30K a year

[SecondCor521]

Hi All,

It seems like quite a few (most respondents, actually) seem reasonably comfortable with 30k/yr. Its encouraging but at the same time unbelievable - no, I wont call anybody a liar - bit its just incredible!

I am seeing some exceptions like health is covered or property taxes of around a grand - in the US? where? what kind of property?

I am in Illinois and live in a fairly "high prop Tax" area and am seriously considering moving out. So Goonie or anyone else, any suggestions on low tax locations and reasonably good quality of life and a somewhat smaller town in Illinois (or elsewhere for that matter?)

Thanks,

Maxer

Maxer, I'd be glad to post my budget down to the penny and go into any detail on any category on the expense side of things. It is quite doable.

My property taxes are $1,193.48 on a property assessed at $208,500, which is a tad under it's real market value. That's for a 3 year old 1,773 sqft home on 0.138 acres (small subdivision lot) with what I consider average features.

I live in Idaho. As previously mentioned here, though, you don't want to move to Idaho. It's too cold in the winter and we're a bunch of uneducated hicks.

ikubak.......

Everyones's responses are interesting and informative, but........

Be sure you filter the information to a common denominator. Does the poster have to pay expensive health insurance premiums? What are local costs of living including real estate taxes? Would you and DW be happy hunkered down and always on a frugal budget? Single or couple or couple with kids still in the house? Are capital expenses and major home repairs/updates being accounted for? Is there some gimmick involved, such as free rent for doing chores, and not being mentioned? Is the poster benefitting from extensive bartering of his/her personal skills?

I agree with this. Also, some people might exclude some real expenses -- taxes and other payroll deductions are common to exclude from people's calculations. I included everything and then subtracted off in hopefully a somewhat transparent way in my previous post. Although, even in that case I wasn't including in my expense numbers the ~$200 per month of principal repayment in my mortgage, as that is not considered an expense by Quicken.

I think I am actually happier with less stuff, but I may be deluding myself there. I've been hankering for some (new) living room furniture but have been holding off because of the expense.

The only gimmick I can think of in my numbers is that my employer feeds me breakfast and lunch on work days, so my food budget is artificially low. I also do all of my own home/yard/car maintenance, but I'm not really bartering, that's just how I live my life. Because I'm an aspiring curmudgeon.

2Cor521

 

[Independent]

We have consistently spent just over 30k (maybe 32k with inflation this year). That ignores mortgage, payroll taxes, children, new cars, and charitable contributions. (The question for me is "Could we live on SS if we were retired?".)

Health insurance is a very big deal. According to the Kaiser Foundation, average premium+deductible for a "family" group plan is about 14k. We spend much less because my employer picks up most of that.

 

[Goonie]

Everyones's responses are interesting and informative, but........

Be sure you filter the information to a common denominator. Does the poster have to pay expensive health insurance premiums? What are local costs of living including real estate taxes? Would you and DW be happy hunkered down and always on a frugal budget? Single or couple or couple with kids still in the house? Are capital expenses and major home repairs/updates being accounted for? Is there some gimmick involved, such as free rent for doing chores, and not being mentioned? Is the poster benefitting from extensive bartering of his/her personal skills?

Bottom line, $30K isnt always $30K in these discussions so check out the details. And be comfortable that your and DW's personalities are congruent with long term frugality.

Agreed!

Here:

No mortgage...No kids....No CC debt (other than month to month spending on rewards card that gets paid EVERY month)....VERY low health ins premiums through former employer, and fairly low car/HO/other ins through 'multi-policy' discounts....Utilities and associated taxes, as well as property taxes are quite reasonable in this area....Groceries are pretty reasonable in the local stores...and we have a good selection of stores, and are able to shop for good deals too.

We have plenty of 'loose change' set aside to cover any unforeseen repairs and such.

We have no major health expenses, and no overly expensive hobbies or tastes. We go on all the vacations and trips that we want to (2-4 major trips per year), LOTS of day trips, LOTS of concerts, eat out at nice places when we feel like it, and we buy whatever we want...whenever we want it.....we just don't want much. We don't need more 'stuff'.

