8 Ways We Financially Thrive On $35,000 a Year With a Family!

The Social Security Administration states the average American salary is $50,321.89. If you’re like me, your annual household income is below this mark. Even as a married person with two children, we are able to thrive on $35,000 a year without living paycheck to paycheck.

It’s no secret that living on $35,000 a year isn’t easy. However, it can be done–even with all of the current financial uncertainty. You must be intentional with how you spend and save each dollar.

Today, I’m going to show how we don’t live paycheck to paycheck, take a vacation, and save for the future on a modest income. Practicing these money habits is helping our family of five pay the bills in 2022. Like many across the world, my wife and I are feeling the financial pinch of “unessential business closures” and the corresponding lost income. We don’t qualify for the $600 CARES Act unemployment benefits as we still have some work.

Update June 2020: I originally wrote this article in September 2017 when our taxable household income was $35,000. Almost four years later, we now make closer to $45,000 as our business is more established.

But we earn a variable monthly income and still live as if we earn $35,000 a year by practicing the money advice below. These frugal habits are helping us make ends meet in 2020 even though we have some debt and some expensive bills.

1. Have a Positive Attitude

Like anything in life, you need a positive attitude. A simple change in attitude makes it easier to conquer debt and appreciate the little things.

This advice sounds cliche, but it’s true. If you need help maintaining a positive attitude, speak with your spouse, deepen your faith, listen to podcasts or music, and avoid negative-sounding content (like the evening news or talk radio) as much as possible.

My Biggest Fear was Quitting My Job

I’ve spent my post-college years on both ends of the income spectrum making between $20,000 and $80,000 a year. I’m now in the middle of that range and probably will be for the foreseeable future.

Having $2,000 of post-tax/post-bills of disposable income each month (when I made $80k a year) was a huge blessing for getting out of debt. Although the 70-80 hour work weeks, not having weekends off, and having to work nightshift wasn’t worth the extra pay. My wife would essentially be a single mom raising three children.

My wife and I didn’t need to earn $80,000 to make ends meet.  I was scared to quit because I didn’t think we could live on a small income.

Well, I quit my job in 2015 when our oldest child was two months old. My original employment plans collapsed three weeks later. Instead of earning a stable income, I found myself unemployed and doing side hustles to at least make something.

Thankfully, my wife (being the entrepreneur she is) supported us with her business income until I got on my feet.

Stomaching that unexpected $60,000 pay cut in 2015 was tough. In the process, I thought about working fast food to at least have stable part-time work. But I wouldn’t have time for job interviews with better employers.

We found out we could live on $35,000 a year. It took some adjustments to learn how to live on less. Using budgeting apps (You Need a Budget was helpful) was a big help, plus talking with family and friends.

Related: Check out these 20 tips to find your first freelance client.

2. Cut Monthly Expenses

The instant way for us to have more money each month was by spending less money. If you don’t have extra time to work a side hustle–even when delivering food with DoorDash where you can name your own work schedule and earn tips –saving money can be your only option.

We reduced our spending in these ways:

An effortless way to cancel subscriptions or lower your utility or subscription bills is using a digital assistant. Two of the best are Trim and TrueBill. If they can lower your bill, they keep a small “success fee.” Hey, you don’t have to call the phone or cable company and threaten to cancel your service or beg for a break. They do the dirty work for you.

  • Truebill: Mobile app (and computer website) for Apple and Android devices.
  • Trim: Cancel or monitor subscriptions with a text message, Facebook Messenger, or online website
  • Kill Cable: This is an online course that can help you cancel your cable or satellite subscription and switch to a low-cost (or free) streaming service.

If you like mobile apps, use Truebill. Otherwise, try Trim to avoid another download. Either one makes sure you pay the lowest price on your recurring bills.

Fetch Rewards for Scanning Receipts

I also use the Fetch Rewards app to scan grocery and retail receipts to earn gift cards. Use my referral code 9H5T4 to get 2,000 bonus points on your first receipt scan.

Getting 3,500 points redeems a $3 gift card. This is my favorite receipt scanning app because you don’t have to activate offers first. Simply buy what you normally do and Fetch matches your purchases with participating products to earn bonus points.

