Author Topic: Can you live on 30k a year?  (Read 20122 times)

Nash3222

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Can you live on 30k a year?
« on: November 01, 2020, 04:02:40 PM »
Can you live on 30k a year or less? I'm talking total expenditures for the year.

uniwelder

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Re: Can you live on 30k a year?
« Reply #1 on: November 01, 2020, 04:06:54 PM »
My wife and I are in a LCOL area and this is our typical annual budget. We don’t have a mortgage on the house, so that helps attain the low number.

NotJen

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Re: Can you live on 30k a year?
« Reply #2 on: November 01, 2020, 04:14:38 PM »
I’m on track to spend <$20k this year (family of 1).

I’ve spent less than $30k per year (if I exclude taxes) since 2017.

YttriumNitrate

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Re: Can you live on 30k a year?
« Reply #3 on: November 01, 2020, 04:37:39 PM »
Sure. In grad school I was living on about 10k a year.

TheFrenchCat

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Re: Can you live on 30k a year?
« Reply #4 on: November 01, 2020, 04:47:16 PM »
Can we live on that?  Yes.  Our base expenses are between 20-24k per year.  On top of that we spend/save about 12k for our daughter's education and savings for college (5400 for school, 6000 for college fund).  So our expenses in FIRE will be a lot less than they are now during our working years.  But since we're making this choice, I don't know if we count.  That number also includes rent and we plan to buy and pay off a house before retiring as well, so I think it will be even lower. 

However, this doesn't make me feel particularly badass.  It doesn't take a lot of work, since my parents used to live on even less, so I was raised very frugally.  We could probably get this number lower, but it's not worth the work or changes to lifestyle for us. 

bbqbonelesswing

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Re: Can you live on 30k a year?
« Reply #5 on: November 01, 2020, 05:10:14 PM »
I don't think I've ever spent $30k in a year. My bare bones budget is about $1,600/month. Currently I'm spending more than that but will still come in a few grand under $30k. We are in Philly (HCOL).

MudPuppy

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Re: Can you live on 30k a year?
« Reply #6 on: November 01, 2020, 05:14:39 PM »
Without mortgage, yes. If we opted for fewer/non special needs pets, we could do it even with the mortgage.

LoanShark

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Re: Can you live on 30k a year?
« Reply #7 on: November 01, 2020, 05:15:51 PM »
Yes. There were times when my take home comp was less than that...lived quite well.

deborah

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Re: Can you live on 30k a year?
« Reply #8 on: November 01, 2020, 05:19:00 PM »
Always have. Being FIRE, I use last year’s underspend for extra things like travel if I want to.

martyconlonontherun

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Re: Can you live on 30k a year?
« Reply #9 on: November 01, 2020, 05:21:42 PM »
Family of 3. Probably 'could' live a happy life at that but we are probably at 70k when you factor in day care, 15 year mortgage, aggressively paying off student and car loans. Hoping that our expenses in Fire will be closer to 45kish, which would include a good amount of travel. (Milwaukee area)

Metalcat

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Re: Can you live on 30k a year?
« Reply #10 on: November 01, 2020, 05:43:11 PM »
Probably, yeah, it would be doable, but it wouldn't be as fun. We're more 45K people, and we live extremely lush at that spend.

OtherJen

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Re: Can you live on 30k a year?
« Reply #11 on: November 01, 2020, 05:51:15 PM »
After tax, that covers all our regular expenses generously.

nobody

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Re: Can you live on 30k a year?
« Reply #12 on: November 01, 2020, 05:54:09 PM »
Always have. (Party of one.)

Zikoris

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Re: Can you live on 30k a year?
« Reply #13 on: November 01, 2020, 06:20:08 PM »
Not only could we do it without any difficulty, we'd have an extra few thousand left over to make a money bonfire at the end of the year. We've never once spent that much in our many years of tracking.

Freedomin5

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Re: Can you live on 30k a year?
« Reply #14 on: November 01, 2020, 07:27:16 PM »
Family of three. We spend about $12K per year ($18K if you include paying for life insurance), but then we have no rent/mortgage, DD has free tuition, and our companies pay for our health insurance.

ctuser1

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Re: Can you live on 30k a year?
« Reply #15 on: November 01, 2020, 08:59:19 PM »
No, we can't!

