I've been living on $13,754 per year for the past 4 years. (Average as of last month.) There are two of us, so, double that and you have the average cost over that period. While we've been doing it, we've been traveling full time, spent the last year in europe living in AirBNB pads, and doing our startup. We buy a MacBook Pro each year and an iPad or iPhone each year as needed, with the old one going to the other person to replace the even older one they were using. We don't live poorly, either. How good our food is depends on where we are-- it wasn't so great in england, but it was fantastic in italy.

Prior to those 4 years, I lived on about $18,000 a year, and in the 1990s, I was living on about $22,000 a year. I made much more, of course.

Starting in the early 1990s I knew I'd want to start a company at some point, and I knew that the less you spent the more profit you had to sock away for retirement. At one point I bought and lived on a boat. Living on the west coast[1] where my friends were paying $1,200-$4,000 a month in rent-mortgage, while I was paying $300 a month in marina fees--- AND I had the best view-- was pretty nice.

Like anything, it is something you can do if you practice it, and you just have to have the right attitude. I had an immediate turnaround in my spending when I started tracking my expenses. Just looking at where things went each month had a huge impact... I started buying less pointless stuff ,and cut out whole swaths of things that I didn't need, and conversely, started eating out more, because I realized it was relatively cheap. I didn't even miss the things I got rid of, because I didn't cut any of the things that were important to me.

I remember, in 1994 buying a TV thinking that I'd be using it until 1997 when I expected that HDTVs would be out, and planning on buying an HDTV. In 1997, HDTVs ware REALLY expensive, but by then I'd made the change. I kept that TV- which I'd only meant to keep for 3 years-- until 2007 when we went nomadic. 11 years longer than "budgeted". We don't do cable, but we do, luxuriously, do BOTH hulu AND netflix. And the occasional iTunes rental.

I got rid of my land line phone over a decade ago, when I moved onto the boat, and then never got it back afterwards. Cellphones were always cheap plans, and then, given up completely years ago. (Reaching me urgently means calling my google voice number or sending an email, which I get in a couple days.)

I kept my vehicle for a very, very, long time, but don't even have that now. That right there got rid of over $600 a year just in insurance. Public transportation is a hassle (except in berlin!) but its cheaper.

One thing that's really helped-- we set a budget. We have the food/transportation budget, and then we have the personal-spending money. Each month we get a bit of money that we don't have to spend responsibly, and the rest of the money goes into specific budget items. We have all of our major purchases planned out, and on schedule. Actually had to accelerate the computer purchases because we were using them past the end of AppleCare. (Traveling all the time, we want AppleCare.)

One important thing to know, to help with all this, is to understand money. I think a lot of people don't really understand money... not on a fundamental level.

Money is just a medium of exchange, right, but have you ever wondered what it is you're exchanging? It's life. Not just in the sense that you need food and shelter to live, but in that you rented your body to some labor in exchange for the money. I think people who don't think of money as valuable as that-- as literally being part of their lives-- tend to respect money very much, and so they don't keep an eye on it. Old timers called it "knowing the value of a dollar".

As for the nomad thing- yeah, plane flights are expensive (but we take relatively few big ones)...but compared to the cost of living in america, most of the world is cheaper. Europe was more expensive, but we wanted to make sure the idea worked before going places where english was even less common.

I expect our cost of living to be significantly lower this year than last.

[1] originally types "west cost", which is about how I think of it.

PS-- I've done a poor job of explaining "How", but it really is an attitude more than a method. There are probably lots of things we don't have, and don't miss, because we simply changed our priorities. Since I don't miss them, it's really hard for me to name them.

There's a line in fight club that is apropos here: ".. learn to let slide what truly, doesn't matter."