One of the most reliable ways to build financial security is to save part of every paycheck as soon as you’re able, so you can both enjoy life in the moment and handle whatever life throws your way.

It’s harder to save today than it was a few decades ago thanks to an inflated cost of living. However, if you’re earning $30k/year or more, there are practical ways to take control of the big things so that even in cities like Seattle and Vancouver, you can live well, build up an emergency fund, and begin saving for the future.

Many, many people do, and to make this concrete I’ll share how I spend money and why.

Disclaimer #1: This is written from the point of view of a healthy 20-something who had the advantage of growing up in Canada, where a great university education can be had for around $6500/year.

Disclaimer #2: This isn’t intended to fit every lifestyle, it’s just one example of how you can live well on a tight budget. I know that I’m more frugal than most, and that’s partly because I enjoy saving money, partly because I have clear goals I want to save towards, and partly because the things I enjoy most are free or inexpensive and I’ve avoided taking on expensive hobbies.

Tackling the big one first: rent

For most people including myself, rent is the biggest monthly expense, and if you can find a rental for a few hundred dollars less per month, that’s hundreds of dollars of free money coming in every month.

In Seattle and Vancouver, the easiest way to cut your rent while staying within 30 minutes of downtown is to live in a shared home. In Seattle, you can find a number of shared houses, townhouses, and apartments for around $600-$1200/month per person including utilities, garbage collection, and Internet. The cheapest options are near highways or in seedier areas, which I don’t recommend (in Seattle, stay at least 3-5 blocks away from the I-5 highway if you’re a light sleeper), but there are a lot of great places in the $800-$1200/month range. By comparison, individual apartments are closer to $1200-$1800/month or more, not including utilities or Internet.

The most important factor in a shared home is how well everyone gets along. If you have great housemates, a shared home is a dream home. I’ve been lucky in this department, partly because I’ve helped my landlord to find other tenants, which I highly recommend. The time you invest in finding a good housemate pays off! We still keep in touch with old housemates who’ve since moved to other cities, and a few have returned to visit now and then.

If you can find a shared house for $1000/month including rent, utilities, and Internet, that brings you to $12k/month for fixed housing expenses.

Frugal subtotal: $12k/year for fixed housing

Resources for finding rentals:

I’ve had mixed experiences on Craigslist, and found the above websites to be better sources. Facebook is the best way I’ve found to connect with potential housemates.

Food. Yum.

Food and alcohol are the next big ones.

If you enjoy cooking or don’t mind learning the basics, it can save you thousands of dollars a year. One of my goals out of school was to cook almost every day, and I’ve kept that up over the last two years, resulting in an average combined food budget of $350/month, or $4200/year.

I take turns cooking with and for my housemates, and buy a good portion of the meat and vegetables, with the understanding that I’ll always be saving a portion for my lunch the next day. This way I never have to buy lunch, and can often enjoy a healthier meal than otherwise, with the perfect portion size. I eat out around 3-4 times per month, while I’m always happy to host friends and family for a meal at my place.

I save thousands of dollars on alcohol… by not drinking alcohol. Bam!

I know, not realistic for most people. If you need your booze to enjoy life, you can get it for a fraction of the bar price at grocery stores and liquor stores to enjoy at home with friends. You get the social atmosphere and save your wallet at the same time.

If you cook most of the time with $300/month worth of groceries, eat out 20 times/month with an average bill of $20/meal ($400/month on dining out), and spend $100/month on alcohol, that adds up to $800/month or $9.6k/year for food and alcohol.

Frugal subtotal: $12k/year for fixed housing + $4.2k/year for food = $16.2k/year

Semi-frugal subtotal: $12k/year for fixed housing + $9.6k/year for food and alcohol = $21.6k/year


Taking the bus is much less expensive than owning and maintaining a car, especially when accounting for insurance, gas, and parking. King County Metro Transit monthly passes (ORCA Cards) cost around $100 USD/month, or $1.2k/year.

Depending on where you live, driving may be more convenient or even a necessity, but many cities have good enough bus service and walkability that you can get around as easily without a car. While I’ve been in Seattle or Vancouver I haven’t seen the need to buy a car, and probably won’t for some time.

Frugal subtotal: $12k/year for fixed housing + $4.2k/year for food and alcohol + $1.2k/year for transit = $17.4/year

Semi-frugal subtotal: $12k/year for fixed housing + $9.6k/year for food and alcohol + $1.2k/year for transit = $22.8k/year


Admittedly I have no fashion sense and don’t work in a profession where it matters, but most people really don’t care whether you’re wearing the same outfit as a week ago.

