How to live on $13,000 a year

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Frugal, Not Cheap

Being frugal might sound like it's about sacrifice and giving up luxury, but for the couple behind the popular blog, it's anything but. "We don't consider our lifestyle to be one of deprivation," says Mrs. Frugalwoods (they use pen names on the blog and asked to remain anonymous to protect their day jobs). The 31-year-olds might not have the latest iPhone or subscribe to a full cable package, but they plan to retire at age 33 and live the life of their dreams in the Vermont woods. If you'd like to replicate their path, here are 10 of their strategies.

Find creative ways to have small luxuries you enjoy.

The couple loves drinking carbonated water, but constantly buying bottles of Perrier or SodaStream replacement canisters is not going to allow you to live on $13,000 a year, as the couple does. (They earn far more in their office jobs but opt to save the majority of their money.) Instead of drinking only tap water, they figured out how to get a CO2 tank for much less (by buying directly from a supply shop) and connect it to their SodaStream to make the drink.

Be flexible about where you live.

The Frugalwoods couple is currently searching for their dream homestead to retire to in 2017. They have settled on finding a property in a rural area of Vermont, but otherwise, they are pretty flexible about the specifics. If the land has maple trees, then they'll possibly collect and sell maple syrup; if the property has apple trees, then they'll pursue that agricultural route for fun and potential profit. Whatever the land offers, they are prepared to either build a new home or live in a house that is already built.

Insource as much as possible.

Yes, insource – the opposite of outsource. Instead of paying someone to fix a leaky toilet, cut your hair or clean your home, you can handle all those tasks yourself. The Frugalwoods couple does just that, and while some tasks might take extra time, they say overall the strategy frees up their schedule. There's no meeting repairmen or scheduling salon appointments to worry about.

Lose your vanity.

Mrs. Frugalwoods has eschewed almost all makeup and new clothes. She says the decision has actually made her feel less self-conscious and more comfortable in her own skin. Instead of constantly fighting against acne or covering it up, she has made her peace with any imperfections. She says in addition to saving money, she also likes herself more. "I don't need to spend money in order to feel good about myself or be beautiful," she recently wrote on her blog.

Stop by thrift stores.

When Mrs. Frugalwoods committed to buying no new clothes, it didn't mean forgoing all fashion. In fact, she's pulled together stylish outfits from hand-me-downs, thrift shop finds and all the pieces in her closet.

Learn to cook.

They eay almost every meal at home, and they also make liberal use of their freezer so they always have premade meals ready to go if they don't feel like laboring over the stove. They avoid purchasing packaged food (when it comes to snacks and cookies, they make their own) and rigorously compare prices to make sure they're snagging good deals on everything from nuts to oats.

Find free stuff.

Mr. and Mrs. Frugalwoods visits free museums, go to the library to borrow books and movies, walk around town, have picnics in public spots and catch outdoor concerts. That way, their entertainment budget is close to nothing, but they're still enjoying their weekends. Date nights comprise of cooking a special meal at home.

Find cheap hobbies.

The blogging couple enjoys writing, singing, hiking, walking, reading, camping and yoga. All of those activities are free or low-cost and are easily done with others for quality bonding time. Some of their hobbies, such as woodworking and welding, might even turn into money-earning pursuits one day, after they move to their homestead.

Reject consumer culture.

It's easy to get swept up into thinking that you need to get frequent pedicures, new outfits and spend nights out at the latest restaurant opening, but over on the Frugalwoods blog, those assumptions are questioned. "Don't be a slave to cultural norms – just because other people throw money down the drain every weekend at the latest oxygen cocktail bar doesn't mean you should," the couple writes.

Give gifts that matter.

The couple does spend money on meaningful gifts, such as socks, coffee beans and a bread pan. They know family members will use those items, and they also reflect their frugal values, making it easier for their loved ones to enjoy simple luxuries, too.

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How to live on $13,000 a year

Automate your finances. 

Set up your finances so that money is taken straight from your paycheck and deposited directly into your savings account or a retirement savings account. You can also set up your fixed bills like your Internet and cable to be automatically deducted from your checking account. Automate your finances to save time and prevent overspending. If you see extra money in your account, chances are you’ll find a way to spend it, leaving you little to invest in your future. Automation helps keep your priorities in line so that as money comes in, it is dispersed to your other accounts immediately.

(Photo: Getty)

Cut back. 

At least twice a year, look at your expenses line by line and see if you’re getting the most bang for your buck. For example, do you read the magazines you subscribe to or maximize that gym membership? If the answer is “no,” consider canceling or negotiating a better rate. Take that money you save, and apply it toward bigger payoffs like debt reduction, retirement or an emergency fund.   

(Photo: Getty)

Get rewards. 

Lots of people use debit cards to make it easy to buy and budget for groceries, gas and other routine purchases. Instead of doing that, look into a credit card with a great rewards program for those daily purchases, and set it up to automatically pay the statement balance from your checking account each month. Over the course of the year, you could potentially pocket a few extra hundred dollars just by using a card with a good rewards program instead of your ordinary debit card (just make sure you’re paying off your credit card every month, so you don’t pay extra in interest).

(Photo: Getty)

Boost your income. 

If you love your job and want to grow your career, it's time to think about boosting your income as well. Make it a goal to negotiate a raise this year. Consider your strengths and look at the value you've provided to your company over the last six months to a year, and discuss it during a performance review. This can feel intimidating, but it never hurts to ask.

(Photo: Getty)

Get a side gig. 

Take advantage of your skills, or turn a hobby into profit. Doing so can help you generate extra income – which you can put toward reaching your financial goals. Etsy, for example, is a great place to sell one-of-a-kind products.  If you have Web design, copy editing or other creative skills, consider offering your services on freelance websites such as Fiverr or Elance. These types of side gigs will allow you to earn extra income while also growing your skills.

(Photo: Getty)

Track your progress. 

You can’t save money if you don't know where your money is going. Every month, track your net worth using a personal finance tool or app that will show you exactly where your money is going. This will make you think about your entire financial picture from income and expenses to investments and taxes. With this focus, you can ultimately make the greatest impact on your finances in 2015.

(Photo: Getty)


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