How to Live on $20,000 a Year

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

how to live on 20000 a year

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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.

Interested in refinancing student loans?

Here are the top 8 lenders of 2020!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.20% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.89% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of December 13, 2019, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 12/13/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.46% APR (with AutoPay) to 7.61% APR (without AutoPay). Variable rates currently from 2.31% APR (with AutoPay) to 7.61% (without AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 2.31% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

3 Important Disclosures for Figure.

Figure Disclosures

Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.

4 Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 1/1/2020. Variable interest rates may increase after consummation.

5 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.


There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.


For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to for more information about refinancing ParentPlus loans.


Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.


The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.


The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.


After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.


This information is current as of November 8, 2019 and is subject to change.

6 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.

7 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.76% effective November 10, 2019.

8 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 12/019/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

1.99% – 6.89%1Undergrad
& Graduate

Visit Earnest

2.31% – 7.36%2Undergrad
& Graduate

Visit SoFi

2.06% – 6.81%3Undergrad
& Graduate

Visit Figure

2.62% – 6.12%4Undergrad
& Graduate

Visit College Ave

1.99% – 6.65%5Undergrad
& Graduate

Visit Laurel Road

1.99% – 7.06%6Undergrad
& Graduate

Visit Splash

1.85% – 6.13%7Undergrad
& Graduate

Visit CommonBond

1.90% – 8.59%8Undergrad
& Graduate

Visit Lendkey

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Big Money Decisions, Budgeting & Expenses,