The bottom line is that we live quite comfortably on less that $30K a year.

 

[Independent]

Of course, some Americans are living on 30k. This is data from the "Consumer Expenditure Survey" for 2004-2005. It is spending for a family with "householder" 45-54, and gross income of $40k-$49k.
This is a broad average, which means this family has .6 children, 1.7 workers, and 2.1 vehicles. I've adjusted the housing numbers to approximate "own home, no mortgage".

5,400 Food
8,500 Housing
1,500 Clothes
7,000 Transportation
2,400 Healthcare
2,400 Entertainment (incl alcohol & tobacco)
1,100 Cash Contributions
1,200 Other
29,400 Total

Details:
3,200 Food at home
2,200 Food away from home
5,400 Food Total

1,800 Property Tax
900 Insurance, Repairs
200 Other Lodging
3,200 Utilities
2,300 Furnishings, Supplies
8,500 Housing Total

122,900 Market Value of House

I see that the BLS has updated their data to 2005-2006. You can see more details at ftp://ftp.bls.gov/pub/special.requests/ce/crosstabs/y0506/agebyinc/x45to54.txt

 

[DallasGuy]

Youbet is right, we may need to provide more information about our particular case:



So the 28K in fixed annual expenses for a couple without kids living in AL include:
Auto repair and maintenance $2200 (2 cars, VW 2001 and Mazda 1997)
gas $1700
Car Insurance $1500
Car registration and Taxes $200
Tax service Fees $400
Groceries $6,600
Home Repairs and Maintenance $2,300
Property taxes and insurance $2,400 (Home is 2500 sq ft and worth ~ 235K)
Health Insurance premiums and copays $5,200
Cable TV $1,500
Telephone / Internet $2,100
Electric/water $1,900

Total $28,000

Just curious, no income taxes? Or is that included above already?

 

[maxer]

Thank you, Goonie and 2Cor521, for your responses. Based on the many responses thus far I feel a liitle more optimistic about my particular situation. I may post details on it at some later date to get 2nd opinions of sorts.

Regarding the 30/yr, I forgot to add in my previous post that many people could probably just get by with just SS assuming they are the qualifying ages - not that additional savings/income sources would be unwelcome.

Talking about SS, perhaps this should be a separate topic, BFWIW, how realistic are the SS Benefit estimates that SSA sends out to everyone each year, anybody have any idea?

Again thanks, Maxer.

 

[kombat]

Wow, I don't think my wife and I could survive on $30k. Here's our current budget:

$ 28,440.00 Mortgage ($2000/month) and property tax ($370/month, house is assessed at $400k)
$ 23,000.00 Investments ($1700/month + $100 biweekly)
$ 8,400.00 Groceries ($700/month)
$ 8,400.00 Spending money ($700/month)
$ 7,260.00 Car payment ($605/month)
$ 2,316.00 Life/disability insurance ($193/month)
$ 2,100.00 Gas
$ 1,824.00 Electricity
$ 1,920.00 Natural Gas
$ 1,560.00 Cable TV
$ 1,500.00 Car insurance
$ 1,140.00 Bus passes
$ 870.00 Line of credit interest (7.25% on $12,000)
$ 852.00 Home insurance
$ 500.00 Lawn care
$ 360.00 Phone service
$ 360.00 Water/Sewer
$ 240.00 Long Distance

$ 91,042.00 Total

That doesn't include things like home maintenance/improvement, auto maintenance and repair, Christmas and birthday gifts, prescription medication, eyeglasses and contact lenses, travel expenses, or many other items. And, truth be told, I find it extremely difficult to stay within my portion of that $700/month "spending money." $350 rarely lasts me till the end of the month.

However, if you took out the mortgage and the "investing" amounts, that reduces the requirement to just over $44,000. Of course, once the line of credit is paid off, that frees up another $870/year. This is all "after-tax" money though, so our pre-tax requirements would be in the $60's, at least.

This just cements my determination to save big for retirement.

