My $15K Middle Class Budget

[hamchan]

Actually, if I add all insurance costs, we are also over 15K between auto, home, property, life, disability, and health insurances. And that doesn't include any out of pocket medical expenses.

I'm talking only about medical/dental insurance. We don't have a home or a car. Or any insurable property.

[disneysteve]

I'm talking only about medical/dental insurance. We don't have a home or a car. Or any insurable property.

Understood. I was just using your post to illustrate that just based on insurance costs alone, we couldn't live on $15,000/year.

[hamchan]

Understood. I was just using your post to illustrate that just based on insurance costs alone, we couldn't live on $15,000/year.

Yep. And for many families medical expenses alone would use up more than 15K a year. I'm sure there are households who spend more than we do on that as well. And unfortunately there is little that can be done to control those costs in most cases.

[Retired To Win]

My Health Coverage's Big 30% Budget Bite

The value of your Medicare coverage is at least another $15,000 in premiums savings. So congratulations for living long enough to qualify for this subsidy...

Although I recognize that Medicare has some subsidizing effect, I do not see, in my case at least, that it amounts to anything like the $15,000 proposed in the reply above.

My wife, who is NOT on Medicare, pays $450 a month ($5400 a year) for her health insurance policy. I pay $158 a month ($1896 a year) for Medicare and a supplemental policy. Although I realize that this is not strictly an apples-to-apples comparison, it does show me what I could have and how much extra it would cost if I did not have Medicare. And that extra ($3500 or so) is nowhere close to $15,000 a year.

Of course, I do have Medicare. But so (supposedly) will everyone else at 65. So at that point, that field will be leveled.

All that having been said, making sure I am covered in case I get seriously sick accounts for a mind-boggling 30% of my basic living expenses.

I have opted for an insurance strategy that is front-loaded with out-of-pocket costs to a maximum of $2435 a year, but then covers me 100% after that. Because those out-of-pocket expenses are sporadic, very variable, somewhat optional and mostly theoretical, I pay for them -- if and when they happen -- out of discretionary funds. So I don’t consider them part of my basic living expenses.

That leaves my monthly health coverage cost looking like this:
[] hospital and medical insurance ---------- $ 158
[] longterm care insurance -------------------- $ 188
[] dental insurance ------------------------------- $ 17
[] medications insurance ---------------------- $ 15
[] TOTAL -------------------------------------------- $ 378

On a budget percentage basis, this is still a big bite. But affordable (to me). Anyway, it is just about what the lease or installment payment would be on one of those late-model fancy-schmanzy vehicles I poke fun at.

And isn’t being able to take care of one’s health way more important than vehicular ego preening?

[disneysteve]

My basic living expense budget is $15,048 a year

My wife, who is NOT on Medicare, pays $450 a month ($5400 a year) for her health insurance policy. I pay $158 a month ($1896 a year) for Medicare and a supplemental policy.

So just to be clear, your $15,048 budget includes $7,296 for health insurance?

[scfr]

So just to be clear, your $15,048 budget includes $7,296 for health insurance?

I'll make a guess at what the answer is going to be. $1,896 of his $15,048 budget is for health insurance (because the $15,048 budget is only for his share of household expenses, not total household budget). Am I right?

[Retired To Win]

I'll make a guess at what the answer is going to be. $1,896 of his $15,048 budget is for health insurance (because the $15,048 budget is only for his share of household expenses, not total household budget). Am I right?

Scfr, you are almost right. The $15,048 is for my half of household expenses PLUS my individual expenses for health insurance premiums, automobile operation, and so on. I spelled that out in reply #9 of this thread, as follows: "My budget big picture also includes my wife, who pays for her share of our overall [household] expenses. If I factored her out of my calculations, and I had to pay the entire cost of our indivisible shared expenses (like mortgage), my monthly nut would go up by a net $34 to $1288 a month (or $15,456 a year)."

The same applies to and includes the remaining $294 per month of my basic living expenses (aside from housing, vehicle, and health care coverage.) That $294 goes primarily to "feeding." Feeding myself a modified paleo diet that includes very few starches except for whole wheat bread for lunch sandwiches and rolled oats for breakfast oatmeal. Feeding one dog and 2 cats on mixes of brand name dry and wet foods. And feeding the kitchen, bathroom, laundry room, etc. with all the usual household consumables (paper towels, bath soap, cat litter, what have you). All this feeding eats up $225 a month. (I don’t break it down any further because it all gets purchased on the same register receipts at either WalMart, Food Lion or Dollar General and it’s not worth it to me to subcategorize the expenses.)

So the monthly basic expenses that I arbitrarily grouped as "household expenditures" earlier in this thread tally up like this:
[] food, pets and sundries ----------> $225*
[] Sirius internet radio ----------------> $ 2*
[] $1MM liability insurance ----------> $ 7*
[] federal income tax ------------------> $ 40**
[] state income tax --------------------> $ 10**
[] TOTAL ---------------------------------> $294

* my half of the overall monthly cost
** based on applying the standard deduction and exemption to the gross $15,500 required to meet my basic living expenses

So. For $15,000 a year, I live in a comfortable single-family house. I drive a safe, reliable vehicle. I have comprehensive health coverage. I am well fed. My pets are well fed. And I never find myself lacking for anything.

It is all perfectly satisfactory basic living... wouldn’t you say?

[corn18]

Scfr, you are almost right. The $15,048 is for my half of household expenses PLUS my individual expenses for health insurance premiums, automobile operation, and so on. I spelled that out in reply #9 of this thread, as follows: "My budget big picture also includes my wife, who pays for her share of our overall [household] expenses. If I factored her out of my calculations, and I had to pay the entire cost of our indivisible shared expenses (like mortgage), my monthly nut would go up by a net $34 to $1288 a month (or $15,456 a year)."

