How we live on 15% of our income

Living on less than 15% of our income

Hello readers,

Today we are going to show you how we live on 15% of our income in spite of living in HCOL (High Cost of Living) city. Hopefully, you can implement some of the steps below, and try at least live on less than 50% of your income.

Doing this, will help you achieve financial independence even faster. If you don’t spend less than 50% of your income, we recommend you work towards finding ways to increase your income and/or decrease your expenses. “Experts” will tell you to save 10%, but forget about that rule, unless you want to retire old and broke.

Our expenses

Below, is what we spend in a year on average:

Our expenses

We basically spend about $57K/year which as about 15% of our income on the average.  The rest of our income goes to taxes (6 figures), paying down the mortgage faster, retirement, education fund for the kiddo, and giving.

How are we able to live on 15% of our expenses?

Income increase

We started from the bottom as new immigrants, put ourselves through school and increased our income from $0 to $160K to $400K.

Automated saving, investing and giving

Our saving and investments are automated. We make sure we pay ourselves first, and then we pay the tax man.

Our giving is also automated. We have a pre-set amount we give every month. Our monthly bills and also the mortgage paydown payments are also automated.

Biggest expense/daycare

The kiddo just started daycare and it’s going to be our biggest expense. But the cost is really non-negotiable. It’s not easy to even find a daycare around here, it took us a long time to find one, and we showed up with a blank check and signed right there and then.

The first daycare we found had one spot but available 2 months later than we wanted. However, we booked it since we didn’t really have a choice.  And then we got lucky and found another daycare with a spot available around the time we wanted, and booked it. Thus, we lost an $800 2-week deposit we had put on the first one.

But one way to limit daycare expense, is that we don’t plan to add a 2^nd kiddo until the first one is out of daycare.  That’s the only thing we basically have control over.

And once we no longer have daycare expenses, our expenses will go down to 10% of our income!

Food budget

For food, we have a weekly budget that we try not go over.  Hubby is usually the one who does the grocery shopping on weekends, but I make the list, and set the budget.

First, I meal plan for the week, and go through the fridge and the pantry to see what we really need and I will give him a detailed, specific grocery list and the budget not go to over.  For example, I will say we need 16 bananas, 6 medium potatoes, 4L of milk, and the total should not be more than $125.00.

And we buy our dinnerware from the Dollar store 😊.  We serve guests a nice steak but on a 1-dollar plate from the Dollar store 😊. We basically don’t care much for expensive china.

Also, Baby99to1percent eats what we eat. Pickiness is discouraged in our household.

Taking advantage of points

We also use points when we can.  For example, we love Cineplex, Shoppers drug Mart, credit cards,… points programs.  We get free movies, diapers and formulas all the time. We prefer using apps, because we don’t have to carry tens of cards with us, we can just use our phone apps.

If you are using credit cards for points, make sure you pay it off each month to avoid paying interests otherwise it defeats the purpose.

Comparing prices online

Before we buy household items, or baby items, we go online and look for the cheapest price and have the item either delivered to us or we reserve it and pick it up from the store.  That way, when we go in the store, we just go in and out.  This helps prevent any unnecessary extra purchases.

Clothing & Grooming budget

We don’t buy clothes that often, because to tell you the truth, none of us like shopping.  We would rather find something else fun to do.  For the kiddo’s clothes, we use mainly the clothes we got from our baby showers, and also clothes that friends keep gifting us.

The only few times we have bought her clothes was last year for Halloween and Christmas outfits, and this year for a basket ball game. We were going to buy Valentine’s and Easter outfits but we decided against that.

And this year, she’s probably not going to get any Halloween nor Christmas outfits at all. We don’t think Halloween and Christmas pictures are necessary every year.

Cars

We don’t have any car payments. I bought my car cash, and Mr 99to1percent put his car on a credit line but we paid it off right away after getting married.

We spend as little as we can on gas, Mr 99to1percent works from home, and I take the train to work.  We also have Fitbits, which motivates us to walk rather than drive when we can.

However, since our cars are old (13 and 11 years old), they do cost a little bit to maintain. But we don’t want to get rid of our 13-year-old car, even though EVERY TIME we have to use it, we have to put air in the tires and boost the battery 😊.  We are holding out for those self-driving cars 😊.

Baby toys

Our 1-year old toys consist of homemade toys. For example, her shaker, is macaroni in an empty water bottle. Fortunately, she actually doesn’t like real toys, and prefers playing with random things.

