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I guess I'm in the minority here because I think it'd be quite difficult to live off $60K/ year even if you're single without dependents. I'm single, without dependents, and I don't think I could live a decent life from a $60K/ year salary. Break it down and you aren't left with much at the end of the month.
Obviously adjust expenses accordingly but it's safe to say this could be the situation for many Americans. It's expensive to live nowadays even in areas that don't have high cost-of-living. Frankly if you live in San Fran or New York City, I don't think you could manage without a high six figure salary.
Good numbers, but with some rejiggering the theoretical person could live well. With the numbers I injected into your exercise and assuming apartment living (If I'm single, no way would I want to live in a house), I came up with $3,100. Take out that $400 in student loans a month, and that's $2,700, leaving the person in question $1,000 a month to bank in addition to the $300 in savings you already budgeted.
Mind you, this is in a mid-sized market living in a decent part of town. The numbers will vary wildly depending on where the OP lives. What's more, if the person in question gets a roommate and splits living expenses, that reduces my numbers by another $450, pushing the monthly nut down to $2,250. That means $1,750 into the bank every month. Obviously, these numbers are a simplification, but they're a good starting place.
Or, as another variable, a $200,000 condominium at 3.5% on 30 years is $898 monthly.
I guess I'm in the minority here because I think it'd be quite difficult to live off $60K/ year even if you're single without dependents. I'm single, without dependents, and I don't think I could live a decent life from a $60K/ year salary. Break it down and you aren't left with much at the end of the month.
Obviously adjust expenses accordingly but it's safe to say this could be the situation for many Americans. It's expensive to live nowadays even in areas that don't have high cost-of-living. Frankly if you live in San Fran or New York City, I don't think you could manage without a high six figure salary.
For $60k, a single person doesn't need to get a house. It's a luxury to have more than 1 bedroom. I make much more than $60k and spend $1000 on rent and utilities. It's much easier to live comfortable than $1700 for mortgage/house insurance/HOA/utilites. If OP moves to an area with average COL, then $1000 would work for him also. $500 is crazy expensive, unless he eats seafood often or wants to be overweight.
Good numbers, but with some rejiggering the theoretical person could live well. With the numbers I injected into your exercise and assuming apartment living (If I'm single, no way would I want to live in a house), I came up with $3,100. Take out that $400 in student loans a month, and that's $2,700, leaving the person in question $1,000 a month to bank in addition to the $300 in savings you already budgeted.
Mind you, this is in a mid-sized market living in a decent part of town. The numbers will vary wildly depending on where the OP lives. What's more, if the person in question gets a roommate and splits living expenses, that reduces my numbers by another $450, pushing the monthly nut down to $2,250. That means $1,750 into the bank every month. Obviously, these numbers are a simplification, but they're a good starting place.
Or, as another variable, a $200,000 condominium at 3.5% on 30 years is $898 monthly.
True and I agree with your assessment. But what if that person has credit card debt? That could easily eat away a few hundred each month. Or what if they have an SUV that gets 15 mpg and a 45 mile commute each way? Add some more to the money spent on gas per month.
My point is, there are so many expenses that people don't take into account nowadays. $60K/ year sounds like a reasonable salary but in reality, with the hard numbers plugged in, it really doesn't amount to much. I'll be the first to admit...I honestly couldn't live on a $60K/ year salary because I spend too much. I have a compulsion to buying things; new cars, new electronic gadgets, eating out every meal, insurance for all the toys, etc etc. My credit card bill each month is between $2200 and $2500 and while I pay it off in full at the end of the month, I wouldn't be able to do that on a salary less than what I currently make.
I'd challenge anyone to look at what they spend in proportion to what they made over the years and I'm assuming as your income rose, so did your level of spending. That's how it is in my situation and most people I know who make good money.
I guess I'm in the minority here because I think it'd be quite difficult to live off $60K/ year even if you're single without dependents. I'm single, without dependents, and I don't think I could live a decent life from a $60K/ year salary. Break it down and you aren't left with much at the end of the month.
Obviously adjust expenses accordingly but it's safe to say this could be the situation for many Americans. It's expensive to live nowadays even in areas that don't have high cost-of-living. Frankly if you live in San Fran or New York City, I don't think you could manage without a high six figure salary.
I live in the high cost SF Bay Area and I make less than 60K. Here is what my expenses look like:
$915/ Rent
$0 /Student loans
$0 /Car payment (Car is 16 years old and runs ok. I can pay cash for a decent used car if necessary)
$75 /Cell/internet. I don't have Cable TV. Who needs it when you have youtube, netflix, & the library?