We are a family of 4 in a HCOL area. The carrying cost of our house (including amortized amounts set aside for all maintenance including lumpy ones like roof/furnace) is between $30-$40k. Once the mortgage is paid off, and we save the $6k/year in interest payment, the carrying cost should drop below $30k if you ignore the opportunity cost of the occupied capital.

Based on my number crunching, I have calculated that our base run rate is about $50k/year once our current house is paid off. Hence, this is my bare minimum Lean-FI number.

Note: I have gotten a lot of flak from people for putting this number out there. The criticism is justified from a certain point of view. I had done a similar "base run rate" calculation when we were renters and it came out much lower simply because renting the small apartment was a lot cheaper than "owning" a (small) SFH dwelling.  At that time, our "base run rate" was around $30k. We don't want to go back to the "apartment" lifestyle, however, and hence don't consider that to be a relevant option any more.

Sid Hoffman

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Re: Can you live on 30k a year?
« Reply #16 on: November 01, 2020, 10:52:14 PM »
Based on my number crunching, I have calculated that our base run rate is about $50k/year once our current house is paid off. Hence, this is my bare minimum Lean-FI number.

Note: I have gotten a lot of flak from people for putting this number out there.

I think it's good to be honest about it, especially for all the people who are more enthusiastic about FIRE than their life partner. If $50k/year lets you do everything you life and see that your entire family is taken care of, then that's still a good number for a family if you asked me.

For me, I've been running around $36k/year as a roughly 1.5 person household (my adult son has lived with me off and on for the past several years and has relatively modest expenses that I've covered from time to time) and my math says that I should have my house paid off next year, at which point my base comes down to around $21k/year. So in that situation of having a paid off house and car, $30k would mean a pretty substantial buffer of $9k/year to allocate to future expenses like repairs, renovations, replacement car, vacations, and anything else that's outside my normal activities. For a 2+ person household I still think $30k/year is totally doable, but it will almost certainly have a lower annual buffer.

evme

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Re: Can you live on 30k a year?
« Reply #17 on: November 01, 2020, 11:12:23 PM »
Yes, very doable. It helps a lot not having a mortgage though.

deborah

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Re: Can you live on 30k a year?
« Reply #18 on: November 01, 2020, 11:23:33 PM »
The point isn’t whether we can do it, or even whether it can be done. There are plenty of people who’ve done it or are doing it. And less. A lot less. Look at early retirement extreme.

The point is whether YOU can do it.

And whether you are happy doing it.

And whether you are happy doing it for a lifetime.

APowers

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Re: Can you live on 30k a year?
« Reply #19 on: November 02, 2020, 05:45:36 AM »
Easily. But why are you asking?

Car Jack

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Re: Can you live on 30k a year?
« Reply #20 on: November 02, 2020, 06:09:11 AM »
No.

prop tax $9k
insurance for car, home, umbrella $4k
health insurance, copays, deductibles, $10k

Without going any further, that would leave us $7k for the year.  Nope. 

MasterStache

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Re: Can you live on 30k a year?
« Reply #21 on: November 02, 2020, 07:08:11 AM »
Sure! I lived on about 12K per year in college. As a family of 4 we have no intentions of trying to scrape by on that amount. My daughter competes nationally in gymnastics and my son has some special needs. Not even going to try to live on 30K per year.

blue_green_sparks

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Re: Can you live on 30k a year?
« Reply #22 on: November 02, 2020, 07:48:39 AM »
Yes, $25K for 2019 and 2020 in a MCOL area. Insurance policies and real estate taxes are our biggest expenses. We feel we live well and want for nothing, especially with this relatively sizable piece of property to roam. We will be selling a few valuables next year. I was expecting we would grow more attached to material things but for some reasons unknown to us, the opposite is true. 

RainyDay

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Re: Can you live on 30k a year?
« Reply #23 on: November 02, 2020, 09:37:26 AM »
No.

prop tax $9k
insurance for car, home, umbrella $4k
health insurance, copays, deductibles, $10k

Without going any further, that would leave us $7k for the year.  Nope.

