How Much of Income Would Be Enough for You to Live "Reasonably Well"?

LJill of alltrades on 29/09/2021 - 18:28

Long time lurker here - It's always interesting to read Ozbargain forums and the comments. Some comments totally make my day, due to the excessive laughter that follows.

My question was inspired by the recent discussion by 900dollaridoos on 26/09/2021… "If Your Income Was Double or Tripled, What Daily/Weekly/Monthly Items Would You Buy?" It was very interesting to read everyone's comments.

So my question being.. "How Much of Income Would Be Enough for You to Live "Reasonably Well"?"

My guess is that people would have a variety of different definitions of "reasonably well". From my perspective, the definition of "reasonably well" would be to live life with everything you need but not having everything you want.
- Having everything you need = enough money for home cooked food, utilities, shelter (rented or owned), whilst not living pay check to pay check and the occasional luxury like eating out/takeaway once in 2 weeks or a massage once every 6 months
- Not having everything you want = ie: the new phone/car/house/computer/handbag or the monthly expensive fine dining meal

To clarify, I'm not with a survey company either. I've just been reading a lot on the median income and the "average middle income australian". After reading all of that, it still befuddles me on what is termed "average middle income australian", as it seems that people generally deem themselves as the "average middle income" whether they earn $60k per annum or $300k per annum (business owners included).

Anyhow, I thought it would be an interesting conversation and poll to have.

The poll is based on a 1 person's income (pre-tax), with no kids - I know that a lot of people have kids here, but hey, let's just go with that assumption ok? Also, I've chosen pre-tax income aka gross salary, since it was easier, as some people obviously have special accountants (see below link)
https://www.theguardian.com/business/grogonomics/2021/jun/08…

Poll Options

  • 70
    < $50,000
  • 217
    Between $50,000 to $100,000
  • 432
    Between $100,000 to $150,000
  • 85
    Between $150,000 to $200,000
  • 43
    Between $200,000 to $300,000
  • 228
    > $300,000
Financial

Comments

  • Vote for Pedro on 30/09/2021 - 20:49

    Depends if I own my own home and it’s paid off

  • harthagan on 01/10/2021 - 00:50

    Lived in sydney my whole life and i can honestly say that if you are on 100k you can live comfortably enough as a single person. Even if you are paying $500 per week in rent for a decent apartment not too far from the city, that still leaves you almost $1000 per week for everything else.

    Id go so far as to say you could easily save $500 per week on 100k and without having to skimp on any essentials plus still having little luxuries and splurges along the way as well.

  • Freaksta on 01/10/2021 - 08:19
    +1

    Interesting question, I have two different answers:
    From a job $150k
    From investments $55k

    If I had enough investments to provide me with the $55k I would not need the $150k job.

    • serpserpserp on 01/10/2021 - 09:21

      Weird, because after tax you are netting above 100k. So that is quite a gap.

      • dajackal on 01/10/2021 - 10:48

        He could live off the $55k and work only as much as necessary to fund discretionary expenses.

  • serpserpserp on 01/10/2021 - 09:20
    +1

    If I was single, 100k-150k before tax a year world be fine. If I was single and had that as passive income I'd move somewhere remote, buy a cheap, modest place on a bit of land, just follow creative pursuits and travel domestically on the road.

    Ahhh to relive my youth and not be dirt poor through my 20s, that would be a thing of beauty.

    • [Deactivated] on 01/10/2021 - 09:30

      I got poorer and richer as I got older. Earn a lot more with an actual job but if you decide to move out, you're paying for rent, food, bills etc. Contrast this to earning 20-30k while at uni but living with parents and having no expenses.

  • Taro Milk Tea on 01/10/2021 - 09:27
    +3

    When money becomes the factor to live 'reasonably well' - then you will never live reasonably well. The thing with money, it's never enough.

  • ashftc on 01/10/2021 - 09:31

    I think it's a bit of everything. Mortgage or no mortgage, kids, income and most importantly, spending habits. I know a friend who makes 400k per annum and hasn't paid up his 500k mortgage in last 10 years when he could have easily. Another one earns much more than me and wife combined but still live in smaller house (rented) and drives similar basic car and couldn't save. Spending habits counts much more than earning potential.

  • Hangryuman on 01/10/2021 - 09:57
    +5

    I'm retired and studied this topic extensively before retirement and have many spreadsheets tracking my finances.

