “allowance”. Our monthly % of income spent varies, but we basically aim to keep our checking account balance at a set level on the first of the month and transfer the rest of our income into savings. If we start running low during the month, we have to consciously decide to borrow from the savings which makes it much harder to go over budget than it would be if we considered those funds available.

  34. Jessica @ Faith Permeating Life January 31, 2012 at 1:03 PM

    When my husband was working part time, we were putting away the majority of his income (which wasn’t a ton) into savings and living primarily off mine. We figured we’d continue to do the same when he found full-time work. However, then we figured out we could save hundreds of dollars in interest if we put his income toward paying off his student loans instead. His paycheck goes mostly toward that, with some in savings and a little bit left over to cover expenses. It does make me a little nervous about when we have kids and he stops working to stay home with them (which should be right around when all his loans are paid off), but then again a huge portion of our monthly budget right now goes to paying gas for him to drive to work. So I think we’ll be OK.

  35. Bethy January 31, 2012 at 1:17 PM

    I agree with Stephanie’s comment waaaaaaaay up there. We COULD live on 50% of our income, if we had to, but we need that entertainment (and clothing) budget. We also save a good bit of our income, thankfully, which is huge considering that we live in one of the most expensive cities in the U.S. (San Francisco). I’m thankful to know that, if one of us became unemployed, we could still survive.

  36. Mrs. Money Mustache January 31, 2012 at 1:43 PM

    Great post! I love how people are starting to take this stuff more seriously, and as Nords pointed out, you could be financially independent MUCH earlier than most by following this path (definitely read the link he posted — cool stuff!).

    We saved between 65-75% of our income for about 10 years and then quit our jobs (we also made more money than a lot of people — our expenses were about $40K/yr including the mortgage — we now live an extravagant life on $20-24K per year with mortgage paid off)… but, when you realize that stuff is not what makes you happy, you end up leading a richer and more frugal life forever and somehow it becomes really easy and quite freeing.

    Anyway, I’m glad to see you post about this. Imagine if we all stopped buying so much stuff and spending so much time working/commuting? If we could all volunteer our time, be with our families more often, and build communities and gardens together? I think our society and the health of our planet would be much better off… That’s my dream anyway. :)

  37. Ginger January 31, 2012 at 2:04 PM

    My only objection to this article is she is not including repairs or any fun money. She is not really living on half of her expenses. I could get behind it if she was just not including fun money but between my car and home expenses, it averages out to 8-10% of my budget. So maybe she could not live on 50% of her income, but 60%. Still great but not as fun to say.

  38. Tyler S. January 31, 2012 at 2:04 PM

    I’ve been wondering what percentage to chop off my upcoming paycheck and stash away. Not sure that I’m gonna jump right in at 50% yet, but it’s an option.

    It sounds crazy.. so crazy, it JUST MIGHT WORK!

  39. CityFlips January 31, 2012 at 2:16 PM

    My first reaction was “Heck No!” Then I realized um…yeah…that’s pretty much what I already do. I live on about 60% of my meager grad school salary. I cheat a bit though…I live at home, so I have no rent and next to nothing for bills. If I lived on my own, it would be next to impossible without getting insanely frugal and probably grumpy.

  40. Cassie January 31, 2012 at 2:30 PM

    I’m currently working with 70-75% of my income, if I don’t include my roommate’s rent as income. The only way I’m going to get that down much further is if I sell my home and move into an apartment (not happening any time soon), or if I make more money. I’m leaning towards the make more money front, because I’d LOVE to get it down to 50%!

  41. Edward Antrobus January 31, 2012 at 3:23 PM

    I remember that post. Still spending around $1800 a month, although we did decide not to keep an entire month’s budget sitting in limbo, but “just” $1000.

    But the living off one paycheck and saving the other is more-or-less what we are doing. Since my employment has been so unsteady throughout our entire marriage, it’s the only rational thing to do: budget as if we only had her paycheck. My paychecks cover long-term savings goals, such as the down-payment we’re going to put on a house, and large expenses, like the two vacations we’ve taken so far. It isn’t a 50/50 split. Last year was 60/40. The year before it was more like 80/20.

  42. Melissa January 31, 2012 at 3:25 PM

    Ugh, I’m practically salivating at the thought of this. If only! But since my rent takes up about 50% of my net income, this definitely isn’t possible for me. Sigh.

  43. Laura January 31, 2012 at 3:27 PM

    I make significantly less money than my husband and if we had to, we could pay all of our bills and eat if he lost his job. We bought a house recently and it was important to us to be able to afford our bills if he lost his job. We wouldn’t be able to contribute to retirement or savings, but we wouldn’t get foreclosed on.

  44. Earn Save Live January 31, 2012 at 3:42 PM

    Our living expenses are 52% of our household income. My pay covers all of our living expenses and my student loan repayments. This year, we’re putting nearly all of my husband’s take-home pay toward debt. Once we’ve finished snowballing over $25,000 in credit card debt, we’ll shift and save his salary toward a down payment on a house. Bonus? We’re in Australia and the Aussie dollar is really strong right now.

    All through our marriage, our goal has been to get to a point where we could live off my income and save his. We will be there next year! It didn’t come easy, though. I had several years of underemployment while in graduate school and he had over a year of unemployment. But we’re working toward our goals, one step at a time. :)

  45. Kris @ SimpleIslandLiving January 31, 2012 at 4:34 PM

    We’ll be living off of essentially 50% of our previous income – a touch more I think. If we didn’t have an emergency fund, and if our previous budget didn’t have $1600 allocated immediately into savings/retirement, I think we’d be freaking out a lot more than we are now.

  46. George January 31, 2012 at 6:11 PM

    I just took a quick peek at my budget…and I realized that my monthly expenses (around $1000) are at about a third of my pay, without figuring in gas. And while I gave myself some leeway in January, I still managed to put about $1000 towards debt, leaving the rest for entertainment, fuel, and food. So I think living off of half my paycheck would definitely be doable, especially once I’m rid of all my debt.

  47. Renee January 31, 2012 at 6:26 PM

    It’s too far out of reach for me to even consider right now. Gotta dig myself out of this hole. :/

  48. Kyle January 31, 2012 at 6:53 PM

    I do this. I’ve done this for almost 5 years since I graduated college and started working. I budget $2200 in expenses and bring in about $4400 after taxes and Pre-Tax deductions (401K, medical, etc).

    Not surprisingly, I have 113K in cash and my 401K and Roth IRA add up to about 70K. My goal is to put a down payment on a house of about 50% and ideally my mortgage would be about what i pay in rent right now (950$).

