My Deprived Life: Raising a Family on Under $27,000 per Year

One of the biggest objections we get from new readers around here goes something like this:

“Yeah, I guess Mr. Money Mustache has a point. Spending less than you earn really is a good idea. Too bad he’s so hardcore, though. I’m not ready to cut back my own life to the bone like he has, so I could never live on less than $40,000 per year – let alone raise a child on that budget!”

This lament comes up again and again, no matter how many times I insist that the Mustache family leads a pretty fancy lifestyle, with no cash constraints of any sort. People still don’t believe me, and they don’t have time to read the older posts which explain things step-by-step. So let’s just present a summary of what life is really like when a family of three lives on well under $30,000 per year in early retirement. This post will then become a piece of reference material, so I can link back to it whenever the topic of how deprived our life must be comes up again.

Please don’t take this as a celebration of materialism and excessive spending. My point is not to say “Yeah! Look at all the fancy things we have!”. It’s actually with a certain amount of guilt that I present this series of pictures, because I know it’s far from the minimalist ideal that many of the happiest people of the world pursue. All I can say is, “this is where we are now, it’s obviously more than enough, and over time we’re finding we want less and less, rather than more and more”.

Following the style of those Forbes Magazine top ten lists, we’ll cover each aspect of the lifestyle with a picture and description, then follow up with notes on how we try to get the most out of each area of life while minimizing the cost. After all, just as important as the amount of money you spend, is how efficiently you are able to spend it.

The House

This is our most excessive piece of lifestyle, as we live in a 2600 square foot house worth about $400,000, in a city where the average is a little over $200,000. Around here, that buys you a 4-bedroom house in great condition, in any of the nicest neighborhoods of the city. The house has four bathrooms including a master suite that is straight out of a design magazine. All of the city’s best amenities, as well as high-paying jobs and fast bus lines to other cities, are within a short walk or bike ride.

A quick note from 2021, nine years later: WOW, things have sure changed! Due to a long housing boom that is still happening, the house we lived in back then would now be worth over $700,000, and even tiny houses in this neighborhood start in the mid-400s.

Of course, to early retirees this housing “feels” cheaper than ever because our investments have grown even faster than housing prices. It’s a lesson to invest early, and often, in assets that appreciate (both houses and stock index funds). But it’s also a lesson to shop around before settling down somewhere: there still plenty of other nice cities where houses are still cheap.

How we get it for less: We bought this house for $350,000 about six years ago. At the time, it was underpriced by almost $50,000 due to a motivated seller and a lack of market research on the part of the agent. We toured the house on the first day it went to market, and had the offer in on the same day. Since then, I’ve spent almost a thousand hours of my own time renovating the house to add upgrades like wood floors instead of carpet, ornate tiles instead of plastic shower pans, and other details that make me happy. It all came at minimal cost due to the fact that carpentry is my idea of a good time – it feels like play rather than work to me. This also means home maintenance and repair costs virtually nothing – I can often find the materials through Craigslist and the labor is free.

The house is also strategically located: property taxes are only $2400 per year. Good solar design and insulation in a sunny but moderate climate keeps our combined heating and cooling bills under $450 per year. Understanding our electric use and low local electric rates means electricity bills are under $25 per month. Is housing much more expensive where you live? I had the same problem – I had to move here deliberately to find the right combination of good and affordable.

The Toys:

We have all the stuff we need. Too much stuff. Five working computer systems sharing a high-speed wireless network system stocked with movies and music. A video projector in the basement with an 11-foot screen for movie nights. A stereo system that can reproduce the richest and most detailed music you’ve ever heard, and five other systems which also play music. A complete Ludwig classic 1994 maple drum kit. Two guitars. Microphones and mixers. A frickin’ five-foot-long Didgeridoo bought directly from its Aboriginal maker in Australia, who also taught me how to play it. A set of carpentry tools complete enough to build an entire house from scratch. An enviable set of educational toys for the little boy.  Six bicycles*. A Sevylor inflatable kayak. Great camping gear. Workout gear. Snowboarding gear. Too much!

How We Get it for Less:

At 37 years of age, I’m getting old. I’ve been earning adult wages (and/or investment income) for about 17 years now, and every year I have been tempted or tricked into acquiring more of the luxury items listed above. I bought most of the things used from Craigslist, inherited them for free from friends or family or rental house tenants who abandoned them, or traded for them through barter arrangements. For the rest, I did agonizing comparison shopping, considering each purchase for months before making it. Everything is of fairly high quality, which means it tends to never break, which means it ends up accumulating over the years as you get older. I’m not proud of having so much stuff. But I’m mentioning it just to show that we do not lead a life of deprivation.

The Place in the World

The Money Mustache Family lives, in my own humble opinion, in one of the nicest places on Earth. The Boulder County area of Colorado sits on the edge of the Rocky Mountains, where constantly sunny weather lights up the sparkling glacier-fed streams. You can ride your bike out of your driveway and soon be in a canyon where 2,000-foot cliffs tower on each side of you, a river rushes along at their base, and rock climbers look like tiny ants strung up in the sky above. Bike just a little further and you can set up a tent in an area of wilderness that shows absolutely no sign of human influence as far as the eye can see. Yet you’re surrounded by cities and small towns which connect you by trade to the richest economy in the world with minimal taxation and regulation. And yet, it costs almost nothing to live here relative to the wages available, since food and housing are so cheap and land is plentiful. As with many places in the United States, this place is Pure Freedom, expressed as a series of geographical features.

