Most people live on whatever they have. That’s not a good idea. You should budget, live below your means and save/invest the rest.
In this article, I’ll help you figure out if you can live on $4K monthly as a single person or a family of four, depending on what city you live in, and what lifestyle you want.
Let me give you the short and general answer:
Yes, you can live on $4,000 a month. In almost all cities in the U.S., $4,000 a month is above the median cost of living (including rent) for single people. For families of four, living frugally is necessary to get by.
Actually, I think single people should aim to live on $3,000 a month. If you’re not in a crazy expensive city like New York, you can consider shooting for living on $2,000 a month. If you’re able to be really frugal, you can also make it on $1,800 a month.
For a family, $2K is almost impossible. $3,000 is challenging but doable. However, $4K is well within your reach! Let’s get into the nuances, and figure out if YOU can do it!
Table of Contents
In the first section of this article, I’ll look at the median expenses and rent in different cities, and figure out if $4,000 covers it. Let’s go!
The Places You Can Live On $4,000 Per Month:
Location is the biggest factor in the equation. For example, moving from Tulsa to New York you can expect to double your expenses and rent.
To help you determine which cities are “livable” on $4,000 a month, I’ve put together a table showing the median cost of living, including rent, in various cities.
|Location||Expenses Including Rent:|
|New York, NY||$4,193, $7,934|
|San Francisco, CA||$3,843, $7,471|
|Oakland, CA||$3,403, $6,853|
|Washington, DC||$3,113, $6,292|
|Boston, MA||$3,268, $6,429|
|Pittsburgh, PA||$2,178, $5,201|
|Nashville, TN||$2,766, $5,740|
|San Diego, CA||$3,118, $6,092|
|Miami, FL||$3,086, $6,058|
|Chicago, IL||$2,611, $5,506|
|Philadephia, PA||$2,430, $5,307|
|Los Angeles, CA||$3,044, $5,917|
|Dallas, TX||$2,496, $5,286|
|Atlanta, GA||$2,365, $5,117|
|Las Vegas, NV||$2,130, $4,797|
|Orlando, FL||$2,364, $4,979|
|Austin, TX||$2,668, $5,264|
|Huston, TX||$2,163, $4,762|
|Tulsa, OK||$1,709, $4,115|
Observations based on the table above:
- New York is the only city with median expenses (including rent) above $4,000. Therefore, to live on $4,000 in this city you need to be more frugal than most others and spend less than the average guy/gal.
- No cities on the list above lend themselves to living on $4,000 monthly for a family of four. You need to be frugal to make it possible.
- The average monthly cost of living for a single person is $2,834. This indicates that living on $4K a month should be rather comfortable for a single person in most cases.
- For a family of four, the average monthly living expenses are $5,743, which is $1,743 more than our target of $4,000. To reach your target, you need to cut the number by roughly 30%.
Remember, the numbers above are the median expenses and rent. By making frugal decisions, you can live on less than the numbers above!
Let me be clear: Living frugally does not mean living in a tent and eating ramen noodles…
You just need to cut down on “the big stuff”. Here’s what I mean:
The typical American household spends roughly 35% of their money on housing and another 16% on transportation. 12% goes to food (groceries and eating out). This means that Americans generally spend over 60% of their money on rent, their car(s) and on eating out.
This info can be leveraged practically – making frugal decisions on the three biggest things, which are housing, transportation and food, you can live far below the numbers in the table above.
I did this (and still stick with it) and cut my expenses by 40%.
Suggested reading: Is $100K A Year Good?
How To Live Frugally On $4,000 Per Month:
As mentioned above, most single people can live on $4,000 a month. This doesn’t mean you should spend $4,000 monthly on living expenses and rent.
You should live frugally, and save/invest as much as possible!
Not saving and investing significant sums every month is a huge issue, especially in times of high inflation.
To read more about why inflation necessitates saving and investing, check out these articles:
Before I give you practical and concrete actions to take, I want to explain my basic philosophy for personal finance.
The number one thing you need to understand is this: Small stuff makes a small impact. Big stuff makes a big impact.
Here’s what I mean by that:
If you cut out your Netflix subscription and stop drinking the occasional Starbucks coffee, you’re probably only saving $100 a month. In addition, you have to make the choice repeatedly every time you pass a Starbucks or get bored and crave a good movie.
