How We Live Off of Under $40,000/Year

Friday, September 16, 2016 AnnMarie Brown 0 Comments

I have been writing about saving money for a long time now. I am often asked how we life off such a modest income. I am not going to say it has been easy or that everything is always happy but I will say we are very content in our life. Because I believe in complete transparency I am going to share how we live off of $40,000 with all the details below. 

House & Taxes

We live in a small city by most peoples standards and our housing prices are cheaper here than the larger cities. I would say the average price of a house here is $210,000. We pay our mortgage and taxes every other week no matter how many weeks are in a month. Our mortgage and takes includes garbage pick up as well. We pay our house insurance monthly at a cost of $117.29 per month.
Total - $395 x 36 weeks = $14,220, $117 x 12months = 1,404
Running Yearly Total - $15,624

Car Insurance

We have one car that is paid for and because of where we are located in our city we can walk to most of the places we need to go on a daily basis. Car insurance in Ontario Canada is high compared to other areas. We pay $86 every month for car insurance.
Total - $86 x 12 months = $1,032/year
Running Yearly Total - $16,656


We live in a different city than Rob works so he commutes every day to work and the price of gas here is always fluctuating. When I look at our gas log book it averages to $200/month for gas.
Total - $220 x 12 months = $2,640/year
Running Yearly Total - $19,296

Utilities (Electric, Water and Gas) 

Don't get me started in the price of electricity in our area. It is crazy! Last we spent $2,500 on electric and water combined for the year. Our cost just went up last month so I am going to budget $2,600 for the year. Last year for gas to heat our house we paid $550 for the year.
Total - $2,600 + 550 = $3,100/year
Running Yearly Total - $22,396


I keep thinking this is the area we need to change. We have 5 smartphones we pay for because the deal is while my kids are in school we will pay for the cellphones so we know we can get a hold of them. Not only that it is cheaper to be on a family plan for them. This costs us $250 for a month. I think we might suspend the one phone though since it really doesn't get used.

We also have our home phone through magicjack and we pay $30/year for the service it allows us to call over North America for this price.
Total - $250 x 12 months = $3,000 + $30 = $3,030/year
Running Yearly Total - $25,426


We have not had cable in years at our house we do have Netflix and we get our subscription for free currently. I won a contest that allows me to have it for 5 years for free.
Total - $0.00/month x 12 months = $0.00/year  
Running Yearly Total - $25,426


I can not blog or watch netflix without internet. We have unlimited internet at a decent speed for $70/month. It allows everyone in my house to enjoy the internet and watch netflix.
Total - $70/month x 12 months = $840.00/year
Running Yearly Total - $26,266 


We are very strict about your food budget in our house. I try to keep our food budget at $50/week and that averages out to $200/month. I share my weekly menu plans every Monday on my blog with new detailed information of my purchases for the week. I do use coupons and store reward points to help keep my food budget in check every month.
Total - $200/month x 12 months = $2,400/year
Running Yearly Total - $28,666

Health, Dental, Vision and Life Insurances

This is all together as one at our house. We have coverage through Rob's work and it covers us for almost all things in this area. We do have to pay a deductible yearly so that is part of our expense with these plans. As well as purchasing my glasses. This amount is a far cry from the thousands we were spending every month just few short years ago on our daughter medication.
Total - $1,000/year
Running Yearly Total - $29,666


This is for common expenses like clothing, car maintenance, house maintenance, clothing and vet bills. I look for sales for all our clothing purchases. We often shop a thrift stores for all of our clothing needs and even then we try to shop on the 50% off days to have our money go even further. We do our car maintenance as needed through the year to keep our vehicle in operating condition. We do the same for our house and make improvements as needed so we can maintain things in good repair.
Total - $200/month x 12 months = $2,400/year
Running Yearly Total - $32,066

Any other income we bring in goes into debt repayment to pay off all our debt we incurred with our daughter medical needs.


How much do you spend every year on your families needs? What do you do to save money?