How We Get it for Less:

We settled down not in the city of Boulder itself, (where a house like mine goes for over $1 million), but just 12 miles down the road in Longmont. It is drastically less hip and fashionable, and the richer Boulderites mock it endlessly, imagining it as a dim expanse of mullets and meth labs. But they’re dead wrong: living here for six years I mostly see towering trees, clear streams, natural people and happy families. And even a little bit of hipness creeping in, if the growing number of cruiser bikes, Subarus, beards, and packed microbreweries can be considered a measure of such things.

The Vacations:

As your life changes, your travel preferences will probably change as well. As twentysomethings, my wife and I saw a bit of the world including Australia, New Zealand, Italy, Hawaii, Mexico, and of course Canada and a great amount of the US. Now that we’re parents to a six-year-old, we keep things a bit more tame by staying mostly within North America. But that doesn’t mean sitting at home at all times. Even at this age, our son has been to four countries and about 20 US states. We spend about 3 months traveling each year and plan to do more as he gets older.

How We Get it for Less:

Mrs. Money Mustache is a travel planning enthusiast. Travel is one of her interests, which is why we do so much of it. She combs the Internet and gets ridiculous deals on flights and hotels. We use high-reward credit cards to get free flights and cash back. We sometimes travel by road in a fuel-efficient small car, bring our own food, and camp out in Nature for some of our US-based vacations. We aren’t impressed by valet parking or $20 drinks and $100 steaks, but we ARE impressed by 14,000 foot peaks, coral reefs, wilderness preserves and untouched beaches.

The Cars:

I write about bikes pretty often, so I must be one of those wacky car-free people right? Wrong again! I actually love cars and am a closet gearhead. Throwing aside practicality, I would own an all-electric Tesla Model Y (a practical 7-passenger crossover which also just happens to be one of the fastest cars in the world) and a custom-built Mercedes Sprinter cargo van converted into an RV for extended travel.

How We Get Them For Less:

But instead, I have forced myself to acknowledge that expensive cars are a big drain on the wallet and don’t actually deliver lasting happiness, so I focus on practicality rather than the latest luxury. We have a 2005 Scion xA (“Xena”) for most of our rare driving, and I also have a 1999 Honda Odyssey minivan (“La Mujer Azul”) for hauling the tools and lumber for my part-time construction business. The Scion can carry us all in great comfort at over 40MPG. The van occasionally gets to come out on camping trips, which makes her happy as well.

Both vehicles were bought used, and yet are in nearly-new condition and have never broken down or demanded much beyond oil changes and wipers. Part of this is the fact that combined, we drive less than 7,000 miles a year and it’s mostly for long highway roadtrips. Despite a combined current value of less than $12,000, they are far more than we could possibly justify needing.

The Food:

Oh, the luxury of good food. We don’t need it to be happy (I could live just fine on beans, rice, fruits and vegetables), but somehow we manage to buy fancy food every week and go to great lengths to prepare it in entertaining ways. We invite people over for parties and feed our expensive food to them frequently as well. Most of our food is organic these days, and gluten-free due to my wife’s dietary needs. All of these things cost more.  I enjoy and appreciate them, but they are far beyond being basic needs, which is why I’m acknowledging them here. Dig in!

So What’s Missing?

Many people who are new to this blog add up their own budget, and find it’s a lot bigger than that of the Mustache family. So what are we doing so differently that allows this seemingly-normal lifestyle to occur at such a low cost?

Most notable is the virtual absence of a “miscellaneous” category. We have a lot of stuff, but it was bought only once, and most of it long ago. I often go for months with no need to visit any store beyond the grocer, and the hardware store for construction supplies.  We don’t buy high-heeled shoes or massages, and probably eat out at a restaurant once a month on average.

Then there’s the absence of driving. We drive only when it’s time to go to another city, which is only once every week or two. No trips to the store, no commuting to work back in the working days, no driving just for fun. That shit is what BIKES are for. This paragraph alone can cut some people’s expenses in half.

Then there’s the child-raising. Having only one kid is obviously less expensive than having more (child-related stuff has averaged $300 per month for us for the 6.5 years of his life so far). But there’s great variability in how much you choose to spend on being a parent, and spending more doesn’t make you a better parent. I like to call it Avoiding Ivy League Preschool Syndrome.

Finally is the absence of interest payments. I’ve never been in debt, with the exception of one year of car-related foolishness when I was young and a few years of paying off a mortgage. A lifestyle like the one in this article could easily cost $60,000 or more per year if you jumped into it by borrowing for everything.  But by owning the stuff you use, life becomes much cheaper.

Of course, owning things is not exactly free either: besides the annual spending, there’s real money tied up in this house and stuff. If we sold it all and moved to a rental house and rented the cars, bikes, and furniture too, living costs would rise. But in the end, it’s just one of the two parts of the savings required to pay for a lifestyle:

  • the stuff you own outright (the things in this article cost somewhere in the mid-$400,000s, mostly in the house)
  • the income-producing assets you own (stocks, bonds, real estate, businesses, etc.), which pay for your annual outflows. To provide $27,000/year in income using the 4% rule, you need an additional $675,000.  (Since I have a rental house as part of my income that provides at a much higher than 4% rate, I could get by with even less than this).

In other words, a lifestyle like this can be sustained indefinitely on around $1M in savings, with no need for any additional income. A million dollars – remember that number? That’s the amount that used to be big, but that everyone says is far to little to retire on these days. My whole point here is that it’s still way more than enough.

The Future:

Life is full of change, and I’m looking forward to lots of it myself. We’re still only beginners in this life of not working for a living (although still working plenty for other reasons). And there’s still lots of baggage left over from the days of being more consumption-oriented.

