Ask HN: What Are The Costs of Living?
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.
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?
So I guess the main question is, is $20,700 a year enough for one person?
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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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.
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.
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.
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.
Thanks for the reply!