The same applies to and includes the remaining $294 per month of my basic living expenses (aside from housing, vehicle, and health care coverage.) That $294 goes primarily to "feeding." Feeding myself a modified paleo diet that includes very few starches except for whole wheat bread for lunch sandwiches and rolled oats for breakfast oatmeal. Feeding one dog and 2 cats on mixes of brand name dry and wet foods. And feeding the kitchen, bathroom, laundry room, etc. with all the usual household consumables (paper towels, bath soap, cat litter, what have you). All this feeding eats up $225 a month. (I don’t break it down any further because it all gets purchased on the same register receipts at either WalMart, Food Lion or Dollar General and it’s not worth it to me to subcategorize the expenses.)

So the monthly basic expenses that I arbitrarily grouped as "household expenditures" earlier in this thread tally up like this:
[] food, pets and sundries ----------> $225*
[] Sirius internet radio ----------------> $ 2*
[] $1MM liability insurance ----------> $ 7*
[] federal income tax ------------------> $ 40**
[] state income tax --------------------> $ 10**
[] TOTAL ---------------------------------> $294

* my half of the overall monthly cost
** based on applying the standard deduction and exemption to the gross $15,500 required to meet my basic living expenses

So. For $15,000 a year, I live in a comfortable single-family house. I drive a safe, reliable vehicle. I have comprehensive health coverage. I am well fed. My pets are well fed. And I never find myself lacking for anything.

It is all perfectly satisfactory basic living... wouldn’t you say?

So none of this is what you actually live off of, it's a theoretical what you could live off of. Would love to see what your actual annual spend is vs. this theoretical this is what I could live off of.

[disneysteve]

The $15,048 is for my half of household expenses PLUS my individual expenses for health insurance premiums, automobile operation, and so on. I spelled that out in reply #9 of this thread, as follows: "My budget big picture also includes my wife, who pays for her share of our overall [household] expenses. If I factored her out of my calculations, and I had to pay the entire cost of our indivisible shared expenses (like mortgage), my monthly nut would go up by a net $34 to $1288 a month (or $15,456 a year)."

Now I'm even more confused. I'm married. When I sit down and figure out our expenses, I don't separate out my costs and her costs. We're in this together. We look at household expenses, not individual expenses.

Still, are you saying that you spend $1,254/month and she only spends $34/month? In other words, if she were to leave today, your total expenses would only rise by $34/month? Sorry if I'm being dense here but I can't seem to figure out what you are actually calculating when you say your expenses are only $15,048/year.

[rennigade]

My expenses were $15k...for the first 6 months of this year.

[JoeP]

Now I'm even more confused. I'm married. When I sit down and figure out our expenses, I don't separate out my costs and her costs. We're in this together. We look at household expenses, not individual expenses.

Still, are you saying that you spend $1,254/month and she only spends $34/month? In other words, if she were to leave today, your total expenses would only rise by $34/month? Sorry if I'm being dense here but I can't seem to figure out what you are actually calculating when you say your expenses are only $15,048/year.

I'm looking for a similar answer. OP: Please add up ALL the expenses (his and hers) for an entire year.

[Singuy]

Maybe the OP's point is not the actual number but the ratio. 1/3 of what you make is all you need to live on.

Of course this skews nicely for high income earners and terribiliy for low income earners.

Maybe if you work at MCDs making 8 dollars/hr..you should find a way to live a year using $4000. Hey maybe it's very possible(living with parents). Guess you have no business buying a house or living alone with that kind of income anyways.

[~bs]

So none of this is what you actually live off of, it's a theoretical whinto considerationconsiderationyou could live off of. Would love to see what your actual annual spend is vs. this theoretical this is what I could live off of.

Id agree with this. In ye real world, random expenses pop up that need or should be taken into account versus theoretical best case scenario. Easy example is vehicle or home maintenance costs

[LivingAlmostLarge]

Summary you need $15k/year to live on but your wife pay $3600/year for health insurance and needs $15k to live on?

So as a family you live on $34k/year? Or am I way off? What is the total family budget of health insurance, etc?

By the way it is location dependent. We pay around $35k/year mortgage/taxes/insurance etc. Medical insurance we pay $4k/year then $2500/year extras (co-pays etc). Then we have other insurances for $4k/year like car, home, life, umbrella. We are at $46k before the utilities, food, gas, clothes etc. Granted part of it is our mortgage, but even without our mortgage we are looking at $7k/year taxes and stuff. So our base needs are at $18k+ without food, utilities, etc.

[Retired To Win]

... are you saying that you spend $1,254/month and she only spends $34/month? In other words, if she were to leave today, your total expenses would only rise by $34/month? Sorry if I'm being dense here but I can't seem to figure out what you are actually calculating when you say your expenses are only $15,048/year.

The answer to your question is already posted on reply #9 of this thread.

To quote from that reply:

"My budget big picture also includes my wife, who pays for her share of our overall expenses. If I factored her out of my calculations, and I had to pay the entire cost of our indivisible shared expenses (like mortgage), my monthly nut would go up by a net $34 to $1288 a month (or $15,456 a year).

That my go-it-alone costs would go up so little is something that we have already tested out to be true.

We own a smaller rental home on one acre of land that I have lived in by myself before. If I were alone, I would live in that house. From prior experience, my solo housing costs (lower mortgage, lower real estate taxes, lower utilities costs, etc) would then go up a net $34 a month.

My vehicle and health coverage costs would remain unchanged because they are already calculated on a solo basis for me and my 1996 Dodge Dakota. And my household expenditures (food, etc) would not change either because their consumption would be proportional (half) to the number of people doing the consuming (1 instead of 2).

So, living with my wife or living alone, my basic living expenses would still be about $15,000 a year."