In the long run, I’d like to live a simpler life in a smaller house with less stuff. As our boy gets older, we want to involve him in more work and adventure, so he doesn’t grow up knowing only this life of easy material abundance.  So while the doubters will continue to accuse the Mustache family of living an overly frugal lifestyle, you’re only going to see it get simpler from here. Even as income and happiness is rising over time, excessive spending and materialism can drop away as you figure out what’s really important in life.

* after hearing that part of the article, my son informed me that I should count his new bike in the total and be sure to include it in the picture. So make that seven bicycles.

  • catalana June 2, 2012, 6:02 am

    Sadly I found this article extremely frustrating. MMM I just feel you were far too wide of the mark with your introduction. Pretty much everyone on here acknowledges that you can live comfortably on that amount of money.

    Me and my fiance are the same age, and live a similar lifestyle on a similar amount of money. We count ourselves amongst the wealthy and privileged where we live because we both have jobs and earn way above the average wage.

    However it has taken us since graduation in 1997 for me (later for him indoors who went on to MSc and PhD), and two professional salaries to reach a point where we can save enough to contemplate retiring some 20 YEARS LATER than the MMMs.

    I don’t feel like this post spoke to us at all.

    • Mr. Money Mustache June 2, 2012, 7:51 am

      Thanks Catalana – I can see we’ve got pretty different perspectives. When I write this blog, I see all the complaints that come in (mostly on other sites) talking about how ridiculously low a budget of under $30k is, and how it would lead to a deprived family life – and therefore early retirement or financial independence is impossible. Those are the people who I’m trying to welcome with this post.

      As for your own personal situation – I’m curious about any claim that it takes over 20 years for two professional salaries to save for retirement. But as I said before, it’s all in your spending. We spent $30-40k throughout the working years, because we earned just over $120k combined on average, allowing an over-60% savings rate. (A 60% savings rate leads to financial independence in 12.5 years).

      If you’re saving less than 60%, you need to decrease spending or increase income .. IF financial independence is important to you. My own values would have forced me to maintain the savings rate even if I had earned far less. If I earned $30k after tax, I would have lived on $12k, etc.

      In my own view, this only reaches a floor somewhere in the $5000-$7000-per-person range of spending, where you have to become so innovative that you are almost dropping out of society. It’s still not impossible, but I think it would take much more effort for most people.

      • catalana June 2, 2012, 9:36 am

        Thanks for responding MMM. I guess I can see the target audience is probably a new one, rather than those of us who have hung around a while.

        The point I am trying to make is that professional salaries typically take time (and often debt) to reach, and are not necessarily in the stellar heights you reached. I agree we can reach early retirement within 13 years – which is the 20 years behind you guys that I quoted.

        To put some numbers on it, we only reached an annual equal to your average a year ago, and have been able to make 50-60% savings. My first five years average salary was c$30k gross which means a little over $20k net at a time when there was student debt to repay. I was happy to reach the grand old age of 28 debt free, and with a small stash to put towards my first home.

        • Anna June 2, 2012, 1:45 pm

          My thought on “professional” salaries and FI: IF FI/early retirement is a top priority for you, AND you have the means & brains to get a bachelor’s degree (never mind advanced degrees for now), it is up to you to choose a field of study that will allow you to move quickly up the earnings ladder. i.e., major in engineering, computer science, nursing, or other fields where there is high demand and a decent starting salary, and go to the cheapest college available to minimize your costs. Okay, maybe these are not your dream jobs, but guess what? If your goal is to retire in your early 30s, you’ll only be doing them for a few years anyway! Once you’ve amassed your nest egg, you can always look for more fulfilling work, go back and take a few classes in subjects you really love, whatever floats your boat.

          If you have amassed a load of debt for an advanced degree that gets you not much in the way of earnings, you’ve implicitly decided that FI is a lower priority than…something else (job satisfaction?), and that’s fine too, in my book. Just recognize that high salaries early in a career may simply be a sign of different priorities, rather than the other person having gotten 100% more lucky than you.

          • Marcia @Frugal Healthy Simple June 3, 2012, 6:14 am

            This is a really good point. I am an engineer, but in HS, I was really interested in a lot of things. I loved history and language (took French), and math and science.

            I picked engineering because…I have an analytical mind, and it was more appealing than straight science, and…well, it pays better than straight science and history or language.

            Now, I did start off making very little in the military for several years, but that was the tradeoff you make when you are in ROTC and they foot 3 years of $14,000 tuition bills. They paid for my master’s at night while I was in too, so I consider it a good trade.

  • Salis Grano June 2, 2012, 7:05 am

    Only came across this blog a little while ago. Interesting to view it from across the pond and see the universally sound principles of prudential money management put to work so effectively.

  • Marcia @Frugal Healthy Simple June 2, 2012, 7:21 am

    One thing that I was really thinking about last night when I wasn’t sleeping (which happens frequently, I’m afraid), is how you’ve positioned yourself with respect to your “fun”.

    As my 36 year old nephew made fun of me for getting rid of cable – pointing out that he’s going to have 3 TV’s in his basement (which is bigger than my whole house – not a challenge really) – I got to thinking. Well, what comes with those 3 TV’s? Probably DVR’s, cable, sports channels, and video game consoles. For the most part, those all come with a regular monthly outlay in premium cable channels, new video games, etc.

    By choosing to spend money on things like – our Thule rack system, camping gear, and a blow-up pool for the back yard instead, we are hoping to get more entertainment with a one-time outlay of money. That’s a great lesson I learn from reading this post, is just changing how I get my entertainment.

