How One Family Lives Well (And Even Owns a Home) on Just $11 an Hour

By Emily Guy Birken on 10 June 2015 21 comments

Budgeting is a tough skill for anyone to master, but the difficulty increases for those living on a low income. Without any wiggle room for financial mistakes, it can be all too easy to rely on credit cards and payday loans to make ends meet.

But with a little organization and resourcefulness, it is possible to live well, save money, and even own a home without pulling in a huge paycheck.

An Inspirational Family Example

Samantha Luh, a 23-year-old mother of two and her husband John, 24, of Grove City, Ohio, understand the importance of budgeting on a limited income very well. Samantha works 30 hours per week as a medical assistant for $11 an hour, and John earns $13 per hour working as a manager for a roofing company.

Both Luhs' hours can be variable, and John will go from working 40+ per week in the summer to about ten hours each week in the winter. Their 2015 earnings will likely be less than $40,000 for the family of four. (For comparison, the median income for their community is just over $65,000.)

Despite those financial challenges, the Luhs have created a rich life for themselves and their two sons. For instance, Samantha organizes their finances to make sure she never misses a birthday or gift-giving occasion, and she is justifiably proud of the recent purchase of their first house.

Here is how Samantha is able to make their limited budget work for them.

Planning Ahead

I spoke to Samantha on a Thursday, and she told me that she only had $0.30 in her checking account at that moment — but she was getting her next paycheck the following day, and she already knew where that money was going.

"We are currently living paycheck-to-paycheck, which I don't like," she says, "but it means that I plan where our money goes before we even have it." Since most of their bills are due on the first of the month, they expect to have very little money leftover from their first paychecks of the month. Their second paychecks go toward their groceries and gas for the month.

Any "extra" money in a paycheck is saved up to spend on non-essentials, such as gifts. "I love buying presents for people," Samantha says, "so I look for things throughout the year to buy for my loved ones. I start Christmas shopping in January and I'm usually done by August. I keep an eye out for things my kids and family and friends would love, and either wait for a sale or save up for the item. That way I don't feel time pressure to buy."

Though their emergency fund dropped from $2000 to $500 last year when they had to replace their 25-year-old secondhand bed, Samantha has a plan in place for that, too. Since they both bought a home and had a baby in 2015, they anticipate a larger-than-usual tax refund in 2016, which they will immediately put into their savings account to cushion them from future financial hiccups.

Setting Priorities

What sets the Luhs apart from other young couples living on a low income is their willingness to prioritize the things that matter most to them — like owning a home.

Starting two years ago, Samantha and John worked to build up their credit and save money for a down payment for the $101,000 home they bought earlier this year. Though they were only able to put $5,000 down on the home, they were able to add another $2,000 to the down payment by asking the sellers to help with closing costs. Now they are living in a place they own, and their mortgage is only $25 more per month than they spent on rent.

But prioritizing for the Luhs is about more than just planning for big purchases. For instance, they know what can be trimmed from the budget if they ever have a shortfall. "We can pay all of our bills right now, but we know that the cell phones will go if there is ever a month when we can't make ends meet," she explains. "That's why we have cell phones without contracts, so we can cancel them if we ever need to."

Since their priorities are so clearly defined, impulse buying is simply not done in the Luh household. If they are ever tempted by a purchase, Samantha stops to think through whether or not it's really necessary. And if they do decide to buy something, she figures out a way to save up for it over the next couple of weeks, even if it's only a $20 purchase.

Splurging Creatively

Anyone who has had to live on a severely limited budget knows how much of a drag it can be. But Samantha and John have found several creative ways to keep fun in the budget without sacrificing their bottom line.

In particular, they both love movies but they can't afford the $10-per-ticket price at the local multiplex. So they shop the $5 bargain DVD bin for movies they want to watch, and for half the price of a theater ticket, they have flicks on hand that they can watch over and over.

In addition, Samantha squirrels away the gift cards that they receive as presents. "It pays to spread them out," she says. "If we're getting cabin fever, I can look to see what gift cards we still have, and then we can afford to do something fun without spending our own money."

At the time of our conversation, Samantha and John's wedding anniversary was approaching. They planned to celebrate at The Cheesecake Factory, because they had a gift card.

Living Well is a Matter of Intention

By any metric, Samantha and John are bringing in a modest income, and many young parents would find it challenging to raise two kids on so little money. But the fact that the Luhs are mindful about their finances and refuse to let anyone else's priorities affect them means their life is full and satisfying.

"It can be kind of stressful to cut it so close," Samantha says, "but we know our kids are okay. And that's the important thing."

What tips and tricks does your family employ to live well on a limited budget?

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Guest's picture

Good for them! Amazing what intentionality can do. They budget (planning ahead), understand opportunity costs (set priorities), and don’t make excuses. What a concept! Financial fitness, as I like to call it, doesn’t come from how much we have, but how we behave with how much we have. Should they live like this forever? No, hopefully they can continue to increase their income. But they’re well on their way to mastering the single most important component of personal finance – behavior.

Guest's picture

Yeah and they live in an area that has houses that cost $101,000! I wouldn't dare buy a house for that much in the Seattle area....

Guest's picture
Bethany M

We lived in the Seattle area and I can attest to what you say, but then we moved to SoCal and it's even worse here!

Guest's picture

I loved this article. I wish only good luck to this family. They are both on-board with their limited spending and it is great to see a family working together on limited finances. Since they are both so young, I hope they return to school for more training to help them get ahead. Also, I would love to see their actual spending on food, medical care, etc.

Guest's picture

Cheers for Luh family. They are doing a great job under difficult circumstances. But let's don't ignore the fact that they, like so many, are balancing on a thin edge. One unexpected expense, like an injury or illness, away from disaster. This article strikes me as propaganda with the message that people don't need more--as in full employment and a living wage--they just need to do a better job living on the little they have. All while the few individuals at the top continue to gobble up the economy.