Use Upside to Find Cheap Gas

I’ve recently started using Upside to save on gas. Our local gas stations usually offer a discount between 1 cent and 15 cents per gallon.

The app is free and also offers discounts at participating restaurants and grocery stores.

Bonus $0.15 cent per gallon savings: Use my refer-a-friend link ZRE5V when you join Upside and save an extra 15 cents per gallon on your first fill-up.

3. Avoid Debt Like It’s a Plague

What do monthly payments and vacuums have in common? They both suck.

If you don’t borrow money and go into debt, you instantly need less money to live on.

For instance, not applying for a loan with a $500 monthly payment is an extra $6,000 in your bank account every year. You can use that cash to pay off current debt, invest more, or build up your rainy-day fund.

Becoming debt-free in 2018 is how we could buy a rental property in 2019 instead of, let’s say, 2024. We do have a small loan on that property. But we wouldn’t have this investment property if we still were making a mortgage and car payment. The rental income pays our monthly loan payment.

Paying off debt also improves your credit score. Great credit has more benefits than qualifying for low interest rates. You can qualify for a job handling money or even moving into a better apartment or rental home.

Need Help Making a Plan to Get Out of Debt?

If you need help planning how to get out of debt, I recommend the Pay Off Debt App. My friend, Jackie, built this app to let easily see how much you need to pay each month to get out of debt. Simply list your loan amounts and the app calculates the quickest pay off strategy.

Invest Your Interest Savings

As you pay off debt, invest a portion of your previous loan payments. Invest for the long-term and the short-term financial goals.

I personally use Schwab and M1 Finance to buy individual stocks without commission. You can also buy fractional shares of the largest companies which makes it easy to invest with small amounts of money.

Related:  You might consider investing in these unique stock market alternatives in 2022 to diversify your portfolio and not completely rely on stocks to build passive income.

4. Don’t Drive a Fancy Car

2012 Mustang GT

My one “splurge” as a single person was buying a new 2012 Ford Mustang GT. I sold my dream car because the cash was more valuable than an eye-popping ride that depreciated in value monthly. It was an emotionally tough decision since that car was so fun to drive and because I didn’t have a car payment.

Talk about learning the value of detachment. Looking back, it was a small sacrifice (it’s only a car after all).

Instead of driving a $20,000 car Mustang GT (V8 with leather interior), I got a $2,000 Mustang V6. It’s like comparing apples to oranges, I know. I still reliably get to work with an older car and the extra cash was split between rebuilding our savings and loan payments.

Tip: Pay Cash for Vehicles

We own two vehicles and the total combined value of both is around $10,000. We now save up cash so we can avoid car loans for our replacement vehicles. Paying for periodic repair costs less than driving a nearly-new vehicle.

Each month, we set aside about $300 into a savings account that’s exclusively for buying another car. Large family vehicles are expensive, even after the first five years of depreciation. As we buy older cars, the loan interest rate is higher than for a “new car.” Banking up as much cash as possible is helpful.

For some people, a new or almost-new car can make sense if you travel often or can keep it for a decade. Otherwise, you are better off letting the first owner pay full price and sell it to you after the car has depreciated in value by thousands of dollars.

When you’re living on a modest income, it’s also harder to justify buying a brand-new $40,000 to $60,000 SUV or truck to cart the family around in as well. In our case, buying a used yet reliable family car was our best option.

For instance, we can buy a reliable family SUV (or minivan) that costs $20,000 or less and not lose sleep about still being able to pay the bills. Having a less valuable car can also reduce your stress level for the inevitable paint scratch, ding, or fabric stain.

Life happens.

I don’t miss these “stress moments” when I had my brand new sports car that cost as much as I currently make in a year.

See Cheap Tasty Meal Plans!

5. Cook Your Own Meals

Our monthly grocery budget now is around $400 ($4,800 annually) for our family. FYI–We have three children under age six so that monthly cost will increase as our family grows.

Cooking your own meals is another easy way to spend less money. Even if you go to the grocery store freezer section, it’s still cheaper than going to a restaurant.

