Naturally, when in college, most of us tend to survive on very minimal budgets for long periods of time. In the entrepreneur space, the reality is often similar. Sure, there are lots of entrepreneurs with cushy jobs, living comfortably while they try to launch or grow their own business, but this isn’t about them.
This is for the guy bootstrapping a new company as a waiter on the side; for the lady that wants to go from nothing saved to a down payment on a car in a couple months; or maybe for the person trying to pay off their student loans in the first year after college graduation. They all can sound a bit crazy and ambitious for sure, but these situations make you ask the question: how much do I need to spend every day? I’d be willing to bet you can survive on $5 a day. So, is that possible? Well, we need to clarify a few things.
Defining the Goal
I said “surviving” on $5 a day; this is a bit different from “living” on $5 a day, and definitely isn’t “thriving” on $5 a day. Survival involves the basics needed to sustain life, and pretty much nothing else. So we should get rid of a few things from the budget, and make a few more assumptions, the first being that at $5 a day for 30 days, we will have $150 to spend every month.
For the sake of where this article is posted, let’s say that the person following our guide is: an entrepreneur, out of college, under 25 years old, just beginning development on a web-based product, and drives a 2000 Toyota Corolla. As an added kicker, they’re stuck working full-time at minimum wage. This does not necessitate an office, nor does it imply there are employee related costs. For simplicity, let’s assume rent will be covered and factor it out of our survival spending, since the very lowest monthly rent (around me) from a quick Google search will hover around $400; with utilities, say $500. Car insurance prices for our entrepreneur at their age will likely hit $100 a month and gas will eat up at least another $50 (30mpg at 600 miles per month at $2.50 per gallon; they go to a lot of networking events, alright?). Let’s factor that out as well.
This leaves them with at minimum $650 a month we’re assuming is covered, and the $150 for all other necessities for survival. That’s a grand total of $800 a month. For our entrepreneur, a peek at a few Department of Labor statistics gives $15,080 per year for their salary, giving about $1256 per month. If there is no swaying from the budget, that leaves $456 at the end of each month.
Full disclosure: I do NOT recommend doing this; numbers are only ever this nice in theory.
What to Cut
Before getting down to our actual budget, there needs to be a critical examination of spending so far, and we can set up rules after learning from it. Our entrepreneur has been spending every last bit of their paychecks until last month, and now has savings of $456. What could have possibly consumed it all before that?
Well, the culprit for a lot of us, eating out. Even alone, the bill at a sit-down restaurant can easily hit $20. Once a week over a month, that gives us about $80. Add a small plain coffee at the nearest coffee shop for $2.50. Bought at similar prices are energy drinks, a bag of chips, or a few small things from the dollar store. A purchase like this every other day (15 X $2.50) gives $37.50 by the end of the month. Notice these small things don’t have to be a Venti Starbucks coffee every day to add up. At $117.50, casual snacks, a couple dinners, and cafe trips have almost eliminated the budget. Rule number 1: don’t eat out.
Another money drain is entertainment. Video games (~$30), phone apps ($1-$5), the arcade ($10?), or even cable TV (~$55/month) can easily suck up cash. Then there are social events like the movies (~$20), some drinks at the bar ($15?), or worse, clubs ($$$). If your group of friends is the type that never splits the bill, you could potentially blow the entire budget in one night on your turn. Instead, try choosing one game, pick up a thrifty hobby for your spare time, or, like our entrepreneur, developing your business is fun enough. I personally tried learning stunt kite tricks, which, after the initial cost of the kite, costs only wind and transportation to an open area. Instead of going out, try inviting friends over for board games or other inexpensive activities (pro tip: tell them to bring the supplies and save some loot on that too). Rule number 2: have fun for free or less.
Money gets nibbled away by subscriptions and hidden fees too. Our entrepreneur might easily overlook a monthly Netflix cost, or one of those personalized monthly mailing subscriptions. Tighten the belt strap enough, and even small things like being charged for 6 bananas instead of 5 or that 35 cent debit fee at Arco becomes an issue. How many times have you overlooked a mistake on your receipt because it was less than a dollar? Rule number 3: small costs matter.
Choosing a Scale
You might notice that with all extraneous expenditures eliminated, our entrepreneur will still need to eat and hydrate. Everything has been reduced to budgeting food. At this point we should decide on a scale.