Exactly.  Our property taxes aren't as high as that, but we do live in a HCOL area (right outside DC).  Even though we live in a modestly-priced home (for the area), it's still expensive. 

So nope, no sub-$30k/year for us! 

Nash3222

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Re: Can you live on 30k a year?
« Reply #24 on: November 02, 2020, 10:24:06 AM »
Easily. But why are you asking?

Eyeing retirement, with what I have saved up, 30K a year would work. :)

Metalcat

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Re: Can you live on 30k a year?
« Reply #25 on: November 02, 2020, 10:29:23 AM »
Easily. But why are you asking?

Eyeing retirement, with what I have saved up, 30K a year would work. :)

Yeah, but what other people spend is virtually meaningless.
The range of housing costs alone makes annual spend amounts impossible to generalize.

There are people out there who can barely get by on 100K/yr and people who are living well and traveling internationally on under 20K/yr.

Even if every person on here said "oh yeah, we can easily love on 30K/yr" that still wouldn't mean anything for your particular circumstances.

Do a case study if you want actual reassurance about your ability to retire.

ixtap

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Re: Can you live on 30k a year?
« Reply #26 on: November 02, 2020, 10:33:04 AM »
Easily. But why are you asking?

Eyeing retirement, with what I have saved up, 30K a year would work. :)

Then all that matters is can *you* live on $30k?

It depends on your lifestyle and your existing possessions (many have said having a paid off Josie keeps their costs down, for example).

We know that we *can* line on $30k, but we are currently making lifestyle choices that have us spending twice that and we want to have similar options in the future. Specifically, we currently have a second home because DH had some health issues that required us to eliminate his commute or choose to retire on a scant $30k. Since his health issues also meant we wouldn't be able to do the things we want to do, he chose to spend more to earn more.

Metalcat

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Re: Can you live on 30k a year?
« Reply #27 on: November 02, 2020, 10:34:28 AM »
Easily. But why are you asking?

Eyeing retirement, with what I have saved up, 30K a year would work. :)

Then all that matters is can *you* live on $30k?

It depends on your lifestyle and your existing possessions (many have said having a paid off Josie keeps their costs down, for example).

We know that we *can* line on $30k, but we are currently making lifestyle choices that have us spending twice that and we want to have similar options in the future. Specifically, we currently have a second home because DH had some health issues that required us to eliminate his commute or choose to retire on a scant $30k. Since his health issues also meant we wouldn't be able to do the things we want to do, he chose to spend more to earn more.

man, autocorrect kicked your ass a bit on that one, eh?

ixtap

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Re: Can you live on 30k a year?
« Reply #28 on: November 02, 2020, 10:36:10 AM »
Easily. But why are you asking?

Eyeing retirement, with what I have saved up, 30K a year would work. :)

Then all that matters is can *you* live on $30k?

It depends on your lifestyle and your existing possessions (many have said having a paid off Josie keeps their costs down, for example).

We know that we *can* line on $30k, but we are currently making lifestyle choices that have us spending twice that and we want to have similar options in the future. Specifically, we currently have a second home because DH had some health issues that required us to eliminate his commute or choose to retire on a scant $30k. Since his health issues also meant we wouldn't be able to do the things we want to do, he chose to spend more to earn more.

man, autocorrect kicked your ass a bit on that one, eh?

Line up the Josie!

I am leaving it...

nirodha

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Re: Can you live on 30k a year?
« Reply #29 on: November 02, 2020, 10:37:00 AM »
For the OP - when asking questions like this, be sure it is an apples to apples comparison:

- how many people in the household
- is the home paid off (ie there is really capital tied up providing imputed rent or some other "cheap" housing hack that is really a labor trade?)
- who is paying for health insurance (is it "free" because a spouse works, what about clever use of ACA subsidies and cost sharing?)
- are all taxes being accounted for (people often ignore income / capital gains / dividend taxes - but what if you have to manufacture income to get ACA subsidies?)
- any other free perks the person is getting, that are really a trade on labor? maybe work pays for internet and phone, maybe watching the grandkid every day includes meals
- what is the cost of living of the area

Accounting for all of the above, my household of 2 is above $30k. Could we force it? No. We have a $300k townhouse that acts as an anchor. I'd estimate cost of capital tied up into that around $1200 per month, which already puts us at $14400 for the year. Add on property taxes, association dues and home owners insurance - we're already at $24k. That's before accounting for health insurance, transportation, food or income taxes on money spent to afford those expenses. I bet we'd end up closer to $50k per year in comprehensive expenses.

