Ask HN: What Are The Costs of Living? | Hacker News Reader

Ask HN: What Are The Costs of Living?

9 pointsgareim13 comments

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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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.

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.

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.

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!

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.

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.

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 ;)

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/

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

I think a page from this was submitted to HN before because I remember reading part of it, but thanks, I haven't actually looked at the blog till now and this guy seems very interesting!

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.

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

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

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