How To Live On $2500 A Month: Budget Breakdown

While I’ve talked extensively about budgeting, saving, and cutting expenses, it’s natural to wonder if I practice what I preach. I understand the skepticism – after all, it’s essential to see real-life examples before blindly adopting someone’s advice. As a proud advocate of the #FrugalLife, I’m here to provide a transparent look into how I manage to live on a $2500 monthly budget, to be precise, $2476.68!

The key lies in allocating specific amounts for necessities like housing, utilities, and groceries. Prioritize essential expenses, limit discretionary spending, and consider saving for emergencies or future goals. Regularly track and adjust your budget to ensure financial discipline.

Sky view of San Diego with the title, "My Monthly Budget Breakdown: How we live on $2,500 a month!"

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My Budget For $2500 A Month

Surprisingly, we’ve cracked the code on affordable living in San Diego, CA, one of the most expensive cities in America. Although we’ve recently moved, I want to showcase our budget from our time in SD to shed light on how we navigated this pricey urban landscape.

Our current expenses rose slightly, as we prioritize safety in our new state, albeit at a higher cost. However, along the way, I’ve discovered innovative ways to save on various expenses, and I’ll be sharing those insights with you.

While $2500/month may not suit everyone, I offer our experiences as a practical example of what is achievable. (Note: This breakdown does not include details about our actual income and savings.)

For those embarking on their budgeting journey, consider checking out these helpful posts:

Rent: $1,000

Our search on Craigslist led us to a fantastic rental in San Diego’s east county. Despite being a cozy one-bedroom apartment, it offered comfort in a pleasant neighborhood. The only drawback was the 20-minute drive to my husband’s workplace, which could stretch to an hour during rush hour—a typical scenario for the area.

Electricity And Gas: $55

Our monthly expenditure on gas and electricity ranged between $48 and $62, averaging $55. Our apartment lacked an AC unit, relying on gas for the stove and heater. In the summer, staying cool was simple—opening windows, using fans, and enjoying popsicles!

For those interested, this is my favorite fan and my BPA-free popsicle tray.

Car Payment: $258

Before our cross-country move, we purchased a new yet used car. While I prefer buying within my means, I recognized the need for a reliable vehicle given our extensive travels. Although uncomfortable with borrowing, our single car has proven cost-effective, facilitating two cross-country journeys and various road trips.

Car Insurance: $128

Our car insurance, including about $12 for renter’s insurance, initially surprised us with its combined cost. We later discovered that increasing the deductible reduces the monthly payment. Post-move, the insurance rose to approximately $180, but with adjustments like raising the deductible and accounting for reduced mileage due to my husband’s half-year deployments, it now stands at $125 with USAA.

Reflecting on my previous fully paid-off car, I spent only about $450 for six months with Progressive.

Cellphone: $150

Despite my preference for older technology, I occasionally invest up to $200 in two-year-old used phones, avoiding the pricey $600 to $1000 range. Even if they last just a year, it’s a budget-friendly choice. However, this bill includes installments for two new phones.

Excluding that, our T-Mobile bill is $81.70 ($91.70 without auto-pay). Without a military discount, the same plan would cost $121.70, but for four people, it’s $141.70. The plan offers free text and data abroad, ideal for deployments and travel. An additional $1.70 is allocated for Netflix.

Internet/ Tv Package: $100

Our plan includes internet with a TV package solely for sports viewing. Attempts to cancel the TV part during off-seasons didn’t yield significant savings.

Currently, we pay $40 for a 30Mbps internet plan, sufficient even for gaming. Opting to buy our modem and router has proven cost-effective compared to monthly rentals.

While we’ve used Hulu Live for sports, the escalating costs prompt us to explore alternatives. Considering an antenna with favorable reviews on Amazon, rated at 4 stars with over 3 thousand reviews, is one option.

For more budget-friendly choices, cut the cord with these cable TV alternatives.

Dental: $11.68

With my husband’s military health insurance covering most medical needs, an additional $11.68 is spent on dental coverage for myself. While I used to pay a similar amount with Humana, it likely provided less coverage.

Note: Vision insurance at $11.50/month ($138/year) is available, but I find it more economical to pay around $60 for an eye exam and purchase prescription glasses online for $15. (Further details in the linked article below)

Related: 10 Things I Stopped Buying To Save Money

Life Insurance: $34

While crucial, contemplating it can be somber.

Groceries: $300

In San Diego, fresh produce is more affordable, advantageous for someone who enjoys cooking like me. Though I could spend less, my preference for organic foods, especially the Dirty Dozen, influences my choices.

Favorite Stores in San Diego:

  • Costco: Ideal for bulk items with a longer shelf life like oats, frozen foods, peanut butter, and condiments.
  • Sprouts Farmers Market: A personal favorite with bulk bins allowing precise purchases, reducing waste. Bulk spices, perfect for trying new recipes without committing to a full jar, were a highlight. I often purchased spices in small quantities, sometimes spending as little as 20 cents on a particular spice.
  • 99 Cents Only Stores: Despite some items exceeding 99 cents, they offered great deals. Their increasing selection of organic items, like a 99-cent cereal compared to over $3 at Sprouts, was noteworthy.

