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How To Live On $2,000 A Month (Or Less!)


There are usually two kinds of people who want to live on $2,000 a month or less.

  1. The kind who only have $2,000 to spend, and
  2. The kind who want to live on two grand in order to put the rest in savings.

I’ve been on both sides of that fence. In fact, I was waaaaay south of the wrong side for a while.

How to live on $2,000 a month - or less! | save money

$2,000? Psssh. Such luxury!

Here’s my breakdown of how to spend two thousand dollars in a month:

Total: $2,000

Car payments are notably absent here. If you only have two thousand coming in every month and you have a car payment, you need to sell your car and pay cash for something cheaper. Period. You don’t have to have a spiffy car. That’s not a need.

I’ll admit that as my car turned 12 this year, and it’s approaching 200,000 miles on the odometer, I’m beginning to think about replacing it before it starts showing it’s age (but it’s really been such a good car! *knocks on wood*).

But the truth is, we don’t need showroom quality cars to get us where we’re going. If new cars are something you really love, use that as incentive to find a way to make more money. But until you make that money, drive an old car.

What about home insurance?

a detailed plan for How to live on $2,000 a month

There are a lot of things not included on this budget. Like homeowner’s insurance, school supplies, etc.

On a two-thousand dollar budget, you can’t have everything. For instance, you may have to decide between cell phones + entertainment, and insurance. You may have to move into a less than ideal house to stay out of debt (an $800/month house is likely already pretty small or in a non-ideal area).

In other words, you have to get creative for your needs.

Now on to part two:

What if you only have $2,000 (or less) take home pay every month, and you’re uncomfortable spending every dime?

I personally believe in living below your means 100% percent of the time.

You are the person who, as a family friend used to say, sets your poverty line. You decide whether the money you make is enough. You get to tell your money where to go every month, no matter how much money that may be.

You can:

Find cheaper rent

You’ll likely end up in a smaller house, and it may not be in the ideal location, but it’s possible, and if it allows you to get a savings account going, and ultimately, make more money with a side hustle, it’s worth it.

mobile home ceilings

Our own situation is such that we are within a month or two of not having to pay rent anymore at all, because we compromised location and ideal housing, in order to live rent and debt free on the farm. (I. am. so. excited. I can hardly stand it!) I joked to Gabriel just yesterday that we’ll have so much money after we quit paying rent, we won’t know what to do about it! (something tells me that’s not going to be a problem though…)

Spend less on food

Check out the $20 grocery budget for some ideas, and get creative about how you can get your own budget lower. Through our Grocery Budget Solution eCourse, you can learn to keep your grocery expenses super low, while eating high quality food.

We personally try to keep our weekly budget under $40 (which totals at about $160 a month), and eat really well, including meat at every meal.

Cut Cell phone Expenses

A pet peeve of mine is talking to someone holding an iPhone in their hand, while they tell me how broke they are. I mean, I love you a lot lady, but if you’re so broke, how do you have so many extras in your life?

how you can cut your cell phone bill in half!

You can decide for yourself whether a smartphone is a priority for you, and if it is, maybe the wise thing for you is to do everything you can to minimize your bill. I switched to Ting Wireless a little over a year ago when I decided I couldn’t live the dumb-phone life anymore, pay an average of $24 a month, and haven’t looked back!

Find The Lowest Car insurance Rates

If you’re scraping the bottom of the barrel, I’m guessing you already don’t have full coverage. We’ve carried minimum insurance ever since I can remember. I mean, we drive cheap cars. All I need is the other guy to be covered if we have an accident. I don’t want to pay premium insurance on my sub-two-thousand dollar car!

We pay our insurance yearly, and it averages out to $41.67 per month on our aforementioned car, and pickup truck.

Spend Less On Fuel And Maintenance

It goes without saying that fuel and car maintenance are cheaper when you drive less, which is important to keep in mind when you’re trying to save money.

Save On Electricity

There are a number of ways to save on electricity if you really want to, such as turning off your a/c, and figuring out how to keep cool without air conditioning, turning off lights, insulating around your doors and window, and line drying your clothes instead of running the tumble dryer.