Guest's picture
Emily Birken

Hi Nancy,
I can assure you that I don't believe that people don't need full employment and a living wage. I am a proud supporter of measures to both increase the minimum wage to a living wage, and to include regular cost of living increases to that wage so we are not stuck with previous decades' minimums.

The Luh family is an inspiring example of making a good life even under harsh circumstances. I have no expectation that every young family will be able to do what they do. That's why I felt compelled to write about them.

Guest's picture

So, they spent $1500 on a bed?

Guest's picture

Your point being? If you are a minimalist, a mattress can cost $250. A simple metal piece of crap bed frame is almost $100. A basic box spring is $125 at Walmart. Assuming they bought new bedding for their bed that's like, another $80 at Target. Need some pillows? Thats another 30 if they get nice ones. Plus taxes on everything, you looking at almost $600. So assuming that they got an a bed that is actually worth a damn, then yeah, it's totally acceptable that they spent that much on a new bed.

Guest's picture

Eh, not really. Common sense tells me they spent the $1500 on the mattress alone, not on new bedding, given the description of their spending habits in the article. And I doubt they opted for a new box spring...most people don't. Maybe some new pillows, at the most. So yeah, a $1500 mattress, while luxurious to sleep on, is a bit extravagant. I'm all for it if that's what they want to spend their money on, but don't make it seem like it's a frugal, money saving decision when it's just not. There are cheaper, just as good options out there, mattress-wise.

Guest's picture

no kidding. I bought a new mattress from Overstock for $400 and my husband built a platform frame for under $100 in lumber. $1500?! wow. My savings is more important than that.

Guest's picture

So as Mrs. Luh herself I assure you there was a little more to the story. We had to re-buy everything in the bedroom. We had something unfortunate happen and it was more then a bed. We had to pay for other things as well that I would rather not be in public. Thank you for the comments though. They are appreciated

Guest's picture

They are fortunate to live in an area where they are able to purchase property for only $101k. It is wise to forego impulse purchases and I'm all for planning for the future, but buying and watching the same $5 DVD over and over doesn't sound like much fun. Sometimes it makes more sense to go out to the movies or to dinner once a week if that is what you enjoy because before you know it you are old, sick, and dead. Try to find a nice balance between financial gluttony and asceticism. Life can be very, very short.

Guest's picture

This is how everyone should be managing their finances, it doesn't matter if they make 30k a year or 100k year. I work in the financing industry and it amazes me how I see someone earn 100k a year and only have a few thousand dollars in a savings account and their credit is down the drain and I see someone else have over 10k in savings and only make 30k a year and have perfect credit. It all has to do with being smart and living within your means. Not going out and buying that brand new car for 40k when its only worth 30k. If you've bought a car at a dealership and if you did not put any money down, more than likely you are underwater by a few thousand dollars, I've seen people be underwater by more than 10k, its ridiculous.

Guest's picture

"Living well is a matter of intention"

That is beautiful.

For my family we control our spending by understanding psychology of consumer behavior.

We avoid using credit cards for daily purchases because they increase spending by about 13%.

We understand and challenge our status quo bias when we feel like we would like to save more money (that hasn't happened for a while now. We save well over 40%)

We are consistently aware of the total expenditure affect. If something costs us monthly, we extrapolate it over the year to see what it REALLY costs us. Similarly, if something seems hefty (like a $12 000 vacation) we ask ourselves if we want to put $1000 per month towards it for a year.

Guest's picture

Libraries offer DVDs along with books for free entertainment and edification. And I agree that they should focus on increasing their income stream and restore their emergency savings. Wish we could see their monthly spending broken down into categories like food, utilities, and such. But kudos to this young family for staying afloat.

Guest's picture
John Ferr

Yeah try buying a house on 11 dollars an hour in New Jersey or anywhere in the northeast United States. You might be able to get a bridge to live under in New Jersey for 101,000. The property taxes would break your budget though.

Guest's picture

I give them a LOT of credit, and I've been reading everything I find about how to be successfully frugal.

I live on disability and intend to own a house again one day while I can still enjoy it!

Except, it's NOT eleven dollars an hour they're living on but rather TWENTY-FOUR DOLLARS an hour, which is more than double.

Guest's picture

They are young and are heading in the right direction. I do have a couple of questions though. The $25 more per month they are paying for their house does that include taxes, maintenance, and utilities? Since they both worker what do they do about childcare?

Guest's picture

If they are both working, are the kids in daycare or are they lucky enough to have a family member watch them?

Guest's picture

This is Mrs. Luh. Well to answer some questions the house payment only includes taxes and insurance. Utilities are seperate. We were fortunate enough to have my grandmother watch the kids for free but she is unable to do it now so now they go to my step-mom's daycare. I do get a discount but I still pay 360 a month. Food is 200 a month sometimes 300 just depends. We only buy off brand. My husband will be getting a promotion soon! I got my dream job (an MA in a family practice which is what I have wanted to be since I was little) and get paid 1 dollar more an hour since this article has been posted. We don't want to live paycheck to paycheck forever so we are working our way up. :)

Guest's picture

Where did the $11 an hour come from? Did I miss something, because I thought the article said less than$40,000 for 2015 (which could be @ $22,000 I guess)?

Guest's picture

This article would be great if there were actually steps to how they made it work. All this means to me is that this article is just pure entertainment with no educational insight for the reader... instead leaving the reader to feel bad that he or she can't make ends meet when the family in the article somehow can.....I feel like I wasted 5 minutes of my time waiting for some insight and ended up disappointed.