How to Live on $20,000 a Year

how to live on 20000 a year

If you’re trying to figure out how to live on $20,000 a year or less, you already know how difficult things can be. In fact, it’s practically impossible to make it work without help, no matter how frugal you are.

When you make $20,000 or less, you’re not even making a living wage. Very few people can survive on that. In fact, the living wage for a household containing two working adults and two children in the United States is a little less than $31,500 a year, according to information from the Massachusetts Institute of Technology.

Even if you’re single, you’re still likely to struggle. For a single person living in my Idaho county, it still costs more than $20,000 a year just to survive — and I have a relatively low cost of living.

When you’re trying to get by on less than a living wage, it’s hard to know where to go and what to do next. Here are some steps you can take.

Food programs

Making sure you have the food you need can be a daunting task. If you make less than $20,000 a year, couponing can help you save some money at the grocery store, but it’s probably not going to be a complete solution. Chances are, you need additional help. Maybe you can eat at mom and dad’s a couple of times a week. Perhaps your friends occasionally buy you lunch. But even with these boosts, you probably need to turn to other resources.


The Supplemental Nutrition Assistance Program (SNAP) — formerly known as food stamps — can be accessed through your state. If you qualify, the state will determine how much money you can receive for food each month. Money is loaded onto a card similar to a debit card, and you can swipe to pay for your purchases. Eligible food items include most food staples, but not alcohol, tobacco, households supplies, pet food, or items from a hot-food bar.

Brynne Conroy applied for food stamps after becoming pregnant while living in Pennsylvania several years ago. Even though they could have applied for government food assistance, Conroy and her partner were hesitant until they knew another life depended on them.

“There had been months when we had made some hard decisions between necessities,” she said. “That changed when it was no longer just us. We knew we couldn’t raise children in a home where food wasn’t a given.”


In addition to signing up for SNAP, Conroy also enrolled in the Women, Infants, and Children (WIC) program. With WIC, you can use benefits to purchase specific foods that can supplement the nutritional needs you have as a pregnant or postpartum woman, as well as buy foods essential for children under 5 years old.

When you have young kids and are trying to figure out how to live on $20,000 a year, WIC can be a helpful supplement to SNAP. This is another state-administered program, and you can usually get more information through your state’s health and welfare department.

Community food bank

Food assistance from the government isn’t always enough to cover all the needs of some families. When that is the case, a local food bank can help bridge the difference. Look for food banks run by church groups or community organizations. You can also check the Feeding America website for network food banks near you.

With food banks sometimes more accessible (many will provide help, no questions asked), some low-income earners might not apply for government help. Some don’t even realize they qualify for government food assistance. That was the case with Athena Lent.

“I wish I had known I qualified for food stamps,” Lent said. For five years she lived with her then-fiancé and split expenses. However, she made so little money that she could have taken advantage of SNAP. She didn’t realize it was an option and instead received help from a local food bank.

Housing assistance

One way to manage housing costs is to live with a roommate and split expenses. You might also be able to bunk with a friend or relative for a while, or even move back with your parents. But not everyone has these options. Additionally, there might be other circumstances that prevent you from taking this step. It can be especially hard for families struggling on $20,000 a year to take advantage of personal networks.

Federal assistance is available to help you pay rent if you need it. In fact, about five million low-income households use rental assistance programs to ensure a roof over their head.

The Department of Housing and Urban Development offers a number of programs and resources to low-income households. It’s possible to get help paying rent, receive a referral for public housing, and even get assistance paying your utilities. The Veterans Administration also has programs for current and former service members and their families.

Many counties and cities also have housing programs. Additionally, it’s possible to find housing through charitable organizations and local rescue missions.

Medical help

Depending on where you live, Medicaid might be an option for you. It’s important to understand that states set their own requirements within a federal framework. Getting health coverage even with a low income can be especially tricky, since not all states accepted federal funds under the Affordable Care Act (ACA) to help expand Medicaid, creating what is known as a “gap population.”

“Very few adults had access to Medicaid in my state,” said Conroy, speaking of her pregnancy before the passing of the ACA. “However, the state did provide coverage for expectant mothers under a certain income level. That coverage was critical, helping us avoid medical debt.”

Another option is to look for free and low-cost clinics. “I found out where I could go for $30 exams,” said Lent. “I also knew which pharmacies would fill my scripts for free or a low flat fee per month.” Because Lent has a chronic illness, finding these healthcare resources was vital.

