Could you live on $1000/month?

I wouldn't want to.

But that's how it is sometimes. I'd rather live on 1000.00 a month than be living in a city apartment and working my butt of to be unhappy.

Hi Terri. You know a good bit, from other subforums, about my experiences with the medical industry. And you know that I am completely truthful when I tell you I'd rather pack my gut with dog manure than to trust my life to a hospital. So, to heck with health care insurance.

Where you live has a lot to do with how much you can live off of. There are certain expenses for your area that just won't change no matter how frugal you are. People starting out will not have their home paid for so this is something that has to be considered. When we were young we LIVED on less than $500 a month but that did not include the mortgage and property taxes which were another $500 a month. Once you are older and there is no mortage or education to consider you may be able to live on $1000 but even that would be difficult if there are medical issues.

The question I would ask - rather than setting a dollar value since $1000 in New York is very different from $1000 in a small town just about anywhere - is can you live on 75% of what you are living on now? Figuring out how to do that would be a real feat for most people. 25% does not seem like a big deal until you start figuring out the dollar value of everything that you need to pay. If you spend $4000 a month can you live on $3000 and cover everything that you need for today and tomorrow? If you spend $2000 can you live on $1500?

We adopted the "financial percentage pie" to figure out the best distribution of our net income and by sticking to it we have been very successful at covering all aspects of day to day life including daycare, medical & dental, emergency savings, retirement funding, educational savings, repair, replacement and maintenance funding.

35% for housing, 15% for transportation, 25% for life (everything else) and 25% for savings (long and short term).

I'm happy to see my question has spurred some discussion. I've enjoyed reading through the posts and learning from each of you.

A few years ago I had a conversation with another homesteader who encouraged me to find my "ideal". For some people, their ideal is going to be an urban homestead in a big city, for others, it will be choosing to live in a cabin 80 miles from the nearest town, and for most of us on the forum, I suspect it will be something in between. Each has it's advantages and disadvantages, and the costs that are necessary to maintain such a life will vary greatly on one's location and desires.

For our family, we can scrape by on $1600/month. It requires a lot of careful planning, especially since we are about 10 miles out from the nearest town. If we paid off our mortgage (which we at present time are unable to do), we could go as low as $1200/month, but not any lower. That's partly due the costs associated with my job duties which require me to drive and maintain a second phone line. But, as others have posted, Murphy visit's us to. You just can't ignore the well pump when it goes bad. Nor can you ignore the $600 bill to replace it. That's why I believe it's important to save for a "rainy day". I just wish the rainy days didn't turn into 30 days of thunderstorms.

Then there's the aspect that on the $1600/month, very little is budgeted for "routine" maintenance and capital improvements. Our current property Needs to have 3 acres fenced in for small livestock. But we've forgone the fencing (and the livestock) as realtors told us that in our area, it won't increase the value of our property. And since we are hoping to move in the not so distant future, we'd rather save that money toward that endeavor.

Finally, I second the recommendations for healthcare sharing ministries like Samaritans Purse and Medishare. I realize that it may not be the right option for everyone, but for many it can save quite a bit of money.

For those of you without insurance budgeted into your monthly living expenses, how are you planning on "complying" with the Obamacare mandate for health insurance when it goes into effect?

Thanks again for a lively interaction.

QuietInTheLand

For me the question is easy to answer. Absolutely not. I cannot live on $1000 a month. But then again my circumstances are different from anyone elses as are yours. I can and do live very frugally however.

There was a time when I supported myself and two kids with $800 a month. I'm not on land yet, still looking for the right place, right price. Kids are teens now and we could squeek by on $1200 a month BUT heaven forbid anything major break, we'd be up the creek...
This last year we've climbed to nearly $700 a month in grocery/household expenses so I sat down to figure out what the heck was going on. Paper. Diapers (teen autistic). Pads. Tissues. TP. Wet wipes. Heck, tissues alone are $40 a month. !!!
Time to crack down and go back to mini living. Just no reason for that much expense.
Luck!