Yet, I could say the home is paid off and work covers my insurance. Throw out the internet and phone costs, since work pays. Cut off the "optional" stuff I bought for mental sanity in pandemic times. Ignore income taxes, because they only apply from working. Then divide what is left by 2, since there's two of us. Then I might claim expenses under $10k/yr.

Often, there is a bias towards the latter, especially in the FIRE community. A low score can be a point of pride. IMO that confuses the picture for newer people, makes things look more extreme than they really are.
« Last Edit: November 02, 2020, 10:38:32 AM by nirodha »

nalor511

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Re: Can you live on 30k a year?
« Reply #30 on: November 02, 2020, 11:54:14 AM »
About $35k for two, yes, but it's (of course) going to depend on your area, family size, and extravagance

WhiteTrashCash

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Re: Can you live on 30k a year?
« Reply #31 on: November 02, 2020, 11:57:44 AM »
I can't live on 30k a year due to healthcare needs in my family. 50k is more reasonable for us.

Sandi_k

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Re: Can you live on 30k a year?
« Reply #32 on: November 02, 2020, 11:59:40 AM »
Can you live on 30k a year or less? I'm talking total expenditures for the year.

I can't. We're in CA, with a 15 year mortgage. PITI alone is $40k per year.

MudPuppy

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Re: Can you live on 30k a year?
« Reply #33 on: November 02, 2020, 12:00:12 PM »
@WhiteTrashCash healthcare costs are huge. Unless universal/single payer is passed I will likely need to coastFI just to keep decent coverage

WhiteTrashCash

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Re: Can you live on 30k a year?
« Reply #34 on: November 02, 2020, 12:09:58 PM »
@WhiteTrashCash healthcare costs are huge. Unless universal/single payer is passed I will likely need to coastFI just to keep decent coverage

I think I could make it work if they at least added a public option. Otherwise, I would need a lot of income to cover premiums and deductibles for a HDHP on the ACA Marketplace plus co-pays.

MudPuppy

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Re: Can you live on 30k a year?
« Reply #35 on: November 02, 2020, 12:16:09 PM »
That’s another path!

Jack0Life

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Re: Can you live on 30k a year?
« Reply #36 on: November 02, 2020, 10:46:51 PM »
We have a smaller rental house that's paid off. If we move back, we can easily do it.
Monthly: Family of 2.
$200- property tax
$100- home insurance
$150- utility
$250- health insurance(ACA)
$50- cellular
$70- internet
$80- car insurance(1 car)
$80- gas and tolls
$1500- Food and misc spending($50 per day)
========
$2480= $29,760 yearly.
Wow, still a lot more than I thought. I can probably trim it down to $25,000. Use the extra $5000 for vacations.

MasterStache

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Re: Can you live on 30k a year?
« Reply #37 on: November 03, 2020, 07:08:25 AM »
Easily. But why are you asking?

Eyeing retirement, with what I have saved up, 30K a year would work. :)

Yeah, but what other people spend is virtually meaningless.
The range of housing costs alone makes annual spend amounts impossible to generalize.

There are people out there who can barely get by on 100K/yr and people who are living well and traveling internationally on under 20K/yr.

Even if every person on here said "oh yeah, we can easily love on 30K/yr" that still wouldn't mean anything for your particular circumstances.

Do a case study if you want actual reassurance about your ability to retire.
+1
Perhaps the OP is just wondering how many folks live on under 30K/year. I get that. But in the grand scheme of things there are so many variables it's inevitably pointless to weigh decisions for yourself based on others inputs. 

