Living on a 20K Monthly Salary: Still Possible or Not Anymore?

Yeah, it’s 2023. Let’s welcome the year of the Water Rabbit with this interesting question — Is it still possible to live on a 20K monthly salary in the Philippines?

Instead of answering or reflecting on it, most underpaid workers would simply laugh and shrug it off while in vocal gratitude for keeping their jobs amidst the high unemployment rate in the country. We, Filipinos, are amazing survivors.

Ahead of the lengthy discussion — I say, yes, it is still possible — but you’re not living at all. You are barely surviving.

Living and surviving, in the face of personal finance, are two different terms defined by which force or to which direction you are pulled — growth or defeat.

If you’re really earning the figure a month, or lower and just around the city, then you are surviving paycheck to paycheck, and possibly, you’ve already got trapped in bad debts.

Before We Do the Math…

I don’t say that I earn 20K a month (that’s legally confidential). It’s just a reference point for all the illustrative budgeting and computations.

I am single, not into dating, and I don’t have kids or any other dependents.

I don’t run an extravagant, rather a dead boring lifestyle, and most of the days, it’s just home-work-home routine except when invited for hangouts, i.e., once or twice a month, and when running personal errands such as going to the grocery, the dentist, or the mall for seriously important stuff.

I live in a decent two-story two-door apartment on the outskirts of Pasig City with my younger sister, who earns way higher than I do, and we split all the monthly rent, the bills, and shared expenses such as food and other household needs.

Both of us leave the apartment in the morning for work, i.e., normally taking just coffee and bread for breakfast, and come home at night when I still have the time to prepare our dinner. That also means, all appliances are turned off except the refrigerator and my 35-gallon fish tank air pump which run 24 hours. Of course, we normally just stay at home on weekends for the off, laundry, and other household chores.

I work in a private school (which I’ll quit in a week) just a jeepney-ride away, and do not have any major work expenses other than transportation, lunch and snacks, and occasional after-work street food.

I do not have any other special personal maintenance and expenses other than my monthly dental appointments for my braces, and just basic personal care, but I do have a monthly amortization for a subdivision lot under purchase. My insurance and life plan are also paid up.

I am an average smoker of around 10 sticks a day and a regular beer drinker, i.e., once or twice a week.

Lastly, I do not own a car or a motorcycle that requires gas or any other maintenance.

Now, Let’s Do the Actual Math

[1] Net Pay (PHP18,800). Let’s just say that I earn 20K a month. Normally, that is the gross pay, and not yet the net pay or the take-home pay. All mandatory contributions such as SSS, PhilHealth, and Pag-IBIG premiums must still be deducted.

From a gross monthly pay of PHP20,000, the estimated take-home pay after these deductions is around PHP18,800.

• SSS Monthly Premium (~ PHP800)
• PhilHealth Monthly Premium (~ PHP300)
• HDMF (Pag-IBIG Monthly Premium (PHP100)

[2] Monthly Rent and Bills (PHP5,674.50). These include the monthly apartment rent and the utility bills — electricity, water, and internet connection.

• Apartment Rent (PHP7,000). In an estimate, it’s a 35-square meter two-story two-bedroom apartment that we have been renting (first with my aunt and uncle, now with just my sister) since around 2009. Since then, we haven’t been demanded a raise on the rent. Thus, we’ve been paying the same, and never missed a single month.
• Electricity (PHP2,000). It’s the average we pay monthly for an aircon occasionally used at night, a refrigerator, two electric fans, a TV set, an electric stove, a microwave oven, an air fryer, a rice cooker, an automatic washing machine, a coffee maker and an electric kettle, a flat iron, seven light bulbs, an aquarium pump, and personal gadgets. As I said, these appliances are mostly used only at night when we come home from work and during weekends.
• Water (PHP250). We just consume water for daily bath, cooking, cleaning, and weekend laundry. We also have a regular delivery of purified drinking water (part of the shared household expenses).
• Globe Broadband (PHP 2,099). We are also subscribed to Globe At Home for a 300-Mbps broadband internet connection. It provides us an internet connection for our personal gadget needs and Netflix (though it’s my other sister who pays for the Netflix, and even Disney+).

All in all, monthly rent and bills amount to PHP11,349, and each share after the split (divided by 2) is PHP5,674.50.

[3] Food, Grocery, and Other Shared Household Supplies (PHP3,500). I regularly go to the nearest public market for fresh meat, fish, and vegetables on weekends and make trips to the grocery whenever necessary.

