Author Topic: Can you live on 30k a year?  (Read 20147 times)

monarda

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Re: Can you live on 30k a year?
« Reply #50 on: November 08, 2020, 10:25:20 PM »
One person? Yes, for sure. Two of us are living between 30K and 35K in a middle COL city.  If we'd spend 45K it'd feel extravagant.

bbqbonelesswing

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Re: Can you live on 30k a year?
« Reply #51 on: November 09, 2020, 09:30:44 AM »
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?

It depends what neighborhood you live in. For us, yes, it's HCOL compared to living in the burbs, but definitely lower than some other big cities like NYC or SF.

DeniseNJ

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Re: Can you live on 30k a year?
« Reply #52 on: November 12, 2020, 07:24:55 AM »
Nope. Living in northern NJ. Paying for two kids in state college right now. Monthly mortgage, taxes, and maintenance on small townhouse is $2600, so that alone is 31K.

However, yes it can be done and I personally could totally do it since if it was just me I'd live in a studio apt and be perfectly happy. It's the rest of my gang that can't do it! Can't wait to send them all packing and move to Costa Rica.

yachi

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Re: Can you live on 30k a year?
« Reply #53 on: November 12, 2020, 01:41:00 PM »
I think so, but we would have to pay off the house, sell the second car, and rely on Medicaid.  Family of 6 with 4 in elementary school.  I'm not convinced that this level of spending without a job beats how we're living with a job.

HenryDavid

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Re: Can you live on 30k a year?
« Reply #54 on: November 23, 2020, 08:47:26 PM »
Can you live on 30k a year or less? I'm talking total expenditures for the year.

In Canada the median individual after tax income for 2018 was 25289.00 USD.
So over half the individuals in Canada took home much less than 30k US.

Goldielocks

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Re: Can you live on 30k a year?
« Reply #55 on: November 29, 2020, 08:34:49 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.
Ah! but your number is pretty impressive if you think of it as "per adult".
Your bare bones is $25k per adult.   In HCOL, with children. 

ilsy

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Re: Can you live on 30k a year?
« Reply #56 on: November 29, 2020, 10:30:44 PM »
LCOL state, but expensive hood, 2 adults (one is elderly with out of pocket health expenses) and 2 kids, $29k/year (this year with projected Dec spendings). And that's not the bare bones. We spend a lot on our 4 cats, brand new iphones this year for me and kids, nintendo switch+ games and new laptop for kids, tons of brand new books this year, unexpected repairs to the house and the car. The budget includes mortgage, car is paid off.

StarBright

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Re: Can you live on 30k a year?
« Reply #57 on: November 30, 2020, 06:50:11 AM »
We could make 30k work if we had to, but it would be pushing it. I worked out our barebones budget last year when I was thinking of quitting - 32k a year for a family of 4. We tried it for about three months and I hated it.

Once the kids are grown and the mortgage is paid off, it should be cake as long as our property and local taxes don't continue their current doubling trend (they shouldn't).


Dicey

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Re: Can you live on 30k a year?
« Reply #58 on: November 30, 2020, 07:21:18 AM »
Don't want to, don't need to, don't have to, thank goodness! That's what my brain sings every time this thread pops up.

For many years, I struggled to balance home ownership in an actual HCOLA* and saving enough to RE. It often felt like it would never happen, but eventually it did. This shit works, people. Keep at it.

*IMO, there's a huge difference between "some areas are more expensive" and "every damn place is crazy expensive". I did the roommate thing for a very long time.

iris lily

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Re: Can you live on 30k a year?
« Reply #59 on: November 30, 2020, 09:20:49 AM »
One person? Yes, for sure. Two of us are living between 30K and 35K in a middle COL city.  If we'd spend 45K it'd feel extravagant.

I know someone who has a benefit from the Veterans Department that’s about $30,000 a year. She can’t afford to live in California but she wants to live in California. But here in St. Louis she said she’s looking for a place to live and she can’t afford anything here either.

