How to live off of 50 percent of your income

Dec 12, 2012 at 6:01 a.m. ET

What if we told you your salary was going to be cut in half? Could you survive?

Couple going over finances

We understand it may not be possible for some people to live off of only half their income, but we do believe that everyone can at least cut back. Living off of significantly less money requires extreme dedication and willpower. It requires being honest with yourself about your finances and making sacrifices. Here we provide some ideas for how living off of 50 percent of your income can be done.

pigg bankPut half your check in savings, immediately

Challenge yourself to put half your check in savings for three months. The key is to do this immediately, before you spend a dime out of that check. How many times have we wanted to save money, but didn't transfer the money right away, and it ended up gone? We know we're guilty! Put the money in savings right away. If an emergency comes up, you can always take it out, but it's best to put it in there so you can save for a rainy day.

If you're a couple, live off one salary

If you're in a partnership, instead of saving half of your checks try living off of one person's salary and saving the other's. You will have to cut back, but so many of us overindulge without even realizing it. We live in five bedroom houses when we have a small family, own three cars yet have only two drivers, have television sets that aren't even watched, and more. The lesson here is to be prepared. If one of you lost your job, could you survive? Well, you'd have to. Try to survive now off of one income so you're prepared if times get tough. This forces you to cut back, and gives you a huge cushion of cash in case a job loss happens.

How to live off less

  • Save for big purchases. Debt, especially credit cards, is what traps people in their job and prevents people from saving. If you want something, discipline yourself to save for it and pay cash. This includes cars. Though you may not be driving the fanciest car in town, you'll be a lot less stressed knowing you own it and aren't bogged down by monthly payments.
  • Don't budget for clothing and entertainment. Yes, you read that right — don't give yourself a clothing and entertainment allowance. That gives you a sense of entitlement, making you feel as if you need to spend that money. If you do need clothes or want to go out, by all means, do it if you can afford it and already saved. You'd be surprised at how much more you can save by not budgeting for these.
  • Spend less on bills and food. Consider cutting cable and signing up for Netflix, canceling your gym membership and running outside, haggling for a better deal on insurance, using public transportation when possible and more. The opportunities to save money are endless and very possible.

See these 10 tips to save on groceries >>


Living off less money doesn't mean your quality of life is going to diminish. In fact, it will probably improve because you'll have a sense of security for the future or in event of an emergency. Try it for three months. You can always revert back to your old ways, but something tells me after seeing all that money in the bank, you won't want to.

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