    We already get less entertainment by shopping and “going out” (to eat or to concerts, etc.) than most of our friends. I tend to choose free local concerts (where they collect donations when you are there) and take a picnic lunch/dinner. We have memberships to the zoo ($85/year) and natural history museum. Our vacations are more driving/camping than trips to Hawaii these days. I think baby #2 will be on a lot fewer plane trips compared to my 6 yo.

    About the only regular “entertainment” cost I can think of is our YMCA membership. Living in So Cal, we could certainly work out in our home (we have dumbbells) and walk, bike, hike for free. But our personalities are more of the gym-rat variety, and we do love taking our son to swim.

  • femmefrugality June 2, 2012, 1:13 pm

    Amazing advice! I don’t know that we’re ready to give up our cars for local trips, but that would definitely save us a ton of money. We try to live most of the other ones, though. We do need to get out of a tiny bit of debt. I’d love to pick your wife’s brain for those travel finds! I try, and feel like I do pretty well, but airfare is the one I struggle with.

  • Ben June 2, 2012, 3:04 pm

    Great post! It’s nice to get a peek behind the curtain.

    True to Mustachian form, I only own a bike. This works great about 99% of the time, but it makes it difficult to buy used furniture directly from others, and Home Depot runs almost impossible. Some of your savings comes from using your car to shop around and get a great deal on furniture, or just buy the lumber and make it yourself. I’d like to do something similar, but don’t want to impose on friends for the use of their cars. I have also thought about something like zipcar, but those are usually smaller cars, and not so good for moving big stuff. Any ideas, MMM?

    • Hanah June 2, 2012, 6:47 pm

      For a long time I didn’t have a car either, and I know how you feel! Can’t do the costco runs either. But then again, given the expense (capital and operating) of owning a car, I always figured I still came out ahead with just the bike and the occasional rental, even if you couldn’t take advantage of Craigslist as much.
      Where I’ve lived, Zipcar and Hertz on Demand have also rented hatchbacks and larger cars.

    • Mr. Money Mustache June 2, 2012, 10:08 pm

      Bikesatwork.com, man!

    • Ann Q June 17, 2012, 9:58 pm

      In many cities there’s at least one taxi company that has a pickup truck. Go see the craigslist furniture by bike, then call the cab to come take it home.

      Most carshare companies usually have one pickup truck somewhere in town.

      Home Depot also rents trucks by the hour, but the problem is you have to have your own car insurance – which you probably don’t if you don’t own a car.

      And bikesatwork trailers rule. Bike coops sometimes have trailers for loan to members.

    • David Wendelken November 24, 2012, 7:05 pm

      Many Home Depots and Lowes stores have a truck you can rent at an hourly rate.

  • Executioner June 2, 2012, 3:54 pm

    I love the nickname of your minivan: “La mujer azul”.

    In high school my parents had a blue minivan as well. My best friend and I called it Martha. We had great adventures with Martha — I think we took her camping at least once, similar to your own experiences. You are correct to observe that all minivans are female.

  • blindsquirrel June 2, 2012, 5:47 pm

    Swweeeet pictures, I toast a beer at your badassity. 5 years or less
    for me to be totally FI.

  • jsb June 2, 2012, 7:50 pm

    Hey Mr, Mrs and Jr MM

    What a serendipitous article to arrive at after reading through from your first, a lovely summary and reminder of all that’s come before. I now join others in hanging out, waiting for your next post :).

    You have created a fantastic community here, with thoughtful comments which add value and different perspectives to the post (and very few, like my own, which say nothing – I think I can be forgiven though for introducing myself after finally catching up?! With my lack of knowledge, I am not overly confident that I will be commenting as I prefer anything I say to have some use, but I will be here all the same). I truly appreciate you sharing your experiences. They are thought provoking and inspiring.

    Re your comment about photography, it’s a hobby of mine that enjoy a lot but don’t currently get enough time at to improve in step increments. I’m sure you’ve thoroughly researched and will continue to do so…I would recommend taking a look at the canon and nikon ranges, both provide great quality easy to use systems. While you can do a lot with post processing (something I have yet to explore), in my experience canon generally takes images with a bluish hue and nikon with a yellowish hue – if you have a preference to the feel of your images, having the camera take care of this for you can save a lot of time.

    Take care and look forward to what the future holds for your blog. And, thanks again,

  • Shilpan June 2, 2012, 10:43 pm

    You have mastered the art of living modestly without depriving your family from material happiness. I always believed that you can live happily on a $1 million asset. I am glad that you are a living example. How will you make decision to scale down as years go by?

  • CrucialDebtCrusher June 3, 2012, 8:19 am

    Thank you so much for this article. I just rode my first 10mi yesterday warming up for the 40mi round-trip work commute (and got a lesson in changing an inner tube). Summaries of y’all’s situation like this really helps keep things in perspective that it IS achievable. Cheers to cultivating the badassity in all of us!

  • StringOnaStick June 3, 2012, 5:13 pm

    I’m glad health insurance was brought up, and answered; that’s a huge expense and it only gets worse the older you get unfortunately. The premiums also go up progressively higher with age, and at a faster rate for women. While both my husband and I are quite fit and active, we’ve both needed care for sports-related injuries and some of them are chronic now – we’d probably be on the “less desirable customer” list for most self-purchased health insurance policies. I agree with MMM – I want a Canadian system! To me, the single biggest obstacle to FI is health insurance costs and medical costs since both go up with age.

