Can you live on 8000 dollars a year?

Answer 1

It is possible to live on $8,000 US dollars per year depending on where one chooses to live (e.g., Chicago, IL is significantly more expensive than Glen Lyon, PA) and one's willingness to manage your lifestyle (e.g., not much going out or partying). The easiest way to determine if you can live on a fixed amount of money is to do a budget.

Tennessee has the lowest cost of living in the United States, so if you were to live in Cookeville (80mi E of Nashville, population of 28,000), you would expect the following expenses:

Living near TTU in a four-bedroom apartment runs $750 per month with an estimated $150 in utilities (water, electricity, gas). Telephone service is approximately $40.00 per month with unlimited long distance. Assuming apartment sharing (to live on your own in a studio would be a minimum of $395 per month), a possible budget might look like the following:

Rent $190/month ($750 / 4 people)

Utilities + Phone $50/month ($200 / 4)

Renters Insurance $10/month ($480 / 12 = $40/month / 4 people = $10)

Groceries $125/month ($500 / 4)

TOTAL Basic Living $375/month * 12 = $4,500/yr

So, one would have $3,500 per year ($291 per month) left to spend on other things. If one adds a car to the mix (assuming an older vehicle), one would have the following:

Gasoline $1,350 per year (12,000 miles, 25mpg, $2.80 per gallon)

Insurance $600 per year (basic insurance - collision only)

Maintenance $500 per year (4 oil changes, one failing part)

Licensing/Registration$100 per year

TOTAL Car Lifestyle $2,550 per year ($213 per month)

TOTAL WITH CAR $7,050 per year ($588 per month)

So, with a car, one would be left with about $950 per year ($79/month) to spend on other things.

In the end, one needs to determine what is important to them - yes, one could live on $8,000, but not very well.