  49. eemusings January 31, 2012 at 7:38 PM

    I try to live off 60 percent of my income. Don’t always succeed!

  50. YFS January 31, 2012 at 7:58 PM

    My wife and I currently life off one paycheck. We use the other paycheck to bankroll our businesses and other ideas. Life is so easy and stress free while living this way. No complaints for me :-)

  51. Brian January 31, 2012 at 10:01 PM

    If we could pay of our debt we could live on half of my paycheck.. hopefully next year will be the year! I wanted to buckle down and pay off everything this year but I couldn’t bare not putting money into retirement, it just seemed so.. wrong.

  52. Leigh January 31, 2012 at 10:23 PM

    I’m currently saving about 50% of my net income each month (saving includes my 401(k) contributions, net income doesn’t). After I move into my condo and start making mortgage payments, I will only be saving about 40% of my net income. I save all of the net proceeds on my bonuses.

    I pay bills out of my checking account as soon as each one arrives and don’t worry about whether there are funds there because there always are. If an automatic transfer accidentally goes out before pay day, that’s okay, because there’s more than that in buffer. It’s pretty awesome.

  53. Jerret February 1, 2012 at 10:50 AM

    Yeah. I do this too! I live off 50% and the other 50% goes to the freakin mortgage and credit card companies. It’s just peachy.

  54. SmartAssetTeam February 1, 2012 at 11:28 AM

    Right now, my expenses are exceeding my income by a little bit. That might sound bad, but the fact is I am working and going to school and also trying to be an artist. I don’t make very much money at all, so if I can just get used to living this way when someday I get a higher paying job, I might actually be living off of only 50%. That is the hope, to avoid lifestyle inflation. I like the idea of not budgeting things like clothing and entertainment in. The whole idea felt a little absurd when I started budgeting; the amount fluctuates so much month to month, it is really hard to decide how much to budget for. Thanks for the cool post!

  55. Sandy Webb February 1, 2012 at 12:27 PM

    I was kinda forced into this when my husband got sick and died. He brought in about 2/3 of our income so boy have things changed for me. Luckily I have a good job, but I still had to change my lifestyle in a big way! It took me a while to “get my poop in a group” and establish a new budget but I am proud to say that after 2 1/2 years I think I finally have it figured out. I must admit there are some weeks (last week was one) where I still spend money like I used to, but I don’t beat myself up over it. I get back on budget the following week and move on.

  56. J. Money February 1, 2012 at 12:33 PM

    This may or may not be my longest comment – on comments – ever ;) Just so glad y’all loved this post, and so many of you are DOING THIS already! You never stop amazing me.