Health care, I’ll admit, is a killer

There’s not a lot you can do to get around it, other than pay a yearly fine for not being insured when you just don’t have the funds to pay for it.

We personally love Samaritan Ministries, because we know exactly where are money is going every month, and feel like it’s the closest thing we can get to really helping our “neighbors” out with needs.

Clothing is a bit of a controversial topic

Some people love thrift shops, other not so much. Some love having a minimalist wardrobe, others don’t, but the big thing is, if you want or need to save money, you gotta do what you gotta do. Learn to distinguish between wants and needs, and learn how to get the best price in your area.

My favorite Goodwill store has a ninety-nine cent day twice a week, where a clothing with a certain tag color is all ninety-nine cents. I once made a pact with myself that I would only go to Goodwill on those days, and only by the ninety-nine cent clothing. I didn’t buy very many clothes that year, but I survived, and I think my wardrobe was better for it – I know my wallet was!

Entertainment cost can be flexible

But honestly except for in extreme circumstances, I don’t recommend cutting it out. Not having the ability to buy or do something fun every once in a while is the road to burnout. From my perspective, if I worked hard to earn money, and we’re doing okay financially, that money should be adding some sort of value to our lives.

Whether it’s a new book, going somewhere fun with the kids, going out for a family froyo date, or whatever else. I don’t work solely to fill my bank account. Yes, I save like a crazy person, because I have plans for that savings down the road, but no, I don’t think it’s a good idea to hoard money just for the sake of having it.

That’s why I took the kids to see Wonder Woman a few weeks ago. I felt like showing appreciation for their hard work on a project that week was in order, and we all enjoyed it very much (spoiler alert: I ended up covering the kids eyes during part of it).

That’s why we travel when we can; because we feel like it’s an experience that will enrich all of our lives.

What about other wants?

So much depends on whether you have the actual money, or how dedicated you are to saving. Do you want an insulated thermos to keep your drinks cold? Take it out of your entertainment/blow money category.

Or just say no to yourself. Because really, that’s what saving money, and living on a $2,000 budget comes down to: the self-discipline to say no, I don’t need that.

how to live on two-thousand dollars a month

So now I’m curious, what are your best strategies for lowering your budget?

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  1. The area in which we live has a high cost of living. Rent for a two bedroom apartment is $1100-1200. Most rents for a three bedroom are $1600-1800, so we rent a five bedroom house for $1800. Where do you live that rent is only $800?

      1. I live in Eastern Tennessee. Our rent for a 3 bedroom, 1.5 bath, very good condition, stick built house is $600 per month. Granted, we’re getting a family discount on this (because they don’t have to pay a property management to get us to pay our rent), but even when they had non-related renters in here, they only charged them $800 per month, which was the going rate for our rural area.

        We moved here from Michigan, where it was totally possible to rent a decent place to live for $600-800 a month also.

        Right around my husband’s work, rent prices go up to $1200+ per month, so we have him commute into work and save a lot on rent every month.

    1. I’m in Northern Calif and rent is astronomical at an average of $2800 plus a month for an average 3 bedroom house, not new or fancy.
      Food is also crazy along with everythinelse.

      My take on this post is to use her budget as an example, no it won’t be $2000 or under, but it would be lower…

  2. Nice article. It gives some good ideas as to how one can really prioritize on their budget, such as driving older vehicles and getting the bare minimum car insurance. I wanted to mention one way we have reduced our budget. We pay the health care tax penalty instead of having a monthly premium on health insurance/cost sharing, ect. Last year, the tax penalty for us for a family of 4 was about $2100. That is $175/mo, rather than $450/mo for Samaritan Ministries. I know some people cannot stand the idea of not having health coverage. But we know that health coverage does not cover everything, and there are always out-of-pocket expenses. So, we choose to minimize our total cost for health coverage, and just pay out of pocket when we do go to the doctor. Many times they have a cash customer rate, that can be about 35-50% less than the insurance price (depends on the health provider). There is another ministry similar to Samaritan Ministries, called Christian Health Ministries, http://www.chministries.org/programs.aspx. They range from $180 to $600 per month, depending on the coverage/program you want. We have not personally used them, but we have some good friends who do, and they much prefer them to Samaritan Ministries (mostly due to cost). Every person has to decide what is best for their family. Those are just my ideas! 🙂

  3. Such great tips! We try to live below our means, but we also live in expensive city. Saying that, we still live on way less than our income so we can save for a big down payment on a house/farm.

