How to Tell If Your Means Are Just Not Enough

I write quite often on this blog about the virtue – nay, requirement – of living within your means.  Even though I am earning a salary that many would consider laughable for my education and experience, I am determined not only to live within my means but give and save as well.  I think everyone else should strive for this too – whatever your income, you shouldn’t be running up debt for your living expenses.


However, I know there are some situations when the means you have are simply not enough to live on, let alone save and give.  Ideally you would have savings for those times, but that’s not usually the case for young adults.  As an extreme case, the vast majority of medical and law students have (next to) no income whatsoever and take out loans for both tuition and living expenses – obviously they don’t have means to live within!  Other graduate students may not need to take out loans for their tuition and are even given stipends or fellowships, but that doesn’t necessarily mean that the stipends are enough to live on.  Combine a possibly-insufficient stipend with a contract that states that no outside employment is permitted (like in my program) and some graduate student may really be scrambling to make ends meet.


This post is to help graduate students (and other low-income individuals) weigh out whether or not they are able to live on their expected/current income.  It’s not often that PF bloggers consider how little money is necessary for living – no one wants to imagine himself living at the subsistence level.  Only people who are truly dedicated to minimizing debt will attempt these exercises.  Honestly, for those entering high-income professional fields like law, medicine, or business (with a graduate degree), I wouldn’t be too fussed about living at a modest comfortable level even on debt.  For those without great prospects for high-paying careers post-degree, though, I think it’s smart to avoid taking on debt even if it means being less comfortable during graduate school.


If I were given an offer letter and I wasn’t sure if the stipend would be enough to cover my living expenses, this what I would think about:


External Exercises (Before Starting) – explore whether you are capable of living on the means provided


  • compare your income to your peers and low-income people in your city – What do they live on and what are their strategies?
  • compare your salary to the median income, living wage, and poverty level
    • If you are a single person and double your income approaches the median income for your city, it’s very likely livable and there will be plenty of people around living similarly to learn from.
    • Even if your stipend is less than the living wage, you can probably still manage by having a roommate and being very frugal with food choices.
    • If your stipend is below the poverty level ($11,334 for the continental US) and you live in a moderate or expensive city, that’s an indicator that your means will not be enough and you need to look for other sources of income.
  • build a budget off minimums in advance – Research your city before you commit to a lease – find the cheapest (reasonably safe) place to live and estimate your cost of food, utilities, and transport.  Add in whatever ongoing payments you might have.  If the sum approaches your stipend it’s probably not possible to survive on it alone (and if it exceeds it, it’s definitely not).
  • your income is uncertain/variable – If your stipend offer isn’t guaranteed every semester or you are only paid during the school year, it’s going to be more difficult to predict whether or not you’ll be able to live on it for your entire tenure as a grad student.  Use your first semester to figure our your own minimum living expenses and save the rest so you have something for the leaner times.


Internal Indicators (In the Thick of It) – signs that you aren’t able to live within your means


  • your credit card balances don’t always get paid/are increasing
  • you can’t seem to keep your emergency fund at $1k – something is always coming up
  • you don’t give or save even though you really want to
  • you find yourself selling your possessions to pay your credit cards/avoid overdrafting
  • you can’t afford health insurance


Signs that your lifestyle can be further deflated to fit within your means


  • you eat pre-prepared food (restaurants, take-out, frozen meals)
  • you live alone
  • you have an expensive car or other possessions
  • you have a pet
  • you have debt (you can’t afford the payments!)


Obviously the exact figure that constitutes a living wage is specific to each city/university and individual and will change with time.  I feel fortunate that I haven’t had to question whether or not my stipend provides me sufficient means to live.  I certainly understand if people choose not to live on a questionably-sufficient stipend if they expect a much higher salary post-graduation – I think it’s a reasonable risk.  But I also admire those who strive as best they can to live on their stipends alone and I believe they are learning useful life lessons and building character.


Let’s learn from each other: What internal or external indicators would you use to determine if you couldn’t live on your means?  At what income level would you be forced to give up saving or giving?  Have you ever lived paycheck to paycheck and how did you stop?  Have you ever set up your lifestyle to cost as little as possible?


photo from Free Digital Photos


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Filed under: budgeting, choices, debt, frugality, grad school · Tags: , , , ,

20 Responses to "How to Tell If Your Means Are Just Not Enough"

  1. Great post ! My means are definitely not enough for once I have children, so I will need to start working more and paying down debt so that my budget has some extra wiggle room!
    Gillian @ Money After Graduation recently posted..Happy Birthday to ME

    1. Emily says:

      I have understood that becoming debt-free feels like getting a raise!

  2. Emily too says:

    I think you’re maybe conflating “enough” or “livable” to mean both “enough to live on to avoid debt” and “enough to save and give” throughout this post, even though there is a middle ground – for instance, my husband and I have enough to pay the basics, contribute to student loan payments, and give and save a little bit, but not in the realm of 15% and 10%. I think this is the case for a lot of people who are not in debt and have some savings, but don’t have at least 25% to spare every month for retirement & tithing, either. Probably we could do that if we lived like we were seriously poor, but it would be quite unpleasant. I’m not sure what the line is between “reasonable standard of living” and “short-sighted, selfish priorities,” and how many people who aren’t, say, nuns would give up the first to avoid the second.

    It’s also important to remember that the local median wage isn’t necessarily the local living wage. Housing is a huge problem in my area right now because a lot of it is unaffordable for low-income families, and we have a higher than national unemployment rate. Our household income is a few thousand above the local median, which I am grateful for, but in context that also makes me feel worse about our local economy.

