Tightwad Gazette readers - a revelation.

[Renee in NC]

I have been re-reading through the Tightwad Gazette recently (my well-worn Complete version with no cover!) I came across the article where she talks about what they were able to do on an average of $30,000 per year. I was feeling guilty until I remembered that the book was written in 1990!

 

So, being curious, I found an inflation calculator. That $30,000 would be $48,000 today. Not only that, but her family did not have to pay for health insurance (military.) They lived on roughly 57% of their income, saving the rest. So, they would be living on $27,000 today (with no health insurance costs.)

 

I couldn't figure out whether they lived on base for any of those years (which would mean no housing costs.) Their food budget was AMAZING! ($200 in 1996 is $270 today - for 8 people!)

 

Dog food is cheaper now than it used to be.

 

Gas prices were about $1.25 per gallon in 1996 - adjusted for inflation that is $1.69 today (and I paid $2.98 2 days ago.)

 

Could you do it? Not just the grocery budget, but the rest? What do you think has changed since then?

[i.love.lucy]

No, I don't see how we could do it. Our housing and healthcare costs alone are over 40% of our budget.:glare:

[Snickerdoodle]

Perhaps she didn't live on either of the coasts or Hawaii where COL is high.

[sbgrace]

We couldn't. But it's because of health care costs (and related extra food costs--we're dealing with a metabolic condition and life threatening food allergies). Without even considering the extra food costs we average $1000 per month in medical expenses. So no way. With our food restrictions I couldn't afford to feed a family of eight on the 49K we live on now I don't think--let alone clothing everyone and paying for even more medicine and tests/appointments. I guess God knew what he was doing when he only gave us two children.

Edited May 9, 2010 by sbgrace

[dangermom]

Keep in mind also that 1996 was also before housing prices inflated so much in parts of the US. In 1996, you could easily buy a comfortable middle-class house in San Jose for less than $400K, and people were worrying about the high cost of housing. By 2000, a townhouse was over $500K and rising fast.

[DawnM]

yes, I *could* do it. I wouldn't want to, but with a much smaller house and careful planning we certainly could do it.

 

It would have been much harder when we lived in Los Angeles, but even there, we could have done it. Here in NC it is easier.

 

Dawn

[Renee in NC]

No, I don't see how we could do it. Our housing and healthcare costs alone are over 40% of our budget.:glare:

 

That's why I said with no healthcare costs. Take your income, subtract what you pay for health care and insurance, and see what is left.

 

She lived in various places on the East Coast - her dh was in the Navy. The house they bought was in Leeds, Maine.

[kokotg]

I think we could. DH wasn't making much more than that when he started teaching a few years ago, and we did pay for some of our insurance (and DH's mandatory retirement plan) out of that. In fact, I used to have a $200/month grocery budget back then (for 4 of us, one of whom was a nursing baby). We have a lot of stuff working in our favor, though; mostly that we made a lot of money when we sold our house in Boston, so that we could buy cars with cash and put a ton down on this house when we moved here--our mortgage payment is really low.

[Desert Rat]

Yes. I could do it. I've read some of her stuff (from the library) and wouldn't go to the lengths she did/does. However, we have some things available to us that she didn't back in 1990, like dollar stores. I do wonder if I could save 43% though.

[LisaKinVA]

Keep in mind also that 1996 was also before housing prices inflated so much in parts of the US. In 1996, you could easily buy a comfortable middle-class house in San Jose for less than $400K, and people were worrying about the high cost of housing. By 2000, a townhouse was over $500K and rising fast.

 

We had one of those comfortable middle class homes in San Jose... Berryessa area, 5 BR, 3 BA,2 car garage, living room, dining room, laundry room, eat-in kitchen, family room, and a back yard big enough for a real pool. Purchased in 1973 for $70,000. I remember it feeling like a mansion. And then, we moved to Morgan Hill on an acre and a 1/4 with a 4,000 square foot house in 1979. We purchased that house for $250,000.

 

On Zillow, our former home in San Jose is $614,000, and the one in Morgan Hill is $1.2 million.

 

Guess we still can't afford to live there. :tongue_smilie: Makes parts of No.VA look cheap :lol: In Stafford, a comparable home to our CA home in San Jose is about $300,000, and a comparable home to our Morgan Hill Home would run about $450,000.

 

Wow!

 

But no, we couldn't touch that $260 food budget for a family of 8, unless we ate oatmeal every day, and beans & rice for lunch and dinner... maybe some eggs, a slice of cheese, and whatever veggies and fruits we could grow. Occasionally meat. I easily spend about $60 a week on fresh fruits/veggies, bread and milk.

 

Our food budget is now running about $450 a month, which I think is awesome. Looking forward to our tomatoes coming in, so I can make truly "FRESH" spaghetti sauce for about half what I do now (a spaghetti/meat dinner normally costs us $6.00 for roughly 12 servings -- during the summer, it costs us about $3)

[Mom-ninja.]

