s/o living on $25k or $36k a year

[Anonymous]

Anonymous wrote:I take home about $42,000 and saved about $7,000 of that last year. My household is myself and one child who is with me 50%-no child support, but my ex pays for kid insurance and about 3/4 of aftercare and activities. My work picks up 100% of a very good insurance plan, pays for my cell phone, and covers half of a monthly bus pass. I have a student loan and am on an income-based repayment.

- Do you live near your family? If not how do you afford going to see them?
My daughter and I take a regional bus. It was about $80 roundtrip last time we travelled.

- Do you have hobbies? What are they?
I run, read a lot, and am involved in a lot of community and volunteer activities. My daughter and I go to a lot of free events or we hang out with friends.

- Do you ever travel for fun? If so, what's your approach?
By tickets on sale on Southwest, say with family or friends or at an airBB

- Do you ever find yourself really wanting something that is outside your MMM budget (like a trip to Australia, or some expensive shoes)? Do you ever given in to those urges or do you just figure you'll get over it?
I've given up on the idea of travel for now, but I'll buy a $120 pair of shoes now and again.

- What do you eat most days? Do you ever buy the expensive mustard or the fancy tomatoes?
Today I had hard boiled eggs and an apple for breakfast, rye crisp and hummus and raw veggies for lunch. I'm going out for after work drinks and might have something light there. I live in a working class neighborhood where I can get a huge dominican takeout meal for $6 or a pizza for $8. When I have my daughter we eat tacos or homemade veggie sushi, homemade chinese dumplings. I don't feel like we really skimp on food. We eat a lot of fresh fruit and vegetables. I buy meat at a high volume inexpensive butcher. I shop on sale. We also eat out fairly regularly and I go out for drinks at least once a week.

- What do you do for yourself, that you see other people spending money on for others to do for them? Do you make your own clothes, or grow your own vegetables, or...?
Clean my own house, take public transit, do my own taxes, don't go to yoga or therapy, care for my own lawn. I'm pretty sure making my own clothes and growing my own veggies would cost me money.

- Are most of your friends in the same boat? If not how do you do it when your friends want to get together at a restaurant or to go see a concert, or whatever? You just say no and have them over for a potluck instead, or...?
Most of my friends have more than me, a few have the same or less. I'll occasionally do something more expensive with friends, but usually, we hang out on someone's porch, go out someplace cheap or have drinks only. Some of my friends have money but few of them are fancy. Sometimes people pay for me or figure out how to split things so I pay less.

- What sort of house or apartment do you live in? Did you pick that place in order to be able to spend very little? Do you like your home?
Absolutely. I was living in a really rundown 2 bed on a not great block. I recently bought (I have excellent credit) my own ranch house in a working class neighborhood. Housing and transportation are the big areas where I spend a lot less than other people I know.

- What do you think are the big misconceptions about how you live? What do you wish others understood about your approach to money - what do we outsiders usually get wrong?
You clearly think people who bring home what I do are one step away from completely down and out. I feel like I live comfortably. I save money every month. I give about $100 a month to charity. I'm really thankful for everything I have and try to cultivate thankfulness in my child. I think a lot of people from middle class backgrounds overextend for housing and cars because they can't stand to live where poor people live. I live in a city where the average rent was about $1,800 (not DC) and was paying $1,000.

Your ex DOES pay support. Your ex pays more and insurance and more aftercare than you and you are only a 50% parent. This is tremendous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is s/o the Mister Money Mustache thread - I saw a couple of people post there that they live happily on $25k or $36k a year. I am not into luxury stuff - we have one car, an old Kia Soul, for example. But I also think it would be very very very very hard to live at that amount.

Can I ask a couple of questions, for those who are living at that amount by choice? (This obviously isn't about those living on very little because they don't have other options - it's really for those who are living on little while socking away more for later.)

- Do you live near your family? If not how do you afford going to see them?

- Do you have hobbies? What are they?

- Do you ever travel for fun? If so, what's your approach?

- Do you ever find yourself really wanting something that is outside your MMM budget (like a trip to Australia, or some expensive shoes)? Do you ever given in to those urges or do you just figure you'll get over it?