Since I look at rents in the city I know where there are small, clean, and safe rentals for $600 a month. She has no pets. She does not require a garage. There any number of places she can live and I gave her the ZIP Code to find them.

She says she can’t find Rentals and her friend won’t help her and she doesn’t work the computer very well.  So I texted to her several exact rental opportunities.

Next time I ran into her I asked her how it was going, the search for a place to live. She put on her sad face, her “I’m a victim” face and said she just can’t afford places. She mentioned where she was looking—in a very expensive area. VERY expensive. Hell even I wouldn’t be renting there and I have a few more million dollars than she does.

Next time I ran into her—same thing.

Then we ran into her friend who “ won’t help her.”  Not surprisingly, we learned that he also steered her the same direction as I did. That she actually spends hours a day on her cell phone which is for all intents and purposes a “computer.” That she continues to search for rentals in high end places. But  it is easier and cheaper to sponge off of him and to travel around sleeping in her friend’s guest rooms than to actually rent a place that she can afford.







« Last Edit: November 30, 2020, 09:22:43 AM by iris lily »

mistymoney

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Re: Can you live on 30k a year?
« Reply #60 on: November 30, 2020, 11:31:07 AM »
Can you live on 30k a year or less? I'm talking total expenditures for the year.

In Canada the median individual after tax income for 2018 was 25289.00 USD.
So over half the individuals in Canada took home much less than 30k US.

but with a better benefit package :P

StarBright

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Re: Can you live on 30k a year?
« Reply #61 on: November 30, 2020, 11:33:30 AM »
LCOL state, but expensive hood, 2 adults (one is elderly with out of pocket health expenses) and 2 kids, $29k/year (this year with projected Dec spendings). And that's not the bare bones. We spend a lot on our 4 cats, brand new iphones this year for me and kids, nintendo switch+ games and new laptop for kids, tons of brand new books this year, unexpected repairs to the house and the car. The budget includes mortgage, car is paid off.

I think that is impressive even in a LCOL area!

mistymoney

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Re: Can you live on 30k a year?
« Reply #62 on: November 30, 2020, 11:40:11 AM »
Don't want to, don't need to, don't have to, thank goodness! That's what my brain sings every time this thread pops up.



this made me chuckle.....

Yes - anyone could likely make this work - limiting the # of dependents/cohabitators involved...but wanting to pull the plug enough to sign up for doing it in perpetuity....a different question altogether I think.

iris lily

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Re: Can you live on 30k a year?
« Reply #63 on: December 01, 2020, 01:02:39 PM »
One person? Yes, for sure. Two of us are living between 30K and 35K in a middle COL city.  If we'd spend 45K it'd feel extravagant.

I know someone who has a benefit from the Veterans Department that’s about $30,000 a year. She can’t afford to live in California but she wants to live in California. But here in St. Louis she said she’s looking for a place to live and she can’t afford anything here either.

Since I look at rents in the city I know where there are small, clean, and safe rentals for $600 a month. She has no pets. She does not require a garage. There any number of places she can live and I gave her the ZIP Code to find them.

She says she can’t find Rentals and her friend won’t help her and she doesn’t work the computer very well.  So I texted to her several exact rental opportunities.

Next time I ran into her I asked her how it was going, the search for a place to live. She put on her sad face, her “I’m a victim” face and said she just can’t afford places. She mentioned where she was looking—in a very expensive area. VERY expensive. Hell even I wouldn’t be renting there and I have a few more million dollars than she does.

Next time I ran into her—same thing.

Then we ran into her friend who “ won’t help her.”  Not surprisingly, we learned that he also steered her the same direction as I did. That she actually spends hours a day on her cell phone which is for all intents and purposes a “computer.” That she continues to search for rentals in high end places. But  it is easier and cheaper to sponge off of him and to travel around sleeping in her friend’s guest rooms than to actually rent a place that she can afford.
And considering that her VA benefit is totally tax free and she can get free healthcare thru the VA so her $30k should be enough to provide a decent place to live (even in Calif) and enough for extras. Here in HCOL coastal SoCal most singles have shared apt or rent rooms or studios. So could do that for much less out in the Midwest. Even in a fancy zip code. She could get a part time, temp or season job for extra income if she wanted more income. But like you said...excuses excuses.

