Who is able to live on $40,000 a year or less? (sale, market)

[sunnyskies1]

Don't forget about $6,700 of that income is going to Uncle Sam, so in reality you are left with $32,300 a year or $2,691 a month (provided you don't have to pay state taxes too) In NYS the take home amount is going to be more like 30k, which is about 2700/mo take home. I live in a cheap part of NY State, very low cost of living compared to other places. I will go with our estimated costs, trying to pare it down since we are a family of 3.



Rent or mortgage or mortgage free: $ 600
Home Insurance $100
HOA Fees $0
RE Taxes $200
Electric $150
Water $
Sewer & garbage $
Lawn maintenance (if your disabled)
Auto Insurance$ 180
Cable (if you have TV) $75
Telephone $100
Internet $50
Health Insurance $400 (ours is $650/mo, so I am estimating down for a single person).
Prescriptions and co-pays
Food0 $400
Repairs
Misc. (All the rest: Hair cuts, dog food and vets, dental, car registrations, Christmas, Birthday gifts, clothing, new computer or printer, paper, ink etc, etc, etc.

Total cost: $2225

Now you forgot things like student loans= $800 a month and heat= $600 month (higher in winter, lower in summer, this is about average) and gas for vehicles= $400/mo (gas is $4.05/gallon now).

So I'd say its going to be tight even without adding in the other costs listed. I know that is a fairly inexpensive mortgage and rent is much higher here for a small house so that is a fairly low estimate.

[harry chickpea]

Originally Posted by modhatter

Well, I'm talking about living on your own in either an apartment or a small house. Not having roommates. Having a car you have to pay insurance for and gas. Don't forget about $6,700 of that income is going to Uncle Sam, so in reality you are left with $32,300 a year or $2,691 a month (provided you don't have to pay state taxes too)

I was more curious about those who have their own home or apt, and pay all these considered normal expenses. Can you do it? What state do you live in, if so. For example, I live in an upscale town, but live in the cheapest possible place which is a very small 2 bedroom, one bath duplex in a senior development. It's a nice well kept older neighborhood. Now with the drastic fall in real estate prices worth only about $70,000. Car insurance is very expensive here. About $1,300 a yr. Internet alone (no tv) is about $65 a mo. Health insurance is higher here. Property insurance is higher here. Electric is quite high because of the need for AC. (average about $200 a month) Water is high $70 mo.

I live in Southern Florida. So I can't help wonder how much less some of these costs might be in other parts of the country. Besides the cost of real estates, are all these other costs lower (internet, electric, water, insurance, etc) What makes them lower cost of living? Is food cheaper? Is electric and water bill cheaper. Is insurance cheaper? If your up north, than you have heating costs as well. In other words, where do you benefit from lower costs without living in a bad neighborhood or crime ridden area or totally isolated from major stores, doctors, hospitals etc.

AquaBlue: Would you mind sharing some of your monthly costs? Like what you pay for RE Taxes, home insurance, utilities, med insurance, internet, car insurance. You know all those things we have to pay each month no matter where we live. I'll share mine as well for comparison sake.

You are stuck in the "accepted expenses" box. We moved out of south FL to north Alabama. Here is just some of our costs:

Rent or mortgage or mortgage free: $0 (Own our own home, but you could likely rent a small home around here for $300/mo.)
Home Insurance $0 (Not required if you don't have a mortgage and are willing to look at actuarial tables and make an informed decision)
HOA Fees $0 (LOL, we don't even have a building code or zoning in the country)
RE Taxes $300 per year.
Electric $120 +- per month -includes the cost of running the heat pump.
Water $0 (processed creek water and wells)
Sewer & garbage $0 (Septic tank - garbage is $10 added on the electric bill)
Lawn maintenance (if your disabled) $5/mo gas for mower
Auto Insurance $500/yr +- (nobody to run into, or to have run into you)

For health insurance, I only have a catastrophic coverage. The negotiated rates of the plan and limited use of doctors keep those expenses down.

Gasoline costs and internet issues are biggies.

Anything that is an anticipated ongoing cost is a life trap. People used to work for themselves, to cover food, lodging, basic medical care, and not much else. Your grandparents or great-grandparents likely never had:
a car
auto insurance
a cellphone
electricity
internet
cable tv
water costs (municipalities often provided water as a service covered by property tax, or people used wells)
health insurance - before insurance became greedy, doctor visits were surprisingly inexpensive in relation to income.

When our water bill in Florida crept up to over $100 to cover the idiocy of the water management district, and insurance went to over $2500 to cover the idiocy of people building on beaches in hurricane country, and taxes went up to a similar amount to cover choppers flying overhead at night and other unrestrained expenses, and our satellite dish was taxed by the municipality - just because it could - and a host of other leeches continued to drain money from us, to the extent we were no longer primarily working to support ourselves, but to support the leeches, we voted with our feet. We moved.