I’ve had over 90% of my wardrobe for at least 3 years and spend around $100-$300 per year to replace clothing that’s starting to wear out, with most of this going towards a new pair of shoes. We can round up our clothing budget to $1k/year without breaking the bank.

Costco is a good source for reasonably priced, practical clothing, and I often get things like pants and socks there. I like a few liquidation warehouses that get waves of high quality pieces from other stores that need to be cleared for the next season’s stock. They’re less predictable in what they carry and sometimes have sales on specific days or weekends rather than year-round, but they’re a great place to get good winter jackets and coats for a fraction of the original sale price, especially if you don’t need a particular style or colour. They often have sections of clothes with minor flaws for steep discounts. A Stormtech warehouse sale got me and my dad unnecessarily excited, and we got thick rain jackets for around $50 each that have lasted for years.

Thrift shops are a lot of fun to browse through and find cool, unexpected pieces on the cheap. They vary in quality and selection, but some stores have really nice lightly used clothes. They’re a good counterpart to fast fashion, and as a friend recently pointed out, they’re also very eco-friendly!

Frugal subtotal: $12k/year for fixed housing + $4.2k/year for food and alcohol + $1.2k/year for transit + $0.3k/year for clothing = $17.7/year

Semi-frugal subtotal: $12k/year for fixed housing + $9.6k/year for food and alcohol + $1.2k/year for transit + $1k/year for clothing = $23.8k/year

Phone bills

Since I have WiFi at home, work, and most places I frequent, I don’t need much data. I spend $9.07/month, around $110/year, on a Tello pay-as-you-go plan that has 1 GB of data, 300 minutes of calling, and unlimited texting. Pay-as-you-go plans are much less expensive than standard monthly plans in Canada and the US, and many allow you to customize your data, calling, and texting limits so that you only pay for what you need, not for arbitrary thresholds that you never hit.

If you need more data, Tello and several other providers offer 12 GB of data for under $500/year. Here’s a referral link for a $10 credit if you decide to open a Tello plan. Of course, you should always compare with other providers and choose the one that works best for you.

I had a bare-bones $5.75/month pay-as-you-go plan with Rogers while I was going to school in Vancouver, which had no data and lower limits on calls and texts. I’d re-evaluate providers with basic data plans if I moved back. One of my friends recommends Public Mobile for inexpensive pay-as-you-go plans in Canada. As of today, their 500 MB plan will run you $25/month, or $300/year, which is pretty good compared to other Canadian plans.

Frugal subtotal: $12k/year for fixed housing + $4.2k/year for food and alcohol + $1.2k/year for transit + $0.3k/year for clothing + $0.2k/year for phone = $17.9/year

Semi-frugal subtotal: $12k/year for fixed housing + $9.6k/year for food and alcohol + $1.2k/year for transit + $1k/year for clothing + $0.5k/year for phone = $24.3k/year

Health care

Health care insurance is one area that I don’t cut, so I’m putting it near the end of what I consider the essentials.

I’ve been allocating around $4300/year to health care while I’ve been working in the US, between insurance and savings. If I were working in Canada, this would be closer to $1200/year due to most emergency services being covered through taxes.

I pay $348/year for a high-deductible medical plan, $84/year for a basic dental plan that covers check-ups and cleanings, and $168/year for a vision plan, along with $197/year for basic accident and critical illness insurance.

This adds up to approximately $800/year for health care insurance, and the remaining $3500/year is for health care savings, since the US health care system is more of a “you pay for your health care” system.

Frugal subtotal: $12k/year for fixed housing + $4.2k/year for food and alcohol + $1.2k/year for transit + $0.3k/year for clothing + $0.2k/year for phone + $4.3k/year for health care = $22.2/year

Semi-frugal subtotal: $12k/year for fixed housing + $9.6k/year for food and alcohol + $1.2k/year for transit + $1k/year for clothing + $0.5k/year for phone + $4.3k/year for health care = $28.6k/year

Details on high-deductible plans and Health Savings Accounts (specific to US residents)

High-deductible plans have lower monthly premiums than other plans, with the caveat that you have to pay for more of your medical bills up to a fixed amount called the “deductible”. In my case the deductible is $1500, meaning that I’ll have to pay for the first $1500 of medical bills for a given year before my insurance will kick in. For this reason, high-deductible plans are not the right choice for people who have a reasonable expectation that they will use health services on a regular basis, and lower-deductible plans with higher premiums but broader coverage may be a better option.