She Complained about California housing, that there’s no public housing for middle income people like herself, it is  all for very low income people. Or richnpeople. She was looking at taxpayer  subsidized places.

I think she does work a little but dont know how much she can work. But then, she has jetted off to California for several weeks so a job would interfere with that. She is mentally ill and her disability money is for stress/PTSD caused by an attack by her superior in the service.

« Last Edit: December 01, 2020, 04:18:16 PM by iris lily »

secondcor521

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Re: Can you live on 30k a year?
« Reply #64 on: December 01, 2020, 02:44:14 PM »
I can and currently do.  Annual rate is about $28K.

Paid off house and car.  ACA bronze HSA plan.  Metro suburbs in MCOL area.

I do have three young adult children who are in the process of launching, and I don't segregate out some of the expenses attributed to them (for example, my Food category feeds me and my two sons, and occasionally my third child when they are passing through town).  Utilities and income taxes are also entangled in similar ways.

That $28K also excludes college costs for them, which I pay for from a separate group of accounts.  Those separate accounts are currently sufficient to see them all through graduation with some extra.  One graduating in about two weeks, the other two are roughly sophomores.

tj

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Re: Can you live on 30k a year?
« Reply #65 on: December 01, 2020, 07:26:22 PM »
Not if I buy real estate in HCOL area.

FiveSigmas

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Re: Can you live on 30k a year?
« Reply #66 on: December 02, 2020, 08:23:36 PM »
Most years, yes I have. This year, hedonism has won.

#YOLO #SorryNotSorry #WellMaybeALittleSorry #ImOkayWithIt

tj

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Re: Can you live on 30k a year?
« Reply #67 on: December 03, 2020, 05:39:31 PM »
Not if I buy real estate in HCOL area.
Probably hard to buy even in a LCOL area unless you can live cheap for awhile to save up for a larger down payment.

Being in coastal SoCal and knowing lots of lower income earners, I found most rented a room or studio, saved as much as possible and then left the area if they wanted to buy.  Or (like me) were able to buy at the bottom of a housing crash when housing cost dropped 50% and then rent out rooms for a few years to help with expenses.  Of course most people were also unemployed at those times so that didn't work out every time. 

My sister rented a nice "studio" room (private entrance, bath and kitchenette) a few blocks from the beach in Manhatten Beach for under $800/month on average all inclusive. She saved a ton of money, quit her job and moved out of the area to a more affordable location and FIREd. She wasn't a high earner either. I think her expenses were around $1200/month.

 In the OPs case I believe he already had a paid off house and no debt. In that case $30k is very doable if you have affordable health insurance. That's always the kicker here in the US..

Uh, I doubt there would be Manhattan Beach studio at that price today. I'm looking at Long Beach or Seal Beach and there's nothing that is even close to that cheap that is a few blocks from the beach.

Schmidty

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Re: Can you live on 30k a year?
« Reply #68 on: December 04, 2020, 01:15:13 AM »
Yep, live on less than that now.  LCOL area, no rent/mortgage, 2 adults.  No problem.

jim555

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Re: Can you live on 30k a year?
« Reply #69 on: December 04, 2020, 09:41:15 AM »
I've been about half that for the last few years.

tj

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Re: Can you live on 30k a year?
« Reply #70 on: December 04, 2020, 07:28:08 PM »
Not if I buy real estate in HCOL area.
Probably hard to buy even in a LCOL area unless you can live cheap for awhile to save up for a larger down payment.

Being in coastal SoCal and knowing lots of lower income earners, I found most rented a room or studio, saved as much as possible and then left the area if they wanted to buy.  Or (like me) were able to buy at the bottom of a housing crash when housing cost dropped 50% and then rent out rooms for a few years to help with expenses.  Of course most people were also unemployed at those times so that didn't work out every time. 