On the other hand, if you move into a cheaper apartment closer to work, you might save hundreds on cheaper rent. In addition, you’re saving hundreds on transportation costs at the same time. Also, once the move is made it’s made – you don’t have to “stay disciplined” as it’s hard to reverse it.
Basically, this principle can be summarized like this:
Make frugal decisions on the big stuff like housing and transportation and make them hard to undo.
This way you save a ton of money, and even better, you’re automatically saving that money every single month!
Oh, and the best part is that you don’t have to cancel your Netflix subscription!
“Great, but what are the other “big” things?”
Here’s a table of the four biggest expenses American households have:
|Category||Percentage of Monthly Expenses:|
|Personal Insurance and Pensions||11.8%|
Based on the data above, here are some concrete actions you can take to save and invest large sums while living on $3K a month:
- Get a cheap apartment to save on housing.
- Live close to where you spend the most time. This is often work and friends.
- Don’t eat out. At least not more than what social relationships demand.
- “Shop” for insurance. You can often get cheaper insurance if you “look around”, or haggle on the price.
I personally combined the two first actions on the list above, moving into a cheaper place closer to work. This cut down my expenses by a whopping 40% every month.
You can read more about cutting costs and increasing income in this article: Can’t Save Money Because of Bills? Here’s What I Did
Assuming you’re able to do something similar, let’s cut 40% off of the median numbers, and take a new look at the different cities:
Cost of living frugally in different cities: (how much is left of your $4,000?)
Below you’ll find the same table as at the beginning of the article. But this time I’ve cut the numbers by 40%.
As you can see, you can live far below your means, and invest or save large sums of money every month:
|Location||Expenses (including rent):|
|New York, NY||$2,515, $4,760|
|San Francisco, CA||$2,305, $4,482|
|Oakland, CA||$2,041, $4,111|
|Washington, DC||$1,867, $3,775|
|Boston, MA||$1,960, $3,857|
|Pittsburgh, PA||$1,306, $3,120|
|Nashville, TN||$1,659, $3,444|
|San Diego, CA||$1,870, $3,655|
|Miami, FL||$1,851, $3,631|
|Chicago, IL||$1,566, $3,303|
|Philadephia, PA||$1,458, $3,184|
|Los Angeles, CA||$1,826, $3,550|
|Dallas, TX||$1,497, $3,171|
|Atlanta, GA||$1,419, $3,070|
|Las Vegas, NV||$1,278, $2,878|
|Orlando, FL||$1,418, $2,987|
|Austin, TX||$1,600, $3,158|
|Huston, TX||$1,297, $2,857|
|Tulsa, OK||$1,025, $2,469|
- Living frugally, a single person can survive in all the cities above given a $4K monthly income (after tax).
- For a family of four, living on $4,000 a month works in all the cities above except for New York, San Fransico and Oakland.
- The average monthly living expenses for frugal single people and families of four are $1,700 and $3,445. Both are below the target of $4,000/month.
A single person with average frugal living expenses ($1,700) living on $4,000 a month, will have $2,300 left every month to save and invest.
Suggested reading: Is Saving $2000 Per Month Good?
A family of four will on average have $555 left every month.
Suggested reading: Is Saving $500 Per Month Good?
Budget For Living On $4,000 Per Month:
To make sure you can live on $4,000 a month, you should create a budget. It’s better to try it and fail on paper than to try it and fail in reality!
How to budget for living on $4,000/month:
- List all categories/items you’ll spend money on.
- Figure out how much money you’re likely to spend on each item.
- Add it all up and figure out your total expenses.
- Put the rest into savings/investing.
The items/categories in the example below are the most significant, but there are several others. You’re the only person knowing how you spend money, so feel free to add additional items, or change the existing ones.
|Housing (including utilities)||$950|
|Left For Saving/Investing ($4,000 – Total Expenses)||$1030|
The numbers in the table above are random, but you get the idea. Write a list of the items you’ll spend money on, estimate how much you’ll spend on them, and sum it all up at the end.
If you’re “Total Expenses” are below $4,000, put the rest into saving/investing.
If you’re “Total Expenses” are ABOVE $4,000, you need to manipulate the different items to make them fit. Make some hard decisions and cut the expenses sufficiently to get under $4,000.
