How To Live On $2,000 A Month (Or Less!) | The Frugal Farm Wife (2024)

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.

$2,000? Psssh. Such luxury!

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

• Rent: $800
• Food: $250
• Cellphones: $60 (one for each parent)
• Car insurance: $70 (breakdown of average insurance rates by state)
• Car maintenance: $25
• Fuel: $50
• Electricity: $180 (based off of our home running the A/C unit)
• Health Care: $495 (Samaritan Ministries)
• Clothing: $50
• Entertainment: $20

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?

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.

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?

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 circ*mstances, 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.

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