I personally enjoy the freshness and taste of home-cooked meals more. We even eat organic food which we buy at a discount through local merchants and shopping online.

Need help grocery shopping? Avoid these 5 grocery store mistakes

With my old job, I bought two meals a day and would spend $20-$30 daily. Conservatively, I spent $5,000 a year on meals, Starbucks, and gas station snacks. How I wish I could go back in time and get some of that money back.

Although it may sound weird to you, I don’t miss going out to eat. I don’t miss the sodium and the perpetual thirst accompanying most prepared meaks.

I do miss getting coffee and ice cream on a regular basis–but it’s still cheaper to get these luxuries at home. The savings multiply if you have several children at home who live ice cream as much as you do.

Need Help Making Meal Plans?

Ditching my poor eating habits and exercise also helped me lose 20 pounds.

You can start cooking at home with $5 Meal Plans. As you might guess, you can make an entire meal to feed a family for $5.

My wife is the better cook in our relationship as my cooking skills are slightly better than burning water. She’s able to keep us within our grocery budget by making weekly meal plans. Each week, before buying groceries, she makes a rough sketch of what our family is eating this week.

At first, planning ahead was difficult. One of our top recommendations to start meal planning is $5 Meal Plans. It’s possible for each family meal to cost approximately $5–the same meal at a restaurant could result in easily result in a total bill of $30 (or higher).

Grocery Shopping Apps

I’m also a fan of grocery shopping apps to help us indirectly save money on the products we buy in the grocery aisles.

There are a handful of receipt scanning apps to try but these are the two I use and like best:

  • Fetch Rewards. This app doesn’t require you to activate offers first. Simply snap a picture of your receipt with your phone camera and Fetch awards you bonus points on qualifying items. Fetch can track your online grocery delivery orders too. You can start redeeming points with a $3 account balance (3,500 points). Enter code 9H5T4 when joining and we both get 2,000 bonus points!!
  • IbottaYou need to activate offers before scanning your receipt. Despite the extra effort, you can earn more per offer. Like Fetch, Ibotta can track your online orders from over 150 retailers. Cash and gift card redemptions start with a $20 award balance.

6. Shop Thrifty

My wife and I also do everything possible to buy what we need either secondhand or on clearance.  That includes our clothes, gadgets, and must-haves. Don’t worry, we buy brand new socks and underwear.

Here are just a few ways we save:

  • Always check Craigslist, Facebook Marketplace, eBay first
  • Shop Online with Rakuten (get cash back on every purchase)–Read my Rakuten review to learn more.
  • Check local thrift stores or consignment sales for used, name brand clothing
  • Shop in bulk (only for products we will use and not throw away)
  • Wait at least 24 hours before making a large, impulse purchase

In addition to avoiding debt like it’s a plague, we limit our shopping trips. Having two small children makes that easy for brick-and-mortar visits. Although the temptation still lingers for online shopping.

Making a list of items we want (and sticking to it) to compare prices and wait for deals is what works best for us. Planning ahead gives us the freedom to wait for great deals so we don’t have to pay full price because we wait until the last minute to buy.

I also highly recommend using a cashback portal to get money back on most online purchases.

7. Geoarbitrage–Live in a Low-Tax State

Geoarbitrage is another way anybody can thrive on $35,000 or less. I realize not everybody can just pick up and move.

If you have “California cost-of-living,” you need to earn the California-equivalent of $35,000. That’s why so many people are moving away from expensive cities and relocating to cheaper areas. Compare the cost of renting a U-Haul to leave California versus moving to California–the cost difference is astounding.

The high cost-of-living for my intended career and a mountain of student loan debt is why I pursued a different career path. My “dream job” simply couldn’t pay the bills. Perhaps you can relate.

Even if you can’t change cities, consider changing apartment complexes or neighborhoods. Never compromise your safety just to save a few dollars in rent. Living in a neighborhood without HOA fees or an apartment complex without a swimming pool can save you a small fortune.

8. Pursue a Side Hustle

Spending less money is only one way to live happy on $35,000 a year. I also recommend getting a side hustle. Once you live on a barebones budget, making more money is easier than cutting expenses. After all, you or I won’t willingly move into a cardboard box or ditch our health insurance to become minimalist.