    My husband and I are in our early 50’s and he has a wonderful well-paid job, while mine is a lot more marginal so I work part-time and apply my extra time off to cooking cheaply, making his life as easy as I can, etc (plus I do all the home repairs unless I decide it is out of my league). We save a lot and pay no interest costs, plus the mortgage will be done in just a few more years.

    As a note to those advocating for dental hygiene as a good-paying job, just be aware that it is a very, very hard work – the state of my hands only allows me to work 2 days a week now; nursing or ultrasound tech are much better choices. If I injure my hands (and I have, playing) then I am out of work, period; a nurse could at least do a desk job. Dental hygienists can either wield instruments or go into sales, and if you can’t do the former then you’d better be able to do the latter or change careers. The advantage of dental hygiene is it is very easy to find part-time work; the disadvantage is DDS’s as a rule are quite cheap and rarely offer any benefits to their employees. I work for a temp service firm that only supplies dental hygienists, dental assistants, and the occasional dentist; again, zero benefits. Nursing or ultrasound has some flexibility for part-time jobs though not nearly as much, but if you work for a large facility you’ll probably get benefits like health insurance.

  • whoisbiggles June 4, 2012, 5:31 pm

    I love making things with the children. With 4 kids, there is no way I can afford to buy them all electronic gadgets that they must have.
    I can however spend time teaching them how to cook (last weekend we made handmade bread and lemon curd), make a wooden toy service station (a work in progress), walking round our suburb to see what we can see, how to get the most out of our local library. This list could go on for awhile.
    This is very time consuming but the pay-off is huge for us parents and our children.

  • Ron June 5, 2012, 12:50 pm

    Thanks for the household x-ray. Enlightening. Not sure if this was asked in the second half of comments, but I’m curious about insurance costs—auto, home, health—and any college savings. My nineteen year old dented our car recently and I just learned our premiums are going up 3 bills for 3 years.

  • pachipres June 5, 2012, 8:57 pm

    There’s a lot of talk these days about how expenses go down after retirement but I do not see this for my husband and myself. I think we will always be wanting to be gifting our children or their children on some level. I think in planning for retirement, we have to be prepared that expenses may not always go down for some people.

  • Mr. Risky Startup June 10, 2012, 10:47 pm

    When my wife and I decided to get real, start living minimalist lifestyle in order to pay off the debts and retire early, some amazing things happened. For example, we no longer have this desire to own the newest and greatest gadget (staying 1 year behind the trends means you can get still great toys for almost nothing).

    Our mentality changed completely. I just turned 41 and for this birthday (and two previous ones), I received ZERO presents. Not because my wife did not want to buy me something, and not because I was trying to be responsible – in fact, I could not think of anything that I wanted! Not one single thing!

    Since my wife is retired, and I am not concerned about losing my job or money, I gave myself a day off and we took our son to the zoo/waterpark, we had picnic by the lake and picked blueberries at the local U-pick farms. Best birthday EVER! :)

    However, while we managed to control our spending in almost every way, cutting our food budget is still proving to be dreadfully hard. First, we live in Canada where cost of identical food items (compared to US) is at least 20% higher. Secondly, my wife refuses to feed our son anything but fresh food – nothing processed – so we buy local produce, meats… which is sadly more expensive than eating at McDonalds. Lastly, we host at least couple of dinners for guests and family each month which ends up costing us at least $100-$150 per dinner (usually 8-10 guests, good quality ingredients cooked by me)… Best month we ever had was $650, but we usually spend $800 or more.

    Any Canadians out there with 1-2 kids eating non-processed food for less than $20 per day – please help and tell me how you do it?

    • Hanah June 11, 2012, 9:31 am

    • Gerard August 19, 2012, 7:17 am

      Depends where you live and how badly you insist on organic, but you should be able to knock that down a little by eating more legumes, whole grains, and dried fruits/vegetables, getting seriously seasonal (lotsa root vegetables in winter), shopping at “ethnic” stores, and maybe preserving some stuff yourself. Yeah, it’ll be more work, but you can still eat some wonderful food that way. I rationalize the less-local side of some of it by thinking of a pound of dried black beans or rice from the US South or Central America as being cooked with three pounds of local water!

  • Early Financial Freedom June 11, 2012, 7:21 am

    Great article. I am also in my mid-30s. My wife & I work from home and travel overseas since our business does not require us being psychically in New York or anywhere in particular as long as there is an Internet connection. We also paid off our home, which alone gave us peace of mind.

  • John M July 6, 2012, 4:45 pm

    I am also on the path to early retirement and have enjoyed reading many of the articles on this site. I think the advice is quite sound, thoughtful, and delivered in a funny, well written manner. I’ve even linked this particular article to friends as it is useful to challenge the status-quo on the level of spending that is possible to “have fun on” for a young/working professional.

    I do have one comment on this post, though.

    When talking about an annual budget, and thus how much one needs to retire, I think it is important to include the cost of housing as for most people it comprises upwards of 25% or more of their monthly costs.

    In the same way we “consume” food, transportation, entertainment, and utilities – so too do we “consume” the shelter we live in, be it via rent or a mortgage.

    So to accurately paint the picture of what it personally costs to raise a Family at your current standard of living, I think you need to somehow include the cost of your housing — either via depreciation, equivalent rent, or an equivalent mortgage.