Toys for the grownups

Besides our gym in the basement that’s equipped with a treadmill, a stationary bicycle, and an elliptical that we bought at 75% off when Zellers was closing down, we don’t have any toys at all. We don’t have any motorcycles, boats, RV’s,…which means $0 in maintenance costs.

We recently had lunch with an American friend and her husband, and they had recently bought some cool toys such as 2 brand-new motorcycles, and a $150K RV, on top of already having a few vacation houses. Granted they are 20 years older than us, but we don’t really know how they do it.

But we know they are financially responsible as they are about to FIRE (Financially Independent, Retire Early) in their early 50’s.

I always want to learn from other people so I started asking them questions and then Mr 99to1percent kicked my leg under the table, and that was my cue to stop asking 😊.

Unfortunately, in real life in North America, it’s taboo to talk about money. How are people supposed to learn from each other? This is one of the reasons why, I love personal finance bloggers, because we are very open about our financial situations and our readers and us can learn from each other.

Electronics

Our TV is 9 years old. Our then- smart-now-dumb-and-slow 😊 phones are 5 years old. Mr 99to1percent laptop is no longer working, and now he uses my laptop to access and work on his laptop 😊.  But it’s now getting more complicated since I have started blogging.  I now need my laptop 24/7.

But this year, we will be looking for deals around the holidays for a new laptop and phones.

Gifts between adult family members

We have a policy between family members: Don’t give me a gift, I won’t give you a gift. 😊 basically, I don’t exchange any Christmas, or birthday gifts with my husband, siblings or other family members.  We only give gifts to kids, and most of the time, it’s usually money/cheques for their education funds.

Vacations

We haven’t taken vacations for a couple of years, mainly due a complicated pregnancy, and having a baby.  But we are ready to travel next year.  We are planning on going to Europe. Our last trip to Europe was to France & Italy but next year, we plan to go to France and UK, and this time we will be using some travel hacks.

Fun

Most of our fun is free or cheap (such as the zoo, classic car shows…) except for the occasional fine dining we indulge in.  we love fine dining but we limit it to special occasions only (about 5 times a year or less).

The Takeaway – How you can also live on less than 50% of your income

How to live on less than 50% of your income

Decrease your expenses

You can do this by reviewing your recurring expenses.  Start with your biggest expense, down to the lowest expense and see where you can cut costs. Start spending mindfully, and cut unnecessary expenses.  For example, we make our own coffee, wine, and avocado toast 😊.

If you are a dual income family, try living on one income, and saving the rest. Pretend one of you has been laid off, or is disabled and can no longer work.  These things do happen in real life, and it’s best to be prepared. Hope for the best, but prepare for the worst.

Increase your income

Find ways to increase your income.  Ask for a raise or go for that promotion. Don’t wait for your boss to come to you, go to them and ask.

Look for another job outside of the department or company and don’t let them lowball you. Do your research offline and online. Some of the online platforms we use are Glassdoor and Indeed.

Start a business or a side gig. Find something you love and try to make money from it. Start a blog, or an Etsy shop, or an eBay store.

Automate your savings

Automate your savings and investments. You won’t miss what you don’t see. For example, have your employer deduct the maximum RRSP/401K directly from your paycheck.

Set up automatic transfers to saving or investment accounts and set them up to transfer the same day your salary is deposited into your bank account.

So, what are some of the ways that you control your expenses? And how much do you spend in a year? What’s your percentage? And do you plan to bring it down? If so, how do you plan to accomplish that?

Feel free to comment and share. We love ya and wanna get to know ya!

Do you want an easier way to manage/track your finances/investments? The Personal Capital app can help.  Do you want to start blogging? Bluehost can get you started.  Make sure to also check out other resources that we recommend such as books that have helped us get where we are.

Do you want to learn more about us? If so, you can also read these posts:

1. About us
2. How We Increased Our Annual Income From $0 to $160K to $400K+
3. How we live on 15% of our income
4. Joining the Million Dollar Club/Challenge and So Can You
5. How To Pay Off A Mortgage In 5 Years
6. Our Biggest Money Fight and 9 Lessons Learned
7. Our 6 Financial Mistakes and 15 Lessons Learned
8. How I Paid Off My $40,000 Student Loans Before Graduating
9. The resumes that bring in $400,000+/year (Samples Provided)