Living on $2,000 a Month—What, How, and Where You Can Afford

Updated · Mar 06, 2023

There may be two reasons to live on $2,000 a month. One, you want to spend $2,000 a month and save the rest. Two, that’s how much you make, so you don’t really have a choice.

Either way, you need only one thing: a good budget.

In this article, we give you some tips for cutting down your expenses to a minimum. Then, we list the most affordable cities where you can live comfortably on a low budget.

But first, let's see if living on $2,000 a month is even possible.

Average Monthly Expenses in the US

The median individual income in the US for 2021 was just over $3,680 a month. That means half the population makes less than that.

If half the people do it, it shouldn’t be that hard to live with a low budget, right?

We try to answer that question by looking at the budget of the average person in the US. Estimations are based on national average costs.

Monthly budget:

(Sources: Fool, Rocket Mortgage, FRED, CNBC,

Rent: $1,784 / Mortgage: $1,100

Transportation: $819 (vehicle owners) / Public transport: $319

Food: $610

Cell phone bill: $127

Utility bills: $370

Health care: $431

Total: Between $2,957 and $4,141

As you can see, the average cost of living in the US is way above $2,000. And that doesn’t even include things like entertainment, clothing, home repairs, miscellaneous spending, and so on.

Still, these are just rough estimates based on average country-wide data. The costs vary significantly by region, spending habits, property size, and many other factors.

Besides, these are average costs, which means there are people spending less than that. If you lower your expenses in every category, you’ll even have some money to save.

Tips for Living on $2,000 a Month

While it is possible to live on $2,000 a month, it will take some careful budget planning.

Here’s what you have to do to make ends meet.

Track Your Spending

This is the 101 of how to make a budget.

First, you need to get an idea of where your money is going each month. This will help you identify areas where you can cut back.

Make a Budget Plan

Once you know where your money is going, you can start creating a budget.

Make sure to include all of your essential expenses, as well as some wiggle room for things like entertainment and dining out.

Find Ways to Save

When you’re done with your plan, go over it again.

Look for more ways to save money. There are plenty—even on a tight budget.

Here are a few ideas.

Saving on Rent

(Source: World Population Review)

Rent prices vary widely depending on location. For example, the median rent price in North Dakota is only $826, while in Hawaii, it is a whopping $2,399.

So, if you’re wondering, “Where can I retire on $2,000 a month?” you may want to consider moving to a cheaper place.

Of course, the cost of living isn't just about rent prices. You'll also need to factor in food, transportation, and other necessities—not to mention the huge expense of relocating.

Before packing your things and moving to another state, try to reduce your spending in other ways.

Start by looking for cheaper areas or smaller apartments nearby. Sure, it'll be a downgrade, but it'll free up resources you can use for other purposes.

In the meantime, you can figure out how to make more than $2,000 a month. You can start with our list of hobbies that make money.

Saving on Transportation

If you live in a big city and don't work from home, chances are you need transportation every day. So, how to create a budget with reduced transportation costs?

For starters, use public transport more often. You may even want to consider getting rid of your car altogether. If possible, this will save you a lot of money in the long run.

If you absolutely need a car, there are still ways to save. For one thing, you can get cheaper car insurance.

You can also walk more and try carpooling or biking to work. That way, you’ll save on gas and reduce your carbon footprint.

Saving on Food

Next on the list comes food. It is one of the most significant expenses for most people, so it's essential to learn how to budget for this category.

One way to do this is by cooking at home more often. This will not only save you money but help you have a healthier lifestyle as well.

In addition, you can plan your meals in advance. That way, you’ll avoid impulse buying and waste less food.

Finally, you can find cheaper stores or buy in bulk when possible. This may require some extra effort, but it’ll save you a lot of money in the long run.

Saving on Utilities

Utilities can be a considerable expense, but there are ways to reduce it. 

The most apparent yet essential budgeting tip for beginners is to be conscious of your consumption. This means turning off the lights when you leave a room, running the dishwasher only when it's full, and so on.

Next, you can try to negotiate your bills with your service providers. That doesn’t always work, but it’s worth trying.

Lastly, you can buy energy-efficient appliances. They will lower your electric bill, and it’s better for the environment.