    • Mr. Money Mustache July 6, 2012, 9:34 pm

      If you read towards the end of this article, I do try to address that:

      “Of course, owning things is not exactly free either: besides the annual spending, there’s real money tied up in this house and stuff. If we sold it all and moved to a rental house and rented the cars, bikes, and furniture too, living costs would rise. But in the end, it’s just one of the two parts of the savings required to pay for a lifestyle:

      – the stuff you own outright (the things in this article cost somewhere in the mid-$400,000s, mostly in the house)
      – the income-producing assets you own (stocks, bonds, real estate, businesses, etc.), which pay for your annual outflows. To provide $27,000/year in income using the 4% rule, you need an additional $675,000. (Since I have a rental house as part of my income that provides at a much higher than 4% rate, I don’t need quite so much).”

      So there’s no need to address my housing costs in my annual budget, because it’s already accounted for in the amount of capital tied up in order to get me free rent. Alternatively, you can drop the capital number and add in an allowance for rent.

      This article is not meant to explain what it costs to raise a family at this standard of living while simultaneously saving for retirement (in fact, I’d advise strongly AGAINST living this lavishly if you are not yet financially independent – the money is better used for investments for now!).

      Instead, it’s meant to answer the question: “what kind of life do you get AFTER retirement, with your house paid off and $27k/year in spending”. And I wrote it because there were too many people saying “I don’t want to retire early if it means living an ultra-spartan lifestyle like Mr. Money Mustache”.

  • Michelle September 7, 2012, 7:19 pm

    I just heard you speak at FinCon12 today and you did a fantastic job. I don’t understand how I missed this blog. Looking forward to reading it. I live a car free lifestyle btw and don’t think it’s strange that you bike as much as you do. As a fellow Coloradan, I get it! Keep up the good work.

  • Mike October 12, 2012, 12:21 pm

    I did the math and if I didnt have my rent and car payments my current life would cost approx 8100K a year..

  • Sam@I Tell Stories October 13, 2012, 6:09 pm


    I was wondering what makes up the $300 per month number for your son? My daughter’s line on the budget is $50 per month, but she’s not yet 1.

  • Qwerty November 4, 2012, 6:46 pm

    Its interesting, whenever I read about how much you guys spend a year, i wonder now the heck you do it. Well, after reading this article I did the math, and if i cut out the debt repayment, car payments, and mortgage, we live on
    approximately 25,000 per year.

    We have taken the first step, we have locked up the one credit card that we own so that its still there for emergencies, but isn’t in our wallets tempting us to spend. We are working to get our debt paid off, and although we haven’t come close to reaching your level of badassity, this is big for us. I’m proud.

    • Mr. Money Mustache November 4, 2012, 8:09 pm

      Right on Qwerty.. I always tell people we are not doing anything impressive at all and any family should be able to duplicate it once debt payments are removed. But it sounds like you really ARE doing it, so congratulations!

      Did you say CAR PAYMENTS!?!! Whoa. Yeah, things will start going much more quickly for you once you eliminate that problem – hopefully by owning less expensive cars, rather than paying off a couple of new ones that you bought before reading this blog ;-)

  • bunedoggle January 22, 2013, 8:42 am

    Firstly, thank you. Thanks for all the info. My goals align perfectly with yours and you’ve inspired me to take more steps to reel in my early retirement goals to be even earlier.

    We have three children, but we started our family early, which I think is an advantage, since we had less money back then we made due when we didn’t know we were making due (no need to cut out what you can’t afford anyway).

    I was glad to come across this sentence in this article:

    “child-related stuff has averaged $300 per month for us for the 6.5 years of his life so far”

    Since I hadn’t seen mention of your child expenses before. I haven’t tried calculating it myself, but I’m guessing it’s a bit less per child as you add children (due to hand me downs and shared toys/books etc). But I’ll tell you one thing, teenage boys eat a lot :)

    When I read yours and other early retirement blogs, children are often not mentioned. They throw quite a bit of complication into the equation, for example: I’d love to move somewhere cheaper but we need to consider disrupting our kids in school. We need to keep the quality of the school system in mind, etc. College is another biggie.

    I’m wondering if you can talk about your plans/thoughts on college for your child.

    Anyway, thanks again for sharing and inspiring.

  • Tyler Durden March 29, 2013, 3:19 pm

    Hi MMM,

    I’ve come across your blog about 2 weeks ago and I have to say it’s probably one of the most valuable things on the internet right now.

    I’m also an engineer, currently 30 years old. I’ve already read a big part of not found an answer to is healthcare. How are you approaching this with your blog and while I agree with you on almost everything, one thing I have respect to your annual budget? I’m currently employed and very happy that my insurance is covered by my employer, but once one retires, this doesn’t apply anymore.


  • Elliott Garber April 29, 2013, 7:40 am

    I discovered your site through the recent profile in the Washington Post. What an inspiring story! I would love to be where you are five years from now, when I hit 37 myself, so I’m looking forward to learning more.

  • Mark July 5, 2013, 3:55 am


    Your house pics link (http://www.mrmoneymustache.com/wp-content/uploads/2012/06/house_mix.jpg) is broken – it should be http://www.mrmoneymustache.com/wp-content/uploads/2012/05/house_mix.jpg with a 5 in the month not a 6.

    Same for trips.

    Hope this helps,


  • Lal July 20, 2013, 7:27 pm

    I love your house. Sight. I can’t believe anyone would think living on $27k without a mortgage hard. Geez that would be an upgrade in lifestyle for us! With two kids and living on less than that annually except our mortgage payment is the extra $30k or $2500 month. And we didn’t over buy just an expensive cola.

