Is it possible to live only on $16,000 a year? Before discussing about this, let us discuss about a situation when a family might have to live on this income.

Studies reveal that about 33% people don’t save anything for retirement and 30% of these people are of 55 years or more.

But, can you live only on Social Security income? The answer is ‘no’. It is because Social Security is supposed to replace only 40% of your income; that is, 40% of what you used to earn before your retirement.

Thus, a couple both receiving Social Security benefits can get a little more than $32,000 a year. Still, that’s much less, since you have to meet your daily necessities like food, clothing, housing, transportation, electricity, etc.

Research shows that in 2014, a person spent about $934 on an average on rent. Though this cost can be lowered, yet it’s difficult to sustain with $16,000 a year.

So, what’s the solution?

You have to save towards your retirement.

Now, the question is: If you have to meet your daily necessities with just $16,000 a year, how will you do it?

There are some couples who have done this or are doing this. Here’s how:

1 Reduce your gas station trips

Try it for some days… Go out only when at least 2 members in your family need to go outside. You can adjust your job timings in a way such that you can drop and pick your child on your way towards work and while coming back.

Moreover, family trips are always enjoyable.

And, do keep only 1 car and sell off the other one(s). Doing so, you’ll get some extra cash, which you can keep for financial emergencies.

2 Try to do grocery shopping from wholesale stores

Since you’re reducing your car trips, plan grocery shopping once or twice a month. Plan your meals ahead and shop from wholesale stores. Buy in bulk and be sure that you can consume the item before the expiry date.

3 Stop eating outs for the time being

Learn to cook good dishes at home. There are lots of recipes and cooking videos online. So, have a look at them and cook healthy but tasty meals at home. Believe me, you’ll pay lot extra if you have these dishes at a restaurant.

Why not make it a family affair during the weekends to cook some dishes for the week?

4 Keep credit card only for financial emergencies

If you can follow this, you’ll win half the battle. Try to use cash for your entire shopping. Keep the credit cards only for financial emergencies.

Using your credit cards occasionally and paying off the entire bill, will also help you to boost credit score.

Basically, you can lead a frugal lifestyle till your financial situation is improved. You should also start looking for extra income opportunities, which along with practicing frugal lifestyle, will help you secure a good financial future.