    @Shondellclarke – Wow, that’s amazing – good for you! How long did it take you to get to this point? (I.E. how old are you? haha… you don’t have to answer that if you don’t want ;))
    @Kim B. – Wowww, 35 weeks??? You def. don’t live in the US do you, haha… that sounds amazing :) Smart to get in the mindset early on too – congrats on the baby!!! We’re due July 2nd, when are you?
    @Valencia – HAH! Good for you, I’d do the same thing too if I could (and the wife would let me ;)). I bet they enjoy your company too.
    @Valerie – That’s great to hear! I was spending 100% of my income throughout college w/ absolutely nothing saved behind me, so you’re WAY ahead of the game :)
    @KC @ PsychoMoney – Awesome dude, love that you share it out for everyone to see too – that’s motivating.
    @Steve – Amen to that! And 10 years is a LOT of good memories to still come from there too. Wanna stop by my place next and redo the kitchen? ;)
    @IntelligentSpeculator – For sure, just like anything important in life it takes some time and effort to get there. As long as we’re taking those steps though, we’re on a good track!
    @Chris C – I bet! And can you imagine how it’ll be once you’re DONE w/ all that debt? Man you’re savings/investments are gonna be on fire – keep it up!
    @Ginger @ Girls Just Wanna Have Funds – That doesn’t surprise me :) See you tonight!
    @Jackie Walters – AWESOME story!! Scary as hell I’m sure in the beginning, but just goes to show you can always do better! Especially when forced to. Thanks for sharing with us :)
    @Rachel @Balance and Blueberries – That’s def. the best way to do it, for me too :) I LOVE knowing I can spend money anytime I want, but that if I don’t it’ll all go to savings or another category that helps out financially. THAT is freedom to me :)
    @Sarah – Congrats on the baby! And for KILLING those loans too, jeez… 75-80% is no joke.
    @Amy – Amazing!!! And incredibly smart!! Great great job you two, that is sexier than I don’t know what ;) Huge fan of maxing out 401ks (obviously).
    @Molly (Mike and Molly’s House) – Wowwwww, from one extreme to the other! Haha… I’m glad y’all have been able to roll with the changes though, that’s great :) And I bet hard to do when kids are involved – I don’t know what I would have thought as a teenager, well done my friends.
    @Stephanie – Hey, that works :) It’s good you know yourself like that.
    @LB – That’s the beauty of it all when it comes to debt – once it’s all gone your options open up sooooo much. Esp if you stick to your mindset and don’t go back to the way it used to be, which sometimes happens too. So keep on rockin’ it!
    @Ellie – Haha, yeah it does! Well done my friend.
    @lorakathleen – YES! That was it!! Thank you – man it was killing me figuring it out… gonna go add it to my list to read later, thanks! :)
    @Nick – Yeah son! Love hearing the words “murder” and “mortgage” in the same sentence, haha… perfectly phrased!
    @Jeffrey – Perfect! And def. true – if you can wipe away as much as the biggies as possible, your freedom opens up soooo much more. Something I didn’t learn till it was too late with our house ;)
    @Sarah Fowler – Woohoo! Congrats on hitting, and STAYING, debt-free! Not a bad position to be in at all.
    @Nicole @The Penny Frugalista – Haha, yeah – you don’t touch another man’s TV ;)
    @Kathryn C – I’d gladly accept their money anytime! :)
    @Bobby – Damn straight it’ll be worth it, esp if youre parents would enjoy having you there! (Mine totally would! But I know others who want their kids gone for good, haha…) It’s def. a great plan while starting out a marriage!
    @Leah – Congrats on all the awesome life changes going on over there :) Soak it all in!
    @Michelle @ Making Sense of Cents – I hope you can!
    @Jen @ Master the Art of Saving – Well you’re in the perfect spot then! If you’re already living off one, anything extra you bring in is, well, extra! Imagine if y’all took on another job or side gig? You’d be unstoppable :)
    @Good Cents Savings – Haha, yeah for real! LOTS of people here seem to be on the right track, it’s incredible. Though I guess it’s not too suprising since we’re all financial nerds here ;)
    @Kevin @ Thousandaire.com – Bah dum ching.
    @Trinnie – YES! Just hit up one of our favorite USAA friends over there, you know they’ll hook you up! Even a glance over your entire picture will be good :)(Says the guy who also needs to contact an advisor)
    @Jennifer Lissette – Oh man, you’re right on that one. It’s def. easy to get jealous watching everyone live the “high life” without a seeming care in the world… I def. admire their balls, but also REALLY glad I’m not them! Haha… (unless they have a secret we don’t know about?)
    @Kristin – Baby steps! :) That’s awesome their sending you to school too, I miss it!!
    @Jeff@goodmoneysense – True true, always gotta be on the watch for downtimes. Though still doesn’t mean it’s not possible even WITH college. If you start saving enough early on, and get scholarships/stipends/etc, anything’s possible :)
    @Jeff @ Sustainable Life Blog – Oooooh exciting! Will there be any baby-making in the process? ;)
    @Jeff – Oh man, I used to do that xfer game alllll the time – drove me crazy! I finally learned to adjust my allotted fake budget back then so at least I wouldn’t have to be pissed at myself from xfering every other week, haha… I don’t miss those days!
    @Nords – Not too bad at all :) And whe you’re in your 40s you’ll still want to do something anyways, so maybe you can still earn some good cash by hustling with your passions?
    @Jessica @ Faith Permeating Life – It’ll save on childcare and lots of other stuff too :) Which we’re gonna be thinking about here shortly… it’s great y’all have a solid plan being set up though!
    @Bethy – Hey, sometimes that thought alone is enough for you to feel secure and happy :) There’s no shame in that.
    @Mrs. Money Mustache – YEsss!!! I want to move to that place where everyone’s hanging out as a community!! Haha… that would be brilliant :) And you should check out today’s post then too – I think you’ll like it: A Minimalist and Money. Here’s to a brighter (and happier) future!
    @Ginger – Yeah, I can see that. Maybe by now she’s at the 55% level? Since it’s been a good year or two since she originally posted that here? Haha…
    @Tyler S. – And if it doesn’t, you just cut it down a bit :) But I think people would be surprised how much easier it is to tighten up than they think. Not in all cases, but certainly in a lot of them.
    @CityFlips – Haha, there’s no shame in that!
    @Cassie – And over time you def. will too :) Esp if you keep hustling. And there’s nothing to say you can’t take on side gigs here and there whenever you’re in the mood, right?
    @Edward Antrobus – You remember that post from back in the day? That’s awesome! Didn’t realize you’ve been reading for that long :)
    @Melissa – It is if you move and/or get extra jobs/raises ;)
    @Laura – GOOD FOR YOU!! That’s something we failed to do when buying a house — being able to afford it if one of us lost our jobs, there’s no way we could have! Though oddly enough that’s exactly what we’re doing now after me starting this blog and her going to grad school, haha… but that could have easily gone the other way ;)
    @Earn Save Live – Good good good!!! That makes me happy!! :)
    @Kris @ SimpleIslandLiving – Haha, and no one would fault you for that :)
    @George – Good! You’re on the right track, bro.
    @Renee – Awww, I’m sorry – but at least you’re DOING SOMETHING about it now! And not hiding under your mess like some others do, that counts :) You’ll get there at some point, we all start in the dumps.
    @Kyle – KILLER! Good for you man, that’s super impressive and I honestly don’t know *anyone* who’s ever put down that kind of cash on a house before. You’re slaying it!
    @eemusings – Well it’s better than trying to live off 100% of your paycheck and not succeeding! ;)
    @YFS – Even better!! You’ve got money to build stuff and keep yourselves excited! I love it.
    @Brian – I hear ya on that, it’s def. hard to not invest ;) But better than you just deciding to spend it on stuff instead, eh? This time next year you’ll be a LOT better off!
    @Leigh – Isn’t that a great feeling? KNOWING that you have money in your accounts even if something funky happens? Good job :)
    @Jerret – HAH! So you’re living off of 100% then, eh? ;)
    @SmartAssetTeam – Awww, well that’s not too bad considering your goals in life. You’re totally right in that if you keep lifestyle inflation low you’l; DEF be able to save/invest/etc more down the road. People’s incomes usually go up up up over time so if your debts stay low, you’ll be doing just fine :)
    @Sandy Webb – Oh wow, I can’t even imagine (and I’m sorry to hear!). I’m really glad you were able to get things cleaned up and you’re back on track now though :) That’s awesome! Maybe in another 2 1/2 years you’ll be even better?!

  57. Crystal of Moneydrain.net February 1, 2012 at 12:47 PM

    I can’t live off of 50% of my lone salary right now, but when I get married I definitely intend to live off of one paycheck and put the other away or onto debt. I think that’s definitely the way to go.

  58. Kelly February 1, 2012 at 5:58 PM

    Thank you for this post – and for all of the encouraging comments!! My fiance and I were just talking about this over the weekend, and how we want to live on just one of our paychecks for the first year of marriage so that after one year we have a big ol’ down payment on a house! I am debt free and he has very little (which I plan to attack!). I’m pumped – and it’s great to hear from SO many other who are doing it so successfully!!!

  59. BE @ BusyExecutiveMoneyBlog.com February 2, 2012 at 10:37 AM

    Great post. This is very timely as we’re trying to chop off a big chuck of our income now and redirect it somewhere else so that we can manage living off the remainder. I am finding that if we can keep out lifestyle in check, our net worth makes a steady climb.

  60. J. Money February 2, 2012 at 10:54 AM

    @Crystal of Moneydrain.net – That’s def. the beauty of being married or in a long-term relationship – you get double’ish the income and share a lot of expenses :) Hope you find the man of your dreams!
    @Kelly – Yayyyyy!!!! Feel the love baby, it’s all do-able!! Go for it! :)
    @BE @ BusyExecutiveMoneyBlog.com – Yep! All about that lifestyle inflation my friend – you get that down pat and you’re rockin’.

  61. engin33r February 2, 2012 at 11:04 AM

    Me and my fiance make similar amounts. We do our best to save hers and spend mine. Although certain months are harder than others.

  62. Money Tips February 2, 2012 at 2:23 PM

    Yes I think its the easiest way, to save wherever possible, however the most difficult thing is that you hardly figure where you can save. I believe in prioritizing my necessities in three categories, basic needs, subsidiary needs and luxuries. When I don’t be miser on my basic needs and subsidiary needs, I try my best not to spend or spend as less as I can on luxuries.

  63. jesse.anne.o February 2, 2012 at 4:59 PM

    I totally favorited this post to come back to it after I got a moment to do some rough math.