Honestly, this is where my wife and I are at. We can’t cut much more unless we don’t run the air conditioning in the summer, stop taking vacations, or don’t eat as many desserts.

The bigger challenge for is in 2020 is rising costs. For instance, our monthly health insurance premiums increased while our coverage plan didn’t increase in quality. We’re also paying more for a few groceries and we have had some surprisingly expensive bills that challenge our emergency fund.

When your expenses increase by no fault of your own, working extra hours is the only way to make ends meets.

While I haven’t pulled the lever on these side income ideas yet, these side hustles offer flexible hours:

  • Shopping for groceries as an Instacart shopper (you don’t have to deliver restaurant food)
  • Delivering food with DoorDash (this is the busiest food delivery app in most cities)

If you have free time, put it to good use and make extra money. My side hustle (freelance writing) is now my primary income stream. You never know what will happen. Be patient and try new things to find out.

Invest Some Cash

Investing is a long-term game and you have to find high-quality stocks and stock market alternatives to build wealth.

I recommend starting with index funds as they are low-fee and give you instant diversification. If your employer has a 401k, invest enough to get the monthly match–it’s free money.

Once you build a solid stock and bond index portfolio, consider investing in individual stocks. Even if you’re not ready to buy single stocks, I recommend knowing what the stock market is doing.

Morning Brew is a free, daily 5-minute read covering stock market news. The digest can also give you investing ideas and help you plan your financial future.

You Too Can Live on $35,000

Avoiding debt and knowing how you spend your money on a daily basis is essential to living on $35,000. Making less than the median national or regional income doesn’t mean you will live paycheck to paycheck.

Plenty of “wealthy” people struggle to pay the bills because they chase a high social status.

It is easier to save for retirement, pay off debts, and take exotic vacations with a high income. But a little planning and a positive mindset make it easy to live on a smaller income.

Speaking from personal experience, I have no regrets giving up my large salary because we know how to thrive on our smaller income.

Related Articles:


$35,000 a year is how much an hour?

Your annual salary is $35,000 a year when you make the following hourly wage each week:

  • 40 hours a week: $16.82
  • 50 hours a week: $13.46
  • 60 hours a week: $11.21

Can you live on a small income?

Yes but it’s not always easy. You will need to keep your expenses as low as possible. One of the best ways is planning family meals instead of going out to eat. Also, ditch cable tv and use a pair of rabbit ear antennas for local channels and get a streaming app to watch on-demand videos.

That’s what I’ve done since 2008. It was an adjustment at first, but you will save money and discover new interests that don’t involve watching tv.

*Eligibility requirements apply. Free instant delivery is available for eligible Empower Checking Account customers with an activated debit card. Empower is a financial technology company, not a bank. Banking services provided by nbkc bank, Member FDIC.


$35,000 a year

22 thoughts on “8 Ways We Financially Thrive On $35,000 a Year With a Family!”

  1. Nicely done! Location and rent/mortgage are the big factors for me. Controlling usually your biggest expense in rent/mortgage really give you the wiggle room in other areas of your budget. Living in an area with an overall lower cost of living is another key. Like you said California or NYC will not cut it on a modest income. Avoiding debt is a must. Having debt hanging over your head just adds unwanted stress.

    • Borrowing money is a lot more appealing with a higher salary because you know you can pay it off relatively quickly if you get in a bind. It’s harder on a smaller income because a larger percentage of each paycheck goes to regular bills like gas, electricity, water, etc.

    • In ten years, we might have self-driving cars 😉 Never say never, but I don’t see us spending more than $20k on a car again. As you mentioned, there’s still too much value to lose. We would rather spend that money on vacations, experiences, and other items that can benefit the entire family.

      Besides the price, I have no regrets for buying my Mustang. It’s the one “big” (and unfrugal) purchase I have ever made. Thankfully, I bought it preowned so I saved $8,000 off the sticker price and the first owner enjoyed the first six months of depreciation.

  2. Nice! It’s even do-able on $12,000 per year: froogalstoodent.blogspot.com/2015/06/grad-student-blues-how-i-live-on-less.html

    However, I don’t have a family (at least not yet!), so the situations are obviously different. You’re 100% right about the cost of living, though; I couldn’t do it if I weren’t in a low-cost area!