UnleashHell

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Re: Can you live on 30k a year?
« Reply #38 on: November 03, 2020, 09:36:51 AM »
no. I can't. But I have 1 1/2 mortgages and alimony to pay. That's nearly 30k a year right there.

but so what - unless you have alimony and 1 1/2 mortgages then me living on 30K a year (or non) is totally irrelevant to you.

The question is can you live on 30k a year. maybe
or How can I live on 30k a year?

provide context and you might get a relevant answer.

Mrs. D.

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Re: Can you live on 30k a year?
« Reply #39 on: November 03, 2020, 11:37:57 AM »
No. We are a family of 4 in a MCOLA. We spend in the 45-50 range. When DH and I are empty nesters, and if we can get rid of the mortgage, then probably yes. Although that probably wouldn't leave room for a vacation or any occasional splurges.

alcon835

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Re: Can you live on 30k a year?
« Reply #40 on: November 04, 2020, 12:22:31 PM »
Not until my house is paid off. Even then, my lifestyle puts me at ~$40k/year FIRE with a $60k/year fat FIRE. I could cut things to get under $30k fairly easily, but I don't think I'll need too, so I plan to live off of 40K+

dandarc

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Re: Can you live on 30k a year?
« Reply #41 on: November 04, 2020, 12:25:02 PM »
Theoretically the numbers should work for our household of 2, but we're not trying hard at all so can't say we're actually doing it.

oldladystache

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Re: Can you live on 30k a year?
« Reply #42 on: November 04, 2020, 04:15:09 PM »
I certainly could if I had to. Fortunately I don't have to

MudPuppy

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Re: Can you live on 30k a year?
« Reply #43 on: November 04, 2020, 04:25:51 PM »
@oldladystache i don’t know why that answer made me laugh but it did

PoutineLover

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Re: Can you live on 30k a year?
« Reply #44 on: November 04, 2020, 04:28:15 PM »
I personally can, and do. My household spends a bit more than that, two adults. We do have some luxuries that we could cut out if we really had to, but my current personal spending of about 22-24k works pretty well for me.

2Birds1Stone

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Re: Can you live on 30k a year?
« Reply #45 on: November 05, 2020, 01:29:16 AM »
Easy peasy.

As an individual my expenses have never been more than $26k/yr in my adult life (34 now). And over the past 14 months our combined expenses with DW were <$30k/yr while traveling in Europe.

foghorn

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Re: Can you live on 30k a year?
« Reply #46 on: November 08, 2020, 06:28:14 AM »
Yes.

Monthly bare bones budget is about $1300 ($15,600 per year).  Throw in all the extra stuff that comes up during a year and I am still well under $30K per year. 

Single. No kids.  No mortgage.  No debt.

Linea_Norway

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Re: Can you live on 30k a year?
« Reply #47 on: November 08, 2020, 07:26:33 AM »
Yes.
In one of the most expensive countries in the world. With 2 adults.

To clarify, this was in a house that we fully owned. Now, living in a rental, I think we are spending more.
« Last Edit: November 08, 2020, 12:09:50 PM by Linea_Norway »

Dicey

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Re: Can you live on 30k a year?
« Reply #48 on: November 08, 2020, 02:47:00 PM »
I don't think I've ever spent $30k in a year. My bare bones budget is about $1,600/month. Currently I'm spending more than that but will still come in a few grand under $30k. We are in Philly (HCOL).
Huh. I did not know Philly is a "HCOL". Really?

Tass

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Re: Can you live on 30k a year?
« Reply #49 on: November 08, 2020, 03:22:55 PM »
In 2019 and 2020, I've spent about $15k/year while paying rent. That covers only my half of expenses, which are split with my partner. It does not include ~$3.5k/year in charitable donations.

Next year my spending will go up to about $17.5k/year (again excluding charity) because I no longer have roommates besides my partner. The two of us together would have a hard time staying under $30k, but only because we are paying rent in a HCOLA. We plan to move somewhere cheaper after I finish my degree.

My non-rent, non-charity spending is $7-8k per year.
« Last Edit: November 08, 2020, 03:27:43 PM by Tass »