Living Well on Less Than $30,000 a Year--One American Family's Story

"It's all because of our low cost of living that I can feel relatively secure."

We see stories like this all the time: Survey: The average American feels they need to earn over $186,000 a year just to live comfortably.

This is over three times the $59,000 median annual earnings of full-time workers in the US (52 weeks X $1,139). Median weekly earnings of the nation's 119.2 million full-time wage and salary workers were $1,139 in the first quarter of 2024 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported. (Source: BLS).

This is more than double the median household income of $74,580.

According to this site, about 13% of US households earn $186,000 or more per year. Other sources say the top 10% of US households have an income threshold of $191,406, while the top 5% have an income threshold of $290,164. These numbers vary widely state by state, with high-cost / high-income states having much higher thresholds than lower-cost states.

Bottom line, the bottom 90% say they need a top 10% income to feel secure financially. According to the survey, to feel rich, the average American feels they need to earn $520,000 a year--a top 2% income.

All of the above represents the conventional view that financial security requires being wealthy. The alternative view is financial security results from a low-cost, low-consumption, no-debt lifestyle of the kind I outlined in Is It Possible to Live Well Earning $30,000 a Year in America? Yes--With These Conditions (July 3, 2024).

To state the obvious: it's easier to live on less than it is to earn big bucks.

Confirming that it is possible to live well on less than $30,000, correspondent M.C. shared how his family lives well on a modest income. Their lifestyle and financial choices are within reach of pretty much any couple / family willing to make the required trade-offs. Yes, it can be done in inflationary America 2024, but it requires redefining "financial security" and "wealth," and trading the insatiable desires of conspicuous consumption and the desire to live in places coveted by the wealthy for much different sources of both inner security and financial security.

Here is M.C.'s commentary:

"Yes, it's certainly possible for a couple to live on 30k annually.

My wife and I have been doing this the past 4 years on a single $13.65 an hour job (up from $12 a few years ago) in a retail hardware store a few blocks away. (No benefits except an employee deduction on purchases.) We live in a rural area near the center of the USA.

We bought the house we are living in for 14k cash in 2011. Further, we can replace it (in our rural community with a population of 3,000 and continuing to decline) without breaking the bank (not much housing demand here).

Taxes. We pay nothing to the IRS. For 2024, the standard deduction for a two person household is $29,200. If our taxable income went over that, we can contribute to an IRA. We paid less than $200 in state income taxes last year. Our sales tax is 9%, except that unprepared food from a grocery store has just a 2% tax.

Debts. We own our house and land. We buy our vehicles for cash. I just replaced my 1997 Grand Marquis that I've been driving since 2006. My wife drives a 2014 that we've had several years and that will hopefully last several more. No debts, no credit card balances.

Healthcare. Health insurance on the ACA marketplace is free if taxable income is between 100 and 150% of the poverty level. For a couple, that's $19,720 - $29,580 this year. If we were a bit over that upper number, then we could reduce taxable income by contributing to an IRA.

Food. We are growing tomatoes, strawberries, watermelon, cantaloupe, and green beans. The lettuce and spinach got eaten up by bugs last year, so I didn't plant more. The corn and sunflowers didn't work out well either. I try to stock up on groceries when they are on sale, especially the items we eat a lot.

Entertainment. I rarely ever watch television. We don't have an XBox or any such gaming devices. Four of our seven grandkids live in town, so that's our entertainment. We go to their ballgames, music programs, take them to movies, recreational activities (I play tennis with a couple of them).

Insurance. No property insurance except the required liability insurance on our vehicles. So we are self-insured (other than the required auto liability insurance). That's scary to a lot of people, but we buy good used vehicles and keep them maintained. In addition, we have an added advantage of family members who are electricians, as well as the fact that we are allowed to do the work on a house that we both own and live in. So, I do my own roofing, repairs, painting, etc.

We are able to go without property insurance because we have a few years worth of living expenses saved up. We have been living on less than $30k per year, but I feel it important to be straight-forward that we have an advantage that many don't have. We have peace of mind with retirement funds in a Roth IRA that can be used if things break or the budget gets tight. This is the first year of the four where we will draw some from retirement accounts. I don't anticipate doing this again for another four years.

To be quite honest, we could get by on a lot less than we currently live on. We eat out more than we would if money were tighter.

I would like more people to be aware that it's possible to live on less money. Around age 25, I had it all mapped out to becoming a millionaire. But life happened. And at some point I figured out that I wouldn't really want to win the lottery, as it would change almost everything about my life.

We could seek more paid work but I felt we had enough money, even though we have a fraction of what most people consider to be 'enough' to retire. It's all because of our low cost of living that I can feel relatively secure. I don't have much that anyone would want to steal, so I don't have much to worry about.