Shoot, we couldn't live on $1000/mo, our income tax is more than that!

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This is the government the Founding Fathers warned us about.....

If you are claim Married Filing a Joint Return and take the exemption for both spouses, a couple with no children can earn $18500 and not pay any federal taxes. So if you actually did try to earn only $1000 a month, there would be no tax to pay. You would really have to make a little more than $1000 a month to bring home that amount because you would still have to pay into SS and Medicare.

You still pay federal income taxes. In some cases you pay state and local income taxes. Add on the school tax in an increasing number of areas. You can file and hope the federal IRS doesn't close down the check printing facility before you get your refund check which would be all of your federal income tax BUT they are still taken from you at the beginning.

You have to be very careful not to fall into the trap my MIL fell into one year. She didn't earn enough money to have to file so she wasn't going to. Nearly missed out on a couple grand in taxes which she had coming back to her.

Just had a thought, there are 4 of us in this house. Would that be $4,000 a month? If so then yes, we could live on that. But $1,000 for the 4 of us, not here, not with this debt.

If you knew for sure that your income would be low enough that you would not owe any federal income tax you can have your withholding adjusted so that you have none taken out of your check to begin with. On the W-4 there is actually an option to file EXEMPT and have $0 withholding. Of course this is only federal taxes, I am not well-versed in every state's tax system, but if you fall in these lower income amounts you most likely would not pay much in state taxes either.

If you have tax withheld in any amount, it is important to file so that you will receive any refund due to you.

sounds like a great set-up! do you have a blog/site somewhere that has some of your story in getting to where you are at today?

Once we get past the house construction stage, I'd like to see us get our expenses down to ~2K/month with the various insurance premiums included. Won't happen til we stop building, though.

Did not know you could file an exempt W-4. But pretty sure that in Ohio you cannot claim 0 liability for income tax and no way in the world will the cities allow you to get out of paying city taxes.

If your nephew's Asperger's is severe enough that he can't live independently, he should be able to get SSI. Is he?

In Ohio you can only take the number of exemptions which you will actually claim which is slightly different than federal taxes. This year Ohio is again allowing for an amount of $10,000 in taxable income to be completely tax exempt. So in our situation of a couple filing jointly with no dependents, they could use their $1700 per person exemption along with the $10,000 exemption and earn $13400 and pay no state tax either.

Most city and school taxes do not allow for any expemtions, they are just taken straight out of your income. However I think you could still earn the amount that would allow for no federal tax to be paid and have your $1000 a month to live on- as the thread is describing here. At these income levels taxes aren't a huge problem, at least not yet!

Unfortunately, when people live on 1k per month or less, they would have nothing left for insurance or savings. When an accident happens and they end up with 300k in medical bills, society ends up paying for it.

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"For if you start dancing on tables, fanning yourself, feeling sleepy when you pick up a book... making love whenever you feel like it, then you know. The south has got you.”

Presently, short answer, no way.

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" Do or do not, there is no try. " - Yoda

If somebody made $2500 per month, and lived on $1,000 a month, how would they have nothing left over? As opposed, say, to someone who made $2500 a month and lived on $2500 a month.

I thought the OP meant "bringing home 1k and living off that", not "brining 2.5k and living off 1k"?????

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"For if you start dancing on tables, fanning yourself, feeling sleepy when you pick up a book... making love whenever you feel like it, then you know. The south has got you.”

Melissa, isn't it still taken out? Yes you get it back but you still have to pay it up front.
Columbus city tax is more than Ohio state tax. Pretty big chunk on $10,000 for a lot of nothing. (I don't live in the city!)

I don't know, I just took it at face value, "Could you live on $1,000/month"
OK, an income of $1,000 a month. home paid for, 360k in the bank, still doable. you don't need to earn money specifically for saving when you got savings. Without any savings, still doable. I expect I was over 40 before I ever got ahead at all. So, I guess savings wasn't nearly as important as eating and all that. Heck, I paid the late penalty on my electric bill every month for 22 years.