$300 /Food (rough estimate..I could be underestimating, but I don't think so.)
$90 /Fuel (I walk to work every day. This estimate may actually be high)
$150 /Renter's/Car/Health Insurance. (I am very lucky to have cheap health insurance through work)
$1200 /Savings, incl. retirement savings. I save some cash, but most of this number is for retirement.
$200 /Miscellaneous Expenses
$20 / No HOA. Just utilities for a studio apartment.
$2950 per month gone.
With the exception of wishing I'd have more cash to save (or spend) outside my retirement fund, I feel like I live pretty well. A big part of that is the fact that I live a block away from my job in a city center where I can also walk to get all the basic services (library, grocery store, theater, restaurants, etc.). Another part is the SF Bay Area's great weather 9 months out of the year, and ok weather for the other 3 months. Finally, having a retirement plan balance that is more than 4X what I earn really helps a lot.
Last edited by mysticaltyger; 10-15-2012 at 08:01 PM..
I think $60K is decent for an individual. By the time you're 30, I'd imagine you should be in the 6 figure range if you're good at what you do. I know a lot of people in their 50s and 60s who still work minimum wage jobs or just above that and it blows my mind.
Or what if they have an SUV that gets 15 mpg and a 45 mile commute each way? Add some more to the money spent on gas per month.
An SUV for a single person is ridiculous in most instances. Heck, I think they're ridiculous for most people. More status symbol than practical transportation. Same thing with 45 mile commute. It's insane. Live in a smaller place closer to work. Not always possible, but singles without kids can usually be more flexible with their living situations than families can.
My point is, there are so many expenses that people don't take into account nowadays.
Eh, yeah, that's true. People have been conditioned into the monthly payment mentality. Life is always gong to be like that for those who aren't conscientious, regardless of income. It pays to not go along with the herd.
Quote:
Originally Posted by SpeedyAZ
$60K/ year sounds like a reasonable salary
Because it is. Luxury? No. Reasonable? Yes. Comfortable? Yes, in most places away from the NE & West Coasts.
Quote:
Originally Posted by SpeedyAZ
but in reality, with the hard numbers plugged in, it really doesn't amount to much. I'll be the first to admit...I honestly couldn't live on a $60K/ year salary because I spend too much.
Ding Ding Ding! We have a winner! You spend too much. You can do that on any income. Once you've reached an income of 60K for a single person, a lack of income is almost never at the root of a person's financial problems.
Quote:
Originally Posted by SpeedyAZ
I have a compulsion to buying things; new cars, new electronic gadgets, eating out every meal, insurance for all the toys, etc etc.
Well, at least you're honest. You're compulsive. Once again, that's not a problem that can be cured with more income, although I hear regular meditation can help with that.
Quote:
Originally Posted by SpeedyAZ
I'd challenge anyone to look at what they spend in proportion to what they made over the years and I'm assuming as your income rose, so did your level of spending. That's how it is in my situation and most people I know who make good money.
Well, um, yes, that IS what most people do. That is why America has huge trade deficits, huge budget deficits, and high household debt. According to Jean Chatzky's book The Difference, 69% of American households were living payday to payday or were going further in debt (as of early 2008 when she wrote the book, and before the economy totally tanked). If you want to be well off, the key is to do the opposite of what most people are doing...at least as far as consumption/spending goes.
If people would ever step back and start realizing that "new cars, new electronic gadgets, eating out every meal, insurance for all the toys, etc, etc." isn't really making them any happier, they coulc adopt a different value system (i.e. value flexibility & freedom over expensive toys and the debt that goes with them) and become both more financially secure AND happier in the process. I hope people are starting to do this but I am not holding my breath .
Last edited by mysticaltyger; 10-15-2012 at 08:06 PM..
For $60k, a single person doesn't need to get a house. It's a luxury to have more than 1 bedroom. I make much more than $60k and spend $1000 on rent and utilities. It's much easier to live comfortable than $1700 for mortgage/house insurance/HOA/utilites. If OP moves to an area with average COL, then $1000 would work for him also. $500 is crazy expensive, unless he eats seafood often or wants to be overweight.
If I had the money for say a 3/4BR house, I would buy one and collect rental income by renting out the spare bedrooms, thereby defraying most of the house expenses. Currently I rent a room in a house with five other people, so the biggest difference is that by owning a house, I would be able to decide whom I live with - not an option I have now, where I have no control over who moves in or out.
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