    The strongest determinant of financial contentment in retirement is owning your own home - paid off/unencumbered.

    In Sydney, a single person renting paying $4-500pw needs $21-26Kpa just to keep the roof over their head.

    We paid off our small home strata unit years ago, so have no mortgage loan, just strata levies, electricity, council rates, internet, water, insurance in descending order of annual cost - total about $7500pa (or $144pw if you like)

    I drive a 30yo car because it's only $1000pa to keep insured and registered (stopped depreciating years ago - I read new cars can depreciate up to $5Kpa) and I rarely drive as we live inner city and prefer to walk to shopping and for healthy exercise

    Apart from food where I like expensive sourdough bread and beer and some eye fillet steak occasionally but otherwise tend to be frugal, most spending is largely discretionary and has varied from around $4K last year with COVID lockdowns to maybe $20K in 2018 when we were flying overseas as a couple like every 3 months.

    So - I don't like to spend money I don't have, to buy stuff I don't need, to impress people I don't like

    I liked our Indian taxi driver to the airport in Goa - similar age as me - who told me his desire in retirement was to 'live naked in the forest' (like Gautama Buddha before enlightenment - an Indian dream) - and with Sikh temples giving free meals in India - if he doesn't need clothing (naked gurus being a thing in India) - why would he need money ?

  • curryblender on 01/10/2021 - 10:31

    It's different at different stages of life.

    When I was single $50k will do the job, Paying off car, rent and weekends comfortably.

    When I got a GF, about $70k for going on trips(She was studying)

    When we got married and she got a job, We hit $120k and bought house.

    When I opened business we hit 200k-$300k Mark. But our expenses remained same until we had kids.

    2020/2021 our income gone down a little but our expenses have gone down a lot as we have everything we need in the house. Recycling older child's clothes/toys for younger one, Not like we are going out anyway. Mortgage paid off PPOR so only expense we got is rates and utilities and general repairs.

    I'd say $120k-$150k should do it for us comfortably.

  • Dalton on 01/10/2021 - 11:15

    Not all people who live here can fall back on Centerlink. For them, job stability and the ability to save are as important as how much they get paid each week.

  • FilePeter on 01/10/2021 - 12:04

    ~ $250k as that is our current income and we would not wish to lower our standard of living. We also have a work vehicle that we would need to replace and pay costs for if we were no longer working.

    • ely on 03/10/2021 - 14:58

      "we" - the question is explicitly about single

  • Miss B on 01/10/2021 - 12:27

    Definitely under $50k for me. One of the reasons is that I don't care where I live (I'd rather live further out and pay a quarter to a third of the rent of closer to the city - about 40km from the city). I am happy to live with someone else. At a guess it would be somewhere around $40k pre-tax based on your parameters. This would still allow a bit of savings and some treats.

    In reality, if you have to live on less than that you figure it out. I lived on $15k and had everything I needed, living in a regional area, in a not well regarded town in the cheapest house, shared with another person. Very much pay cheque to pay cheque though. It is also difficult to find a job living there and to pay for anything to help you look for a job, including public transport. It also causes a lot of stress. Not sure how people do it in the suburbs, rent is double that even out where I am. Because it was a Centrelink payment there were some concessions at least. You can also get food from charities, I didn't because I was okay.

  • [Deactivated] on 01/10/2021 - 12:49

    Anything under 100k for a family is not going to be comfortable in Sydney. Accepting the same wages as pre-pandemic is not going to be the new reality.

  • Trying2SaveABuck on 01/10/2021 - 13:40

    How long is a piece of string?

  • netjock on 01/10/2021 - 14:46

    Always interesting to read the comments. You could even say that $1 is not the same to everyone, some will think they can afford to buy 1kg of flour at Aldi others will just complain it isn't enough to get 1kg of flour. Just good entertainment.

  • BreezyPalms on 01/10/2021 - 16:37

    Before or after tax?

  • LoserScott on 01/10/2021 - 19:28

    Those that make more spend more, those that make less spend less, but ones more intelligent right???

    Because we measured it when they qualified for the job.

    I guess not everything's equal, even with sex disparity.

  • love2buy on 01/10/2021 - 19:50

    55k with 2 kids and a mortgage of 520k and 2 cars. No eating out.

  • Blargman2001 on 01/10/2021 - 20:36

    When I was single, I started eating out a lot and buying copious amounts of junk I didn't need once I started earning about 70k. So my guess is about 70k (in Adelaide, so probably more in the Eastern states).