- What do you eat most days? Do you ever buy the expensive mustard or the fancy tomatoes?

- What do you do for yourself, that you see other people spending money on for others to do for them? Do you make your own clothes, or grow your own vegetables, or...?

- Are most of your friends in the same boat? If not how do you do it when your friends want to get together at a restaurant, or to go see a concert, or whatever? You just say no and have them over for a potluck instead, or...?

- What sort of house or apartment do you live in? Did you pick that place in order to be able to spend very little? Do you like your home?

- What do you think are the big misconceptions about how you live? What do you wish others understood about your approach to money - what do we outsiders usually get wrong?

I know you wanted the perspective of people who does it by choice, but I’m living this way because of circumstance, based on my choices - so, in a way, you could say it’s by choice. Last year I made 24k and got 12k in child support - I have two young children. I’m working three jobs while going to grad school. (Side note: my children recently went to live with their dad because living on so little with children is extremely difficult, as you can imagine). This year I’ll probably make 18k. When I graduate in May I’ll have many more opportunities available to me.

- my mom is a 2.5 hour drive, so was about a tank of gas. (“Was” because my car broke down and I can’t replace it. It’s like that!)

- I don’t have a ton of free time, but I enjoy having coffee out, reading, going to yoga (go for free because I teach at the studio), working out, taking walks.

- This last year I was lucky (?) to have a boyfriend who subsidized trips for me, so went to Bermuda and London when my kids were with their dad. Bermuda especially felt weird - people there are so rich! - but I grew up UMC so I wasn’t out of my depth. Obviously without his help I’m lucky to take a weekend trip anywhere, but travel isn’t my concern right now.

- I get a few hundred a month in food stamps - even for a single person it does not go far. I eat very simply: eggs, bread, salads, curries, rice, pasta. I don’t buy meat very often. I also work in a restaurant so can eat there when I work. I buy a lot of organic which I know some might consider indulgent.

- I don’t grow any food or make my own clothes. I don’t shop often, obviously! I have good pieces all within the same color palette, winter gear, and shoes for each season.

- My closest friends make good money (avg low six figures). They know my circumstances and will offer to do low/no cost activities when we get together. Occasionally I will splurge on dinner, but not often.

- I live in a rental (in a neighborhood of no rentals, which I have to say is pretty nice). I can walk to work, to school, and to the grocery store - this is a huge perk to me. I like where I live! Part of why I moved here is the low COL - the trade off is limited job opportunities, but I spend $600 a month for a 1500sqft 2 bedroom.

- This is the first time as an adult I am poor. I wish others understood the snowball effect of poverty - there are problems in my life that would be very easily fixed by money, and problems that are compounded by my lack of money. That said, money isn’t everything. I have many qualities that make my life a lot easier than those living in garden-variety poverty. My situation is temporary - for this I am grateful. If I had to live this way forever I would be so incredibly depressed. It’s impossible to save money and very difficult to pay bills like this, but there are many more people in the US living like me than like the average DCUMer. I wish this forum in particular would get its collective head out of its ass about what it really means to be poor.

This is OP - and I just wanted to say thank you for sharing your info, and I wish you so much good luck. I often feel like I wish people would get their heads out of their bums, too - and then a thread like this one makes me realize that I'm in as much of a bubble as anyone. I truly appreciate you sharing your perspective.

[Anonymous]

I'm confused, are we talking gross or net?

I lived between $20k and $30k gross as a grad student in my 20s, but:
1) I had NO health insurance premium, it was 100% covered by the university
2) my parents paid my phone bill...it was $10/month for an extra line on their account, and they offered, so I said thanks
3) I never lived alone, so I never paid a full apartment's rent, went straight from 4 roommates to married
4) No option for a 401k, so I saved in my Roth IRA post-tax for retirement and called that good.
4) Hobbies were distance running, cooking at home, board games, and cheap beer.

Now I couldn't do that because I have kids and work, and day care for one kid is $18k. Plus I have to pay more of my family health insurance premiums, save more for retirement, and can't rent one room in a group house once kids are in the picture. Time of life matters a lot here. But my overall spending habits have stayed the same, without day care we could pretty easily live on $36k net after paycheck deductions.