    I *think* I am on track for doing this – at least between 50-60% but it’s a weird calculation for me. My Metrocard and 401k are deducted pre-tax.

    The breakdown:
    52% post-tax covers rent, utils, phone, groceries, cat food/litter.
    13% goes into “savings” accounts that I use regularly (clothing maintenance, vacation, donations, apartment misc, gifts, etc.).
    13% goes into straight up savings (this will move to 24% when I reach the cap on my vet bills account)
    18% goes into an account for future vet bills (once I reach my cap here, this will switch to 0% and only be replenished up the the cap amount as needed, as the funds are used – diverted from my straight up savings account)

    I realize I’m missing 4% – this were all rounded up or down so…

    Anyway, I am living off 52-65% and straight up saving 13-24%. But the rest of it is “save for later” for something specific, so I don’t really know how to classify that. Like vet bills. The money is insurance. Hopefully I won’t have to use it. It’s in addition to my already-set emergency fund.

  64. Ann February 2, 2012 at 9:15 PM

    That’s exactly what I’ve been doing since Sep 2011. That’s when I officially retired from the military. Of course it helps that I have a paid for piece of rental property but even without it, I would be just fine. And to make things even better, I haven’t worked since then and don’t know if I will anytime soon. Now that’s financial freedom!!

  65. Diane February 4, 2012 at 1:29 AM

    Ummmm…yeah – hate to break it to the fuzzy math person, but clothing, car repairs and – good lord, restaurants – ARE still all part of the budget and they count against what you earn. If you start eliminating things on a whim, then could I say for example, “I spend 20% of what I earn!” – if I eliminate the mortgage. You aren’t given magic money by the money fairy if you don’t count those items in your %.

    What you do – is you spread those costs over the year. And you count them. You count every penny. Not doing so is just lying to yourself. Or you can establish a monthly fund for those things. But you do need to count them.

    Now that said, the goal is a good one. I spent years living on 50% – 60% of what I earned. Now that I own a house, it’s quite a bit higher, but I am still saving a good chunk of my income.

    But fudging numbers makes the whole exercise highly dubious.

  66. Valencia February 4, 2012 at 12:18 PM

    J, I seriously can’t believe you just responded to every one of these comments…LOL

    And yes, my parents do enjoy having me around….and I enjoy it about 68% of the time. =)

  67. J. Money February 4, 2012 at 2:45 PM

    @engin33r – That’s great man!
    @Money Tips – Yeah, and that’s hard too cuz you want to treat yourself every now and then ;)
    @jesse.anne.o – Awesome!! Yeah, I’d say you’re living the 50% lifestyle for sure :) You’re just saving the rest for future stuff, just like an emergency fund or extra savings in the bank would be – congrats! And I’m glad you came back to leave a comment :)
    @Ann – WOW! Yes, total financial freedom – well done! :)
    @Diane – Haha, is everyone here fudging numbers? ;) Great idea on estimating the yearly costs into monthly ones though, I like that one a lot. Good call.
    @Valencia – I love y’all to much to not ;)

  68. Robyn February 8, 2012 at 9:33 AM

    My pay varies a bit. All of my regular expenses (monthly and yearly) take around 70% of my net base pay. The extra goes into my Roth IRA (maxing it out), savings for future things I would like to do (like big trips out of the country and renovating my kitchen & bathroom), and paying off the mortgage early. When I get more than my base pay, it gets split between saving for the future things and paying off the mortgage. Looking at the totals at the end of the year, I’m living on about 50% of my net total pay. Looking at the gross and the expenses that come out, I’m about 50/50 with savings/taxes so using the gross, I’m still around 50%. If you count the savings for future expenses as expenses, then I’m living on about 60% of my total net.

  69. J. Money February 9, 2012 at 12:12 PM

    It looks like you have a great plan there :) KNOWING where your money goes is huge.

  70. Usiere February 23, 2012 at 2:11 PM

    I do not live on my salary. I live on 35% of my income, so living off 50% means investing less. When you have multiple streams of income, you get to depend less and less on your salary, and eventually do not depend on it anymore. It starts with living below your means, paying yourself first, and investing your savings in assets, starting from fixed income investments

  71. J. Money February 24, 2012 at 12:05 PM

    YEP! Nicely said my friend, nicely said. Congrats on all your success so far :)

  72. JMK March 17, 2012 at 10:46 AM

    Guess I missed this post back in January but I still pop in from time to time. I was surprised to see my comment had inspired a post. I know we’re not alone in living on way less than what we have available, I just figured lots of folks never give the option serious thought and maybe our way of managing it would help someone else.

    We didn’t always live this way, and that something I constantly regret. We could have retired in our mid 40s rather than aiming for mid 50 if we’d just started this much sooner. It all started when my husband was laid off ~5 yrs ago and once the initial panic subsided we realized we didn’t really know now much our basic expenses were and how long we could survive on my income before we ran into serious trouble. We had no emergency fund and his severance was being delayed (long story). At that point we didn’t know what we spent on groceries, gas or any other variable spending. In hindsight that job loss was the best thing that could have happened. We assessed what was critical to maintain (mortgage, property tax, insurance, utilities, groceries and gas). The one thing we had been doing right was that we had no consumer debt, so covering that wasn’t an issue. We considered everything else to be optional until he found another job. Just that simple review of what had to stay and what could be reduced or cut out completely was a real eye opener. We had no idea how much money was disappearing into either crap we didn’t need or really value or completely vanishing because it was untracked cash spending. Ultimately the job situation turned out to be no big deal – he started a new job at the same salary 4 months later, and because of cutting back on all the nonessentials, when the severance from the old job finally arrived we didn’t need it and rolled it all into his retirement account. We had discovered that the true basic necessities of our lives were FAR less than we’d been spending. Not the 55% we currently run at – that took another year of trimming, reviewing, changing habbits, and finding less expensive ways of doing things. Each year since the layoff, I’ve reduced our grocery budget by another $10/wk. If I can stick to it all year, I cut it another $10 the next year. This is the first year since then that I’ve left the amount alone. I think we’ve reached our minimum while still eating healthy and having a teenaged boy in the house… Even so, compared to where we started 5 years ago, I’ve our grocery bill by 40% just by meal planning and shopping around the weekly sales.