The downside is that it requires a bigger initial investment, but it’s cheaper in the long run. It might not be the most applicable idea if your budget is already tight.

Saving on Healthcare Costs

Healthcare is expensive, but you can't just ignore it. Incidents happen all the time, and if you're not prepared, you'll end up paying much more.

So, even if you live on $2,000 per month, you shouldn't give up your insurance. Instead, try to find a cheaper plan. There are plenty of options out there, even for the unemployed.

Insurances are good to have, but prevention is the best way to reduce your healthcare costs. Go for regular check-ups and take good care of yourself.

It's worth spending a few more bucks on healthy food and athletic activity (even though many require no investment whatsoever) to ensure you're in good shape.

Saving on Entertainment

Giving up all fun activities may save you money, but you'll burn out from budgeting much quicker.

Of course, you do need to cut back on entertainment costs. But there are still cheap ways to have fun.

You can visit free museums and art galleries or have a picnic in the park. If you're looking for something more active, you can try hiking or biking. And if you want to socialize, you can have game nights or potlucks with friends.

As you can see, there are plenty of ways to save money without sacrificing your enjoyment.

It may take more effort than simply paying a Netflix subscription, but the extra effort usually makes us appreciate what we do more fully.

Where Can I Retire on $2,000 a Month?

All these tips about how to save money and live on $2,000 in a month are useful if you're still working and trying to increase your income.

But what if you're retiring and want to live comfortably without learning how to budget your money and making sacrifices?

Luckily, there are places where you can retire on $2,000 a month. Let's see the top five locations.

Best Cities to Retire on $2,000 a Month in the US

(Source: Numbeo, Zumper)

Rents in New York City are notoriously high. In fact, they are the highest in the country as of 2022. Renting a one-bedroom apartment costs $3,590 on average.

The cost of living there is also almost unmatched.

The only cities that surpass it by a very small margin, mainly due to the cost of groceries, are Honolulu and Santa Barbara.

But when we put rent back into the equation, NYC remains the single most expensive place to live in the US.

If you’re ​​making $2,000 a month, it’d be near impossible to survive there. Luckily, there are much cheaper cities and countries out there.

Here are our top picks.

  • Wichita, KS, United States

Cost of living and rent: 55% below NYC

Groceries: 42% below NYC

  • Tulsa, OK, United States

Cost of living and rent: 54.4%  below NYC

Groceries: 41% below NYC

  • Memphis, TN, United States

Cost of living and rent: 54.4%  below NYC

Groceries: 41.7% below NYC

  • Oklahoma City, OK, United States

Cost of living and rent: 51.4% below NYC

Groceries: 30% below NYC

  • Louisville, KY, United States

Cost of living and rent: 50.7% below NYC

Groceries: 31.2% below NYC

Best Countries to Live In on a Low Income

(Source: Numbeo)

To give you a similar estimate of the cost of living, we compare the capitals of the countries below with NYC.

  • South Africa (Cape Town)

Cost of living and rent: 68.94% lower than NYC

Groceries: 66.71% lower than NYC

  • Vietnam (Hanoi)

Cost of living: 75.75% lower than NYC

Groceries: 64.67% lower than NYC

  • Philippines (Manila)

Cost of living: 70.58% lower than NYC

Groceries: 63.26% lower than NYC

  • Thailand (Bangkok)

Cost of living: 63.36% lower than NYC

Groceries: 52.42% lower than NYC

  • India (New Delhi)

Cost of living: 81.54% lower than NYC

Groceries: 73.56% lower than NYC

These are the cheapest places to live in the world that speak English. Even if it isn’t the primary language, you can live comfortably there without learning the local languages.

So, if you’re up for a budget adventure when you retire, these are all great options.

Wrap Up

Living on a tight budget can be difficult, but it's not impossible. There are ways to reduce your expenses and make the most of your limited resources.

Just follow our tips for living on $2,000 a month. And if a strict budget isn’t enough, you can move to a cheaper place.

Aleksandra Yosifova
Aleksandra Yosifova

With an eye for research, Aleksandra is determined to always get to the bottom of things. If there’s a glitch in the system, she’ll find it and make sure you know about it.