    I rarely ever pay for clothing for myself or my daughter (hubby buys all his clothes on clearance). All my clothes are hand me downs from friends or family. People offer all the time or we having clothing swaps a few times a year. Our family loves to buy clothes for our toddler and everyone loves to give away their children’s clothing when they are done. It’s a win win

  4. I really appreciate the article and your ideas. While the $2000 budget is not all that realistic in states like California or New York, there are a lot of great ideas to incorporate into most budgets! We live in CA and between MUCH higher housing costs, fuel prices & utility prices — we’re well over the $2000 budget with just those three budget items 🙁

  5. I am a widow of almost 6 months (Oct 6th with be 6 months) & I live in AL. I don’t make $2000 a month at my job & really struggle to survive financially. There are cheaper apartment complexes but being single again I don’t want to live there due to the activities that go on at those places but can no longer afford to live where I am currently. I DON’T know how to meal plan or shop for food cheaply. (Never have – my mother did but never passed that knowledge to me before she passed away.)
    I WISH I could take your class but I can’t afford that expense.
    Any other ideas besides what you have listed here? (For saving money & all?)
    BTW Though I know we are not related – we have same last name!

  6. We run around $2200 a month, which i feel is impressive for a family of 7 with a bunch of animals. I’m always looking to cut back. Hubby, not so much. He loves his cell phone and high data plan, but we pay so much for it! Otherwise, we do pretty well. Not a lot of fun money, but we don’t starve.

  7. For years we lived off $1900 a month with mortgage and similar bills. What made it work was having a huge garden, chickens, bartering, etc…i wanted to be a stay at home parent so i worked part time. All rests on your priorities.

  8. Our home and food budgets for 4 adults are the same, but our monthly medical bill, including premiums and copays for meds, dr. visits, tests, procedures, and surgeries, has averaged over $2400 a month (or $28-$29,000 per year) for the past 5 years.We have excellent insurance and have copay assistance on several of our most expensive drugs that would otherwise cost us $10,000 per month–with copay assistance, those meds cost us zero. The fact is, chronic autoimmune diseases do have a genetic component over which we have no control. But it would be impossible for us to live, period, on $2,000 per month. I cannot imagine that a kind of non-insurance mentioned in the article would address even one of my family member’s needs.

  9. Never skip insurance especially renters or homeowners. You will not be able to the loss if you have no insurance. You can always cut another bill like internet access and no needs cable. One does not buy clothes every month.

  10. I’ve set up our bills/expenses for every penny we spend on a “first 2 weeks” and ” second 2 weeks” monthly, color coded schedule. If it’s a regular bill due or being paid with the first paycheck of the month it’s highlighted ORANGE. If it’s a regular bill that comes out of the second check it’s highlighted PINK. Variable(No due date) monthly expenses are in BLUE. Appointments are in YELLOW. Payday is in GREEN. I write the amounts due/ approx expense/actual expenses for all we pay on their due dates. I also count out every 5 days for gas in my husband’s truck w/the expense. I have NEVER been a budgeting person. NEVER balanced our checkbook. NEVER fully understood how to create a budget plan that actually works for us until I started doing this last August. It is the simplest way to budget for beginners. Our monthly budget is $2000(or less when possible) and this budget plan helps me keep to our strict budget.

  11. Does the $800 rent include water, sewer, Internet, cable. It’s a low rent to include all. Car Fuel/Maintenance is pretty low. Just got 4 new tires for car that has 100K miles and cost me almost $600. You can live on $250 of food but you are not stepping foot into a restaurant of any kind. We live in New York where things are very expensive. Cause Long Island has a relatively mild climate, the only expense I have that is lower than yours is the electric/heating bill and its not by much – average around $150 a month. We keep our house @55 degrees while we sleep in the winter. Other then our cell bill, which are in line with yours, everything else is much much higher. Want to get rid of our health insurance but my wife wont let me.

