Save. Spend. Splurge.

Try to live on one income, or 50% of your income

Vague advice like ‘living within your means‘ is a nice but it makes you think:

Yes, that makes sense.. but what does that really mean?

Here are some ways to find out:

  • Live on one income
  • Live on 50% of the household income (singletons included)
  • Live on incomes that could be picked up easily
  • Live on as little as possible

 Live on one income

If you are in a dual-income household, live on one person’s income, preferably the lower-salaried income.


Just in case either of you loses a job, at least you know you can make it work, and you already have a quick budget and plan in place to do so.

Obviously, the lower-salaried budget would be the ideal way to manage your money because it could very well be that the higher salary is the one that gets chopped.

(True story! Had a friend whose husband made $60,000 a year. He lost his job, and they had to scramble to try and make ends meet on her $30,000 salary. Not fun.)


 Live on 50% of the household income (singletons included)

Okay, so maybe trying to live on a part-time income is not really feasible. Or maybe you’re single and you don’t have another household income!

The next method is to consider living on 50% of the household income, whatever it may be.

So if you currently make $50,000 a year, try living on $25,000 (or as close to it as possible).

It will give you an idea of the budget shortfalls that will happen each month (maybe your rent and other fixed expenses are too high for this to be feasible).

It will also give you a fast action plan in case you ever have your income halved, such as:

  • Getting a roommate to offset the cost of that high rent
  • Moving to a cheaper place
  • Moving to another city altogether (a cheaper one?)
  • Having to pick up another job to make ends meet
  • Cutting back on certain categories
  • Taking public transportation instead of driving a car
  • Having to sell your car or house after a certain period of time

 Live on incomes that could be picked up easily

I am not saying getting a job is dead easy, especially in light of the economic woes of the world, but if you KNOW you can get a job at $30,000 a year (but are currently slinging in $75,000), then consider living on that income that can be easily picked up for you.

You will have a good Plan B in place, and like the option above, it will give you a fast action plan to fall into place with as little downtime as possible.

 Live on as little as possible

This is the method I ascribed to once.

I tried to live on as little as possible (somewhat). I managed to have a pretty comfortable living (low key and simple), but my savings were next to nothing. It was near impossible to save when I didn’t have anything leftover to save!

Naturally, this was just an experiment because I did have the money so I wasn’t really starving myself on ramen and beans, but it sure gave me a wakeup call.


I didn’t take the income and savings I had for granted before, but I sure as heck appreciated it even more after that stint!

The point was I ended up learning that I COULD live on very little, and while it was not comfortable, I knew where my pain points would be.

 Living with less money is a lifestyle change

Naturally, you don’t have to just do this as an experiment and then forget about it.

A lot of people actually implement a strategy of living on 50% of the household income, or any of the other methods above, then they just bank the other income as savings, which is a fabulous idea.

I personally ascribe to trying to live on less, but with my recent year of spending (2011), it has been hard to wean back into that mindset, because it’s easier to go up than it is to come back down.

RIght now, the only thing that works is if I keep staring at my budget and making notes of how much money I could be banking if I stopped spending so much! 🙂


  • Financial Orchid

    I wish I could live on 50% of calories. Like if calorie tracking was as easy as money tracking, I’d probably do a lot better in my fitness goals. But a lot of dishes esp ethnic/Asian can’t be as easily tracked so I have to focus on what ingredients are put in to get an idea. Again v. arbitrary.

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