That same amount net is totally diffetent

[Anonymous]

Anonymous wrote:I'm confused, are we talking gross or net?

I lived between $20k and $30k gross as a grad student in my 20s, but:
1) I had NO health insurance premium, it was 100% covered by the university
2) my parents paid my phone bill...it was $10/month for an extra line on their account, and they offered, so I said thanks
3) I never lived alone, so I never paid a full apartment's rent, went straight from 4 roommates to married
4) No option for a 401k, so I saved in my Roth IRA post-tax for retirement and called that good.
4) Hobbies were distance running, cooking at home, board games, and cheap beer.

Now I couldn't do that because I have kids and work, and day care for one kid is $18k. Plus I have to pay more of my family health insurance premiums, save more for retirement, and can't rent one room in a group house once kids are in the picture. Time of life matters a lot here. But my overall spending habits have stayed the same, without day care we could pretty easily live on $36k net after paycheck deductions.

That same amount net is totally diffetent

This is OP - This is an s/o of the other thread where people are talking about living on somewhere between $25k and $36k in order to be able to retire early. So really not how do you do it in grad school - I lived like that in grad school, too - but how do you do it when you are out of school and earning enough that you don't *have* to live like a grad student.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is s/o the Mister Money Mustache thread - I saw a couple of people post there that they live happily on $25k or $36k a year. I am not into luxury stuff - we have one car, an old Kia Soul, for example. But I also think it would be very very very very hard to live at that amount.

Can I ask a couple of questions, for those who are living at that amount by choice? (This obviously isn't about those living on very little because they don't have other options - it's really for those who are living on little while socking away more for later.)

- Do you live near your family? If not how do you afford going to see them?

- Do you have hobbies? What are they?

- Do you ever travel for fun? If so, what's your approach?

- Do you ever find yourself really wanting something that is outside your MMM budget (like a trip to Australia, or some expensive shoes)? Do you ever given in to those urges or do you just figure you'll get over it?

- What do you eat most days? Do you ever buy the expensive mustard or the fancy tomatoes?

- What do you do for yourself, that you see other people spending money on for others to do for them? Do you make your own clothes, or grow your own vegetables, or...?

- Are most of your friends in the same boat? If not how do you do it when your friends want to get together at a restaurant, or to go see a concert, or whatever? You just say no and have them over for a potluck instead, or...?

- What sort of house or apartment do you live in? Did you pick that place in order to be able to spend very little? Do you like your home?

- What do you think are the big misconceptions about how you live? What do you wish others understood about your approach to money - what do we outsiders usually get wrong?

$36,000 goes a LONG way when you don't owe anyone anything.
1. $80 in gas to go see family
2. I bike, run and play unlimited golf for $70/month
3. I travel whenever I want to. You can get super cheap flights when you are flexible on dates, times and layovers. You can get anywhere in the country for $200 if you are flexible.
4. I eat mostly meat and vegetables. I don't cut corners, I get whatever I want. I drink craft beer not Miller lite
5. I clean my own house, cut my own grass, change my own oil etc. I have an extra 10 hours in my day that the average working person doesn't have.
6. When my friends get together in a restaurant, I go too. How much do you think that costs? Two people can eat at a steakhouse for $100.
7.I picked a ranch house on a golf course less than 1900 sq ft located within bike distance of grocery stores and other stores. It was $189,000. I bought it this year. Yes, it's in the south.
8.People think FIRE means living a boring, do nothing lifestyle. They are wrong. I have never been so entertained in all my life

This is OP - and this doesn't sound SO different from how we live, though our families are a flight away, not a drive. Our house was $330k instead of $190k - so that's some difference (but we have two incomes). We have someone who cuts our yard and another who occasionally cleans the house. We get the oil changed when we get the car serviced twice a year. So I guess I'd expect our expenses would be maybe twice yours? - which is still considerably less than our HHI.

We have other expenses - a big one is student loans. My husband is paying off an annoyingly large credit card bill. And we have pets - but no kids. Still it doesn't seem like our expenses should be SO much greater that you'd feel you are a FIRE person and we are not anywhere close to being that. Or far enough from it that the lifestyle sounds very foreign to me.

