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October 20, 2019
Living on 30k a year

Living on 30k a year

According to the latest statistics, nearly half of American workers receive $30,000 a year. Living on 30k a year first of all means that you will pay FICO (Federal Insurance Compensations Act) fee federal tax, which currently stands at 6.2 percent. It means that your total annual pay gross is at least $31,860 or $2,650 a month or $15.30 an hour.

Here are the most common professions, which are paid off around $30 000 a year or less. Find out your 30k or 20k a year hourly rate from the table below. 

How much a yearHow much an hour
Retail salesperson$25,000$12.02
Cashier $19,000$9.15
Food prep worker$18,000$8.71 
Office clerk$29,000$13.94
Waiter$20,000$9.62
Customer service representative$33,000$15.87
Laborer$27,000$12.98
Janitor/cleaner$25,000$12.02

 

It may be frustrating to set your monthly budget, and you may constantly be asking yourself how you can live on $30,000 a year. It is much easier to prioritize when preparing your monthly spending schedule. First and foremost, you need to cover your basic needs before you do anything else.

The most common answer when you ask people what they need to do to improve their financial situation is to make more money.  Although making more money can be helpful, it is actually much more important to be able to manage money.

If you are unable to manage the money that you already have, what makes you think it will help to make more? It is not about being wealthy; it’s always about the financial decisions people make. So, what are the basic needs of households that we should first take care of?  Is it possible to live comfortably on $30,000 a year?

Dave Ramsey, a renowned financial expert, and host of a popular radio talk show, suggested calling basic economic necessities “four walls”. These are housing, transportation, food, and clothing – the largest parts of your monthly budget. By starting to work on these issues, one can significantly minimize your expenditures.  This is where your dollar can get the most bang.

When you are living on a 30k a year budget, you can potentially be financially more successful than someone making $50,000 a year or more. You would think that someone who receives a six-figure salary is wealthy, but what if he has a $250,000 student loan debt? While someone else who makes $30,000 a year may actually be in a better financial place if there is no debt and less monthly expenses in his life. 

This is how it works! Let’s explore the “four walls” strategy.

How to Save Money on Housing

The first one of the “four walls” is your housing. That is the largest part of your budget, which can dramatically influence your financial situation. 

The average percentage you should pay on rent is 25 to 30 percent of your salary. And this should include the taxes and other monthly home costs such as homeowners and renter’s insurance. It means that to live on $30,000 a year, you have to spend no more than $625 to $750 a month on housing.

When you live and in a very expensive area, and you have a relatively low income, you may need to find creative ways to save on your accommodation. Here are some examples of how you can start to save your money on housing:

  • Rent a home with a spare room for $400 a month
  • Buy a home in a less desirable location with an $800 monthly mortgage
  • Purchase an unusually small home with a $750 monthly mortgage
  • Rent a home’s top level for $600 a month
  • Buy a low-cost condo with a $950 monthly mortgage. Rent the $650/month spare room
  • Rent a $500 guesthouse
  • Rent a home space at $700 a month

How Does A NetSpend Card Work?

How to Save Money on Transportation

Transportation is the second big part of the “four walls.” How much are you paying for your vehicle?   

People often try to justify buying brand new cars by claiming they need “something reliable” to get to work, but you can easily find something reliable by reducing car expenses for $10,000 or less.  Here are a few tips for reducing the cost of your transport:

  • Stop the car updating every couple of years. You don’t have to change the car every couple of years. Use it as long as possible if your car is in good shape.
  • Downgrade to a low-cost driver.  Do you own a car worth $20,000? Sell it and purchase one for $10,000 or less.
  • Get a smart vehicle. 
  • You can carpool with your spouse or a coworker if you have the opportunity.
  • Cycling and walking. Whenever possible, you can save on fuel by walking or cycling.
  • Take the train or bus. 

You will have to spend about 18% of your income on transport, whether you’re riding, taking the bus, train or a taxi. When you ride, your gas, tolls, car payments (when applicable), and auto insurance need to be considered. That means you’ll have to spend about $450 on transport needs.

How to Save Money on Food

The next phase in “the four walls” is the food economy. Food is a common budget buster for people. Meal planning can save you more than $1400 a month and can be a key part of a functional budget. Furthermore, it is much healthier than take-out or restaurant food.