No. The quality of food is important to me. A grocery budget like hers would not allow for the food we buy. We have allergy issues (so no PB&J here or regular pasta) and I'm also a stickler for no HFCS or trans fats. Yes, we grow a lot of produce in our garden, but I don't have a dairy cow in my back yard. ;)

[LibraryLover]

They had a huge organic garden, plus fruit trees and berrie bushes. They 'put up' tons.

[HRAAB]

So you're asking if we could live on $27,000.? Yes, we could, and we are. The only reasons we can do that are we are debt/mortgage free and our area does not have an extremely high cost of living although it is continually creeping up. As for health insurance the girls and I have a high deductible major medical policy ($7,500.) and my dh is currently covered under COBRA. Now, when the COBRA runs out - I have no idea? Oh, and we only have three children living at home.

[LibraryLover]

People live on 27k. I don't know how they do it. I know a family living on 40k before taxes. They own a small home (have a mortgage) in a nice area, no debt, organic garden, healthy kids. I have no idea how they manage.

[HRAAB]

I had another thought about living on so small an amount. If that's all you have, your income, and no savings, it wouldn't be a very comfortable position. I would imagine that they (Tightwad Gazette people) had money in savings while they were living so cheaply. I would be worrying constantly about what we would do if (insert your own catastrophe) happened. We have savings so if something does happen, we can take care of it - within reason, of course.

[KidsHappen]

We were military in 1990 and that was our approximate yearly income. We were quite comfortable then and we were also both going to college full time. We make more than that now but I wouldn't say that our standard of living is that much better. Of course, we have four more kids than we did then and we live in a much more expensive area but we would be hard pressed to make do on much less than we are now in our present situation.

[Audrey]

I have been re-reading through the Tightwad Gazette recently (my well-worn Complete version with no cover!) I came across the article where she talks about what they were able to do on an average of $30,000 per year. I was feeling guilty until I remembered that the book was written in 1990!

 

So, being curious, I found an inflation calculator. That $30,000 would be $48,000 today. Not only that, but her family did not have to pay for health insurance (military.) They lived on roughly 57% of their income, saving the rest. So, they would be living on $27,000 today (with no health insurance costs.)

 

I couldn't figure out whether they lived on base for any of those years (which would mean no housing costs.) Their food budget was AMAZING! ($200 in 1996 is $270 today - for 8 people!)

 

Dog food is cheaper now than it used to be.

 

Gas prices were about $1.25 per gallon in 1996 - adjusted for inflation that is $1.69 today (and I paid $2.98 2 days ago.)

 

Could you do it? Not just the grocery budget, but the rest? What do you think has changed since then?

 

 

I don't know. I have one kid. I can't imagine what it would be like to budget for 6 kids. It does seem like they had a lot of advantages, and a salary that (I don't think) was poverty level. I see families all the time struggling to make it on minimum wage, but here minimum wage isn't so bad and we get that commie :D goverment universal health care, so it's not the same at all.

 

I was always impressed that they managed to save to pay cash for everything. Even huge expenses like cars and their house. What I mostly took from those books is that there are always alternatives to paying full price or buying new or replacing old things just because they're old. Some of the tips were too extreme for me, but many made me go "aha! I could do that no problem."

 

The food budget, well mine is embarrasingly tiny, but we have a farm and we grow tons of stuff and can or freeze or store it. We also have our own eggs and some meat (depending on what we do that year). Animals certainly aren't free, but they are cheaper per pound raised yourself. Now, obviously not everyone can do that. We do what we can to save. I'm actually quite grateful for the farm in so many ways. It's paid for, for one. And I know that no matter how bad it gets, we'll be able to feed ourselves and have a roof over our heads. May not be the prettiest roof or the most/best food, but we'd survive. I didn't always have this kind of security. Dh always has, but I know what it's like to be scared.

Edited May 9, 2010 by Audrey

[Renee in NC]

People live on 27k. I don't know how they do it. I know a family living on 40k before taxes. They own a small home (have a mortgage) in a nice area, no debt, organic garden, healthy kids. I have no idea how they manage.

 

Of course they do - we do! BUT, we can't without help.

 

However, I don't know that this is long-term sustainable (even with help.) When the minivan my dh drives finally dies or rusts away (we are taking bets on *which* will happen first) we will have to have another car. If we were living on less than we made, we could buy another car from our savings.

 

Is it the savings that made it possible for them to live on so little? Because when the emergency came they had backup?

Edited May 9, 2010 by Renee in FL

[cathmom]

They did not pay all cash for their house. I think they saved just under $50K and the rest was a mortgage.

[cathmom]

A big thing about them also was that both of them had skills that saved money, and both were willing to do cost-cutting measures. It's very difficult to get anywhere near what they did if only one spouse is doing everything. Plus, they weren't homeschooling. The SAH parent had time to do the things that saved them that much money.

[Jen in PA]

A big thing about them also was that both of them had skills that saved money, and both were willing to do cost-cutting measures. It's very difficult to get anywhere near what they did if only one spouse is doing everything. Plus, they weren't homeschooling. The SAH parent had time to do the things that saved them that much money.

 

The skills thing is a great point. I can't calculate how much money we have saved by having DH do 95% of car repair, plus apply his knowledge when buying used cars. He also handles all of our computer issues, which can get expensive when you are paying for help.