To compensate for high deductibles and encourage people to save for their own health care expenses, the US government created Health Savings Accounts (HSAs), which allow before-tax contributions to savings and investments and provide tax-free growth and withdrawals as long as they’re used for eligible medical expenses. You can contribute up to a fixed limit per year to an HSA, where the 2019 limit was $3500/year for people with individual health plans.

This is a good deal if you’re unlikely to use your medical insurance for a few years and can contribute the money you would have spent on monthly premiums to your HSA, since you can put money into high interest savings until you have enough to pay for the deductible, and contribute the rest to investments that can grow tax-free to pay for your health care expenses in the future. In many ways it’s like a retirement savings account for health care.

See this Vanguard post for more information on Health Savings Accounts.

Other insurance

Term life insurance is worth getting if you have any dependents, while disability insurance may help you out if you become injured in a crash or another type of accident. I get basic coverage through a work plan.

I pay $162/year for renter’s insurance through State Farm.

Since I don’t own a house or car, I don’t need additional home or car insurance.

Frugal subtotal: $12k/year for fixed housing + $4.2k/year for food and alcohol + $1.2k/year for transit + $0.3k/year for clothing + $0.2k/year for phone + $4.3k/year for health care + $0.2k/year for other insurance = $22.4/year

Semi-frugal subtotal: $12k/year for fixed housing + $9.6k/year for food and alcohol + $1.2k/year for transit + $1k/year for clothing + $0.5k/year for phone + $4.3k/year for health care + $0.2k/year for other insurance = $28.8k/year

Breathing room to save and spend

Even if you don’t go anywhere as far as this, there are simple ways to bring essential expenses down to the $25k-$30k/year range so that as you earn more, you can both save for the future and spend on the things you love.

Once you know how much you need for your essential expenses, you can decide how much you want to allocate towards savings and non-essential expenses, and automatically transfer savings to a separate account to make it easier to mentally separate spending money from long-term savings.

I recommend putting emergency savings into a high-interest savings account that earns more than inflation, such as those provided by CIT, Synchrony, and Ally in the US, or Motive, EQ, and Oaken in Canada. Savings accounts usually limit the number of withdrawals to around 6 per month, while you can add money as often as you like.

To find high-interest savings accounts with the best rates, check for US banks, or for Canadian banks.

For money you need in a couple of years time, fixed term 1-2 year CDs in the US and GICs in Canada can provide a higher interest rate than most savings accounts, with the caveat that you usually have to pay back most of the interest if you withdraw money before the maturity date.

Most banks that offer savings accounts and CDs/GICs are insured through the Federal Deposit Insurance Corporation (FDIC) in the US or the Canada Deposit Insurance Corporation (CDIC) in Canada, where the FDIC guarantees protection for funds up to $250k USD per person per financial institution and the CDIC guarantees $100k CAD per person per financial institution, so these accounts are about as safe as you can get.

Once you’ve paid off any high-interest debt and have a healthy emergency fund with enough to pay for 3-6 months worth of expenses, you’re ready to start investing. That’s another post.

I keep essential expenses to around $23k/year and non-essential expenses to around $10k/year, including $2k-$3k for travel, allowing me to save and invest everything else I earn. This has been easy to maintain since I started out with a $3.5k/month budget and a goal to save at least 20% of my income, and I’ve just maintained the same lifestyle over the years.

Why is it important to keep fixed expenses low? Why didn’t I focus as much on non-essentials?

The “non-essentials” are the things that make you smile, the things that make for a great day or year. Also, you don’t need to spend too much time worrying about the little things. If your fixed expenses are at a level you can afford and you know how much you want to allocate to savings and fun money, it doesn’t matter how you spend your fun money. It’s your fun money.

Getting monthly bills and large fixed expenses under control is where you can get the most bang for your buck, and once these are at sustainable levels, you’ll always have more to work with.

Once you have a balance that works for you for essential expenses, savings, and non-essential expenses, you’re set up for success, and you can get on with enjoying life while knowing you’re taken care of in good times and bad. Deliberately maintaining a similar lifestyle as your income increases can help to avoid getting over-extended or stressed out about paying the bills, and is the first step towards “financial freedom”, where you have the freedom to live and work on your terms.

Key ideas

  • It’s easiest to cut big expenses like housing. Then you’re automatically saving money every month without ongoing effort.
  • You don’t have to micro-manage if you know how much you can afford and stay within your budget.
  • You can keep the things you love and axe the things you don’t once you know where money is going.
  • Maintaining a similar lifestyle as you earn more allows you to seamlessly boost your savings rate over time and achieve your goals years earlier.