That’s still way too much. In my previous job I ran the site on $10 a month dual core cpu. It had decent traffic, live status updates, a live stream during 2 hours of the day, a successful e-commerce shop. The site was getting thousands of visits an hour and I was always surprised at how much bandwidth we would chew. It even survived a could have ddos attacks without issues. I also cached the hell out of it with memcached.
My past two previous projects have been on $5 vps with out issue. Some one really tried to bring one of them down with a ddos but gave up when it didn’t work.
A $5 VPS can take you very far if your project is well optimized.