It’s easy to hear the word “survival” and think of struggle or scarcity.
But the most radical way to improve your finances is to learn that you can — and should — live with less. That’s why I created a survival budget, which gives me clarity into my money and comfort when dealing with uncertain situations.
I’ve created this downloadable spreadsheet to help you calculate your own survival number, which is the amount of money you need to survive each month if you’re only covering your bare minimum needs. But first, I want to share what survival really means to me.
I learned this lesson from my parents, who moved from the Dominican Republic to New York in the ’90s. They endured incredible hardship to chase a better way of life and provide for our families back home. This was the American Dream for Latinos.
My mother worked a minimum-wage job for a pharmaceutical distributor, while my dad drove a beater car to taxi people from Remsen Village to the No. 4 train on Eastern Parkway in Brooklyn. He quickly figured out that not having a commercial license meant staying alert and dodging cops all week just so he could bring the rent money home.
We lived in a small two-bedroom apartment with my grandmother, my grandfather, and six of my uncles and aunts. Yes, if you’re quick at math — there were 11 of us in a two-bedroom apartment. That’s what we had to work with in the beginning, since my parents didn’t have the credit or rent history necessary to get their own apartment.
Knowing Exactly What You Need
My parents continued to work their low-paying jobs and were eventually approved for a one-bedroom apartment in Flatbush that cost $500 per month. My mom practiced what we would now consider minimalism — a small table with two chairs, plain white walls, and a coffee table in the living room — not because it was trendy, but because we didn’t have extra money to decorate.
After years of hustling, my dad became a bodegero and my mom joined the business. My two sisters and I witnessed them work 14 to 16 hours a day to support our family.
One of the lessons I learned from that early part of my immigrant story is how important it is to be resourceful. I watched my parents not only work hard, but work smart to further elevate themselves. I watched them build their own business and reinvest into it.
We survived by being entrepreneurial and grateful for the things we had — not what we wished we had — and that idea has stayed with me.
What Is a Survival Number?
Today, I live in Yonkers, New York, and I’ve established what I call my “survival number.” This number captures the total monthly cost of my core needs (food, shelter, transportation, health, and clothing), as well as a few minor luxuries (dining out and entertainment).
Creating and understanding your survival number isn’t about denying yourself. It’s about being intentional with your spending, clear about your financial goals, and mindful about your consumption.
You may never have to actually live on your survival budget. But establishing your number can give you a sense of security and a benchmark for building your emergency fund savings.
Mastering a Low Survival Number
My survival number is $581 per month. Here’s how it breaks down:
Rent & Utilities: $86
Dining out: $45
The hardest part of achieving a low survival number is reducing your fixed expenses, especially housing. Typically, rent is a person‘s biggest expense. New York is known for its extremely high cost of living, and most people spend 35% to 45% of their income on housing. I managed to figure out a “hack” to help reduce that major expense.
I only pay $86 for rent and utilities because I master lease my large four-bedroom apartment, and have sub-leases for the individual rooms. The total monthly cost of the apartment is $2,386, but the rented rooms provide $2,300 in income, leaving me responsible for the $86 difference.
Because of my upbringing, cohabiting with three other people is something that feels normal. I like the sense of community and it also feels very good to know that we are not wasting resources. Although I know this situation might not work — or be possible — for everyone, it’s one of the strategies I use to keep my expenses low and my savings rate high.
Another large fixed expense is health care. I’m fortunate to have a $48 monthly insurance premium through a plan from my state’s health care marketplace, which is well below the national average.
Figuring Out Your Survival Number
Survival is about your primal needs as a human and taking care of yourself physically and mentally, and being prepared for worst-case situations like job loss. Especially during these unpredictable times, it’s important to know your survival number and consider it square one on your financial plan.
First, you break down your expenses by category. Then you add up the cost of each category until you get your total. After seeing all your expenses laid out, you can more easily see where you might be able to cut back.
Here are some tips I use to maximize my budget by category.
- Groceries: Resist keeping a stocked pantry and only buy things as you need them.
- Dining out: Do it for the social element, but eat snacks beforehand to avoid overeating and overspending.
- Transportation: Plan ahead and think of public transportation as if it were the only means of transportation possible. This means saying goodbye to your Uber and Lyft apps.
- Household: Buy reusable cloths to eliminate the need for paper towels.
- Clothing: Instead of fast fashion, invest in a few quality items to create a capsule wardrobe that you can mix and match.
Once you establish your survival number, all of your income beyond that amount can be used to help others, invest, and build personal long-term wealth.