According to the American Psychological Association, in 2015, 72% of Americans suffered from some sort of stress directly related to money or income.

Not everyone is able to go to college and get high paying jobs which, let’s face it, can often help reduce the stress of money. In fact, in 2019, 50% of Americans made less than $35,000 a year according to the Social Security Administration. 

Although life might not be full of lavish or luxury, it is entirely possible for US residents to live comfortably on a salary of $36,000 a year, or $3,000 a month.

Is $3,000 a Month Good?

Earning $3,000 a month is a great side income, enough to cover expenses and leave unsatisfying jobs. But, even as a full-time income, $700 a week, or $3,000 a month, is a good income for many, especially those starting out in their careers.

The tips I outline below are based on the assumption that one’s income is $3,000 a month after taxes. So here are 5 great tips to help you (or anyone) live comfortably on just $3,000 a month.

5 Tips For Living Comfortably on $3,000 a Month
1. Create a Budget and Stick to It
2. Prioritize Needs Vs. Wants
3. Prepare for Unexpected Costs
4. Think Long Term
5. Live Somewhere Affordable

Tip #1: Create a Budget and Stick to It

Planning your monthly budget is the best way to track your expenses and stay disciplined with your spending. Planning a budget for each month and staying disciplined in doing so is the first step in managing and living comfortably off of $3,000 a month.

A free budgeting app that I use and recommend is called Mint. Here are 6 reasons why I recommend Mint! And yes, it is completely free!

Getting started on budget planning is easy. To begin, write down all your monthly expenses from rent to leisure. With this list go through and highlight everything that is non-negotiable, or must be paid each month, in green. This could include expenses such as rent, insurance, car payments, or bills.

In orange, highlight any expenses that would be nice to have, but not absolutely necessary. In this category would be expenses like streaming services, money set aside for restaurants or takeout, or money set aside for birthday or holiday gifts for friends and family. 

In red, highlight any expenses that you can reasonably live without. Examples of these expenses could be money set aside for travel or entertainment, new clothing, or other spontaneous purchases you want to complete. 

Following these steps leads you to have a list of expenses highlighted based on importance which is surprisingly helpful and will really help you if you are living on $3,000 a month.

For more helpful budgeting tips, check out my article 8 Really Smart Budgeting Tips You Should Know About.

Tip #2: Prioritize Needs Vs. Wants

By this point you should be thinking about your monthly budget and how to best allocate your income to live comfortably – whatever that means for you.

From my experience, it is a much less daunting task to identify which expenses are non-negotiable and must be paid monthly no matter what, than it is to identify which expenses are needs versus wants. 

When you figured out what expenses are non-negotiable (needs), then you can look at what you have left over and allocate your wants based on how much they mean to you.

Budgeting is key here folks! I know it might be boring but giving every dollar you make a job is a must when operating on just $3,000 a month.

Of course there will always be trade offs when distributing your disposable income amongst your wants. So make a list on what will give you the most, as I call them, happiness units, and then prioritize them in your “want” column.

Sounds corny, but it works!

Tip #3: Prepare for Unexpected Costs

Life is a sequence of random events and in most cases unforeseen situations can often be the most costly. Having money saved for these situations should always be a monthly goal for someone trying to live comfortably off of $3,000 a month. 

For example, if your car breaks down and you can’t get to work, then this can be a serious issue if you hadn’t thought about these unexpected costs and had no money to pay for repairs. Because of this, you should work towards a goal of having at least $1,000 set aside for unexpected costs.

To reach this goal, I’d also recommend creating an emergency fund and then contributing a little bit of money to it each month. Pretend like it’s another form of insurance. This way you won’t have to adjust your normal monthly budget, or worse, go into debt, in order to pay for something like a car repair or basement leak.

Dave Ramsey, a sometimes controversial personal finance guru talks about the importance of emergency funds in his Youtube video here. This video, while a few years old now, is really what persuaded me to set one up myself.

To learn even more about emergency funds, what they are and how much you should save, check out my own article here.

Tip #4: Think Long Term

Saving money is the best course of action in planning for the future. Eliminating unnecessary costs and expenses is the first step in saving money. Beyond just saving a few extra bucks a week, investing money is an important aspect of thinking long term about your financial future.

Living off of $3,000 a month for one year is not as difficult a task as living off of $3,000 a month for 15 – 20 years. With inflation rates being what they are, $3,000 a month could be closer to $1,500 in 20 years time.

To combat inflation and plan for the future, set aside a portion of your income each month and invest for the long term in order to out perform inflation. It really doesn’t even matter what percentage you decide to put way, its just important to get started so your money doesn’t depreciate in the bank. 

Related Financial Geek Articles

Tip #5: Live Somewhere Affordable

One of the first things people should account for when budgeting a $3,000 a month income is housing costs. If your income is around $3,000 a month, I am going to assume you are renting an apartment rather than owning a house, and if that’s the case then great. Owning a home can be very expensive and it often comes with unexpected costs.

Additionally, housing costs vary state from state, so it’s important to understand the real estate market of the state you live in.

New York City is a great way to show the differences in market value among different US states. According to NerdWallet’s cost of living calculator, moving from living comfortably off of a $36,000 salary in Texas to living the same way in New York would require an additional $30,000 of income. 

In other words, if you wanted to live the same lifestyle in NYC that you do in Texas (making $36,000/year), you would need to be making $66,000 a year. Isn’t that insane!

Not only does housing cost vary from state to state, but income tax and other general prices can inflate or deflate your cost of living. For example, your grocery expenses in California are going to be much higher than they would be in Florida due to California’s extremely high cost of living. 

Although a move across state lines is an initially large expense, in the long run it could save you a lot of money. 

The Bottom Line

Living off $3,000 a month comfortably can be a daunting task for those of us that are unorganized, but by using the tips outlined throughout this article, it can be a much less stressful task then you think.

So identify your monthly goals, find your necessary expenses, and allocate your money as you see fit.

And remember, prioritize your happiness units when spending in your want column! I feel like I didn’t stress this enough earlier, but it is one of my keys to happiness!

As always, thanks for reading folks. I hope this article provided you with some value and insights on how to comfortably live on $3,000 a month.

Geek, out.

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