My sister rented a nice "studio" room (private entrance, bath and kitchenette) a few blocks from the beach in Manhatten Beach for under $800/month on average all inclusive. She saved a ton of money, quit her job and moved out of the area to a more affordable location and FIREd. She wasn't a high earner either. I think her expenses were around $1200/month.

 In the OPs case I believe he already had a paid off house and no debt. In that case $30k is very doable if you have affordable health insurance. That's always the kicker here in the US..

Uh, I doubt there would be Manhattan Beach studio at that price today. I'm looking at Long Beach or Seal Beach and there's nothing that is even close to that cheap that is a few blocks from the beach.
Yeah probably true. More like a room rental now. She moved from there about 2 years ago and was paying $785 all inclusive but it was at a private house that had 2 rental studios (ADUs) so owners in the big house were probably more flexible than a complex landlord.

Check out crazy craigslist for Belmont Shore or Heights. It is pretty inexpensive for studios and one bedrooms and house shares compared to Seal Beach and a fun place (I use to live in Belmont Shore).  Probably good deals now that Long Beach State and the other colleges aren't in full sesson.  But then anything is probably inexpensive compared to Hawaii ;-).

Actually, the rent seems much worse than it was in Hawaii. I was paying $1600 for fully furnished all utilities with private entrance in Hawaii. It was a ton of square footage too, not much of a kitchen though. 
« Last Edit: December 05, 2020, 12:50:22 PM by tj »

Laura Ingalls

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Re: Can you live on 30k a year?
« Reply #71 on: December 05, 2020, 08:46:31 AM »
That’s about what we have spent this year.  We are a family of 4 in a paid off house in a Low(ish) cost of living area.  This includes helping our college student with housing expenses (he had grants to cover tuition).

We would prefer to spend more and can easily afford too but this stupid pandemic is cramping our style.

ctuser1

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Re: Can you live on 30k a year?
« Reply #72 on: December 06, 2020, 12:32:13 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.
Ah! but your number is pretty impressive if you think of it as "per adult".
Your bare bones is $25k per adult.   In HCOL, with children.

Thank you. That way of looking at it makes me feel a lot better.


steevven1

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Re: Can you live on 30k a year?
« Reply #73 on: December 06, 2020, 09:26:15 PM »
Our worst spending year on record clocked in at $28,190 for two adults. Housing topped the list even though our condo is paid off (association dues suck). And paying full price for health insurance out-of-pocket as retirees came in second.

LovinPSDs

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Re: Can you live on 30k a year?
« Reply #74 on: December 08, 2020, 07:41:28 AM »
Can't wait to send them all packing and move to Costa Rica.


YES!!!! That's what I'm talking about haha. I love Costa Rica.

helloyou

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Re: Can you live on 30k a year?
« Reply #75 on: December 09, 2020, 07:53:04 AM »
I can live on half of that amount in London :)

terran

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Re: Can you live on 30k a year?
« Reply #76 on: December 09, 2020, 01:02:56 PM »
Yes, my wife and I regularly spend less than $30k/year even with an expensive international travel habit. It would be a stretch if we had to pay full health insurance rates (not employer subsidized, not living most of the year in other countries with lower cost international health insurance, and no ACA subsidies).

thorto0803

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Re: Can you live on 30k a year?
« Reply #77 on: December 14, 2020, 01:17:35 PM »
we could but we don't.

DINK currently renting in a L/MCOL city (outside city center).

We will spend ~$33,700 this year not including charitable giving of about $9,000.

We could easily cut off $100/mo on eating out, $10/mo on subscriptions, $10/mo on utilties $40/mo on covered parking spaces, $200/mo on rent, and $200/mo on misc. unnecessary entertainment or "want" items, but we live very comfortably at our current spending level.




fattest_foot

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Re: Can you live on 30k a year?
« Reply #78 on: December 18, 2020, 11:59:40 AM »
I think we could easily if not for health insurance. Maybe my math is bad, but between ACA coverage, deductibles, and prescriptions, I'm guessing we'll likely spend about $1200 a month for two.