Well, maybe it's time to reexamine our expenses and see where the disconnect is?

Thanks for responding - glad it's working for you.

You are completely missing it. You'd have to live very modestly in this area but it would be doable on subsidized housing or in another area. You don't have someone who mows the lawn. You don't have a house cleaner. You don't have pets. You don't have a $330K house on that income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I did it in Manhattan when single. Had rent controlled 200 square foot walk up with no AC at $800 a month. But taking home $1,600 a month still tough. I had no car, no AC, no internet and no cell phone. But I knew ever happy, friends with vacation homes and went to beach a lot. Also loved crashing Company parties for free. Dating alone are up a lot on money.

Still stressful as landlord wanted me out so nothing fixed and place a shithole

What year was this?

My landlord danced when I left in 1999. Even then it was a $1,600 a month apt. Last I heard rent is $2,600. But building now all renovated and gentrified when I moved all crack heads and hookers on block

[Anonymous]

The simpler your life is the easier $ is. Not a difficult concept.

If your life looks like this you are in great shape to earn less and still save:
- you own an inexpensive home
- you have a very short commute for which you own your car or rely on public transit that you can forecast expenses for
- you are healthy
- you have no childcare expenses or your family is your childcare
- you generally have no debt such as student loans or credit cards or car payments
- you are smart with cooking and perhaps enjoy it (eat less meat, have a variety of stores to choose smartly from, etc...)
- you don't desire luxury goods or exotic travel or technology
- you are generally handy/resourceful or have bartering skills to get this stuff for free
- you have the time to do your own cleaning, cooking, childcare, etc...

If you live in a high COL area, don't yet own a home in this climate, have children without free childcare, have student loans or credit card or car debt, have medical expenses beyond a small co-insurance payment, or desire more materiality or experiences, this ain't gonna be a functional plan. Any of the above would kill it, and that applies to most people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$36k also goes a long way if you're healthy. You note that the PP mentions no medical expenses.

Medical is super cheap if your income is low. As stated in the other thread having wealth and having income are not the same thing. But yes, I am healthy

"Medical" may be cheap. But the choice of biologicals for autoimmune diseases or experienced surgeons when obscure surgery is needed is not. Mental health care is not. Addiction treatment is not. Any of those will take a whack out of huge wealth in a hurry. I wish you continued good health!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I did it in Manhattan when single. Had rent controlled 200 square foot walk up with no AC at $800 a month. But taking home $1,600 a month still tough. I had no car, no AC, no internet and no cell phone. But I knew ever happy, friends with vacation homes and went to beach a lot. Also loved crashing Company parties for free. Dating alone are up a lot on money.

Still stressful as landlord wanted me out so nothing fixed and place a shithole

What year was this?

My landlord danced when I left in 1999. Even then it was a $1,600 a month apt. Last I heard rent is $2,600. But building now all renovated and gentrified when I moved all crack heads and hookers on block

So that was 20 years ago. How is that relevant?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I did it in Manhattan when single. Had rent controlled 200 square foot walk up with no AC at $800 a month. But taking home $1,600 a month still tough. I had no car, no AC, no internet and no cell phone. But I knew ever happy, friends with vacation homes and went to beach a lot. Also loved crashing Company parties for free. Dating alone are up a lot on money.

Still stressful as landlord wanted me out so nothing fixed and place a shithole

What year was this?

My landlord danced when I left in 1999. Even then it was a $1,600 a month apt. Last I heard rent is $2,600. But building now all renovated and gentrified when I moved all crack heads and hookers on block

So that was 20 years ago. How is that relevant?

Half my building still lives there. If I stayed even in 2019 my rent would be peanuts. You be surprised at amount of folks who pay very little housing. My 80 year old neighbor in 1998 was paying 400 a month rent. Rent increases are like 1.5 percent a year and some years. If alive still paying peanuts

[Anonymous]

Anonymous wrote:We spent 20k last year on non-housing expenses, and another 14K on rent/utilities. Total ~35K. This was our last year before moving to DC.