For simplicity, I ask if we will set and spend a yearly, monthly, or weekly budget, and what do we have available now? With a budget for a year, and a year of savings built up, our entrepreneur would have ($150 X 12 months) $1800 to spend for the year. At that point, a search for the cheapest way to buy bread, peanut butter and jelly in bulk (webstaurantstore.com will do the trick for the PB&J while the bread may require some local sourcing), and a cheap freezer on Craigslist for storage ought to do the trick. Throw in $10 for a decent water bottle, because our entrepreneur loves tap water. Done.
That won’t do, because our entrepreneur only saved for the last month, so we’ll have to go with either a weekly or monthly plan. I’ll volunteer them for a monthly plan, as a weekly plan for a budget of this type should only be chosen when living with zero savings living paycheck to paycheck. I have neither the experience nor ability to cover the possible issues when discussing financial instability on a weekly basis, which can quickly devolve into an entirely different set of discussions.
How will our protagonist make it through then? Well, a quick understanding that they would like to eat 3 meals a day, for 30 days would yield 90 meals per month. We’ll go with the common nutrition scale of 2000 calories per day which means each meal needs to have about 670 calories each.
How to Survive
You may have heard one of my favorite stories of an entrepreneur roughing it. That would be the one about Elon Musk’s early days with Zip2 and his food budget, which in Musk’s words went something like:
“So it’s like, ‘Oh, okay, if I can live for a dollar a day then at least from a food cost standpoint, well it’s pretty easy to earn like $30 in a month anyway, so I’ll probably be okay.’”
Musk’s story excerpt is about the time he tested out living on a dollar each day at UPenn before trying to start his own tech business, meaning he may have actually done it, but it was first and foremost his choice (an important distinction that should probably be made in a later article). This was also in the early 90’s so prices have changed a bit since; dollars don’t go as far any more. Sticking to our $150 a month, you might still ask, how did Musk do it? He bought oranges and hot dogs in bulk, sometimes trading them out with pasta. I don’t think that plan will always work though.
Jumping back to the 670 calories for each of 90 meals, a more robust plan allowing for various foods might involve a staple. For instance, a cup of rice is good for 206 calories. A cup of rice (ignoring expansion for quick calculations) is about 7 ounces and a 20 pound bag of rice at Walmart can be had for $20, which gives us 45 cups of rice. Double that for a cup of rice every meal at $40, and throw in a rice cooker for another $20. 206 calories at each meal for $60 leaves us with $90 and 464 calories per meal to go.
Let’s stop and think here; I could give an unlimited number of suggestions at this point, but the most obvious to jump to would be to choose one or two pairings for your rice that can be bought in bulk to cover the remaining calories per meal for the month; lots of things have higher caloric content, so it isn’t a stretch. Assume a water bottle and tap water for it is free. Next month our entrepreneur’s rice cooker is paid for and the rest is repeated. For added flavor clip coupons and always run to the clearance section first.
That wasn’t too hard was it? Let’s not leave it that bland.
Surviving on $5 a day isn’t generally a difficult thing to do in itself. Setting it as a goal and getting it done just to do it is, well, boring. Let’s take a look at our entrepreneur. Moving at the fastest rate possible and doing her best to eliminate distractions, she is entirely focused on this web product. I hardly need to mention that the entire reason she is living under these constraints is to maximize resources available for her pursuits. To her, this product is everything, and to us, the project is hardly separable from the person, made up and vague as she is.
Without a solid sense of purpose and rise to action, we are unable to justify much of anything. This is why barely scraping by with $5 for food every day trying to make a real difference tells us loads more than the morning Starbucks mocha every day trying to stay awake at work. At the end of the day, the Corolla will have a story, and the shiny thing next to it will have a summary; which do we listen to? By the end of these frugal ramblings you must be wondering why anyone would try to live off $5 a day. In response, I encourage you to find your reason and come tell us about it.
About the Author
Santiago Ricoy is pursuing his Bachelor’s in Mechanical Engineering at UNLV’s Howard R. Hughes College of Engineering. A member of the Drones and Autonomous Systems Lab at UNLV, he loves everything robotics, and hopes to pursue a career in research and development within the engineering field.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of RVF or UNLV. In addition, thoughts and opinions are subject to change and this article is intended to provide an opinion of the author at the time of writing this article. All data and information is for informational purposes only.