Living on $50,000 a year

MSNBC has a series of articles about people living on the U.S. median income of $50,000. I'm copying a link to one of them below. How far that amount takes you, of course, varies in different parts of the country and based on how many people are in your family.

What do you think? How would you be able to live in your own country on $50,000 a year, or your country's equivalent? How much would you need in order to raise a family in your country? How about in China?

http://lifeinc.today.msnbc.msn.com/_news/2011/12/07/9282101-we-are-the-median-carefully-budgeting-for-food-health-care-costs

The thing about the couple in this article is, they are choosing to live on this amount, as the woman has a local government job and is choosing to work only one day a week. I respect their lifestyle choice, but I don't think they have any room to complain. In fact they both have government jobs and, while it isn't mentioned in the article, they should have a lot more retirement security than the average person.

Overall, I think Americans have too much of a sense of entitlement and need to learn how to get by with fewer luxuries. But that's just me.

Yeah, I mean, she's a stay at home mom, which is great, that's her choice and all, but there's a clear way out of your financial troubles right there.

Also, notice the 125,000 dollar house that they had to "settle for." I've been looking at buying a house when we return to the States and we won't be able to go near 125,000, but that's ok, I have a husband who is very handy and if we have to buy a fixer-upper, so be it. This is a buyers market and there are some amazing deals on property in the States. Not only that, but look at that picture -- their child has a room full of toys and books, and even from that small shot, you can tell they've decorated their home nicely. No Goodwill for them. I mean, I'm not saying you have to do away with all nice things, but when you claim your struggling but you live in a nice house with nice things and you're choosing to be a stay at home mom, it is sort of hard to take seriously.

All that said, I do think that making it on 50,000 a year would be a bit of a stretch, especially depending on the area. However, after living in China for nearly 10 years I also have extremely different ideas about what "hardship" means. My friend and I were looking at houses with her fiance from the States and he was vetoing these houses that she and I were ooohing and ahhing over because let's face it, I pay more in Beijing for my rent than I would on a monthly morgtgage in the States and my apartment is no palace, it is actually extremely average, small, in a not so exciting part of town, so yeah, when fellow Americans feel like they gotta have their dream home in a great neighborhood with this and that and the other, I sort of roll my eyes.

I agree that it really does depend on the location. I used to live on 1/3 of that in the USA (rural MN) prior to moving to China.

I love your post, LD, all told in your usual practical-minded way. I think that in the U.S., if you're away from the East or West coasts, then $50,000 should afford a simple middle-class existence, meaning a three-bedroom ranch that's not new, two used cars, and public schools. You might save a bit for retirement. The problem is, if you don't have a decent-sized contingency fund or some generous family members, it's easy to end up in debt. If you need a new roof or you get a large medical bill or a tree falls and must be cut up and hauled away, the money has to come from somewhere. Of course, you can end up in that position even with much higher incomes, if you are spending all that you earn. But with a $50,000 budget, there isn't as much fat to cut in order to achieve savings. In the least expensive areas of the U.S., I have no doubt that $50,000 is extremely liveable. The problem in those places is earning the 50k, since wages are typically low.

There was a time, in the long distant past, when wages and salaries were high enough that the average working family didn't need both parents working. One income, even a blue-collar income, was enough to support a family. You can argue about the numbers, but that is the real message here. Guess what folks, we saw that change taking place back when I entered the workforce some 30 years ago.

Not if you are trying to "keep up with the Joneses".  All too typical and often a vicious cycle.

I live in a rather high-cost area and I only make about $30K. Of course, I walk or bike to work and bring cheap lunches from home. I also don't really spend money on anything that I don't absolutely need.

Not if you are trying to "keep up with the Joneses".  All too typical and often a vicious cycle.

I've been trying to explain how just how massively in debt most Americans are to my darling wife.  She doesn't quite believe me.

The sad thing is that Chinese people are getting into the concept of long term mortgages, car loans, revolving credit cards, etc.  Perhaps the final way that the west will win the competition for economic supremacy will be by sharing our worst bad habits.

Before I left England I never earned anything like the national average.

My husband and I made about $30,000 together and had a happy life in New England (on the east coast). We own a home (with 6 acres of land), had a car, two cats, health insurance (which I paid for for myself, my hubby had it through work). $50,000 to me sounds like a dream! Ha ha!

Of course we didn't often go out to eat (but we ate plenty well at home), or spend a lot of money on clothes or fancy dodads because I'm not really into those kinds of things. If we needed something new, like a stove or a fridge, we tended to buy quality, but not top-of-the-line. Of course we had (and have) debt, but just student loans and mortgage. Not credit card debt.

But, i tend to be the exception and not the rule in America. (Just like in China where we live an incredibly rich life and yet manage to save tens of thousands of dollars a year.) It just depends if you don't care what people think of you. I have never been interested in "keeping up with the jones" whether it be rich americans or crazy foreign teachers who like to booze it up on weekends.     

Kids add a major expense. I think if you're single or even a couple without kids, it is fairly easy to get by on less than 50,000 a year. When you have kids the expenses pile up -- the food, the clothes, doctor visits (especially when you don't have insurance), daycare and then once they get to be school aged you have even more -- school supplies and school fees and so on and so on, and that's just for the basic stuff. Most people who have kids do want them to enjoy their childhoods somewhat, so you have toys and outings and vacations and gymnastics class or karate lessons ... you can do without these things but most parents I think, unless they are real minimalists by choice, want their children to be able to enjoy nice things and nice experiences.

I think that is more where "keeping up with the Joneses" comes in to play. People don't want their kids going to school and feeling like they're the only child who doesn't have an XBox or nice sneakers. People do go overboard though. There's a huge difference between living some sort of Little House on the Prairie existance and feeling like you have to make sure your child never wants for anything. A little want in life can be a good thing. Most Americans fail to figure out that balance though.

Borkya, how could you guys possibly save "tens of thousands" on teachers' wages in China? Few jobs pay at that level, even if you're a good saver. Do you have an exceptional job?

I'm sure she meant yuan not dollars. Me and the wife can usually save around 6000rmb a month from our salaries while not scrimping hardcore. That's around 70,000 a year. 

Borkya, how could you guys possibly save "tens of thousands" on teachers' wages in China? Few jobs pay at that level, even if you're a good saver. Do you have an exceptional job?

I've been here for 3 years. I don't have an exceptional job, but I am at the high end of the salary and I worked out a sweet contract where I get overtime for teaching writing (and i teach a lot of writing). And no, I meant US dollars. My hubby and I tutor 3 kids each and at this point we live and travel entirely on our tutoring money and airfare reimbursement so every penny of our salary goes into savings. I'm not just a good saver, I'm an exceptional saver!   

But, like I said, we are not interested in getting the latest greatest stuff. We buy the cheap clothes that last for a year or two, not name brands and we like to spend our money on travel, but even then we backpack and stay at hostels and stuff. Also, we don't go out drinking and that saves us ALOT of money.   

For info on living well on far less than $50,000 a year, see Wikitravel's article on retiring abroad:
http://wikitravel.org/en/Retiring_abroad