How I Live on just $12,000 a year

With suggestions for others

"How can one possibly live on just $12,000 year, unless you live on the streets?" one might ask. Well it is possible, I've been doing it for the past seven years, ever since the Iraq war started and I wanted no part of it. I also had some reduction in my income due to the merger mania that is going on in the United States, so as one of the old jokes goes, "This is a non profit corporation, it's not what we intended, but that's what it turned out to be"

When faced with a cash flow problem, the first thing to do is cut all expenses that you can immediately without having to spend money to do so. Use the money that you save to invest in money saving alternatives, then go to work on finding ways to reduce your greatest expense. For most of us, that will be your housing. But it might take awhile to find a cheaper apartment, sell that 4000 square foot monster you were talked into buying or find an alternative living arrangement.

So here is what I did first that doesn't require any "investment" at all.

With the money I saved from the first list, I went ahead and made the following investments. Although I actually did this next item some years ago, I'm including it after my other money saving tips, as most people reading this are probably still living in an apartment that they have to pay rent on, or a house that they are still paying for. Housing is probably the single biggest expense that most people have. I was fortunate enough to find a friend who had a summer home that was largely vacant most of the year. He was always worried about the heating system breaking down during Winter and coming back next Spring to peeling paint and a cracked boiler as happened one year. Even though he had drained all the plumbing, he obviously did not get all of the water out of the hyrdonic heating system. So we came to the agreement that I could live there rent free in exchange for "guarding" the place, as long I paid for property taxes, insurance and utilities. This has worked out very well, and it might be possible for others to come up with a similar arrangement. The only problem might be is finding work in your new location. If it is rural enough, you could grow most of your own food, but you will still need some income to pay for things that you can't barter. Other alternatives are having more people move in with you to share expenses, but be aware that many places have limits on how many unrelated people can live together in one household.

Some thoughts for married people:
All of the previous discussion was about how a single person living alone, or perhaps with others, can save money. What about married people with children? Well, here are some thoughts on that.

First of all, don't have any more children. Although you do get more exemptions, the cost to raise a child to age 18 is now given as $190,000! Plus the world has over six billion people, four times (by the most optimistic estimates) what the planet can support in a sustainable manner. You can cut down on the expense of your existing child, plus reduce your taxable income by having one parent stay at home instead of work, thus eliminating the child care expense. You also don't need a bigger home when you get that additional child. I see no problem with two children of the same sex sharing a bedroom. You'll save $4300 annually by getting rid of the child care expense and roughly $2900 annually by living in a smaller home. These estimates are based on the US Department Agriculture report, "The Cost of Raising a Child" Release No. 0127.98.

Thoughts for pet owners, or would be pet owners:
Pets are an expense, in fact, I somewhat consider them to be a luxury. However, as I sit here composing this, I have a warm friendly cat on my lap, and it is said that people with pets live longer and are in better health than non pet owners. That said, if you are going to have a mammal for a pet, consider a cat instead of a dog. Cats are less expensive to feed, their vet bills are usually less, and they will keep your rodents under control, saving the cost of an exterminator. If you keep your cat indoors at all times, they aren't likely to get hurt or pick up fleas, your only vet bill should be for the annual checkup and shots. If you need to go out of town for a couple of days, a cat can manage on his own, while you would have to take a dog with you or board him in a kennel at additional expense. As I mentioned earlier, this is one place where I found the name brand premium cat food to be better than the house brand. My cat seemed to be losing hair and getting sick until I switched him to a premium brand. He also eats less of it, since it is more nutritious, so the cost is probably a wash. Cat litter, on the other hand, is a generic thing and I buy the least expensive house brand. Be advised that you should switch litter gradually, least the cat not like the new formula and decide that the bedroom carpet is a better place to take care of business.

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