Without that, our spend is likely around $20-25k.

martyconlonontherun

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Re: Can you live on 30k a year?
« Reply #79 on: December 18, 2020, 01:38:38 PM »
Probably not $30k for 2 adults/1 kid at this point in my life but once I hit FI I will be able to do that:
P Taxes: $4k
Child Care: $20k
Food: $7k
Insurance: $1k
Capitalizable expenses?
Mortgage: $14k
Cars: $8k

Ignoring the capitalizable Expenses: Floor $35k, add in cash outflows: Floor $60k

I could see us living really well for $50k once we pay off the house/downsize.
 

Evgenia

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Re: Can you live on 30k a year?
« Reply #80 on: December 18, 2020, 01:46:59 PM »
Sure. In our run-up to FIRE (5.5 years ago), we lived on $32k-$37k/year in the SF Bay Area. That included thousands of dollars of travel, so removing that would have put us at $30k and under. That said...

We definitely had some factors that skewed our situation: We were DINKs, and a big factor in terms of housing affordability was that we were able to purchase a small house in a not-yet-"desirable"/lesser known neighborhood (no longer, alas) home in 2012, not quite the bottom of the post-recession market but close, with low interest rates. And, we had a decent down payment. Lots of advantages that may not make this feasible for others, but $40k-or-less-per-annum was our pre-FIRE target that we tried to beat.

SpareChange

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Re: Can you live on 30k a year?
« Reply #81 on: December 19, 2020, 12:12:43 PM »
Yes. Like a king. 1 person. Small apt. MCOL area (Ft. Worth).

billy

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Re: Can you live on 30k a year?
« Reply #82 on: December 20, 2020, 09:18:18 AM »
My wife and I, YTD spent $15,054

uniwelder

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Re: Can you live on 30k a year?
« Reply #83 on: December 20, 2020, 09:52:06 AM »
My wife and I, YTD spent $15,054

I'm curious to understand your annual budget.  In some other post, you mentioned paying $4,700 property tax and $1,000 per year for water.  I assume you own your house with no mortgage.  So the two of you spend the remaining $9,350 per year on what exactly?  Or is this particular year one in which you didn't pay any of the usual expenses you might normally encounter?  House maintenance, clothes, transportation, etc.

@spartana -- sorry, sent mine right after.  Same general question.

billy

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Re: Can you live on 30k a year?
« Reply #84 on: December 20, 2020, 10:35:44 AM »
I made a bobo, since I normally track expenses from our net paycheck on our budget, I just added medical, dental, and spouse surcharges for the year, $3,380.52, so YTD is $18,435.

I try to copy everything mmm does, and we have no debt. Because of the rona we didn't take vacations this year.

billy

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Re: Can you live on 30k a year?
« Reply #85 on: December 20, 2020, 10:45:03 AM »
I may need to improve on my budget tracking, as I don't count our withheld taxes from paycheck, but I just made an IRS payment of $1,220 as my work didn't withhold enough money, and I added that $1,220 to our budget as an expense, I also add IRS/state refunds as income to our budget. I wonder how others tack this on their budget?

tj

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Re: Can you live on 30k a year?
« Reply #86 on: December 20, 2020, 11:47:34 AM »
I may need to improve on my budget tracking, as I don't count our withheld taxes from paycheck, but I just made an IRS payment of $1,220 as my work didn't withhold enough money, and I added that $1,220 to our budget as an expense, I also add IRS/state refunds as income to our budget. I wonder how others tack this on their budget?

If you are going to stop working, you need to include tax payments in your retirement budget, unless you will live exclusively off Savings accounts and Roth IRA distributions.

uniwelder

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Re: Can you live on 30k a year?
« Reply #87 on: December 20, 2020, 12:07:49 PM »
I try to copy everything mmm does...