    • After our house is paid off, we could make it on about $12,000. Single or with a family, I wouldn’t want to live on that as one large financial setback can be difficult to recover from.

      Congrats on being able to be so frugal yourself.

  3. Josh – this is an AWESOME article. You are so right that anyone can thrive financially. I saw my mom do it on a ridiculously low income – and she does it to this day. Cooking at home is huge, as is avoiding shopping temptation. What do you really deserve? That is the question. I say we deserve financial security MORE than we deserve fancy clothes and cars.

    • My thoughts too. The fancy clothes and cars are nice and I’m the first to admit I would love to own a Mercedes or Ferrari one day, but, they aren’t necessary. We are just as happy (maybe more) than with my old employment situation because I can actually be home and schedule parts of my day around family activities.

  4. I have read that the MMM family lives on $25,000-$35,000 per year. You are doing even better than they are – not just living on $35,000 per year, but from that amount saving AND paying off the mortgage. Amazing, Josh! More people need to know about what you are accomplishing on such a modest income.

    • I didn’t know that about MMM. He does have a very inspiring story that has in turn motivated many across the globe to live life differently. If you don’t have any debt, you can very easily live on a modest income.

  5. My income is exactly $35000 a year from work but with some extra rental income (like $1000 monthly) we have 2 kids. I have a mid segments suv and a nice duplex bunglow. I can go to a 5 star hotel 4 times a year on vacation in my country and still not hold back on most expenses. We have a full time servant to clean the house. I guess because in my country things are cheaper.

    • Depending on where you live, it’s possible. In the U.S., you might be able to stay at a 5-star hotel one vacation per year if you go during the right travel season. But you still may be paying as much as $500 per night which is too much for me for a hotel room.

  6. I really like this article! It’s so refreshing to see someone choosing to live a better life on less income because they want to. It’s fantastic and I like to see the honesty and lifestyle of working for what you want – not for the sake of working.

    • Thanks! It’s not easy at times, but it’s better than having a life-sucking job. I hope this recent pandemic season will help people realize that a simple lifestyle isn’t always so bad..as long you’re healthy and can pay the bills.

  7. Good article; We live on $36,000 a year and I share custody with an ex for two children. Our house is paid for and worth over $1M because I bought and sold houses all my life and made hefty profits on each one. I also made over $150k/year for over twenty yeras.I have to spend my retirement on a lengthy divorce an d amountain of hospital bills from a heart surgery and brain surgery in 2008. But with rental property income and social security, our paid for house costs about $800/month in taxes. All is not lost for my kids education, because we paln to sell and relocate to an area where the same house or better is worth $500k. Taking our proceeds from our house sale, I plan to help my teenagers through a university education. They are brilliant, so scholarships will likely pay a lot of the expense. I do work as a consultant when the opportunities present themselves, which is generally “play” money. I am starting a consulting business with two partners which will put us in better steed. I agree with many other posters about avoiding debt and buying used. I would also add that one should periodically take stock of your material things and what you seldom use and could easily rent on that rare occasion, sell it!

    • That sounds like a good plan and having flexibility to steer your life is priceless. Best of luck with your new business. Taking stock of items is a good idea too–we used this spring shutdown to do a “deep clean” like most of our friends.

  8. I agree that the ways listed will help reduce costs. I began to accumulate and track all expenses more than 4 years ago, and I have to say that there is a result, and I like it. But there is one more point, I began to work more …

  9. Josh,
    Great article and advice! Very I have a similar salary and it really is about attitude, the choices we make and budgeting. I’ve used the Zero Budget Method (Dave Ramsey) for years and it works. You’re right it’s not always easy and I get teased for being “frugal” which, frankly, is annoying but I’m being frugal out of necessity and it works fine for me! Again, this was a great read!

    • Thanks, Lori. I’m a huge fan of Dave Ramsey for getting out of debt and do the zero-based budget ourselves. It’s the budgeting strategy that works best for us. I also like the envelope system he promotes but it wasn’t the best option for us.


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