How to Live on 20k According to a 20-something

2018-02-10 13:36:52.0

It’s expensive to live in the metro. While workers typically enjoy a larger gross salary than those in the province, the cost of living is so much higher that some people exhaust their salaries and end up living paycheck to paycheck.

However, some manage to work with what they earn and live pretty comfortable with what they're given. Let’s see how one 20-something does just that: making her salary work for her, not worrying about when her next paycheck is coming.

Name: Camille*
Age: 22
Industry: Media & Publishing
Income range: 20k-21k
*name changed to protect her identity

Income breakdown

  • 20,000 (after taxes etc.)
  • (5,000) Savings
  • (5,000) Groceries
  • (3,000) Transportation & Gasoline
  • (6,000) Groceries & Meals
  • (1,000) pocket money

What do you do and how long have you been in your job?

I’m in the media and publishing industry, which means I mostly produce content for various clients. I’ve held this job for around 10 months (I got hired right after graduating).

Do you live alone? What are the things you spend on related to rent and basic needs?

Since I live near a university town, my rent is pretty cheap (P5,000 with water, electricity and internet connection at Teacher’s village, QC). I don’t have a roommate but I used to share a condo space with a friend back in college. Rent here is much cheaper compared to living in, say Makati, since most of my neighbors are students from the universities nearby. I’m pretty lucky since my boyfriend usually drives me to work (perks!) because our office is on the way to his so I don’t have to spend that much on commutes (P1,000 at most, per month). I do contribute when he pays for gas since I don't like the feeling of being indebted (around P2,000 per month in total).

For groceries and meals, I usually spend around P8000 which lasts me a whole month. Since there’s no free food at work, I usually cook at home and bring packed lunch and dinner (around P50 per meal). When I was starting out, I used to buy from fast food restaurants but quickly realized that I could save more by making my own meals (but I don't shy away from the occasional Korean BBQ after work). Pro tip: Make friends with your landlady and try to stretch your payment deadlines as much as you could so you’d have money for emergencies.

How much money did you have in your bank before your last payday?

There’s no particular amount but I always have at least P5,000 (from part time job) in emergency funds because our salaries used to come in late. I always tend to account for worst case scenarios (a little OA, eve). Luckily, I didn't have to use it since my salary came on time. Maybe those finance gurus are right after all, you can never go wrong with saving much ha-ha! I'm currently working on increasing my savings rate up from 20% to 25% this year, little by little.

Do you consider yourself frugal?

Definitely. My parents used to fight about money all the time so I always knew how important it is to save for a rainy day. In high school, I used to sell steamed peanuts for my allowance. Even in college, I used my free time doing student assistantships, internships, and other weekend jobs to earn cash even if we were much better financially than we were when I was in HS. I was able to save so much in college that I had a year’s worth in my emergency fund in my junior year in college, just in case it would take long for me to snag a job (It didn't take that long for me but some weren't as lucky)

What are the things in the past that you would've done differently if it happened to you today?

Aside from avoiding the occasional stupid purchases (like the high-end phone which I didn't really need), I would've started learning about how to invest early. I'm now currently trying to learn independently on YouTube but I might take formal classes if I find one that fits my schedule.

Do you have any advice to people who are planning on moving out and living independently once they get a job?

Don't live beyond your means. You'll soon realize how easy it is to overspend once you start making your own money. Also, try to live with your parents to minimize living expenses but do contribute to the bills. My parents live in the province so I can only imagine how much I could've saved if I lived with them.

If you're in college, start saving early. It feels great not having to rely on your parents whenever you need something. Also, try to rack up all those internships early since companies would look at your experience first before your grades (but stay in school!). Your degree is all great but it's your ability to adapt quickly that will define your experiences. We all felt stupid at our first job and the last thing you need is to feel stupid because you spent a huge sum on something you didn't even need.

How about you? Are you a 20-something living on a 20K salary? Or are you living paycheck to paycheck? Leave a comment below with your advice or any questions! Our financial advisors are more than happy to help out!