    I guess since $27k would be a upgrade for us its not surprising that I get a lot of comments oh as a stay at home mom you must be struggling and not have anything saved for retirement or emergencies. Then when I say of course and we save about a third of our income I get weird looks. Rest is taxes of course.

    I guess that explains how people afford private school, luxury cars, etc I find unaffordable at a very comfortable salary.

  • Larry Hoover July 24, 2013, 8:11 pm

    This is a very good article. Yes, I am about a year late compared to the other comments here…But I am confused…Is this advice on how to live like this under 27k per year? Do you make under 27k per year? I do understand the hand me downs, free things, bargains, smart spending and long lasting things, and of course the delayed purchases are very smart moves as well to hold off on the “I want it now” sort of feeling…but this website is worth more than $1M..not calling anyone out in any way on this, but I am asking if this is possible for anyone smart enough with an income of 27k per year alone, or 27k per year and a website worth more than a million dollars?

    • Mr. Money Mustache July 24, 2013, 8:53 pm

      Haha.. thanks Larry. I guess questions like this might become more frequent if this website keeps showing up on places like the front page of Yahoo as it did today! Remember that this particular post was was published in 2012 when the site was much smaller and worth nothing at all. Plus the theoretical value of the website doesn’t matter since I’d never sell it.

      This article is just a description of what we spend and what kind of lifestyle it buys. Our family’s spending has never had much to do with our income, and even if income goes up in the future, we wouldn’t spend more.

      But it is important to note that we get cheap housing due to having paid off the mortgage. So an equivalent lifestyle for a mortgagee or renter would cost an extra $15k/year or more, until you get your housing paid for.

  • Frank August 25, 2013, 6:06 pm

    Speaking of hauling stuff. When we doubled the size of our house (with our own hands) I felt it was innevitable we would need a few sheets of something that we didn’t know about when we ordered the bulk deliveries of materials. Problem was I had a Dodge Neon.. I almost bought a truck when I remembered back in the UK from where I came NO ONE has a truck.. especially not a big truck like an F150.. What we do is pull trailers.

    Sure enough a tow kit was available for the Neon (about $80 at the time) and a $250 trailer, self assemble from harbor Freight and we were set. I still have the trailer and the Neon, except I have since rebuilt a newer Neon for which I paid $350.. I have yet to transfer the tow kit before I sell the old Neon.

    The trailer has proved to be one of the most useful tools I have. Its 8*4 (stretched a little boynd those dims) with the sildes on I can drop sheets of ply in until I hit the 1000lb limit.

    Sometimes you have to think outside the “throw money at a new vehicle” type solution to save a boatload.

  • Jeremy August 1, 2014, 3:41 am

    Hi MMM, I am a new reader and already a huge fan. I however have a question on the food department. I am a self confessed foodie and as such I can’t resist really good fancy food. Nothing against street or homemade food which I eat all the time, however once a month I will splurge on nice restaurants. I understand that you think your food to be fancy which it can be but I am talking more about michelin or pelligrino rated restaurants where intense technique and rare/wild ingredients are harvested and sold by auction or sporadic market prices.

    These restaurants aren’t just hyped up. They have chefs that have dedicated their lifelong career to experimentation and research on gastronomy. As such, the price resembles their effort. My question pertains to this, have you ever had a 3 michelin star meal? If you have, do you think it’s justified given the significant memory you will have of that meal ( as a foodie as myself definitely will).

    • Mr. Money Mustache August 1, 2014, 10:16 pm

      Sounds like a reasonable hobby if you’re already set in the money department. Otherwise look up ‘luxury is just another weakness’ – the same intelligent raving could be made over the finest cars, horses, artwork, palaces, etc. But there is just no point in indulging before you can actually afford it, in my opinion.

      • Garrett August 7, 2016, 11:07 am

        MMM, I’ve been pondering “Luxury is just another weakness” alongside electric/semi-electric bikes. Does having an electric or partially electric bike make practical sense in the essence of badassity (using your body to go kick ass in the world, and using biking to stay strong), or is it a luxury?

        And thank you for recommending bikes. My bike’s back tire had a flat last night (i couldn’t fix it at that time, had to get to an event), and so I had to take the bus. The time dedicated to getting change for the bus, giving up money from the ‘Stash to get on the bus, sitting around lazily on the bus with other people, and not getting fresh air, made me crave my bike. So you’ve awakened something positive inside of me.

  • Israeli Semi-Mustachian November 8, 2014, 1:07 am

    I realize it’s a little late for this conversation, but I have a question. Most of the luxury items shown in the blogpost were not paid for during 2011, so the question is: Were you able to pay for all of those things in years during which your household expenses were also under $27,000 per year?

  • Mandy February 3, 2015, 8:51 am

    To all of you MM haters: He makes some very good sense and here’s a thought for you to chew on…if you think $27,000 a year is a deprived lifestyle, try saving half of what you bring home when you’re only making $16,000 per year…like ME! I am living proof…IT CAN BE DONE!!!

  • Rather be fishing August 2, 2015, 9:52 am

    The biggest problem I have is your lifestyle is all about enjoying free things… I grew up on the water and miss it, my whole reason for wanting early retirement is to fish, hunt, and golf a LOT and those all cost way to much money for your tastes. I am single and think I need about 30k a year. I plan on starting a fishing charter business to offset some costs via taxes and generate some income so I can “retire” sooner.

  • TJ December 12, 2015, 4:36 pm

    So awesome! It’s crazy looking at the few past years of my annual income. My family that became of 4 two years ago have lived off between 19,000 to 25,000 a year (more this year since I finished school in April so now I’m able to work full time) and we have people tell me they don’t know how I do it when they’re living off of 40,000-65,000 and feel like their just getting by and we live in the same city. I’d obviously love to make more to better support a growing family and health insurance for me. I couldn’t imagine how nice it would be in the range others I know are in with same size family or smaller. But for now it is doable.