  • takemymoney on 01/10/2021 - 22:14
    +3

    Away from Sydney, Perth and Melbourne, if you are single, young, healthy, without a mortgage, and living away from your parents house, you don't need more than 30k to survive. 60k you can start eating out, having a holiday in your state, keep a reasonable new car, or start spending in crap stuff that you don't need. 80k plus you can save consistently if you don't go the avocado and toast everyday.
    All values mentioned above are raw/taxable income.

    • Miss B on 02/10/2021 - 10:59
      +1

      Where I was working they had a subsidised cafe that had smashed avo on sourdough toast for $1.40/slice. You could get it with two poached eggs for $6.50. Now I have to choose between buying a house or having smashed avo on toast.

      • takemymoney on 03/10/2021 - 13:48

        I don't get why the interpretation of avo & toast is so literal - maybe a generation issue? My use here is the very typical case: avo & toast everyday == eating out everyday or spending 20+/day on food/drinks.

        • Baghern on 03/10/2021 - 18:58

          Avo and toast is the concept that current generation are wasting money.

          But totally ignoring the fact that our high consumption is a major driver of the economy.

          • serpserpserp on 03/10/2021 - 19:23

            @Baghern: Avo & Toast at home costs about $2 a day at the moment if you make it at home. Avos dirt cheap and should be for the next year.

  • AlanHB on 01/10/2021 - 22:15
    +2

    I diatincly remember that when my salary passed $85k that things became noticeably easier, like I could pay the phone bill when it came in, generally had fun cash lying around, just didn't have to pay attention to my bank account as much. So I'd say $85k-$90k at least for Canberra.

  • lunartemis on 02/10/2021 - 07:05
    +1

    I think it depends on the definition of "comfortable living". Some people who live off-grid and grow everything themselves and don't want much other than simple life could be living on what society considers "poverty income"

  • alexlim2000 on 02/10/2021 - 09:19

    What does comfortable living mean?

    To me it means;
    - Having a decent/nice place to live (and definitely the most expensive item)
    - Have all expenses taken care of including your hobbies, the ability to eat out once or twice a week, and the ability to go on a moderate overseas trip every 2 years.
    - Able to save for retirement / investment - being able to feel comfortable enough when the time comes to retire. - This can be further influenced by whether you have family, etc, etc.

  • Pancaku on 02/10/2021 - 10:46
    +3

    “It is not the man who has too little, but the man who craves more, that is poor. ”

    — Seneca (65AD)

  • Hangryuman on 02/10/2021 - 11:03
    +3

    to paraphrase Charles Dickens -

    'Annual income $80,000, annual expenditure $79,900, result happiness.
    Annual income $80,000, annual expenditure $80,100 result misery'

  • [Deactivated] on 02/10/2021 - 13:30
    +1

    Highly, highly dependent on where you want to live and how you want to spend. Toorak? 300k+, some random town in rural? 60k. Comfortable has changed a lot over the decades. I mean a couple of centuries ago or during the great depression or some parts of the world, comfortable was just having enough food to eat everyday. I mean look at Venezuela. Now it's own a house, eat out, travel and have cash to spare. People complain about our lockdown lives but in reality, we are much more comfortable than a majority of people on the planet. Too bad people can't see this.

  • drfuzzy on 02/10/2021 - 17:30

    The quality of the answers is comparable to the quality of the question.

  • DoaAn on 02/10/2021 - 20:07

    The different answers to this question are pretty amusing. The idea of needing $100k + to live comfortably is amazing to me, though I guess people have different ideas of what is necessary to be comfortable.
    I have never made more than $40k in a year and I am comfortable. I only work part time, and I know I could make more if I applied myself and tried to get a second job, but mental health issues make it difficult. Even with the mere 25hrs a week I work now, I'm exhausted from too much time among people. This year, I might just make it over $40k, assuming I work every public holiday and don't need to use any more sick leave.