    After my husband found a new job, we certainly could have gone back to our old ways, but we found we couldn’t. Our eyes had been opened to the amount of waste there had been and we decided retiring early was far more important to us that whatever we’d been spending on previously. It had forced us to really evaluate what we wanted out of life instead of just paying the bills, taking an occasional holiday and hoping by some miracle we’d be able to retire at 65. We were never flashy spenders – we’ve always bought 3yr old cars, haven’t had cable in 20+ yrs and pack lunches 99% of the time. Even with all of that there seemed to be a lot of useless spending (daily coffee, magazines, DVDs, longdistance calling without a discount plan, cell phone features we didn’t need or use, no meal planning or ever reading a grocery flyer, etc etc.) A hundred small wasteful choices made without thinking month after month. Our brief forced review told us that none of that stuff was actually important to us, but retiring early was something we did want. We just always assumed, as many do, that it was a technicolor dream that nobody could actually manage without a lottery win. Then we realized that if we continued to live on just the planned basics (most of the time) we could redirect all that newly discovered excess towards early retirement. Kill the mortgage and build up the retirement savings. Our only real exception to those two goals it an annual holiday with the kids. I estimate we could retire 2 yrs earlier if we didn’t travel now, but we’ve decided it’s a trade-off we want to make.

    We’re still carrying now on with the same routine I described in my earlier post. Most weeks all the excess goes either to our retirement accounts, or an extra mortgage payment. We paused the transfers for a week or two this past summer and used the excess that built up to take a two week holiday with the kids. We kept costs very low by flying on points, staying in hotels most nights on points and getting the 5-day cruise part of the holiday on a last minute discount. We spent only on admission fees and restaurants when not on the cruise. Still, it was two full weeks of vacation paid for with the excess income of less than two weeks – an excellent trade in my mind.

    Just a comment on the “fuzzy math” reference which I guess was for me. Other than when on vacation we really don’t eat in restaurants so it makes no sense to put it in the spending plan and keep deleting it or pushing it out to the next month. We live 20 minutes out from the suburbs so going to a restaurant means one of us has to run home to get the kids off the school bus and drive back into town. It’s actually less convenient than just cooking at home. Every January there are two family BDs which are normally celebrated by eating out. In preparation I ask for restaurant gift cards for Christmas (the two BD people are very predictable and always choose the same places). Same with the clothing expenses. We spend remarkably little so budgetting for it doesn’t make sense to me. Last year my clothing expenses amounted to a pair of socks and a sweater. The sweater was $4 and brand new at a second hand shop. All the clothes my kids needed were either passed to them by older cousins, or received as BD and Christmas gifts. My husband replaced some dress shirts in at a 2 for 1 sale – he got 4 and won’t need anything else until at least 2013. We all have plenty of clothes, so if nothing wore out (or was outgrown by the kids) then nothing needs to be bought. This is why we don’t budget for clothing. It’s such a rare event it would be like the restaurants – why plan for something that won’t happen 99% of the time? If we need something there is always extra in the account to cover it. Unless you do a job that’s really hard on clothing, do you really wear out clothing on a monthly basis? I don’t. So I see no need for a monthly allocation for clothing. If I do need something someday, I have a gift card from my last BD ready to go to a store I like.

    When I think back to our spending 5 years ago I shake my head. Dumb. We made good salaries but weren’t making the most of them. We weren’t racking up debt, but we weren’t making spending choices based on any sort of plan either. We thought if we put away the recommended 15% for retirement then we had covered our basis and were doing fine. Yes, 15% is great. It’s also intended to get you to retirement at 65. Turns out that’s not what’s most important to us, so we need to contribute considerably more. To do that we simply cut out everything that isn’t important to us. We really don’t miss what we don’t value. I don’t begrudge anyone who wants to have spa days, or 200 channels, or indulge in new car smell. They’re all perfectly valid ways to spend your money, my only comment is that you have to make sure they are your personal priority and worth whatever you’re giving up to have them. After all, if nobody bought those new cars I couldn’t buy used cars!

    Setting up our lives so that the essentials are so far below what comes in meant that when it was my turn for a lay off a year ago, it was no big deal. Looking for a new job was just inconvenient, but not a financial catastrophy. For the 6 weeks it took to find my next job (same salary) we just paused the weekly transfers to the retirement accounts and mortgage. The week my first pay at my new job was deposited, virtually all of it went to the mortgage. Life rolled on, no drama.

  73. JMK March 18, 2012 at 8:23 AM

    I’m going to throw another thought out there on a choice we made since my original comment. Other than the $1000 minimum balance we keep in our account (mostly to avoid bank fees and ensure we never go into overdraft) we now have no additional emergency fund. Theoretically, yes we could run up the credit cards, use the long dormant line of credit, withdraw from our retirement accounts, or increase the mortgage on the house I suppose. Those sources of cash are there but those aren’t options we’d actually consider. So for all intents and purposes there is no official emergency fund.

    Five years ago when the lay off caused our total life re-evaluation we panicked because we didn’t have an emergency fund. In hindsight that was because we assumed we needed one and couldn’t survive without it – wasn’t an emergency fund created for just that kind of situation? We began building up a fund, but at some point we tried to imagine a scenario where we’d actually need to use it. The only one we could come up with was that both of us were fired simultaineously with cause (so no notice, no severance, no unemployment benefits). We know from experience that layoffs are a possibility but we’ve decided a double firing just isn’t realistic.

    Our incomes are split about 60/40. We can live indefinitely on just the higher income if the lower income job was lost. Unemployment benefits received would just be a bonus. If the higher income was lost, first there would likely be a severance payment, but even without that, the unemployment benefits would more than make up the amount required for the lower income to carry everything. Employment benefits here generally last about a year. If either of us was injured/ill we both have short and long term leave and disability insurance that would cover us in the same way. Isn’t the recommendation generally that your emergency fund be able to sustain your basic expenses for 6 mths, or even a year? If so we’re covered. If either of us dies there is sufficient insurance in place to pay off the remaining mortgage and funeral costs with plenty left over. With a generous nest egg and no mortgage the lower income survivor could easily cover the rest.

    Yes, it’s a little radical I guess but we’ve decided that for us an emergency fund is waaaay less critical when you have excess income on a regular basis. Any unexpected expense which we truly could not have predicted could be covered out of the regularly generated unallocated funds. Instead of having a large easily accessible (likely low interest) fund ready for disaster, we’ve instead opted to put that money to work on the mortgage and retirement savings. We figured the sooner we get the money invested, or pay down more principal the better.

    Going without an emergency fund certainly flies in the face of generally accepted common sense and every PF blog I’ve ever read, and would be a highly risky plan in most households. It wouldn’t be something I’d ever recommend in most situations. But we’ve decided that after careful consideration, once again we’re going to do things a little differently.