I love the mention of your building a micro-house. I've been working on a plan, and want to build one on our daughter's 4 acres. And depending how that goes, I might build a couple more, starting with our son's property."

Thank you, M.C. for sharing your family's pathway to financial security. Paying no interest / having no debt is a big part of that security:



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy

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My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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Is It Possible to Live Well Earning $30,000 a Year in America? Yes--With These Conditions

Can a couple of hardworking people live well in America on $30,000 a year in earnings? Yes, if they're willing to do what's needed to make it happen.

Is It possible to live well on $30,000 a year in America? Let's start with the raw numbers. I am starting with a couple, not an individual, so we're talking about two people living well on $30,000 earnings a year.

Why $30,000 a year? Several reasons. One, it's a full-time wage at $15/hour, a rate that is (or will be) minimum wage in some states and two, it's about half of the median annual earnings of full-time workers in the US. In other words, it's within reach of most workers with a few years of experience.

$30K a year is $2,500 a month. Average Social Security/Medicare and income tax withholding is around 22%, or $550 a month, leaving the wage earner $1,950 net income. Self-employed people have to pay the employers' share of Social Security/Medicare on top of the employees' half--an additional 7.65%, a total of 15.3%. (Yes, that's a big chunk. You get used to it. Render unto Caesar that which is Caesar's.) That pushes their withholding closer to 30%, leaving around $1,750 to $1,800 a month income net of withholding.

So under what conditions can you live well on $1,950 a month in America?

First, own your land and house free and clear, or have the right to live in a house that's free and clear of debt. In the status quo, that requires a huge inheritance. But since few of us actually receive a huge inheritance, let's stipulate that we're discussing lifestyles that are outside the conventional status quo.

For example, building a micro-house on a friend's land in trade for helping them. This is what I did at the age of 24. My buddy was a retired US Marines vet (in-country 'Nam) with acreage he couldn't possibly use so we made a deal that worked for both of us. We built a sturdy micro-house without any electrical power, just hand tools, and after living in a tent my femme and I found it pretty luxurious. I went back 30+ years later and it was still in use.

Alternatively, find a way to live cheap and save half your earnings for enough years to buy a plot of land somewhere where people with lots of money don't care to live. The longer we scrimp and save, the more capital we save to invest. If we have to borrow, borrow as little as possible so it can be paid off with a few years of work.

Or find someone who's needing to sell, or willing to sell a piece of their land, and try to work out private financing. Of course you still need an experienced attorney to draw up the contract so both parties' rights and obligations are stipulated and protected, but the basic idea is seek older folks who may be happy with the monthly income at an interest rate lower than a bank mortgage.

Nothing is easy outside conventional debt-serfdom. Sacrifices and trade-offs abound. That's why so few people venture off the beaten path. The point is there is no substitute for owning whatever you own free and clear, zero debt, zero mortgage. Whatever it takes to get there, fair and square, win-win, that's the path we choose.

2. Choose a state with low property taxes. Every state and local government collects tax revenues. The ideal arrangement for those of us living on less is low property taxes and high sales and/or income taxes, because if we consume/buy very little, the sales tax is no big deal, and if we earn a modest income, the income taxes are not that big a deal, either.

The states to avoid are those where property taxes of $1,000 a month or more are normal. That's a lose-lose situation for those of us living on less income. The target is $100 a month in property taxes, $300 at most.

3. Figure out whatever healthcare arrangement works for you. For some people, that's a job that offers healthcare insurance for oneself and one's mate / significant other. For others, it's qualifying for whatever government insurance is available to low-income workers. For some young healthy people, staying healthy is their plan. For vets, it might be a nearby VA clinic / hospital.

4. Get a reliable high-mileage vehicle and learn to maintain it. A buddy of mine just bought a clean 11-year old Toyota sedan with 100,000 miles for $5,000. His existing Toyota has over 300,000 miles because he's maintained it well. 100K miles is no big deal if the vehicle has been properly maintained. A well-maintained Corolla or Civic routinely gets over 40 miles per gallon on the highway. If a vehicle needs $100 to fill it up, it better be making serious money as an essential work vehicle.

5. Grow some of your own food, buy only real food, waste nothing. Ideally, grow some of your own food, growing whatever grows well and without too much care in your locale. Like what you can grow. Trade your surplus for what others raise/grow, or give it away to people who appreciate it (and you). Only buy and eat real food, meaning there is only one ingredient. No salty, fatty addictive snacks, no sugary beverages, no processed foods, no packaged food, no frozen glop. Whole grain crackers, OK, sure. Chocolate chips for home-baked cookies, of course. But homemade is what counts here: we control the ingredients and provide the labor, which is the highest value input in meal preparation.

Once we taste real food, all the processed stuff no longer even qualifies as "food." As for the cost of real food, ethnic markets are cheaper and more fun than supermarkets. Some markets have discount bins. Much of traditional ethnic cuisines are basically peasant cuisines: cheap, locally grown ingredients with very little meat, which has long been dear. Living well means eating well, and nothing beats home-prepared meals with fresh ingredients.

