living on 3000 a month

Living On $3,000 A Month – It’s Possible!

Living on $3,000 can actually be pretty good if you do it right. It depends largely on where you live and your habits, as we’ll see later in the article.

Before we dive into the “hows” and the “whats”, let me give you the short answer:

A single person can live on $3,000 a month in almost any city on the U.S. Given a frugal lifestyle, one can expect to have over $1,000 left to save or invest each month.
A family of four needs to be highly frugal to live on $3,000 a month. It is possible in cities like Las Vegas, Orlando, Huston and Tulsa.

Actually, most single people can live on $2,000 a month, but that’s hard, if not impossible, for a family of four. If you’re up for it, some people can also live on $1,800/month.

For a family of four, living on $4,000 a month is much easier.

In this article, I want to help you figure out if YOU can live on $2K monthly. I’ll help you estimate what expenses you can expect depending on where you live, give you some “insider secrets” (wink wink) regarding personal finance, and lastly try to inspire you to embrace frugality!

Below you’ll see what I’m gonna talk about in this article:

The Places You Can Live On $3,000 Per Month:

As mentioned earlier, location is the biggest factor when it comes to expenses and rent.

For this reason, I’ve put together a table showing the median expenses in different cities in the U.S., for single people and for families of four:

LocationExpenses Including Rent:
(Single, Family)
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
AVERAGE:$2,834, $5,743
(Data sources: Cost of Living and Rent Index, Cost of living in New York, Median rent in New York)

Immediately, we can say the following:

  • New York, San Francisco, Oakland, Washinton, Boston, Sand Diego, Miami and Los Angeles have median expenses (including rent) above $3,000. Therefore, to live on $3,000 in these cities 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 $3,000 a month for a family of four. You need to be really frugal to make it possible.
  • The average monthly cost of living for a single person is $2,834. This indicates that living on $3K a month is possible in the majority of cases.
  • For a family of four, the average monthly living expenses are almost twice the target of $3,000.

Remember, the numbers above are the median expenses/rent. If you live more frugally than most others, you can expect much lower numbers

It’s time for the first “insider secret” of personal finance:

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%. I’ll tell you more about this later in the article.

Suggested reading: Is $100K A Year Good?

Living Frugally On $3,000 Per Month:

As mentioned above, most single people can live on $3,000 a month. However, with the average monthly living expenses across the cities in the table above being $2,834, it doesn’t leave much room for saving/investing!

In fact, single people living on $3,000 a month will on average not even have $200 left each month… Although saving $100 a month is good, you should aim higher.

Not saving and investing significant sums every month is a huge issue, especially in times of high inflation. Therefore, you should try to live more frugally to have more money you can save or invest!

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:

CategoryPercentage of Monthly Expenses:
Personal Insurance and Pensions11.8%
source: https://www.bls.gov/opub/reports/consumer-expenditures/2020/home.htm

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 action steps 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:

Below you’ll find the same table as at the beginning of the article. But this time I’ve cut the numbers by 40%.

In some places, you’re actually able to live on 50% or less of your $3,000:

LocationExpenses (including rent):
(Single, Family)
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
AVERAGE:$1,700, $3,445
  • Living frugally, a single person can survive in all the cities above given a $3K monthly income (after tax).
  • For a family of four, living on $3,000 a month works in Las Vegas, Orlando, Huston and Tulsa. (Maybe also in other cities not included in the table!)
  • The average monthly living expenses for frugal single people and families of four are $1,700 and $3,445.

On average, a frugal single person living on $3,000 a month can therefore save and invest $1,300 a month. That’s great!

Suggested reading: Is Saving $1,000 Per Month Good? (Where You’ll Be In The Future)

Budget For Living On $3,000 A Month:

To make sure YOU can live on $3K a month, you need to create a budget.

I’ll go through how I personally like to budget, and guide you through the process.

4 steps to make a budget for $3K a month:

  1. List all categories/items you’ll spend money on.
  2. Figure out how much money you’re likely to spend on each item.
  3. Add it all up and figure out your total expenses.
  4. 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!

Housing (including utilities)$750
Personal care$125
Other Stuff$390
Total Expenses$2,340
Left For Saving/Investing ($3,000 – Total Expenses) $660

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 your “Total Expenses” are below $3,000, put the rest into saving/investing.

If your “Total Expenses” are ABOVE $3,000, you need to manipulate the different items to make them fit. Make some hard decisions and cut the expenses sufficiently to get under $3,000.

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:

ItemMonthly CostPercentage 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$1202.3%
Personal care$541.1%

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.

Conclusion: Yes, You Can Live On $3K a Month!

In most cities in the United States, living on $3,000 a month is perfectly doable. The average, median monthly living expenses across many different cities in the U.S. is actually $2,834, which makes $3K work in a majority of the cases.

For a family of four, living on $3,000 a month is not possible unless you’re frugal. Cutting down on the big things like housing, transportation, food and insurance makes it possible to live in cities like Las Vegas, Orlando, Huston and Tulsa.

A single person living frugally (40% below the median) with a disposable monthly income of $3,000 can expect to have over $1,000 to save or invest at the end of each month.