I only cook dinner on weekdays and three  complete meals on weekends. While I take just coffee in the morning, my sister eats light breakfast, e.g., bread, eggs, and dinner leftovers.

Food, grocery, and other shared household supplies such as toothpaste, detergents, and garbage bags are totaled at the end of each month and normally amount to around PHP7,000, and thus, PHP3,500 for each of us.

[4] Work Lunch, Transportation, and Other Allowances (PHP4,896). Included in here are transportation allowances, work lunch, afternoon snacks, and weekly mobile data.

• Daily Transportation (PHP600 + PHP400 Contingency). Luckily, the school where I work is just a jeepney-ride away, and after the fare adjustments, I pay PHP30 back and forth. That’s PHP600 for 20 days, but I reserve PHP400 for exceeding calendar days and for some weekend errands such as when I have an appointment with the dentist or trips to the mall.
• Lunch Allowance (PHP2,500). Given the recent inflation rate, I usually get a good lunch at the school cafeteria or nearby carinderia for PHP90 to PHP120.

• Afternoon Snacks (PHP1,000). At work, we don’t have an afternoon break for snacks. It’s just an estimate as I only take snacks whenever a coworker invites or after work, as we drop by the street food carts just outside the campus for some skewers of fish balls or kikiam.
• Mobile Data (PHP396). Internet connection on the go is a need for communication. I spend PHP99 per week for a Globe Go99 mobile data plan that comes already with 8GB data, though I usually consume around 3GB only before it expires as we also have a WiFi connection at home.

That’s PHP4,896 for all work lunch, transportation, and other allowances.

[5] Personal Care (PHP1,000). It all goes to ordinary bath soap, shampoo, haircut, facemasks, and others, and I just reserve PHP1,000 for all of these.

A regular bath soap worth PHP60 and a shampoo for PHP160 usually last a month. I get a good haircut for PHP250 every after two to three months. Also, I don’t have such a complicated skincare routine, but yes, I do take a bath.

[6] Social Needs Allowance (PHP1,000). It’s for an occasional hangout with friends for keeps, once or twice a month. I have already put a personal limit going out as no question, it hurts the budget, unlike when I was on the first two years of working that we would have it once or twice a week, sometimes even more frequent.

[7] Dental Braces and Lot Amortization (PHP5,817). As I have already mentioned, I visit the dentist once a month for the adjustment of dental braces. On a regular visit, I pay just PHP1,150 for the monthly installment and the PPE, although sometimes I have to pay higher if I needed special services such as x-ray, dental fillings, and fluoride treatment. Sometimes, I pay as high as PHP3,000.

Apart from this, I have just started paying the monthly amortizations of the subdivision lot being purchased after full settlement of the down payment. I make a monthly bank transfer of PHP4,667, and this is not just for a year but for five years.

[8] Smoke and Beer (~ PHP3,500). I smoke around ten sticks a day, and that’s PHP9 per stick and PHP2,700 in 30 days. Once a week, I drink beer, and in my computation, that’s also PHP460 a month.

So, Still Possible or Not Anymore?

With [7] Dental Braces and Lot Amortization and [8] Smoke and Beer excluded from the computation, the total of my monthly expenses is PHP16,070.50, but that is the least it can go, not to mention the emergency expenses (against the net monthly pay of PHP18,800).

As can be concluded, surviving on a 20K monthly salary is possible, especially on the suburbs and city outskirts given the same conditions shared above, and of course, the very low-maintenance lifestyle and all frugal practices.

But for a family of two, of three, or even just with a single kid or with an elderly, whose needs are entirely different, it is far from enough.

In the metropolis and major cities with higher costs of living like Makati or Taguig, a 20K monthly salary may not suffice even for a solo-surviving worker, unless other expenses such as allowances are subsidized, or for instance, the house is owned.

With all the items indicated though including the side vices, it will rather result in a total of PHP25,387.50. If I earn just PHP20,000 (and a net pay of PHP18,800) a month, I should have been drowned in debts.

Compared with the monthly budget I had when I was just starting and earning way lower than I do now, this however shows that I have changed my needs and even spending behaviors (and of course, the high inflation rate).

Serious budgeting approach must be employed on top of cutting down on discretionary expenses, in particular the smoke and the beer.

Living a comfortable life means being able to pursue happiness and personal growth beyond worries about financial fallouts. This is possible when have that financial security that further translates to a peace of mind.