6. Waste nothing. It's estimated that Americans throw out a significant percentage of the food they buy because they didn't plan the purchases and stick to the meal prep plan.

7. Get lean. We need less food when we're lean, and if we're eating home-grown and/or fresh, real foods, we're getting nutrient rich foods so we're not starved of essential nutrients, a hidden form of starvation that drives us to eat more in a vain attempt to get the nutrients we need.

8. Minimize the amount of time wasted on media, social media, screens and TV. There are better things to do with our time.

9. If there's extra living space, take in a boarder for the extra income. This is a time-honored way to earn extra income with little investment or outlay required. Choose roomies / boarders wisely and they'll add something to life.

10. Insurance is a rip-off until you need it. Needless to say, avoid locales where property insurance is unavailable or unaffordable. Shopping around is worth the effort. Consider buying a little extra insurance, as even a few extra dollars a month can buy more coverage. Even minimal collision coverage on an old car can prove useful.

Having a goal and a plan helps. So does having a Plan B in case Plan A doesn't work as hoped. Being disciplined helps. Having someone to share the work helps. Being able and willing to work hard helps. Having a mentor or three helps. Being able to ask for advice helps. Learning from others helps. Continuing to learn helps. Changing course when things aren't working helps. Having faith helps.

Is any of this easy? Heck no, a thousand times no. I wrote a little book about this entire journey to Self-Reliance based on what I've learned from experience and from others in 54 years of working. There is literally nothing easy about the journey. Risks abound. Every decision is imperfect because it's made with imperfect knowledge.

OK, all of this is "impossible." If that's what somebody decides, then it's true for them. But that doesn't mean it's true for the rest of us.

Can a couple of hardworking people live well in America on $30,000 a year in earnings? Yes, if they're willing to do what's needed to make it happen, which is step off the conveyor belt of conventional status quo resignation and debt-serfdom.



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy

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My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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Move Over, Disaster Capitalism--Make Room for Addiction Capitalism

That monkey on your back comes in many forms.

We've all heard of Disaster Capitalism: the Powers That Be either initiate or amplify a crisis as a means of granting themselves "emergency powers" which just so happen to further concentrate the nation's wealth and power in the hands of the few at the expense of the many.

Naomi Klein described the concept and cited examples in her 2008 book The Shock Doctrine: The Rise of Disaster Capitalism, and summarized the core dynamic: "Disaster capitalism perpetuates cycles of poverty and exploitation."

Move over, Disaster Capitalism--make room for Addiction Capitalism.

Addiction Capitalism is my term for the last-ditch / desperation method of guaranteeing sales and profits when everybody already has everything: reduce the quality so everything fails and must be replaced, and addict your customers to your product or service which--what a surprise--only you or your cartel provide.

And since you've bought up all the competition and moated your monopoly via regulatory thickets / regulatory capture, consumers must continue paying--or suffer the consequences. Addiction Capitalism is capital's last best hope when the essentials of life and novelties are both over-supplied. So the only ways to juice demand and maintain profits are 1) lower the quality of goods so they must be constantly replaced (Cory Doctorow's "ensh**tification") and 2) addict consumers to services such as social media and products such as smartphones, or create dependencies which are equivalent to addiction, such as dependency on weight-loss medications.

Just as the addict is dependent on a drug, patients are dependent on medications that must be taken until the end of their lives.

Jonathan Haidt's new book offers a scathing indictment of the intentionally addictive--and destructive--nature of social media and smartphones The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness.

For another example of how Addiction Capitalism works, consider how tech companies sell a basic accounting software system for a small sum until it becomes a standard for households and small businesses. Then they eliminate outright purchase of the software and switch to a high-cost subscription model. Nice little history of all your financial records you got there; it would be a shame to lose all that by refusing to pay our monthly fee.

Put another way: going cold turkey and refusing to pay the subscription / prescription is going to be painful. That monkey on your back comes in many forms: checking your phone 300 times a day, obsessively counting "likes," binging on streaming TV and snacks, junk food, fast food, and other addictive glop--the list is long indeed.

Addiction Capitalism is neatly summarized in this scene from Bruce Lee's 1973 martial arts film Enter the Dragon, where the villain Han reveals his opium empire to martial artist Roper, played by John Saxon:

Han: "We are investing in corruption, Mr Roper. The business of corruption is like any other."

Roper: "Oh yeah! Provide your customers with products they need and, uh, charge a little bit to stimulate your market and before you know it customers come to depend on you, I mean really need you. It's the law of economics."

That's Addiction Capitalism in a nutshell: "customers come to depend on you, I mean really need you." That presents us with a choice: "and you want me to join this?"



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy

---

My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free

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