For us the key was living in a low cost of living state (in the South!). We had a 2bd/1ba, cheap restaurants, and went hiking/camping for fun. In DC, we can still most of these things, but rent is killing us.

This is really the key. Owning your home outright, in an area where property taxes are low, is a great first step. In addition, being retired, and so having time to do things you might otherwise be inclined to pay for, also is important. Finally, being single, like a PP, obviously cuts expenses considerably.

But, let's not forget that very few FIRE people are doing it without some public assistance. They're on Medicaid, if younger than 65; and likely other types of assistance. This galls me - people who *could* be working and footing their own bills just deciding to stop and live off a small amount each year, plus public assistance that is designed as a safety net (not a "let us help pay for your early retirement" plan).

[Anonymous]

Anonymous wrote:

Anonymous wrote:We spent 20k last year on non-housing expenses, and another 14K on rent/utilities. Total ~35K. This was our last year before moving to DC.

For us the key was living in a low cost of living state (in the South!). We had a 2bd/1ba, cheap restaurants, and went hiking/camping for fun. In DC, we can still most of these things, but rent is killing us.

This is really the key. Owning your home outright, in an area where property taxes are low, is a great first step. In addition, being retired, and so having time to do things you might otherwise be inclined to pay for, also is important. Finally, being single, like a PP, obviously cuts expenses considerably.

But, let's not forget that very few FIRE people are doing it without some public assistance. They're on Medicaid, if younger than 65; and likely other types of assistance. This galls me - people who *could* be working and footing their own bills just deciding to stop and live off a small amount each year, plus public assistance that is designed as a safety net (not a "let us help pay for your early retirement" plan).

I also wouldn't necessarily assume all the FIRE people are only spending small amount per year, it just that they are only drawing in that much income and are otherwise supplementing with non-taxable savings sources so they stay under the thresholds for ACA and other subsidies. Agree that a lot of this is living in a LCOL area with a paid off home and low property taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$36k also goes a long way if you're healthy. You note that the PP mentions no medical expenses.

Medical is super cheap if your income is low. As stated in the other thread having wealth and having income are not the same thing. But yes, I am healthy

"Medical" may be cheap. But the choice of biologicals for autoimmune diseases or experienced surgeons when obscure surgery is needed is not. Mental health care is not. Addiction treatment is not. Any of those will take a whack out of huge wealth in a hurry. I wish you continued good health!

Isn't this this truth!!! I'm on biologics for UC and it costs 25K/yr just for the drugs! I have great insurance through my company (that I pay 1K/mo for and have a 6K deductible) and that is covered (so my health costs 18K/yr alone. I'm terrified of losing my job and getting insurance that won't cover treatment and have to pay out of pocket or having to get insurance on the market.

I'm also "healthy", great weight, work our regularly, eat well (I have to live a very strict healthy life to help manage my UC), but just have bad lick with the UC. I'm also now facing the decision of getting a possible partial hysterectomy for some enormous uterine fibroids which are causing me extreme exhaustion and anemia. Sometimes you just can't control for health no matter how well you take care of yourself.

[Anonymous]

Anonymous wrote:$36k also goes a long way if you're healthy. You note that the PP mentions no medical expenses.

Also if you have no kids or they do no paid activities or lessons.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We spent 20k last year on non-housing expenses, and another 14K on rent/utilities. Total ~35K. This was our last year before moving to DC.

For us the key was living in a low cost of living state (in the South!). We had a 2bd/1ba, cheap restaurants, and went hiking/camping for fun. In DC, we can still most of these things, but rent is killing us.

This is really the key. Owning your home outright, in an area where property taxes are low, is a great first step. In addition, being retired, and so having time to do things you might otherwise be inclined to pay for, also is important. Finally, being single, like a PP, obviously cuts expenses considerably.

But, let's not forget that very few FIRE people are doing it without some public assistance. They're on Medicaid, if younger than 65; and likely other types of assistance. This galls me - people who *could* be working and footing their own bills just deciding to stop and live off a small amount each year, plus public assistance that is designed as a safety net (not a "let us help pay for your early retirement" plan).

Does public assistance ignore assets? Only income?