Sorry, but I'm still trying to wrap my head around this.  When you say you copy what MMM does, does that also mean typical things that might go into the regular person's budget get allocated somewhere else?  Like how MMM doesn't pay for beer because its provided free of charge at the headquarters?  And vehicle, internet, and home office costs are considered business expenses?

The singular expenses known are quite costly, much more than I pay with an annual budget almost 2x higher.  You buy food, likely pay house/car/health insurance, utility bills (besides water), pets, house/car maintenance.  Even if you didn't have house maintenance expenses this particular year, its kinda cheating to pretend those expenses don't exist.

NotJen

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Re: Can you live on 30k a year?
« Reply #88 on: December 20, 2020, 12:36:04 PM »
I may need to improve on my budget tracking, as I don't count our withheld taxes from paycheck, but I just made an IRS payment of $1,220 as my work didn't withhold enough money, and I added that $1,220 to our budget as an expense, I also add IRS/state refunds as income to our budget. I wonder how others tack this on their budget?

When I was working, I never had a budget, but I did religiously track my spending.  Taxes were absolutely a line-item in my annual spending - they were always the largest expense I had each year.  When I talked about my spending, I tried to note whether it was before-tax or after-tax numbers I was quoting.  I notice that when I first posted in this thread, I indicated that my low while-working spending for the last few years was after-tax.

Now that I'm FIRED, I do have a budget, and I do include taxes (although this year they are expected to be $0).  They are much more relevant/important now compared to when I was earning W2 income.

billy

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Re: Can you live on 30k a year?
« Reply #89 on: December 20, 2020, 12:49:50 PM »
No, not doing creative accounting (shame on mmm), not pretending, just sharing my YTD spending not including income tax withheld. My future fire budget will include maintenance costs for sure.

NotJen, so currently my budget should include state/federal tax withholdings with my w-2 job? Right now my budget tracks money from net paychecks/after tax for simplicity sake, for my fire budget I plan on tracking everything I can to know my taxable income.

NotJen

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Re: Can you live on 30k a year?
« Reply #90 on: December 20, 2020, 01:07:44 PM »
NotJen, so currently my budget should include state/federal tax withholdings with my w-2 job? Right now my budget tracks money from net paychecks/after tax for simplicity sake, for my fire budget I plan on tracking everything I can to know my taxable income.

IMO, (general) you have to track taxes for the numbers to add up.  But if (personal) you only want to track after-tax, then that's up to you -- budgeting and tracking expenses are personal decisions.  Just note that when comparing numbers with other people that your numbers are after-tax.

2Birds1Stone

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Re: Can you live on 30k a year?
« Reply #91 on: December 20, 2020, 01:22:54 PM »
I've never heard of anyone counting income taxes during accumulation as an expense.

ETA: Individual spending for 2020 will be ~$8,500 =D

tj

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Re: Can you live on 30k a year?
« Reply #92 on: December 20, 2020, 05:48:22 PM »
I may need to improve on my budget tracking, as I don't count our withheld taxes from paycheck, but I just made an IRS payment of $1,220 as my work didn't withhold enough money, and I added that $1,220 to our budget as an expense, I also add IRS/state refunds as income to our budget. I wonder how others tack this on their budget?

If you are going to stop working, you need to include tax payments in your retirement budget, unless you will live exclusively off Savings accounts and Roth IRA distributions.
Or you are able to keep your taxable income at or below $12k/year per person or $24k per couple. At least for fed and Calif standard deduction. But agreed that most should include expected income taxes into their overall expenses the same as any other expense. Although for the $30k and under people it might he a fairly small amount each year.

That's true. I'm pretty sure the CA standard deduction is smaller than the federal one though. unlike Arizona, which has a standard deduction that is identical to federal.

Sandi_k

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Re: Can you live on 30k a year?
« Reply #93 on: December 21, 2020, 10:11:48 AM »
I've never heard of anyone counting income taxes during accumulation as an expense.


I do. How else would you categorize it? Our taxes are estimated, so it's not unusual to have a tax bill even after we've calculated the previous year's taxes. We need to have allocated funds for any miscalculation - or weirdness, like this year's stimulus check.