  12. For fun, I went through and looked at my budget and our approximately basics are as follows:

    Rent: $600 (3 bedroom, 1.5 bath stick built house in the country)

    Water and Electric–$185

    Internet and Landline:$57 (would get rid of both of those except I work from home)

    Cell Phones: $38 total for two phones with unlimited minutes, unlimited texts, and 5 GB of data, plus unlimited slow speed data (use Cricket Wireless, share a plan with friends, and pay our bill with Cricket refill cards purchased on discount from target.com with my target debit card)

    Car Fuel–$270 (we live 55 miles from my husband’s work)

    Household and Pet Supplies–$125


    Auto/life/renters insurances–$125 per month combined

    Medical (Christian Healthcare Ministries)–$170 per month

    Total $2,270.00

    We also tithe and give offerings as well, but obviously that amount varies by the amount of income that’s coming in and wouldn’t be an issue at all if we had no income coming in, so I didn’t list it.

    We have two vehicles and carry full coverage on one of them. The other vehicle has liability coverage and comprehensive (covers theft and deer wrecks). Our nicer vehicle has about 8k value (it’s paid off, so no car payment), so we definitely need full coverage on that one. We also make a point to purchase more liability insurance coverage than the state requires, as many states don’t require nearly enough. Lawsuits from medical bills and damaged property can easily exceed the minimum liability requirements. Fortunately, we live in a state with cheap insurance, so the aforementioned insurance only costs less than $400 every 6 months! We were paying closer to $1,000 every six months when we lived in Michigan.

    The two biggest areas that I’m trying hard to work on right now are groceries and electricity.

    I’m trying not to use the clothes dryer and keep the use of the air conditioner minimal. I just found out that my electric bill due in September will be $109.52. Not the worst bill ever, but I could probably get it down to $70 or even $60 if I was very vigilant about certain things. Our water bill is sadly pretty high ($65 per month), despite conservative usage. Our area has high rates and a minimum bill of almost $30.

    For groceries, we’re trying hard to focus on buying what we need and not what we want. If I even could get my grocery bill down to $500 per month, instead of $700, it would be a big help to me.

  13. I love your ideas for helping others live their best life on less. We are on an adventure of doing just this. It is possible and it’s possible not to suffer while doing it. Just takes a little planning. I think people forget that the “things” we own are not the things that make us happy. They actually can do the opposite. Finding ways to cut your budget like playing with your kids instead of buying them Fortnite skins to entertain them not only saves you money it builds relationships necessary for a healthy life:)

  14. I also wanted to mention that when buying auto insurance, it’s best to get high liability limits on your liability insurance. Getting state minimum insurance can be slightly cheaper in the short run, but it can end up being very costly if you have an at fault wreck.

    If your state only requires $15,000 in property damage liability, for example, you’ll be on the hook for the other 15K, if you hit a car that’s worth 30K.

    We forgo full coverage on older cars, but always keep high liability limits. For example, our current auto policy has 100K of property damage liability. It’s not very expensive and could keep us out of serious debt.

  15. You stated that you ate meat at every meal. Did you mean one meal daily? There are cheaper and healthier ways to get your protein. I must say, you do have a really low food budget (though I see this was written in 2017). You will really boost your savings when you can stop paying rent. Best of luck.

    1. We used to eat meatless meals with beans and/or eggs, but we have to be really strapped for cash to talk my husband into meatless meals.

  16. I just became a widow, my husband died, on Oct 31,2019. He was 81 years old.
    I am 74. years old. with a 45 yr.old son living in another state. I am selling my house in
    March, and going to live in Colorando Spring, CO . I am praying that God will help me.!

    I know nothing about investments, and I don’t want to loose what I have! can you help
    me. Sincerely Mary. Date: Feb 10th,2019.

  17. Just wanted to do a quick write in about a phone plan I really like. It’s $40 monthly unlimited everything and includes hotspot on Verizon’s network. I also got a $200 gift card for switching. The phone plan is called Visisble and its very minimal.