    I don't live in a big city but I do live comfortably, so long as I stick to my budget. At the moment, I have everything I need and a lot of things I don't, and I don't live pay to pay. I typically fly to see my family once a year, and order take out once a month. There are things that I want, but stop myself from wasting money on.
    I live in a 2 bedroom unit that Mum bought specifically for me to rent from her. Rent hasn't been raised since I moved here (thanks Mum) but I when I first moved in five years ago, I set the amount at the highest I could afford, which was $40 more than I paid at my previous rental.
    I am even slowly building my savings up and will hopefully have enough for a house deposit in about 5 years. Only reason that will be possible of course, is because Mum is selling me this unit for about what she bought it for and wants to give me part of the deposit so that I'll have 20% deposit. My seriously Awesome Mum is the only reason I won't have to shuffle through dozens of rentals for the rest of my life.
    If not for her assistance, I would be a little less comfortable (have to spend more on rent for a 1 bedroom and couldn't foster cats) but not to the point of needing more than $50k to be comfortable.

  • Eeples on 02/10/2021 - 21:19

    1 person, no kids, owns house $45,000 pretax is comfortable.

    • ely on 03/10/2021 - 14:44

      "owns house" being a biggie here (reduction in costs + already has a decent to enourmous (IDK your house) financial asset).

  • ely on 03/10/2021 - 14:43

    Current salary: > $200k, w/essentially non-working spouse and primary school child (public school), own an apartment with a mortgage. It's pretty comfortable, don't worry about spending money (although we're reasonably conservative) and typically save $1000+/week.

    I'd take half the pay without the spouse and child and would be more comfortable financially though, so ticked the $100-$150k box.

  • mitt on 03/10/2021 - 16:14
    +1

    I can live reasonably well on a sub $50k income, did for a while.

    However I want to be saving/buying assets/investing, so aiming for $100k plus.

    I don't trust super/pension to be there in its current form when I begin to rot, I need passive income.

  • gimli on 03/10/2021 - 18:21
    +1

    bikies

  • Baghern on 03/10/2021 - 18:54
    +1

    What it comes down to is if you have a house/apartment of if you have to rent

    Many of could easily live on less than $30k a year, when you exclude housing requirements.

    In fact most people already do when you take away their mortgage payments and investment expenses.

    The 2nd reason most of us are seeking higher income is because of the future/investment purposes.

  • nicend on 03/10/2021 - 19:07

    Depends on where you live. COL in Sydney vs Hobart is significantly different. So Sydney I'd say probably ~$90k is where you don't have to worry about budgets, while Hobart might be ~$10-20K less mostly due to rent/home loan.

  • Melbourne01 on 03/10/2021 - 22:07

    Looking at how most who have participated in the poll indicated, reasonably well seems to be with amounts higher than 100k. I wonder if ppl who like to spend this much for comfortable living, actually have to look for special deals 🤑😜🤪

    I guess we can want what we want.

    -According to a 2019 report by the Association of Superannuation Funds of Australia Limited (ASFA), Australians aged between 60-64 are retiring with a median balance of $154,452 for men, and $122,848 for women.

    These are total numbers by the way not annual.

    • Eeples on 06/10/2021 - 10:30

      It seems the bottom 50% of ppl who retire with Super are just using their super to get to 66/67 when they can get the old-age pension.

      Perhaps they figure they will need less money then.

      It would be interesting to know what percentage of this bottom 50% will own their own home/over 55's/park accommodation when they turn 67.
      (Because I suppose that is doable to retire like that; comfortable in that they are not working anymore).

      • Melbourne01 on 06/10/2021 - 16:58

        I guess as pointed earlier in some of the posts above, it is subjective. I know first hand that most Australians don't and cannot retire on 150 K pa income! Just look at the number of ppl on welfare and retirements and average super balances.

        What surprised me is the number of ppl on this forum that want to retire on 300k and 150k, yet looking for bargains scrolling through obzbargain deals😊😜, myself included.

  • Tiredman on 07/10/2021 - 08:19

    100 Bitcoin should do it.

  • Smigit on 09/10/2021 - 23:40

    I think your current position plays a big part. If you're earning 80k and trying to scrape together a deposit to buy a house while paying rent, your 'comfort' levels will be quite different to someone on the same salary that already has a property and are paying it off (without the burden of rent) versus someone else who maybe inherited a property and has no home repayments at all.

    It also matters a great deal where you live.

    Going back a decade though I felt like I could get by fairly ok renting (shared place) on 80-100k. Covered my living costs, my low car repayments while putting some money aside. I could have probably lived on my own but being single didn't really feel the need. I've since got married and have 4 children and my situations quite different, but so is my household income.

  • Bunsen on 12/10/2021 - 14:17

    A family investor friend once said this quote to me;

    "look after your Cents & the Dollars will take care of themselves"..

Login or Join to leave a comment
Login Join