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Aug 15, 2014 at 22:23 comment added JohnFx Mod Note: How about continuing this in chat? This is getting a bit long.
Aug 15, 2014 at 21:22 comment added BrenBarn @dg99: I think one way to look at that is "what does the average American person spend their money on?" That's an interesting question in itself. I think the best way to understand why people aren't saving would be to look at what they are doing with the money instead. You can then make judgements (based on whatever your value system is) about which of those expenses could or should be cut.
Aug 15, 2014 at 21:15 comment added dg99 @BrenBarn True, but my point is that even with such low income I was able to save an extreme amount, so why is it so uncommon for the average (American) person to save even a reasonable (30%? 20%??) amount?
Aug 15, 2014 at 21:08 comment added BrenBarn @dg99: Heh. But the point is that there is a big difference between "I was able to live on $5k a year as a single person by eating rice and beans every single day and spending zero money besides that" and "Why can't everyone save two thirds of their income?" Your lifestyle waz possible, but it clearly required an extreme deviation from expected standards of living; it shouldn't be surprising that very few people do that.
Aug 15, 2014 at 21:06 comment added dg99 @MattR Indeed. I can tell you all about the health benefits (and olfactory drawbacks) of a rice and beans diet if you're interested.
Aug 15, 2014 at 20:59 comment added Matt R @dg99, you say you made <15k and saved >10k. This leaves you less than 5k for the year. 375 a month takes you to 4500 a year for rent. This leaves you with less than 10 dollar a week to eat assuming absolutely no other bills.
Aug 15, 2014 at 19:58 comment added dg99 Yikes. I was in Washington state at the time (no state income tax!), and my portion of rent (with 3 housemates) was $375/month. I elected to live < 1 mile from work to minimize commute. Electricity (heating/cooking) is very cheap there. No television/cable/internet. No cell phone. Ancient clunker of a car (long since paid for) with minimal insurance and minimum maintenance. No clothes purchases for almost that entire time, except shoes when they wore through. Employer did fortunately pay for health insurance. Taxes in US are minimal on earnings that low.
Aug 15, 2014 at 19:34 comment added ChrisInEdmonton @dg99, I don't know where you live. Here in Edmonton, Alberta, Canada, you can get a low-end apartment for roughly $1000/month, but it will be in a dangerous part of town. Add in utilities and mandatory insurance and you are at $15,000 per year just on housing. You still have taxes to pay and food to buy, and that's assuming you don't need transportation. Obviously, your cost of living is going to depend very greatly on where you live.
Aug 15, 2014 at 19:15 comment added dg99 I often hear this point raised, and I understand that some people have dire situations (single earner with 3 dependants, chronic severe illness, permanent work-prohibitive disability, etc.) that consume all their income. However, for 5 years of my life I earned < $15K/year, and I still saved/invested over $10K/year. Then when I was unemployed for 14 months, I lived entirely on those savings with no public assistance. I'm not special; I simply made the choice to live in poverty in the present so as to help myself in the future.
Aug 15, 2014 at 18:30 history answered ChrisInEdmonton CC BY-SA 3.0