How to Live on $20,000 a Year

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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 6 lenders of 2018!
LenderVariable APREligible Degrees 
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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 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% 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 Month/Day/Year, 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 08/21/18. 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 ourstudent 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 Laurel Road.

Laurel Road Disclosures

APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.

Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.

However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance:
    Fixed rates from 3.899% APR to 7.979% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with 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 2.470% APR assumes current 1 month LIBOR rate of 2.30% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, 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. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

4 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.

5 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 2.28% effective October 10, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2018, the one-month LIBOR rate is 2.29%. Variable interest rates range from 2.79%-8.39% (2.79%-8.39% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.

2.47% – 6.99%3Undergrad
& Graduate

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2.46% – 6.97%1Undergrad
& Graduate

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2.57% – 8.44%4Undergrad
& Graduate

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3.02% – 6.44%2Undergrad
& Graduate

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2.50% – 7.24%5Undergrad
& Graduate

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2.79% – 8.39%6Undergrad
& Graduate

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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 and will make a positive impact in your life. 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 understand what you are buying, and consult 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. Please do your homework and let us know if you have any questions or concerns.