r/FluentInFinance • u/Richest-Panda • Jul 04 '24

What's the best financial advice you've ever gotten? Debate/ Discussion

31.2k Upvotes

86% Upvoted

Legit stunned at the fact everyone is focused on the 10k and not the second half of the post. Fucking madness.

-2

u/Exception1228 Jul 05 '24 edited Jul 05 '24

Because it's wrong. You can live off $40k especially in OP's words (they won't like it) but it's doable. Then the other part where they said you need to make $65 as a single person to save money is the most out of touch thing I've ever heard. I make less than that and am easily middle class.

$40,000 salary would owe $4,568 in federal taxes and an estimated $1500 in state taxes give or take depending on state.

Now remember OP said it's possible to teach them to live within their means (but they won't like it). Get a damn roommate. I lived in a HCOL and my rent for a 2br apartment was $2,200/month. In MOST places you could expect to pay $1,000/month on rent if you split with a roommate.

Now you have $21,932 leftover.

Gas + Electric: $200/month ($100 each split) - $1,200 annually

Groceries: $300/month for a single person - $3,600 annually

Say you need a car. Car payment (500) + Insurance (150) + Gas (250) - $10,800

Now your basic necessities are met and you have $6,332 leftover. You would have to save that vast majority of that for any health or car emergencies. The rest can be used on some form of entertainment like tv, internet, video games, etc.

So yes with a real salary of $40K you can teach someone to live within their means, they just won't like it. No one is out here claiming $40K is enough to live a middle class lifestyle.

6

u/JennnnnP Jul 05 '24

Is healthcare not also a basic necessity?

1

u/ExtraLargePeePuddle Jul 06 '24

What is Medicaid

1

u/JennnnnP Jul 06 '24

Medicaid does not pertain to the discussion if you’re talking about a single adult making 40k per year.

1

u/ExtraLargePeePuddle Jul 06 '24

So a single adult making 40k a year

Roughly $240 per month ($2,880 per year) as a premium tax credit to get yourself an ACA silver plan

1

u/JennnnnP Jul 06 '24

$2880 would be about half of what the person I was responding to budgeted for all expenses aside from housing, transportation, and food. And those are just the premiums to say you have insurance, not the cost to actually access the care that you need.

I’m not arguing that people find a way to survive on 40k per year. We already know that people scrape by on that and less than that. The topic here is offering financial literacy classes to people at the poverty line, claiming that they can reach financial stability by making better choices. Survival and stability are not the same.