

Ask HN: What Are The Costs of Living? - gareim

I don't want to go into details, but I recently got in an argument about whether or not someone could live off of $20,700 without going hungry. I believe that it is possible (heck, my family of 4 does that right now), but I'd like some stats to back me up.<p>What are the costs of living? If income is $20,700 a year, how much of it is left after taxes? How much would you have to spend on food every week? Rent (assuming an urban area like New York, Chicago, Los Angeles, etc.)? Other necessities?<p>So I guess the main question is, is $20,700 a year enough for one person?<p>I think the answer to this question could be beneficial to anyone looking to cut costs while starting a startup as well.
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_delirium
For the tax question:

If that's earned income (rather than from investment income, say) you'll pay
federal payroll taxes of 7.65%, and, if you don't have anything but the
standard deductions, federal income tax of a bit over $2500, so you'll have
about $16,500 after federal taxes.

Then you'll pay somewhere between $0 and $1000 in state income tax, depending
on your state. So a range of ~$15,500 to ~$16,500 post-tax.

That's probably enough to live on frugally, but it _really_ depends on being
able to find cheap housing, which will probably dominate the expenses. If
you're somewhere like Pittsburgh, that'll be no problem; plenty of $500-600/mo
apartments. If you're in NYC, it will take more searching, even in the outer
boroughs.

Food costs, if you eat cheaply and cook, aren't a huge deal relative to rent.
Health insurance _might_ be a problem if you aren't young/healthy or employer-
covered (individually purchased insurance, if you have any blemish on your
health record or are older, gets expensive quickly). A yearly transit pass
will be around $800-$1200/yr in most places, if you can get by without a car.

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gareim
Finally, an answer to the tax question! I don't have much experience with
taxes so far, but $15,500 after taxes seems pretty livable because even in
higher cost cities, there are still low cost areas. Health insurance seems to
be a problem for everyone, but the guy mentioned in another comment claims he
can do health insurance for a couple hundred per year, so there's that I could
look into.

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alandjackson
I lived on around 13k after taxes all through college, it isn't that hard. I
still spent money on going out to eat, computers, etc.

Assuming you are single (otherwise, this whole exercise changes), then they
biggest factor is room mates. 2 people sharing a 2 bedroom apartment (and
utilities/food/etc) can easily live comfortably on the $15k-$17k after tax
income each.

You can easily get MUCH cheaper by having 2-3 room mates.

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gareim
I guess for all those people who can't figure out how to live on 20k a year,
they should take a look at college students, haha. I've heard that a lot of
money can be saved simply by never eating out, so if you can get by on 13k,
then it should be VERY doable on 20k, especially without eating out.

Thanks for the reply!

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JamesPeterson
It depends on a bit on both luck and work done to reduce living costs. For
example, in my city home prices average ~$500,000 (AUD is currently roughly on
parity with USD). Yet I, renting, live off roughly what you describe.

Yep. I spend ~$380 each week total; ~$380 includes (shared) rent, food,
(considerable) entertainment, health care & cover, gym, mobile, broadband,
travel and whatever miscellaneous expenses come up (well-chosen presents,
broken crockery (!) etc).

I live in a beautiful house that's just a little more than a mile from the
city centre and don't have any shared expenses with my partner (who still
lives with her parents). I do not, however, have any dependents.

I live a great life on next-to-no money (mostly out of necessity; I plan on
returning to my studies next year). We had to find a landlord willing to give
a discount for quality tenants, and I had to give up buying luxury items (my
last watch cost just $20). Most of the work really is just tracking receipts
and making sure there aren't any surprises (and if there are, lose those
habits).

Oh, and we eat very (!) well, but only have take-out a few times a week.

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gareim
Wow, that's some really good numbers you gave me! Your costs per week doesn't
seem very high at all considering you have things like gym membership, mobile
and broadband, entertainment, and eating out. I'm starting to think it's very
hard not to be able to live on 20k a year unless the person had a large
medical problem.

~~~
JamesPeterson
I think it also very much depends in what 'tier' you do your spending. For
example, I bought a Samsung laptop. It's great. My housemate bought a Sony
laptop that's slightly shinier but _has similar features and a pricetag 2.5x
higher_. I buy $30 shirts. Provided they fit me properly, they look great. A
friend of mine frequently spends _$200_ on each shirt. His are a little
shinier, but for a price tag of 6-7x more. And I still look great ;)

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md1515
This is a really good cost-cutting blogger. Lives on $7,000 per year in San
Francisco and is happy and comfortable.

<http://earlyretirementextreme.com/>

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steventruong
One commentator states the author lives in the east bay, which is very
different than SF cost of living. That said, if you're just moving to SF now,
rent has gone up significantly in the past two years. However that doesn't
mean it's impossible

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polyfractal
My salary is $32k pre-tax. I live in Boston, pay $650/month in rent (and two
other roommates) and don't own a car (I bike or ride the train).

I put away about 10k in savings/401k last year, so I'm going to say you can
live on $20k/year. I watch my money like a hawk though. Buying a $400 refurb
laptop was a serious expense for me and took quite a bit of thinking about.

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josh4ever
I know a lot of immigrant students who live in Jersey City (20 mins from NYC)
for $400 a month i.e. $5K annually...

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gareim
That's really interesting to hear. Was that was only the cost of rent or did
it include things like toiletries, utilities, etc?