  74. J. Money March 19, 2012 at 1:21 PM

    Wow, LOTS of great info here! I’m so glad you were able to come across this post and see how interested everyone was about it :) I really appreciate you taking the time to share it all with us – especially the details which we sometimes never hear about. It’s very encouraging. KEEP IT UP Friend!! Maybe one day we’ll be blogging about your retirement here, eh? Just a matter of time, now ;)

  75. lana May 10, 2012 at 7:06 PM

    We live off 75% of my husband’s take home pay. 10% of gross goes to tithe. We have one son in college and one a year away. We help the kids out so there won’t be any debt when they graduate. We are seven months away from paying off our home and have four cars paid off. By the end of the year, it is my goal to have paid off the house, all debt and save 50% of his take home. (All in God’s will, of course.)

  76. J. Money May 11, 2012 at 10:12 AM

    Dang that’s incredible! Way to go!! I’m inspired!! :)

  77. Nightvid Cole August 17, 2012 at 1:04 PM

    As a single graduate student with only a stipend, it is not possible to live on 50% of my income. Even having moved to a crappy apartment without decent air conditioning, TV or internet and everything extremely downsized and old, rent + utilities takes over 40% of my paycheck after taxes and health insurance. Food, medicine, clothes, and living supplies combined take another 15-20 % even when getting things in the largest containers possible, always bringing my food to campus, and rarely eating out (2-5 X per year). I sold the most recent car I had back on January 21, 2009 to get rid of gasoline, oil, tires, maintenance and repair, insurance, fees, registration, taxes, and parking expenses, and walk almost everywhere I need to go, thus spending only 2-4% of my take-home income on transportation (evenly split between public transportation and Zipcar after careful planning to minimize the number of trips per year necessary to go anywhere more than 2 miles from campus and thus generally beyond walking range.) I do not have video games on my laptop and rarely watch movies. I only get about 5-10 haircuts per year. I never host parties of any kind. Still, I must end up spending at least 65-70% of what I make, and this cannot be avoided.

  78. J. Money August 21, 2012 at 8:30 AM

    Wow, you’re pretty thrifty too – way to go! If you can keep that up once you graduate and get a decent income flowing in, you’ll be able to hit that 50% mark in no time. If you still want to live that way by the time that comes ;)

  79. Nightvid Cole August 26, 2012 at 8:54 AM

    The single biggest financial risk I think I face in the next decade is getting married to a woman who disapproves of downsizing and living frugally. I personally wouldn’t mind going another 30 years or more living only slightly more lavishly than I am now, but the wife…..might end up being a different story!

    If my brain is not hijacked by the influence of a really hot, nice, and highly compatible woman within the next 7-10 years, my intention is to live first in a trailer park or the like for two or three years with an upper-middle-class income, then buy something like a 100 sq ft Tumbleweed tiny house for $45,000 cash that I would accrue by then (with a $10,000 emergency fund remaining).

    If I can live in that for a further four or five years with no rent, very low utilities, property taxes, insurance and maintenance and reapir expenses, then it won’t matter as much. I could then buy a 300 sq ft house with cash if the wife demands it, NO MORTGAGE, NO DEBT in my entire LIFE, EVER!!!

    When do I plan to start living in the trailer park? It all depends. It will certainly not be before July 31, 2013 when the lease expires for my current apartment. I don’t know where I will end up working, and there are no trailer parks within 2 miles of campus now, so it isn’t walkable. I also don’t know where I will end up working.

    That being said, if I am in a long term situation where my job is within 15-25 miles (but not 2 miles) of a trailer park or equivalent, a car would be quite a decent investment (!!!)

    Thoughts?

    1. Ginger February 22, 2014 at 9:51 AM

      Night, I am more frugal than my husband. I don’t know if I am as frugal as you, but don’t worry, there are a ton of frugal women out there.

  80. J. Money August 27, 2012 at 9:13 AM

    Nice!!! Keep me updated as you get closer on that too – I’d love an inside scoop on the pros and cons to trailer parks as I’ve always thought they were a good idea too financially! Or better yet, those Tumbleweed homes as you mention – those things are dope!!

    Interesting plan you have there nonetheless. I wish you luck, bud :)

  81. Ev October 6, 2012 at 11:12 AM

    I found this website while shopping around for car insurance and couldn’t pass reading what has been my lifetime spending philosophy! Thank you for blogging!
    I’ve worked p/t since I was 14 saved every penny and paid off undergrad debt within 6 months of graduating.
    At the age of 22 I purchased a condo and paid off 30k of my mortgage(25%) in 2 years by living off of 50% of my salary, saving 40% and enjoying 10% (5% for me 5% for relatives in Ecuador).
    With savings I retired in Ecuador at the tender age of 24 and pursued a masters while living comfortably there with 200 dollars a month.
    After 2yrs abroad and a wedding in between (our modest wedding in the states was under 5k), I am now back in the states and starting my now our 50, 40, 10 plan all over again. My husband is a believer of my savings plan. (My in-laws are not. oh well)

    My first car was a 15yr old Honda Civic that I purchased when I was 19 from the city marshall at 200 dollars. I called her quinceniera and she ran well for many years. Eventually with a healthier savings account I would like to purchase my first new car… a prius.

    I owe what some have considered financial maturity/frugality to being raised by a single mom and a trip to Ecuador at the age of 10. There I learned to define needs and luxuries differently.

    (I attended a private college with a partial scholorship, my mom worked two jobs to support me and I refused to accept any monetary gifts to purchase my home. Though I have a BS in Biochemistry and an MS in Conservation Biology I am a HS Chemistry /Biology Teacher and earn a modest salary.)

    One day, we hope to live off of 50% of one salary so that I could stay home and raise a family in the near future.

  82. J. Money October 8, 2012 at 10:40 PM

    Cool!!! That’s SO awesome to hear – you’re killing it!!! I’m glad you found the blog and are enjoying it so far :) Keep being an inspiration!

  83. Mar October 24, 2012 at 12:30 AM

    I really loved reading this article. It reminded me of when I lived in my first apartment all by myself. I was working two full-time jobs and had a credit card. My limit was 500 and rent was 575 so every month I would use my credit card to pay the rent and would just pay the remaining with a check. It was cheaper for me to eat out since back then I was single and either going from one job to the other or sleeping.
    My one down fall is I got cocky with my credit card and did not save enough to cover in case of emergency or layoff. And guess which one happened first….
    I am paying down the credit cards and living as modest as possible but as soon as those debts are paid I’m free to go back to living off of 50% income and going to school because education = freedom (with a bigger paycheck ;)

  84. J. Money October 24, 2012 at 11:40 AM

    You know it! And much better to mess up w/ financial stuff NOW than later when you’re old and stubborn, haha… so you brush yourself off and become a better human being! Way to go – keep hustlin :)

  85. Eden October 30, 2012 at 6:16 AM

    My husband and I are currently living off of less than 20% of our pay. Even so, we live pretty freely, and honestly by just saving on simple things like using cloth napkins instead of paper, using laundry detergent sparingly, only throwing trash out when the bag is full, ect. we save enough to splurge on a nice dinner or something every few weeks without going above the 20% line.