State agencies and local community programs can direct you toward resources like FREEMED and low-cost clinics. You can also contact state and community organizations for information about mental health issues.

Look for free activities

One of the tricky things about living on $20,000 a year or less is the fact that sometimes you don’t feel like you get to live. I know. I’ve been there, too. You work hard at a low-paying job, and then you go home to eat what you can, and then go to sleep. It can feel like pure drudgery. Add children to the mix, and it can be extremely disheartening since you can’t provide activities for them.

Finding ways to enjoy life without spending extra money can be tough, but it’s doable. “There were a lot of times I couldn’t afford gas for my car,” said Shanah Bell, who found herself divorced with two young children and very little income. “I’d take the kids and walk two miles to the [state] Capitol, and we’d make a day of it.”

Bell brought healthy snacks and water in a backpack so they wouldn’t have to buy food from expensive restaurants along the way. She also found out the local science museum offered free admission and utilized reading time and other resources at the public library.

Lent discovered that she could be creative with her friends. Because many of her friends were in the same boat, there wasn’t a lot of pressure to spend. They focused on free and cheap activities and enjoyed their time together, rather than thinking they had to spend a lot of money to go out.


For those with children, affording care can be difficult. After her divorce, Bell could only work one day a week, when her mother could watch the kids. The cost of childcare was prohibitive, so paying while she worked more wasn’t an option.

Eventually, Bell’s daughter began kindergarten, and Bell started splitting custody with her ex. This freed up time to work another day each week, and for Bell to start a side gig in catering.

“As I became more and more in demand, I started working some of the time when I had my kids,” Bell said. “I had to entreat neighbors, friends, and family to watch my kids for a few hours.”

What Bell didn’t realize was that there are childcare assistance programs available. Check with your state’s health and welfare department to see if you qualify for help. These assistance programs are designed to provide limited child care while you work or attend school. Additionally, some community organizations and religious congregations offer free or low-cost child care to families who need help.

Trimming the fat from the budget

When Bell found herself divorced with two children ages two and five, trying to figure out how to live on $20,000 a year, she made drastic changes to her lifestyle. Her ex refused to pay child support for a time, and the lawyer bills were piling up.

Bell turned to government assistance for food, but that still wasn’t enough to provide a life for her kids and herself. Some of the steps Bell took to reduce her expenses included:

  • Getting rid of cable
  • Switching to a cheap phone plan
  • Not buying wine
  • Brutally cutting other wants from the budget

Bell also discovered that she could further supplement her family’s food needs by attending the farmers market close to the end of the day. Many vendors slashed their prices to get rid of the produce before packing up.

Consignment and thrift stores can also be helpful when it comes to cutting expenses. It’s often possible to find clothing and household items at a very low cost.

However, there’s only so much you can cut from your budget. At some point, you’re down to the bone. No matter how into frugal living you are, it just might not be enough.

“There’s a big myth that everyone who has money problems is there because they need to learn some fiscal responsibility,” said Conroy. “I haven’t found that to be true. We were incredibly responsible with the money we did have. We just didn’t know about some of the resources available to us.”

Seeking out those resources and using them to make ends meet is essential if you want to get out of the situation and start earning more money.


For both Conroy and Lent, education was key to earning more and eventually changing their circumstances.

Conroy turned to Pell grants and scholarships to help manage costs when she went back to school. “I was able to get funding in excess of my tuition,” she said. “That allowed me to use some of the money for books, and nontraditional room and board.”

After learning about the resources available to them, Brynne and her partner were able to take some of the pressure off and focus on taking steps that would allow them to earn more money eventually.

Lent also pointed out that education helped her. She worked at a low-wage, part-time job while attending college. Upon graduation, when she turned 26, her company offered her a full-time position. This allowed her the freedom to make positive changes in her life.

Do you know how to live on $20,000 a year?

Even if you’re doing fine financially now, you never know when things could go wrong. You might not be in dire straits now, but a job loss, medical emergency, natural disaster, or some other change in circumstance could throw you for a loop. Whether you are in a tight spot now, or whether you might be later, it’s important to understand that there is help available.

Tap your personal and community network. Find out about charities offering emergency and long-term help to those with low incomes. Learn about the government programs available, and don’t be ashamed to use them. We all need help sometimes, and if you need help, there are ways to get it.

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