If you have no experience making budgets, or no idea what you’ll spend money on, here’s a table from The U.S. Bureau of Labor Statistics you can use as “inspiration”. It shows how the average American spends their money:
|Item||Monthly Cost||Percentage of Budget|
(Rent or mortgage and utilities like electricity and water)
(Car payments, gas, bus tickets, vehicle insurance etc.)
(Groceries and restaurants)
|Insurance & Pensions|
(Personal insurance like life insurance, pension savings etc.)
(Subscriptions, TV, Speakers, a new Phone etc.)
|Apparel and Services||$120||2.3%|
You can read more about the different items over at The U.S. Bureau of Labor Statistics: https://www.bls.gov/cex/csxgloss.htm
The numbers above are for households, not single people. Therefore, don’t get hung up on the “Monthly Costs” collum, but rather look at the “Percentage of budget”. Use the numbers to get an idea of how the typical household spends its money.
Living on $4K A Month: Lifestyle
After looking around on different forums, I found a guy from Atlanta who wrote this on Quora:
There was a time, not too long ago, that my wife and I managed to live on 4K a month after taxes. This was our scenario:
My wife was unemployed (laid off).
We lived in town (Atlantic station) for around 1400$ (rent + utilities).
We pay around 1600 a month in student loans between the two of us. (70% of that is mine from private university)
We have 1 vehicle (around 550$ a month with insurance).
That left us with about 450$ a month for groceries and misc expenses. We had an emergency savings of about 1 month expenses.
In summary it was entirely possible to do, and you could even say we lived beyond our means. We were very comfortable. Things were tight, there was no beyond budget spending, but hell we lived in Atlantic Station, owned a new car, and ate well. I wouldn’t exactly call it suffering.– Jordan Stevens
As you can see, a huge expense for Jordan and his wife was their student debt. Paying $1,600 a month in total. Stuff like this makes budgeting necessary to figure out if you can live on $4,000 a month.
They lived in Atlanta, which is a relatively cheap place. They would not have made it, without sacrificing a lot, in cities like New York or San Fransico.
Another guy, from Reddit, wrote this:
Here is (roughly) my monthly budget:
Rent (+ water) – $450
Utilities (electric, Internet) – $100
I am (…) not married which allows me to live with roommates and save a lot on rent. I actually have more space living with 3 other people than I did while living alone.
Food – $1,000
Although I have been budgeting $1,000 for food my goal is to bring my combined food+rent expenses to ≤$1,000. The past month or so I have been cooking more at home and I think that I can get my food expenses pretty close to $450-$650 while still being able to enjoy going out with friends on weekends
Car expenses – $0
I don’t drive, instead I walk, bike, and take public transportation. My bike maintenance is maybe $100 a year most of which goes to buying parts (tubes, new grips, etc.) not paying someone else to do it for me.
Gym – $32
My gym membership is relatively cheap because I go to the YMCA. It isn’t the cheapest option in town but definitely the best value.
Debt – $500
I borrowed money from my parents for grad school and they have been generous by not asking for any of it back (yet) but I plan to repay them someday and have been putting money aside for them.
Roth IRA – $458
Holiday savings – $300
Emergency fund – $500
General savings – $1,000
Money is only saved when it isn’t spent. I have tried to minimize as many expenses as I can so that I can save more. I don’t go shopping every month and when I do I think pretty hard about whether I need to buy something.– ColorsMayInTimeFade
This guy’s budget is $4,340, but that includes saving and investing $2,258 per month.
His actual spending is closer to $1,742, which is the number we arrived at as the average cost of living frugally, which this guy does.
He could probably save and invest even more by cutting down on his food-related expenses, but it seems like he really enjoys eating out and does this as a social thing.
Conclusion: Yes, You Can Live On $4K a Month!
In almost all cities in the United States, living on $4,000 a month is possible for single people. The average, median monthly living expenses across many different cities in the U.S. is actually $2,834, which gives you plenty of room for saving and investing.
For a family of four, living on $4,000 a month is not possible unless you’re frugal. Cutting down on the big things like housing, transportation, food and insurance (spending 40% below the median) makes it possible to live in most cities.
A single person living frugally (40% below the median) with a disposable monthly income of $4,000 can expect to have over $2,000 to save or invest at the end of each month.