EDIT: No kids, no plans for any, no credit card debt. Car will be paid off in February, then that money gets added to the investment column.

 

[FIREd]

Just curious, no income taxes? Or is that included above already?

In my original post I did point out that the 28K did not include income taxes. However, I don't think that federal + state income tax would exceed a few thousand dollars per year. (1/2 of my money is in taxable accounts, the other 1/2 is in IRAs. With the personal exemptions, I don't think I would have to pay much in taxes on the withdrawals at that income level). But since the tax code changes all the time, I did not want to include income taxes in my calculations.

 

[Moemg]

If I really had to I could cut out a lot of fat in my budget and do low 30's .I could cut travel ,stop giving presents and downsize to a less expensive house and cut down on the care I pay for my Mother but since the only thing I'm willing to do is downsize I guess I'll continue living on double that amount .

 

[kat]

I agree with everyone about the variation around the country in expenses, like prop taxes. Even within NY state, it's quite variable. Mine are still under $3,000 annually, though it seems everyone from NY quotes higher on this site.

I disagree with the implication in this quote: "hunkered down and always on a frugal budget..." My budget is naturally low, and I am outdoors and active every day. My activities simply aren't expensive. Like property taxes vary per region, personal tastes vary per individual.

 

[barbarus]

There are many people in America with advanced university degrees who live on this amount, even after many years of work.

We'd better hope they don't get mad as heck about their plight and start a revolution! All power to the people. Off the Man.

 

[OAG]

I agree that while my budget is a tad under $30K; my excess (for saving or spending) is twice that amount. So I could spend triple that but we choose not to. Not hunkered down except maybe this week with all of the snow outside.

 

[youbet]

I disagree with the implication in this quote: "hunkered down and always on a frugal budget..." My budget is naturally low, and I am outdoors and active every day. My activities simply aren't expensive. Like property taxes vary per region, personal tastes vary per individual.

If you want to be out and about doing things that cost a few bux, believe me you'll feel "hunkered down" if you can't afford it and must stay home. At least that's how it works at our house!

 

[Darryl]

We're spending a little over $40,000 but still two kids in the house and a mortgage payment. so we could do $30,000 with no mtg and lower still with the kids gone. Don't plan to make that the plan for retirement though. I'm thinking more travel more expenses and a plan that could have us cutting back to $30,000 if the market really tanked.

 

[aaronc879]

Single, no kids, no debt(renter) in midwest. I've never spent more than 18K per year take home pay and I feel that I get by well based on how it was growing up.

43K expected gross income 2008

15,000 401k
5.000 roth ira
8,000 taxes
7000 rent, utilities
1,700 insurance
1000 phone
1800 food
1100 gas
1800 cable/internet
600 entertainment

 

[youbet]

There haven't been too many comments about the expenses of living as a single vs living as a couple.

My own estimate, given our life style and life preferences, is that it costs DW and I close to double what either of us would spend living as a single.

Housing seems to be the primary area to save as a couple. But even there, you could downsize, take in a roommate, sell and rent something modest, etc., if your status changed to single.

I think I could live OK on $30K/yr (given all the prepaid expenses most assume such as home ownership), but doubt DW and I could do it together for $30K. Too independent. We each want our own car, pocket money, personal expenses, medical, hobby money, enough room in the house for two, etc., etc.

Just hypothetical. No plans to split after 37 yrs and have an RE income over the proposed $30K currently being discussed.

 

[Rambler]

My folks live on about 20-22k. Simple people, simple lifestyle, not extravagent. They mainly live off of SS, but have a couple of small pensions. House is paid for, no mortgage, prop tax around 1300/year, medical is probably their biggest other expense (the out of pocket not paid by medicare or whayever they have to supplement it).