    Of course, once we have kids, that will change, but that’s one of the reasons we’re putting that other 80% in savings :)

  86. J. Money October 31, 2012 at 9:11 AM

    Wowwwww 20%?? You guys are WORKIN’ it yo! Good for you, man that’s impressive. Yes, kids will start eating at it, but not nearly up to the 80% level, haha… you guys will be set for quite a while if you keep that up :) Congrats!!

  87. jend October 31, 2012 at 2:41 PM

    I rent a room for $200month. I was having trouble saving $ since I only make $400wk after taxes in nyc that is nothing. I am trying to get my own place so I have recently taken the initiative to live monthly off of 1 paycheck. As long as I make smart decisions grocery shopping, and take lunch to work, I am able to pay my $50prepay cell bill, cable, food Anne make rent, I am saving $1200month. In 1year that would be $24k yea, with more financial freedom as opposed living check to check. Also paying up my cable and phone bills in advance has also helped jumpstart my savings.

  88. J. Money November 2, 2012 at 5:19 PM

    Oh yeah, def. smart of you!! I tried living off of $400 a week too when I was living there and I almost went broke, haha… You’re doing a lot better than I was, keep it up! :)

  89. Zulyta November 24, 2012 at 1:43 PM

    Back in 2003, I was making 26K a year and I felt on top of the world. Now, I make a lot more than that and every month is a struggle to make it work (Without the unexpected expenses).

    Today, I had a thought, “What if I could live on half on what I make today” and then, of course, got on my computer and googgled… “How to live on half on my income” I knew I would find ALL the tips needed to keep up with my new plan! I have found so much GREAT information and feel so confident that I will be able to do it.

    THANK YOU for the blog and to ALL, for sharing your great examples of a better living. I am ready for it!

    Z.

  90. J. Money November 26, 2012 at 10:24 AM

    Cool!! The power of the internet, yeah? :) Good for you on taking the time to research about it and now DOING SOMETHING about your goals. You’re gonna be so much happier when you pull it off! Good luck!

  91. Jeff December 16, 2012 at 6:34 PM

    Great article!
    I actually live on 40% of my income, It can be achieved easily if you live well below your means.
    I have access to Car Auctions, so i buy my cars at wholesale value driving them for 3-4 months ands selling them for a small but nice profit. I don’t have paiements. You can find a used car dealership who will buy a car from auction just for you for only 400-500$ off as profit (ask for car and freight invoice).

    Other than that, i live frugaly.

  92. J. Money December 17, 2012 at 2:09 PM

    Hah! Awesome – haven’t ever heard of that before, way to hustle! :)

  93. naomy February 5, 2013 at 2:17 PM

    Me and my husband are starting this month. We make about the same amount. I will pay all the bills while his check go to our savings account.we should be able to save over 2grand a month.

  94. J. Money February 6, 2013 at 8:51 AM

    Saweet!! That’s what I’m talking about!

  95. Frugalosity March 23, 2013 at 8:58 PM

    I am 40 years old and I live off 50% of my income. The cons: I live with parents, I have bad credit, I am a single parent. The pros: I have a six-figure bank account. When I get my credit straight, I will finance a home or I just may pay cash. Signed: Used to have a fear of flying in life.

  96. J. Money March 25, 2013 at 12:09 PM

    Wow good for you! Looks like you’re turning your financial life around like that – awesome. Buying a house in all cash would be insane. I hope you do it! :)

  97. Poetshyne May 22, 2013 at 7:52 PM

    My goal is to live off of 30% of my income. I saw it on the start up reality show on bravo – some young lady on there said she lived off of 30% of her income and the lightbulb went off in my head; I want to do the same. For now, I am working on developing another stream of income and I am paying off my debt. I only have 2 debts left: I’m at the 1/2 way mark with one, and then I will start on my student loans, so pray for me! (smile).

    1. J. Money May 22, 2013 at 10:05 PM

      Cool!! That works even better :)

  98. Steve July 7, 2013 at 11:14 AM

    If tithing is giving ten and living on ninety, what is it called to live on ten?

  99. J. Money July 7, 2013 at 11:43 AM

    Being awesome? :)

  100. Deanna August 1, 2013 at 8:30 PM

    Right now, my rent alone eats up 67% of my take-home pay.

    :(

    1. J. Money August 2, 2013 at 3:08 PM

      Sorry to hear :( I hope that changes in the future for ya!

  101. Romeo February 5, 2014 at 7:22 AM

    You know, Katleen from Frugal Portland and LaTisha from Young Adult Finances started a “Save 50% movement” last month. I think everyone should jump on board, grab the banner, and aim to save 50% or close to it by the end of 2014. Clicking on my name should bring you to the details of their post and my plan to save 60% of my income.

    1. J. Money February 5, 2014 at 7:56 AM

      Awesome! I’ve seen some info about that here and there, but didn’t realize they were making it into a “thing.” If I weren’t in the pickle I am at the moment (1 income household, biz $$ down, 2nd baby on its way) I’d totally join you guys! Will have to make it a 2015 thing for me.

  102. JMK August 7, 2014 at 6:26 AM

    UPDATE: from my original comment that kind of inspired this blog post.
    Received notice yesterday that my job is disappearing in a couple of weeks so, as we have in the past we’ll temporarily stop the retirement savings and extra mortgage payments (and of course no vacations or car replacements). Since those 4 things are basically what consumes my income, they all go on hold for the duration of the job search and replacement. No drama, no stress, just the PITA of finding my next job. In the interim we continue to live just fine on the other income. If I haven’t found another job by the time my notice period and severance are used up I’ll qualify for unemployment benefits. Since we don’t actually need those to cover our living expenses, they’ll likely go directly to retirement savings and extra mortgage payments. Several others were also laid off yesterday and I’m saddened by the shear panic on their faces. I have used this opportunity to reinforce with our kids that our total lack of panic is a direct result of purposely living on far less than we make.

    1. J. Money August 11, 2014 at 8:04 AM

      YES! Love it!!! So so smart of y’all – still so inspired by your story :) And do wish you luck on finding an even better job soon. Thanks for always dropping by and sharing with us – really good stuff.