Try to cut your meal spending:

  • Eat out less often or make it cheaper when eating out instead of dinner, appetizers, dessert, or lunch.
  • Choose a cheaper grocery store. 
  • Reduce premade products. Frozen meals, pre-sliced foods, and other pre-packaged goods are expensive.
  • Use the fridge. Stop wasting leftovers and get them in the freezer. What you can freeze will shock you!

No more than 15 % of your budget should be spent on food. That’s about $400 dollars a month. If you’ve got a big family, it might be tough, but these are the tactics you should try to follow. 

How to Save Money on Clothing

The last step in the “four walls” system refers to saving on clothing. The first thing you can do to reduce the price of clothes is to stop buying items from name brands.  Through shopping at discount stores like T.J Maxx, you can save a lot of cash. Consignment shops can also be a good way to get gently used designer-label clothes far cheaper than if you’d purchased them new.

Here are our suggestions on how to dress for less:

  • Sell what you are not wearing 
  • Visit thrift stores
  • Find online coupons  
  • Check the labels 
  • Shop online sales 
  • Don’t buy anything just because it’s on sale
  • Swap with friends 
  • Borrow what you need only once

More Things to Remember

There are a few more parts of your life to reconsider in terms of money-saving. 

Save on Movies

It probably costs you at least $30 any time you go out to a movie, and that’s with no popcorn included. You can consider a list of theater promotions that will give you free tickets and snacks. Use your cashback debit card to pay for your family fun. Or you could stream movies and TV shows to your TV using Netflix for just $7.95 a month. If you really want to go the cheap route, there is RedBox, where a relatively new movie costs just $1 a night.

Save on Debts

We would suggest trying to pay off your debts with the debt snowball strategy as quickly as possible.  Reduce your spending as much as you can, and put away a certain amount you plan to save for debt repayment each month.

Therefore, you will stop any additional debt.  Going into debt is also hard mentally. Yet, DebtQuest USA’s qualified financial professionals will help resolve the problem and provide information on how to manage any debt situation.

Save on Traveling

Prioritizing is the first step in your low-cost travel adventure. Now, you already know how to do this with your daily living costs. 

Traveling is subject to the same options. You need to think of the encounter as the ultimate prize if you want to save money. Everything else is negotiable.

Could you live in a hostel since you might spend most of your time sightseeing?  Are there low-cost airlines that cheaply fly to your destination? Could you pack easily enough and not check any luggage?

There’s no need to feel completely deprived, of course. Just strategically pick where you will splurge and make sure it matches your budget. Always remember that traveling is a pleasurable experience based on impressions, many of those are 100% free for everybody. 

Some Useful Apps

Apps have changed the way we organize our lives, as developers have launched countless ones to help us navigate everything from messaging to finance. Today, thousands of resources are available from the app stores to help us manage our financial position, helping us to track all we do with our money.

These applications will help to control your level of spending and see clearly in which areas you are spending too much. Here are the best apps for smartphones to control your finances in 2020.

  • Mint
  • Acorns
  • Coinbase
  • Digit
  • Trim
  • Paribus
  • Countabout
  • Personal Capital
  • YNAB
  • Dollarbird
  • PocketGuard
  • Wally
  • Mvelopes
  • Albert
  • Robinhood
  • Tycoon
  • Venmo

Conclusion

Since starting “the four walls” and setting up a plan for any debt you may have, the last move is to set a budget.  When you’ve reduced your four highest costs, you will notice that your budget now has more wiggle room.

If it’s not enough, you can start cutting back on minor expenditures. The charge for a membership to a gym that you never use? Do you ever watch cable? Are you using your home phone? Begin cutting as many small items as possible. So, as you see it is not only about knowing “15 000 a year how much an hour”, it is always about how to spend your salary wisely. 

If you do not like your financial situation, and are trying to start your conscious economic attitude, use the services of DebtQuest USA. We will provide you the best plan for spending within your budget. With DebtQuest USA help services, even a 30k a year budget will seem reasonable to you.  You will be able to enjoy life and not to get into debt using DebtQuest USA’s planning strategy.

Remember that taking care of financial planning is as important as thinking about your health and career strategies. DebtQuest USA will help you to make a financial plan, no matter how difficult the situation with your debts may be. All the skills we need to have in order to be financially healthy is learning how to build and repair credit, handle loans, and save for the future. Start your way to financial literacy and conscious consumption today with DebtQuest USA, so tomorrow you can enjoy life and absolute financial security.

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