Instead of choppers overhead we hear mockingbirds. Instead of wondering what might be in the water, I look at the creek and farmland and KNOW that it doesn't contain industrial byproducts. NO one says I have to HAVE a lawn, much less constantly pay to water it or keep it cut to under four inches.

A few miles down the road there is a large auto junkyard, fully exposed to view from the road. Every time I pass by I smile because I realize that the controlling personalities of anal "make everything to my esthetic standards" in the various governmental bodies have not been allowed in.

[modhatter]

Harry ChickPea: Just curious what your internet cost there. Do you have cable or just internet. Also wondering the size and age of your house with only $300 a year taxes. Do you live far out from stores and shopping?
Do you find food costs any different there?

[brightdoglover]

A cheaper rural area would likely even out with the absolute need for a car, versus an area with good public transport.
Where I live, anything remotely accessible to public transport is more expensive because of its good location and the general desire to be near public transport.
I think the OP said something about "paying your own health insurance," which is a huge sticking point for most people. Those carrying catastrophic only are good to go until something happens, or something less than catastrophic comes up.
I could live on a lot less where I am if I walked out on existing debts, sold my fine house, and moved to a trailer park in the same town, where I would still be car-dependent. It honestly is my backup plan if my life went to hell in a basket.

[midatlantic12]

$40k a year? As a single guy, I could probably live on $15-20k a year in NYC if I had to.

[M3 Mitch]

I think we could do it, particularly if the 40K was retirement income. We live in Eastern WA in a small house on an acreage.

Comments on the helpful list of typical expenses

Rent or mortgage or mortgage free: $ 400/month, paid off in a few years.
Home Insurance $ 100/month or less
HOA Fees $0 and would not consider anywhere I would have to pay this extortion
RE Taxes $ ~110/month
Electric $ ~70/month
Water $0 (we have our own well, so I would say it's in the electric)
Sewer & garbage $ 7/month for garbage
Lawn maintenance (if your disabled) DIY
Auto Insurance $~150/month. Could park a couple of cars if need be.
Cable (if you have TV) $0. Anyone who needs to watch expenses, does not need to watch cable TV.
Telephone Land line $~15/month, 3 cell phones are about $100/month.
Internet $60/month
Health Insurance (guessing) $400/month
Prescriptions and co-pays about $100/month
Food - roughly $300/month. Assuming I was retired, could do a bigger garden, maybe raise a steer or 2 for our own use.
Repairs DIY
Misc. (All the rest: Hair cuts, dog food and vets, dental, car registrations, Christmas, Birthday gifts, clothing, new computer or printer, paper, ink etc, etc, etc.

Estimating the sum of these in my head, I am coming up with like $1200/month of "necessary" expenses, way under $40K/year.

[Celestyn]

This is for two adults in the mid atlantic. This is just our fixed monthly expenses and doesn't include our savings, charitable giving or major projects to fix up the house. However it could work fine within the 40k income range and could be trimmed some in a pinch.

mortgage/tax/insurance 610
groceries/household goods 400
health insurance 100
car insurance 120
internet/phone 70
car expense 30
electric 100
water 20
heat 125
gas for cars 100
life insurance 25
dining out/entertainment 200
gym 10
cell phone 5
total fixed expenses 1915

[Submariner]

Originally Posted by modhatter

Who is able to live on $40,000 a year or less including taxes, and paying your own health insurance? If so, what part of the country do you live in? Are you single or a couple or a family? Do you rent or have a mortgage? Do you feel that you do without a lot in order to manage?

My pension is about 40% of that amount. It is plenty to support myself and my Dw. For the last few years, her income has been just a hair less than mine. So our combined income was not high enough to be taxed [after personal exemptions and deductions].

Right now her income is just over mine, our combined income is still just a hair less then your suggested amount.

Sometimes our youngest son lives with us, sometimes he lives with a girlfriend.

I own our home; no mortgage.

Currently about 60% of our combined income goes to building materials, as we are not finished building our house. If we were not building, then I guess we would be investing most of our income. As the majority of our income would be disposable.

I am not sure of anything that we are "doing without in order to manage". We do what ever we want to do.

[StealthRabbit]

$40k/yr,, EZ, we (2) do better than that, even with property taxes and health insurance taking $24,000 of the $40k. That leaves us with $1,333.00/ month for everything else... no problem

[stargazergw]

My wife and I live on about 38,000 a year. we live in Mississippi. dont feel like we do without we just don't have expensive tastes.