As for us, we're not FIREd yet, and still living in a work situation that skews things. Best estimate for us is about 86.4k after tax, assuming the lifestyle we think we'll lead, in expenses except for income taxes and tithing. Grossing up for that will be about 116k pre-tax and tithes. This assumes some tax management, but I think I can do just a little better. However, if we include an RV, which we would like, then the figure becomes about 96.3k post-tax. Note that these figures include quite a bit of play money and travel money, as well as depreciation on two cars and the RV (which are always bought with cash, never debt). My more reasonable estimates are in the 66k post-tax range, but tastes and experience are telling me that DW won't be happy on the 66k version. Me? I would be fine between 30-40k, but it would require a home downsizing because of the cost of tax and upkeep on the McMansion.

 

[haha]

There haven't been too many comments about the expenses of living as a single vs living as a couple.

My own estimate, given our life style and life preferences, is that it costs DW and I close to double what either of us would spend living as a single.

There was a long discussion of this about 3 years ago, we seemed to arrive at a couple on average can live on roughly 1 & 2/3 the cost for a single person.

Even housing costs are somewhat higher for a couple than a single, as you mention. You really do need more room; you have to accommodate a woman's taste in decor; you may have to keep the home warmer, or at least heated more since with 2 people there are going ot be times when one is gone, but hte other home- hence heat or AC must be kept going.

I really can't understand any of these low cost claims. If a couple can live on $30,000, theoretically then I should be able to live on 3/5 of that, or $18,000. Well, that would get me my one bedroom apartment and my medical insurance, with enough left over to buy water and sewer. But that would appear to leave a quite a few uncovered expenses- food for one. Even if you reduce my rent to what the average homeowner here pays for property tax and insurance and modest maintenance alone, that still would only leave about $4000-$5000 for all other expenses.

Years ago I lived in LA. I knew a woman who was into yoga, and specifically Indian Yogi Gurus. Some famous yogi was visiting LA from his holy ashram in India, and he was said to subsist on air and water only. No need at all for food. But when he arrived it turned out that he needed to go out for meals. Why? The LA air was too impure for him to metabolize it.

 

[mh]

Years ago I lived in LA. I knew a woman who was into yoga, and specifically Indian Yogi Gurus. Some famous yogi was visiting LA from his holy ashram in India, and he was said to subsist on air and water only. No need at all for food. But when he arrived it turned out that he needed to go out for meals. Why? The LA air was too impure for him to metabolize it.

I love it. Is he sure it wasn't just the bad aura's emanating from
of all us corrupt southern californians?

 

[kjpliny]

Here's my YTD, 2 people, 1 dog, no kids in NY:

$16,438.01 - Mortgage
$9,067.00 - Propety Tax
$6,583.54 - Groceries
$5,726.09 - Dining Out
$3,979.67 - Pet
$3,881.90 - Auto Repair
$2,922.00 - Insurance
$2,516.83 - Gasoline
$2,430.00 - Tuition
$2,141.12 - Clothes
$1,965.13 - Oil
$1,792.37 - Electric/Gas
$1,630.98 - Medical
$1,565.37 - Household
$1,482.46 - Cable
$1,394.60 - Gifts
$1,381.37 - Home Maint
$1,328.45 - Wine/Spirits
$1,158.50 - Misc
$1,072.80 - Entertainment
$884.86 - Phone
$811.40 - Hobbies
$761.24 - Health/Beauty
$545.00 - Charity
$532.61 - Electronics
$329.78 - School/Work
$238.33 - Water
$79.92 - Furniture

$74.641.33 - Total

 

[Maurice]

$1,482 on cable? I haven't had cable since the 80s, but that seems really high to me.

 

[barbarus]

Does Rover have a taste for fine dining?

 

[Dawg52]

Single with one dog. I live a pretty good life on 30k a year. Probably will pick up the pace in a few years, but retiring at 53 makes me some what reluctant to spend the normal 4% at this stage of my retirement.

 

[kjpliny]

LOL...cable includes internet, tv and wired phone, plus HD recorder. Phone bill is for wireless accounts. Rover is old and cancer survivor, but worth every penny! Another item standing out is auto repair...new tires/brakes for 2 cars and new tranny for truck hurts!

 

[aaronc879]

$1965 for oil? Does that include the cost of airfare to the middle east to pick it up?