Post-move, my grocery budget remains at $300, although the specific items purchased have evolved.

Related: Explore my $200/ month healthy budget grocery list for two!

Gas: $160

While our car is fuel-efficient, California’s high gas prices and a 20-minute commute (which could extend to an hour in traffic) impacted our expenses. Currently, with a shorter commute and lower gas prices, our monthly budget is $60, a significant improvement from the previous $160.

Laundry: $10

Our apartment complex provided affordable coin-operated laundry machines.

Haircut: $40

Military regulations necessitate regular grooming, reflecting in a monthly expenditure of $40.

Misc.: $150

This budget encompasses household essentials such as toiletries and laundry detergent. The unspent amount is set aside for occasional purchases like clothes, gifts, etc. While we don’t meticulously track every expense, our focus remains on minimizing discretionary spending.

Going Out: $80

We prioritize home-cooked meals over dining out and are generally homebodies, spending less than this allocation. However, when we do go out, San Diego offers numerous free activities like hiking, strolling the boardwalk or beach, and exploring Balboa Park.

Moreover, there are numerous free things for military families, such as monthly events, a complimentary movie theater, affordable bowling alley, and discounted tickets and transportation to theme parks.

$2500 A Month Budget

Living on $2500 a month or less is an illustration of effective budgeting on a $40,000 annual salary. Even if duplicating this budget seems challenging, it offers insights into potential spending cutbacks.

As demonstrated in various categories, I could have spent over $200 less, providing room for additional savings. Regardless of income, adhering to a frugal lifestyle and following this budgeting approach remains our constant practice. By saving any surplus, we managed to afford two budget-friendly vacations to Paris and Italy in a single year.

After another move, explore our budgeting approach for $5000 a month near Seattle, WA—an apt plan for a $60,000 salary.

Home Budget Planner Printables

For further guidance on living within a budget, check out “How To Live On A Budget: 17 Tips to Start Now!” and find assistance in financial planning with these Free Budget Printables and Savings Challenges.

Sample Budget For $2500 A Month

Here’s a detailed breakdown of our frugal budget:

Sample budget for 2500 a month

How To Stay On Track

To adhere to our budget, we employ a multi-account strategy, as detailed in my post on creating a budget. Amounts for Rent, Utilities, Car Payment & Insurance, Cellphone, Internet & TV, Dental, and Life Insurance are allocated to a dedicated bills account. This separation ensures that fixed expenses are kept separate, reducing the risk of unintentional overspending. All these payments are set on auto-pay, with a monthly review for verification.

For variable expenses like groceries, going out, and miscellaneous items, a second account is utilized. We make a concerted effort to adhere to the allocated budgets for each category, but with the flexibility to make adjustments when necessary. For instance, overspending in one category might prompt a corresponding reduction in another, ensuring overall budget compliance.


Living on a $2500 per month budget requires thoughtful planning and strategic financial decisions. By sharing our experiences and insights, we hope to inspire and assist others navigating a similar budgetary journey.

Your unique tips, questions, and experiences are invaluable, fostering a community of shared knowledge. Feel free to continue the conversation below and support one another in achieving financial goals!

How To Live On $2500 A Month: Budget Breakdown Pin

6 thoughts on “How To Live On $2500 A Month: Budget Breakdown”

  1. Thank you so much for this article. I’m a single 53 year old woman. I’m a freelance journalist and recently escaped an extremely abusive relationship. I’m moving from my small town and trying to limit my budget as much as possible as my abuser put me in financial ruin.
    I’m also looking for any programs, grants etc. who may help me with this situation.

    • Hi Cynthia. I’m sorry to hear what you have been going through. But, I am proud to know that you have the determination to change your life and make things better.
      I’m rooting for you!


  2. Thanks for showing us your budget. This is about what we spend for our family of 5 (3 kids), so I am feeling pretty good about what we spend. Of course, we could certainly save more!

  3. Wheres health insurance? Thats another minimum of $100/ month. You got dental but what about vision insurance. Car maintenance? Water bill? This has got to be a joke 😅 School supplies? School clothes? I could go on and on. What about an unforeseen medical bill?

    • Hi Amber,

      To answer your questions:
      Health Insurance- I mentioned I received that for free.
      Vision Insurance- It’s not worth it to me when I can buy prescription lenses for $15 online.
      Car Maintenance- That is in the Misc. budget and typically around $2-300/yr.
      Water bill- Included in the rent for that apartment.
      School supplies and clothes- Not applicable to my life.
      Unforeseen medical bill- I mentioned I have savings as well but don’t share the dollar amount.

      I understand it is not possible for everyone to live on this budget, but it is certainly not a joke and was my actual living costs in that area.


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