  103. Larissa October 12, 2014 at 7:20 AM

    I’m not doing this right now, but I did for most of the 18 months to January this year. I’m single at the moment and it can be pretty expensive to rent on your own. So I decided to sign up with two housesitting websites in Australia (where I live). I’d wanted to do it for years but never had the guts!

    I wasn’t sure if it would work or not, but I was amazed how trusting people were with their homes and pets. It was a really brilliant experience (sure, a bit annoying at times and my mother thought I was mad), and it was surprisingly easy to get bookings almost back-to-back, which gave me the savings to quit my full-time job and become a freelance journo. I also travelled for about five months over this period of time, so just scheduled the housesits around my departure dates, or vice versa.

    I was probably really lucky that I got a short contract that paid really well during some of this time, and I was putting away a lot of money there for about six weeks. More than I’d ever earnt! Back to reality now though and I’m definitely not saving 50 per cent at the moment as I am back renting. But I have a great little buffer that has provided me with a great feeling of security.

    Anyway, there’s my two cents worth. If you’d like to know more, I’m blogging about it here. Kind of a sexy blog, but probably not as sexy as the one we’re reading right now:). http://heylittlespender.com/about/

    1. J. Money October 18, 2014 at 4:30 PM

      LOVE THAT. And you’re right, not easy to do *at all*. Good for you on pulling the trigger and chasing your dream. It seems like it was well worth the experience! And now you have stories for the rest of your life! :)

  104. Lena @ WhatMommyDoes November 1, 2014 at 12:09 AM

    We did this (lived on one paycheck even though both of us worked) when we were about to start a family. It was a SCARY time because we tried to pretend like we didn’t have any of the second income and overdrafted many times before learning how to manage. It’s hard going from living on two incomes (eating out, spending money like fools, etc) to cutting back 50%. But it was so worth it and I’m proud to say 7 years after quitting my job, I have not once felt the need to go back due to financial strain. I won’t say it was easy, but so worth it. You can really learn to live on less if you’re willing to make sacrifices.

    1. J. Money November 3, 2014 at 2:25 PM

      Awesome end to the story! So impressive you’ve been able to do it for so long too. Just proves that when you make it a priority you can get anything done. You have to want it bad enough to go through the hard parts!

  105. sakuradelilah November 29, 2014 at 8:03 PM

    We (my husband and I) have lived off of about 50% of one income for several years, even when he was in the military. He makes significantly more now post-military, but we generally live well below our means. I would say our quality of life is pretty good, neither of us (or our children) really go without. If I go back to work, my paycheck will go straight into retirement or savings and we will adjust living off of one paycheck as needed to cover additional expenses like gas and day care, but we will most likely pretend we are still at 50% of one income for day tp day expenses. Some months, we are above 50% of his paycheck for expenditures, but it is mostly due to medical expenses for our child with some pretty severe health issues.

    1. J. Money December 1, 2014 at 12:14 PM

      YES! Love this!!!!

      And even more so that you’re rocking this WITH kids – which is usually the part people throw their hands in the air and give up, haha… Being a recent father myself I can understand too :)

      Thanks for sharing with us – further proof this is possible!

  106. Jacquelyn December 3, 2014 at 11:47 AM

    I know this is an article from a bit ago but this is something I have SERIOUSLY been considering doing this. We both have debt that we want to get rid of (driven mostly by me) and I want to be able to leave my current position, but that isn’t feasible until I get a comparable income via my own business ventures.

    She makes about half of what I do, but is on the fast track to several promotions. I had entertained the idea of trying to live off her paychecks and using mine to pay our debts…but we aren’t married and we have had some serious financial fights…naturally. My biggest goal is to eliminate CC debt, then student loans and see how much happier we would be without the weight of debt outside of basic expenses that are part of the cost of living.

    Any ideas or tools to help sort some of these things out? I am a spreadsheet nut, well I like organization, so anything to help us sort through what is feasible. If we did that…I would be debt free by my 2016, unless I start dominating in my side venture.

    Whew. that was a winded comment I was just excited to see that this was a thing that people do!

    1. J. Money October 9, 2015 at 12:56 PM

      HEY! I’m so sorry – I don’t know why I’m just now seeing this? After chatting with you on and off over the past year, I know things are getting better :) You should compare this comment in December of this year to see how different things are!

  107. Tammie May 13, 2015 at 8:32 AM

    I live off 50% or less of my income. My secret, get rid of of broke ass and non ambition husband and it works like a charm. By the way, I have a beautiful child and we are enjoying life, we spend enough and have good time but still saves over 59% of my own income. Selling luxury car and replacing it with more functional small VW also cut my car lease payment by 75%

    1. J. Money October 9, 2015 at 12:56 PM

      Hah!

  108. Steve October 7, 2015 at 12:42 PM

    My wife and I have been living off less than 50% of our combined income for most of our marriage. I think it definitely lowers our stress knowing that either one of us could lose our jobs and we could live off the other’s income.

    1. J. Money October 9, 2015 at 12:57 PM

      Damn straight!

  109. Rudy January 22, 2016 at 9:56 AM

    For most of my employee working years, I was saving above 80% of my paycheck. Don’t worry, I wasn’t starving or something like that, I was just disciplined with my money. Everyone should save more than 50% for the future, a future financial free and without worries.

    Some good tools to use are ExpenseLite for Iphone and Mint.com.

    1. J. Money January 23, 2016 at 3:14 PM

      You’re a baller!

  110. Shallary Marie March 6, 2016 at 12:46 AM

    At 24 yrs old, my average each month is around this:
    24% of my paycheck goes to paying loans
    14% goes to retirement, health savings, and a regular savings account.
    I don’t always spend the remaining 62%, but I like to leave it in my checking account for emergencies or in case I miscalculated to avoid overdraft fees.

    1. J. Money March 16, 2016 at 5:37 PM

      Doing a lot better than I was at 24 :)

  111. Amelia Williams August 30, 2016 at 1:24 AM

    Amazing post!!! I agree don’t increase your expenses according to income receiving. Nice Tips.

  112. Hannah April 9, 2017 at 5:17 PM

    In the last 3years, I quintupled (5x) my income. I’m single and save over 50%

    Increase your income and keep your expenses low

  113. Dinero Pro April 11, 2017 at 5:26 PM

    Getting out of debt helped us a lot since we had to force ourselves to live on one income! Now it sort of comes naturally. We don’t have kids other than our dog, or a mortgage. But Even then we have managed to live with around $2500 bucks (roughly 50%). Great article!! Will be sharing this with others:)

    1. J. Money April 12, 2017 at 6:08 AM

      Beautiful!!! Way to pull that off!