And yes, I have taxes - both Fed and state - as an estimated expense in retirement as well.

Sandi_k

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Re: Can you live on 30k a year?
« Reply #94 on: December 21, 2020, 10:13:23 AM »

That's true. I'm pretty sure the CA standard deduction is smaller than the federal one though. unlike Arizona, which has a standard deduction that is identical to federal.
Yes Calif is less. I looked it up and seems to around $5k single (including one exemption) but there must be some other reductions to income tax as I haven't paid state tax in a long time and my taxable income is higher than that.
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I believe that CA still allows the full deduction of SALT, unlike the Feds after the 2017 Tax Cut and Recovery Act.

yachi

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Re: Can you live on 30k a year?
« Reply #95 on: December 21, 2020, 12:19:36 PM »
I've never heard of anyone counting income taxes during accumulation as an expense.


I do. How else would you categorize it? Our taxes are estimated, so it's not unusual to have a tax bill even after we've calculated the previous year's taxes. We need to have allocated funds for any miscalculation - or weirdness, like this year's stimulus check.

And yes, I have taxes - both Fed and state - as an estimated expense in retirement as well.

What if taxes end up negative?  With the Earned Income Tax Credit and the additional child tax credit, an income less that 30k and a few kids it easily can be.  The OP did qualify the 30k as "total expenditures".  Are taxes still an expenditure when negative...?

NotJen

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Re: Can you live on 30k a year?
« Reply #96 on: December 22, 2020, 08:03:54 AM »
I've never heard of anyone counting income taxes during accumulation as an expense.


I do. How else would you categorize it? Our taxes are estimated, so it's not unusual to have a tax bill even after we've calculated the previous year's taxes. We need to have allocated funds for any miscalculation - or weirdness, like this year's stimulus check.

And yes, I have taxes - both Fed and state - as an estimated expense in retirement as well.

What if taxes end up negative?  With the Earned Income Tax Credit and the additional child tax credit, an income less that 30k and a few kids it easily can be.  The OP did qualify the 30k as "total expenditures".  Are taxes still an expenditure when negative...?
They'd be an income.

Technically, taxes are on the income side for me this year.  I had no 2020 withholdings because I quit my W2 job last year.  No estimated payments because I don't expect to owe anything in 2020.  I received about $200 in refunds when I filed my taxes in Feb, so my spending tracks $200 of income due to taxes.

When I file my 2020 taxes in 2021, I'll likely come out ahead again because of the stimulus payment that I didn't get automatically this year.  Or it might just offset some withholdings or estimated taxes if I end up earning some money next year.

billy

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Re: Can you live on 30k a year?
« Reply #97 on: December 22, 2020, 12:22:32 PM »
I updated my budget and removed tax payments/refunds, while I have my w-2 job, so I can easily see my cost of living including medical and dental and plan appropriately. And it will be easier to share with others my yearly household spending, as peoples tax payments vary obviously. On a side note, I just updated my w-4 to try to break even next year.

I can see if you pay quarterly taxes/additional estimated tax payments, you definitely want to track that for record keeping separately.

American GenX

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Re: Can you live on 30k a year?
« Reply #98 on: December 22, 2020, 12:25:51 PM »
Can you live on 30k a year or less? I'm talking total expenditures for the year.

LOL.  You say that like it's not much, but it's about double what I've spent from my take home pay yearly in recent years.

I'm a single person with no kids and a paid off home, and I would really have to ramp up my discretionary spending to spend $30K per y ear, and I don't plan to do that until I FIRE.

MyAlterEgoIsTaller

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Re: Can you live on 30k a year?
« Reply #99 on: December 22, 2020, 01:18:19 PM »
I can't, because of my mortgage and student loan payments. 
I have the resources to pay off both, but the interest rates are low, especially for the mortgage, so it hasn't seemed like the best move.
Not counting those 2 payments, what I spent from take-home pay this year was $17,532.