    1. Emily says:

      Yes, I totally agree there is a middle ground of 10 or 20% or so. I thought about it when drafting the post but didn’t want to get really detailed into that area since it is so difficult to navigate even when you have specifics, much less with the generalities that I am using here. I think there is a point where an income may be enough to live on but not enough to give or save on, but it’s sort of… asymptotic? I doubt many people have ventured into that area (you are one exception I can think of). Most people would give up on finding that line and not attempt to save/give or just take on debt to have a more comfortable standard of living.

      The real wrench in what you’re talking about is our student status. If we weren’t in school, there would be two differences: 1) we wouldn’t have a reasonable guarantee of a higher income in the near future and 2) we wouldn’t be, in many cases, prevented from earning more money through performance-based raises or outside jobs. Debt or suspension of savings and giving is a reasonable option for students in a way it isn’t for non-students in the same situation.

      I did assume that the median wage would be higher than the living wage in a given city – I didn’t think about the exceptions that there are in our current economy. I guess the suggestion should be to compare your salary to other people in your city who aren’t living on debt or savings to get by.

      Thanks so much for voicing your thoughts on this post. It was a tough one for me to think about and write but I wanted to take a stab at it. If you have any further points to discuss I would love to hear them.

      1. Emily too says:

        I think many of the PhD students at my university are in this space, as well as many of our recent graduate friends with MAs who have higher salaries, but unstable 1 or 2 year positions and loans coming due: enough to get by month to month, a little extra to build up a bit of a savings cushion for big upcoming or unexpected expenses, but not much beyond that. I’m not sure how many people find it problematic, though! Most of the grad students I know, and even my parents, think that we make so little that saving or giving anything at ALL exceeds expectations at this point in life. That is very different from your standard (and my ideal one).

        You bring up a really good point that having it be temporary puts us in a different situation. In terms of income increases, question of whether grad students should be allowed to earn outside income is seriously in contention at my school right now, actually – a stipend may provide a living wage for one person, but what about those with spouses and children who may not be able to provide a second income? I think ideally, grad students should have options for taking on second jobs just like employees anywhere else, and it’s really problematic that international student visas don’t allow it. It’s enough to make you really hope for those post-graduation raises – and that even with possible future expenses like kids and mortages we won’t make excuses about saving and giving.

  3. AverageJoe says:

    Early in my career I was worse than paycheck to paycheck: I made nearly no money for 12 months. The only way out for me? Find more income.

    It amazes me the number of people I worked with who busted their brains trying to find a way to save $10 per month more rather than find $50 more income. You’re right….in many cases it was an income problem, not an expense problem.
    AverageJoe recently posted..Can’t Save? Write It Out, Bitches!

    1. Emily says:

      It’s best to work both ends of the problem, I think. Sometimes there is no way, in certain life situations, to make more money and sometimes you’ve cut your living expenses as far as possible already – you need to check out both approaches.

  4. I relocated to get married on the assumption that I would find work quickly, which proved to be false. My wife and I both had a substantial amount of debt from previously not living within our means, and then her wages started getting garnished at 25% of gross. For her wages at the time, it actually put her below minimum wage. We were well below subsistence then! Once she declared bankruptcy, we could afford to buy food other than peanut butter again.
    Edward Antrobus recently posted..How to Budget around Seasonal Employment

    1. Emily says:

      Wow, that is quite a story of escaping the debt cycle!

  5. If you look at your trends and see several months of negative net income, you know your means are not enough 🙂
    Josh @ Live Well Simply recently posted..10 Ways to Lower Your Heating Bill This Winter

    1. Emily says:

      Haha, yes very good point! You don’t just have to look at your checking account balances. Mint would be particularly helpful to differentiate between income from your job and income from other sources such as selling things – would your head be above water without getting rid of resources?

  6. This is a great resource, especially for graduate students. Once more thing that people can often go without is cable television. Whenever people come to me looking to cut costs, that is the first thing I suggest to cut from the budget. It does not provide enough return for the investment.
    Wayne @ Young Family Finance recently posted..Eat healthily and live well for less

    1. Emily says:

      You are so right. The only time I had cable was when I had 3 roommates so it wasn’t too expensive. It’s so easy to waste time watching show after show, too.

  7. SWR says:

    I think that, even if you’re not in school, you need to see whether you really don’t have enough means or if it’s a moment-in-time thing. If you looked at our finances today you would probably say that we just don’t have enough- but you also wouldn’t see that we’re digging out of a short-term hole. If I’m still saying that in six months, then maybe I was wrong.

    Also, I think you’re far too forgiving of law/medicine/business grad students. Many of those students wind up making much less than people think for the first few (or several) years out of school, so I would discourage them from living any more extravagantly than any other grad student.
    SWR recently posted..The last 48 hours have not been fun

    1. Emily says:

      To your first point, yes I agree there is a distinction to draw between short-term and long-term means and spending discrepancies. There are short-term spending sacrifices that you can make to get through a rough period that aren’t sustainable in the long-term, and likewise maybe there are ways to get some extra cash by selling things or working that is also unsustainable but workable for a short term.

      Definitely I think that students should have a realistic prediction of their post-grad salaries. But I also don’t think that med or law students have the option of working while in school because their programs are so all-consuming – so they really do have to take on some amount of debt unless they have savings or a source of passive income. I totally agree that they shouldn’t live extravagantly, but it’s also hard to pin them to a certain income level of another grad student since there is such a wide range of stipends.

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