  • Matt June 7, 2016, 2:13 pm

    Really, a 6 piece drumset??? Wow, that IS indulgent!!! I think you could get by with 4 or 5 max. What are you, Neil Peart?

    Enjoy the blog. Thanks for the kick in the head.


  • Garrett August 7, 2016, 11:01 am

    Great article.

    Just an FYI, your hyperlink says “http://www.mrmoneymustache.com/2012/06/01/raising-a-family-on-under-2000-per-year/ ” Under 2000 per year. It ought to say “27000 per year”, yes?

    I understand that changing it now will probably shatter the internet & associated links to this page… or maybe that’s worth it if your hyperlink is correct (what us nerds see in the address bar right off the bat) and people don’t feel a tad misled from the words in the address? :)

  • Vanessa November 12, 2017, 11:25 pm

    When I started reading this I could not believe that you were actually being honest with us. However as I continued you made me realize that it is very possible and achievable . However my question here is, how did you keep yourself from not getting all the luxurious things if people all over the internet post about it? I fell like that is what makes me vey curious and draws me to it.

  • Celena February 21, 2018, 2:56 pm

    Love this article. We’re a family of two, living on ~48k a year and traveling full-time, plus working part-time from the road in our Airstream. Funnily enough, Longmont has been on our list of possible new home bases. We traveled through last summer, and loved it, but also thought, “whoa, crazy good value for Colorado!” Some friends turned us on to your blog, and I’m loving the advice here. It’s making me feel much more confident about our choice to live with less (always nice to know we’re not the only crazy ones out there), and spend less of our time working. We’re 36 and 42, and I’m optimistic that we won’t need to take full-time cubicle jobs again based on what we’ve already saved and how we’re budgeting. Look forward to reading more! Cheers.

  • Garrett May 18, 2018, 4:30 pm

    Just a heads up, your URL says “raising-a-family-on-under-2000-per-year/” – “2000, instead of $27,000”. There’s an important 7 missing. :)

  • T on FIRE February 15, 2019, 9:08 am

    Thank you for posting this article. I’ve not read every post on your site, but I was wondering how you could possibly live on so little with a family and kids! I have 1 kiddo and a husband. We’re currently spending almost 3 times your monthly expenses (although maybe a bit less, as we live in Canada and are currently spending about 76k per year CAD). Despite the fact that things are more expensive up here, you’ve still given me some great ideas that I could apply to our life. Your 27k lifestyle truly looks fabulous!!

  • Saartje February 18, 2019, 3:25 am

    I agree your lifestyle is not deprived.
    I’m Belgian, currently living in Belgium. From my perspective a house with four bathrooms is crazy! There is a trend of people getting an en suite bathroom, but most families just share one bathroom, usually with a separate WC on another floor. Also, having a bike is pretty standard here, although more and more families see two cars as normal (and more and more people spend more and more time stuck in traffic…).

    We spend about 55 000 euros per year, plus the loan on the house, which is another 1100 euro per month. We are a family of 6, with 4 children between 6 and 12 years old. We are not striving for FIRE, because we want to be time rich now, not in 5 or 10 years time. Why not create a frugal and free lifestyle, without being completely financially independent?

    We need our jobs to live, but we don’t work just for the money. My husband and I both work part time (30 hours a week) in jobs we love, we get to spend time with our kids, and we choose quite a frugal lifestyle. Thus we are time rich NOW, and not working long hours in a job we don’t like, just to save enough money to achieve this blissful state of FIRE in the future. I’m all for saving (we have a good savings account, so that we could live on one income for more than a year), and investing (we are starting to look into that, or paying off our loan faster), but it would be wrong to only start living the life you want once you are completely financially independent and “save”. I keep an eye on our family budget, and we get a real feeling of freedom and time richness from knowing that we don’t need a lot of money to have a lot of fun. Getting to spend a lot of time as a family is worth a lot more than a big house or expensive holiday, but more important also than reaching FIRE at the age of 40. I would say: find a job you like, build a life you love, spend your time and money wisely, on things that really enrich your life, live now and have faith in the future.

  • Erik G. January 18, 2024, 10:27 am

    As you mentioned in the housing update, “there still plenty of other nice cities where houses are still cheap”. Can you list some of those cities that you believe are still cheap and nice? I’m currently living in the Los Angeles area where I was born and raised, but now I’m stuck in a high cost of living area (700k for a starter home) trying to raise a daughter. Housing is off-limits for me here and I’m looking to find somewhere affordable and nice. Your feedback would be greatly appreciated.

    • Mr. Money Mustache January 19, 2024, 10:07 am

      Yeah, I think the best way is to start with the data on housing prices and a few other things, and then dig into the cities that sound promising so you can evaluate the more qualitative stuff.

      One fun site that allows this is The Earth Awaits: https://www.theearthawaits.com/

      Even within just the US, the numbers are fascinating: I live in a city of 90,000 people, which feels plenty big to my small-town soul (I grew up in a one stoplight town of about 5000 people.)

      If you take the current US population of about 330 million, that’s equivalent to over THREE THOUSAND CITIES of my size!

      Of course, a lot of our population is in the megacities, but some of them have regions on the outskirts that are nice, and there are also hundreds (thousands?) of fully independent metro areas between 50k-300k people, which happens to be my preferred size.


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