    I admit I’ve had a few rough calls but everything else has been flawless (mostly calling is fine too). At that price, nothing has really come close for me. Also, if you hit up Reddit and get on a party pay plan (very easy to do) its $25 monthly. Highly recommend!

    For the house thing…I’d recommend saving up for a house if possible. Rent doesn’t give you any sort of investment where a home does. Also, if you save up for a large downpayment, your monthly rate can be cheaper than rent and you can get a decent home in a safe area. I’m personally renting a room in a home ($500/mo). In 5 years, I’ll be able to afford a 300k home w/ 100k down (of course with a loan you’ll need house insurance so factor that in). I’d rather have the extra coverage in case of fire/theft.

    The car thing is rough because anything you buy cheap you risk breaking down and outweighing other options with repair costs. I went the lease route personally for this and hopefully can buy it after the lease is up. $100/mo for AWD isn’t bad at all.

    Shop Goodwill or secondhand whenever you can for things that aren’t food! 🙂

  18. What about other utilities? Gas? Water? Trash? I see no internet? And entertainment of $20 with kids?

  19. We live on a little over $1000 a month for a family of 4. We both work and homeschool. We live a very basic life with basic things but our needs are met and we even have a little left to save every month. Modern society has led people to believe that they need so many things to be happy and comfortable that they don’t. We have a nice, comfortable home, a good vehicle that is paid for, and I find great clothing at thrift stores. I cook all of our meals and spend about $25 a week on groceries and necessities. We even have internet! It’s all about your mindset and priorities.

  20. We spent the bulk of our monthly money on paying off our home. We have 10Acres of farm land and we grow and preserve as much food as we can. It cuts down on our grocery shopping. We have had back yard chicks for a long time now. We weigh the cost of food for them and the saving on eggs and have found they have really been a bonus. For phones we use Straight talk. We have found it to be expensive and we aren’t locked into a contract if we don’t have the funds for the month. Lastly we turned our farm fun into a small business. We purchased a couple of dairy goats for milk and have been making goat milk soap. We sale it on line along with wood working projects. It took some sacrifices to get us where we are bot it was an incredible journey.

  21. We live on less than that, but we make 3x that bi weekly. We both ride in 2 different carpool teams for work. We cook our meals at the house or family member watches our kids. I get TRICARE (Army Reserves) so I don’t pay much for healthcare. We go to a lot of free events. Every 2-3 Days we make Chili/Soup/home pizza when we know were going to not have time for cooking the rest of the week. We do this so we can pay off our properties.

  22. I am a 73 year old woman with a dog and trying to figure out where I can move to anywhere in the world that is fabulous, healthy and safe and live on around $2,000 per month!

  23. In 2022 everything has gone up. If I didn’t have kids I could live with someone and split the rent. In the South of the United States you have to keep the AC on because of mold. Mold is a huge issue. However my bill is cheap since I live in a small apartment. We try not to drive much but even then I spend like $350 on gas a month. Car payment… if you buy a cheap car you will easily spend thousands a year on fixing it. It is nice to not have a car payment though. I look forward to that in 2 years. I don’t know how I will be able to reduce costs further. My apartment is the cheapest in the county. I have a free phone and service through state funding. I still can’t keep my budget below 2k.

  24. I live very well i’m just under two thousand dollars a month. I work full time at a low paying job. I am single and plan to retire in about six months. I bought my house during the housing crash and it was able to put down twenty five thousand dollars on it, So my mortgage payment is only two fifty a month. I always pay cash for my cars and I drive with two thousand and seventeen chevy trax. Car insurance is my big expense, I also have a 2004 F150 pick up so my car insurance. On both vehicles one with full coverage one with minimal coverage Cost me 146.00 dollars a month. I save around five hundred dollars a month in my Savings Account. I will be hitting about $1800 a month when I retire and I planned to work a little part time job 1015 hours a week to make an additional five hundred dollars a month. So I will be fine. I also have 2 401ks and an annuity. You don’t need millions of dollars to retire.

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