We live in one of the more expensive areas of the country. We bought a one room condo - yes we share walls, but we own. It's all we could afford. We are very frugal and make a lot of foods from scratch - I've eliminated a lot of foods that come prepackaged and minimal cooking. We went from 60K+ income to the mid thirties when we moved. We share a car and take good care of everything we have so things last. We do without some things at times but we are both very on top of spending and I almost always put something back when I'm out shopping. I've learned a lot when we took the pay cut and moved into our condo (our payment is about 2 1/2 times your rent). We have a pretty strict grocery budget - but there's so many things you can do - a 25 lb. bag of brown rice is like $10 at the international foods store near here. Dried beans are cheap and can be fixed in many ways. I shop stores for loss leaders and clip coupons and only buy what we will really use, but stock up when there's a sale on frequently used items. I get all the grocery store's mailings and line them up. I created a price list and shopped all the stores for my staple items and then I know which prices are really best. Most stores mark a few items down in hopes you'll buy their other marked up items. I only buy the real deals and I have a notebook that I have it all written down in and my coupons are in pockets and I fold up the weekly advertisements so when I go to a store I can easily tell if an item is a real deal or not and if I have a coupon it can make the deal even sweeter. I joined a bulk shopping club (costco) and figured I had to save $4 a month to make my membership worth it - but I found that cheese and a few other items there were really a good deal and my price list is an easy reference to know if an item is a real deal or not.
I know that may sound like a lot of work, but it's not that bad once you get into the swing of it. I'm not really that organized, but I did manage to get the notebook going - took groceries down from $80-100 a week to $50 average usually.
I also turn my heater down and shop a thrift stores for clothes and also hit the clearance racks at stores I like. I buy dd's clothes for the next year during seasonal closeouts.
I don't mean to make it sound like we don't live well - we do - you just have to decide what's a priority. Sometimes we've had to give up a too-frequent Starbucks trip. Sometimes when we're out for dinner with others we split a meal or just get an appetizer or eat before and get dessert or use coupons. We just got back from a vacation in CA - so we do get to live - I guess each person has their own definition of "living" - what's no sacrifice to me may be a great sacrifice to someone else. To me being able to stay at home and own a home while my husband is in school is worth it to forgo things that seem like 'luxuries', but that's me - you have to decide for you.
But you can do it if you want to!