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Living on Only $460 a Month? Really?

I woke up this morning and realized that my mortgage will soon be gone. No longer will I have money deducted from my account each month. My house will be 100% mine. I also will not have any other common forms of debt: student loans, car loans, credit card balances, or any other type of loans. I will be completely debt-free.

20111216 - dollar billI don’t need a car loan because I decided to buy a 2001 Honda Civic two years ago. In these two years, it has only cost me $500 in repairs and has depreciated in value by about $300. And, the gas mileage is often over 35 mpgs! I absolutely love this car, especially since I bought it outright for $2,500 cash.

Student loans used to be a way of life for me as well, but I was able to pay these off back in 2011 (was it that long ago already? Crazy!).


So now that I will soon have absolutely no debt, that means that I will also have absolutely no debt payments each month. So what bills are left to pay? Here is a list of my standard bills each month:

  • Gas: $140
  • Phone: $60
  • Utilities: $100
  • Food: $160

My absolute necessities will only cost me $460 per month. Now that is pretty cheap! Of course, I might need some clothes once in a while, and I still intend to have some fun and also give money to my favorite charities, but as for my absolute essentials – the bill is only $460. That is fricken awesome!

The Benefits of a Low-Cost Life

So if I really wanted to, I could spend only $460 each month. What does this really prove though? That I am a cheapskate that isn’t willing to part with his money? Well, sometimes yes, but there is a bigger picture here. While I am occasionally sick in the head and enjoy depriving myself of spending money, the master purpose is in the long-term advantages.

Inflated Confidence

In my experience, as my debt has begun to disappear I have continued to get braver at work. You may not think about it, but when you have less debt and can live on practically nothing, you really don’t have much worry about losing your job. And, when your worries are minimal, you are free to do what you’re best at and will likely get promoted more quickly, which will then increase your income (it’s funny how that works isn’t it? When you don’t really need the money, that’s when you get it).

Investing is Less Challenging

When you have a solid income coming in and have very few expenses, you have quite a lot of discretionary funds to invest. Due to the large amount of excess money, you really don’t have to seek out the high-risk, high-return investments. Instead, you can invest the majority of your extra funds into boring ol’ Bond funds, Index funds or Mutual funds. Your odds of growing rich are greater and the risk is minimal.

Raises Are Magnified

Do you recall your reaction to your most recent 2% raise? The majority of the workplace would probably scoff at the “piddly raise” that was issued because it isn’t keeping up with the general cost of living! But, what if you live on 20% of your overall income? Your cost of living would not increase by that much (when considering the dollars), but your large income would. Let me illustrate with some dollar figures.

Let’s say you can live on $500 a month and you earn $4,000 a month.

  • $500*1.02 = $510
  • $4,000*1.02 = $4,080

You see? Your cost of living has only risen by $10 a month, but you now earn $80 more a month than you did before the “piddly” 2% raise! When your cost of living is low, your raises inflate your overall earnings immensely.

Are you trying to live on less? Do you see the benefits of eliminating your debts?

Money Save Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Great point about keeping costs low so that raises mean even more – that is something I’ve never seen presented before but the math makes total sense!

    • Yeah, I can’t believe I never really thought about raises having such a positive impact. But, I guess it’s just because my expenses were always nearly equal to my monthly wage. Now that they are so low, my small percentage increase feels HUGE! 🙂

  2. Amazing! I can only dream of bills that low.

    We don’t borrow money, so we don’t have car notes or credit cards, and we plan to move closer to family within the next three years, so we’re renting a house, but our monthly groceries alone are about as much as all your bills.

    Keep up the great work! I can imagine having bills that low adds a lot of freedom to your life. 🙂

    • Even if those expenses jumped to $1,000, there is still so much money to be saved each month. Put those toward investments and you could soon have an amazing chunk in your retirement funds.

  3. That’s amazing! I can’t wait for the day to be mortgage free! Congratulations on all your accomplishments!!!

    • I can’t wait either, but I can almost taste it! Hopefully my day will come in December (if all goes as planned). What about you? Do you have a goal to pay down your mortgage?

  4. I have been following your Blog for quite sometime, Thank you! you are giving me and my husband hope that someday we will be mortgage free as well, we are so close, in 24 months we will be mortgage free. We put GOD first then everything else. I can’t wait in December for you to achieve this goal, it is such a big deal. Good Job.

    • Awww, thank you Rachell! I appreciate the compliments and I’m glad I can help you and your husband. That means a lot to me!

  5. Did U forget … real estate taxes, car and home insurance among other things?
    We’ve been debt free for a LONG time, as you might know, and our income these days is low… but even we need more than $460.

    • Oh I didn’t forget. I said “standard” bills each month (meaning, non-recurring). I pay insurance and real estate taxes yearly, so of course there will be times when my bills are higher than $460 a month, but 10 months out of 12 of less than $500 is pretty sweet!

  6. What about internet, phone , cable and property taxes? My property taxes are about $475 monthly.
    $160 a month for food seems like you are not eating much or many carbs. I spend about10-12 a day on food without those restaurant visits w friends, coworkers and fam.

    • I guess you did mention phone and utilities, but those are extremely low. My utilities run 250-350 a month. If winter is cold, it could be even higher. I think you need to talk about your insurance also on car and house.

      • My utilities in the spring summer and fall are about $70 a month (no need to run the A/C in Michigan!). In the winter, they are typically around $180-$200, so it all averages out to around $100. My insurance is paid yearly as well, so I didn’t consider that as part of my typical monthly expenses. As I said to Johannah, 10 months out of the year I could probably get away with $460 a month. But, in those two other months I would probably spend about $1,800. Still, not bad!

    • Hi Barb! My internet is free (long story), I listed the phone ($60 a month), and I only pay my property taxes once a year ($1,860), so I did not include them on the standard recurring monthly expenses that I see. I eat pretty well when it comes to food actually. Most of my protein comes from chicken and eggs, but yes you caught me, I do love me some carbs! 🙂

  7. This is awesome news! I can really sense your excitement on this one; man am I jealous! Well done to you, sir, for achieving what so many of us try – and creating a highly motivating story to boot!

    • It’s just crazy to think about! Creating wealth is going to be so easy when there is no debt! Hopefully there is a big success story brewing. 🙂

  8. Derek, that’s incredible. I can’t imagine the flexibility that comes with reducing your expenses to $460/month. I hope to soon be reading about you quitting your job and blogging full-time from paradise. Except that could result in more expenses?

    Until then, with your liabilities disappearing, I look forward to seeing how you grow your asset column.

    • It will give me TREMENDOUS flexibility. Just the fact that I know I will have options will just make my life enjoyable. I can’t imagine going out and purchasing a $300k house and knowing that I will have to trudge over to work for the next 30 years of my life. No debt and options are enjoyable. 🙂

  9. So you actually either spend $600.00 a month approximately or is $1,800.00 each of the other 2 months plus the $460.00 which come out to be about $800.00 a month. Are there any other 1 time or twice a year bills as well? Also don’t forget the occasional clothing purchases, entertainment, gift purchases and repair bills. In other words $650.00 to $700.00 or $850.00 to $900.00 a month would be more realistic. This still isn’t bad but saying you only pay $460.00 a month is inaccurate. For once a year bills divide them by 12 to be closer to being accurate in your estimates. C.

    • $460 a month are the non-recurring bills. The only others are the occasional clothing purchases (figure $20 a month), property tax ($1,800 a year), and home insurance ($400 a year). That’s about $600 a month. Still pretty cheap! Isn’t living without debt amazing??!!

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