How to Live on 80 of your Income

Everyone dreams of living like a millionaire on a poor man’s budget. It’s not impossible and it’s well within anyone’s reach. It doesn’t matter how much money one does or doesn’t make, it’s all in the choices we make as to how we save and spend our money.


The first step to living on 80 percent of your income is to budget your money accordingly. Sit down with pencil, paper, calculator and at least 3 months of pay stubs and see exactly where all of that hard earned money is going.

List every bill that comes into the home. Rent/mortgage, utilities, food, doctors bills, satellite or cable, etc. Now deduct these costs from the income. What’s left? If nothing is left then the budget needs to be immediately revamped. Where can money be saved? Can a lesser satellite or cable package be chosen? Can the food budget be trimmed with coupons or less frequent trips to the store? Perhaps using a different store where prices are more reasonable.

Plan to begin setting 20 percent of income aside into a savings account. Figure that into the budget. This may require making some changes as to what the money is spent on or how money is allocated but make that the goal. Cancel magazine subscriptions. Cancel the paper and read it online. Opt for cheaper or less expensive versions of the same things used daily. Make financial choices that will save money on a daily basis.

Use public transportation 

If living in an area with a bus route consider taking the bus and saving the expense of gas, higher car insurance and upkeep on vehicles. Every penny saved is a penny earned and every penny saved puts one closer to living on 80 percent of the income.

Living beneath your means

Interestingly, many millionaires live well beneath their means. They live in unassuming houses in quiet little neighborhoods saving most of their money. They shop at thrift stores, garage sales and dollar stores. They don’t drive the latest model car they simply keep the car they have in tip top shape. Some lived during the great depression and remember how bad it was. Some simply have a frugal mindset and have learned to spend as little as possible.

Be content with what you have

It’s not about the clothes you wear, the house, the car or the belongings. These are only material things. What really matters is how one feels inside. Living on 80 percent of one’s income is a choice that many make in order to save for retirement or a rainy day.

Living on 80 percent of your income is a mindset that must be exercised on a daily basis based one each and every financial decision. It can be done if one sets their mind to it, just make a few changes each month until this goal is reached.