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Daymit, how you can SURVIVE on 35K a year in USA???
Maybe somewhere in Mississippi, but not in North USA.
Still, you'll have to eat random crap from 7-11 and macdonalds...
Wages: 35k
Taxes: 10.5k
Rent: 1000/mo = 12k
Utilities: 200/mo = 2.4k
Transportation (car): 200/mo+200/mo = 4.8k
Food: 400/mo = 4.8k
Total: 34.5k
Get a roommate, use public transportation, get rid of TV, make your own meals, and you could probably put 5-8k in the bank each year. Even if you're living in NYC, it should be pretty easy to "survive" on 35k a year.
Rent [1]: 300/mo = 3.6k
Transportation [2]: 100/mo = 1.2k
Food [3]: 250/mo = 3k
Total: 20.7k
Obviously that leaves a lot of things out, but that is what the other $14K+ is for. If you can't live on 35K, I'm guessing it's because you're either carrying too much debt, or you've convinced yourself you need to spend $X/mo on a car/living in <expensive city>/whatever when you really don't.
[1] Right now I actually am renting an entire house with one roommate and we each pay $125/mo, but we are renting from a friend. Before I moved here, I paid about $240 a month. I could easily find a place under $300/mo here in Columbus, OH.
[2] I don't have a car right now; instead I use public transportation or ride with my roommate or other friends. Even giving my friends gas money and renting a car once a month or so would only come to 1-1.5K per year.
[3] I could easily get by on about $125/mo for groceries. Doubling that allows me to go out a couple times a week as well.
http://hcsoftware.sourceforge.net/jason-rohrer/supportMyWork...
From the sound of it, they're not living on Big Macs. But they do live an unconventional lifestyle and have made material sacrifices to minimize their consumption.
My opinion - yes you have to try to live cheap life, but not by buying used stuff - somebody else, with not really cheap life bought it first, but buying inexpensive stuff and using as long as possible, till it falls apart.
[Note: I realize that electricity and Internet are not necessary to survive, but the person claiming to survive on $20K/year obviously has both.]
[Aside: I hope that the answer doesn't come down to something stupid like, "I invested $1-million in making my house/property as self-sufficient as possible." That kinda excludes a good portion of the population from trying.]
Person 1:
Rent = $600/month (1 roommate in a small condo on a bus line)
Transportation = $0 (walks to work/store/bank)
Health care = ~$0 (grad school presumably covers it, modulo co-pays)
Food = ~$200/month (guessing at this, lives on lots of rice & beans)
Electricity = ~$50/month (also guessing)
Internet = $0 (uses it from work if necessary)
Total = $850/month = $10k/year
Person 2:
Rent = $400/month (basement apartment with 3 roommates)
Transportation = ~$130/month (T-pass, off Green Line)
Food = ~$200/month (guessing)
Health care = ~$0 (presuming he's under the university policy)
Electricity = ~$50/month (guessing, may be less with 3 roommates)
Internet = ~$10/month (you could split $40 cable or FIOS among 4 roommates)
Total = $790/month = about $9500/year.
Do not forget to add taxes. And waterbill. And trashbill. And phonebill.
My observations are in total correspondence with Daniel Kanemann's research: For good life in USA you need $60K/year - more will not make you happier, less will make you unhappy.
I included waterbill and trashbill in my utilities estimates; I was basing it off what I paid for utilities when I lived with roommates in California.
Person 1, at least, didn't have a landline - he used his cell (still on his parents plan) or IM from work. Person 1 also did not have zero savings: he managed to save up $20K over 2 years. Remember, a typical grad student salary is about $20k/year, and he was living off $10K/year.
People who make $10-20k/year don't pay much in taxes. Many don't pay anything. That's reverse-income-tax land.
You have a point with clothes, but over the short term, it can be ignored. I'm still wearing some of my clothes from high school, 10 years later. And you certainly have a point about health care, which is the elephant in the room, though that will hopefully get better as Obama's plan phases in.
I suspect that Daniel Kanemann's research could be rephrased as "For a good life, you have to be making more than average." It's not coincidence that $60K/year is just slightly more than median household income in the U.S. I suspect that if he were to run the same experiment in Vanuatu - supposedly the happiest place on earth - he'd find that you need roughly $5K/year for the good life. That's just slightly over their per-capita GDP.
Unless you are applying the term 'McMansions' to include a single person living in a studio apartment or a 1-bedroom apartment (or even a couple living in a 2-bedroom apartment), then I suggest you revisit that statement. It's obviously not abject poverty, but to say that the only people that would consider your living conditions to be something that couldn't deal with must therefore be living in 'McMansions' is a bit of an overstatement.
You seem to be ignoring though, that the cost of living is different between the two places (I'm assuming that both of those dollar amounts are in US dollars).
Rent: $325/mo ($950 split three ways)
Student loan bills: $500/month
Fios/gas/electric: $70/mo, (again, $210 split three ways.)
Food: I eat out a fair bit, so probably like $500/mo, on average? I could cut down on this a lot if I tried.
Transportation: I bike everywhere. Spent $600 three years ago.
Phone: $60/month, Nexus One on T-Mobile with unlimited data/text, small amount of minutes that I never use.
That puts me at roughly $1450 of spending. I'm sure I'm forgetting something minor. But for just expenses, that'd end up being $17,400 / year.
I mean, Pittsburgh is a cheap city, but still, I live in the city. If I lived in the 'burbs I could do it for less. Well, maybe not, needing a car would probably make up the savings in other expenses.
I had a friend who never made more than $20k her whole life and yet was able to own her own house (a tiny cottage here in the Minneapolis metro area), have a running car (bought used and maintained properly) and eat well (cooked her own meals, rarely ate out). I haven't talked to her in about 7 years, but as far as I know, she's doing fine.
I lived alone with no roommates in Fairfield County, CT (a pretty expensive area) for more than 5 years while making less than $30k and was perfectly happy. It just requires managing your finances well.
Even so, if you look at the lifestyle of a single person on 35k a year, it's vastly superior to that of someone in the 1980s in many aspects, with health care and real estate as major exceptions.