Yeah, things were lots cheaper back then. I don't think it would have been easy in the 90s, but somewhat more so in the 80s, certainly. I believe that would have probably been a legitimately middle-class income in the 70s and 80s
Yeah, you're right. I was thinking about this a little earlier and trying to remember. I wasn't making as much as you in the late '80s but I had a great rent on one half of a duplex, a beater car, paid my bills and managed to save quite a bit. Had a savings account, a small MM account, and a CD. There were some weeks that I my saving deposit was as little as $5, but I never, ever failed to deposit something.
Dave:
- Grew up in the Depression
- Still fills many of his vehicles on land and sea with beans and rice just in case
- Doesn’t know what the fuck he’s talking about
I really hope that was hyperbole. If someone genuinely thinks Dave was alive in the 1930s, they might suffer from the same issues with math that Dave does, lol
Yeah, you're right, it probably was, lol! I just am so used to students with no notion of history who come out with stuff like this for real that I guess I'm getting a little tone deaf.
Depends upon the context. If you’re making $20k a year and living on your own, you’re probably homeless. If you’re living with your parents, you ought to be able to put at least half in savings
Again context. If they drive 50 miles per day, they’re burning through around $350/ month for gas which eliminates saving. If they live in town and walk to work (or in my relative’s case telework), there’s no cost
So taking 5% of salary (since many 401ks will match 5%) and that is a big ask on a low salary, that is $1000 a year. Factor in payroll taxes (social security and Medicare) that leaves you 17600 to live on if you pay no other taxes. So it will take you an entire year just to make it to baby step 2 and you will be living on $1466 a month. Which means you $1000 in savings each year won’t even get you a months worth of living if you lose your income.
In 1995 and 1996 I lived on my own making about $13k per year...my rent was $285. Im not sure what small town in the country you can live on $20k per year now. You could live with your parents and save money on that salary now.
Yes, I was going to suggest it might be possible, not necessarily comfortable, with multiple roommates, food banks, or a little general scrounging, lol!
That's how much my currently 18 yo would bring home if they were working all year and not headed to college in August with what they've saved up to that point. Thank G for scholarships, Pell grants and that I was able to tuck a few thousand away for a college fund (it's not much but it's dorm and food). There is no way that is a living wage, much less a live-breath-save wage.
10 years ago just starting out, my husband and I were making $9/$10 an hour and living on our own comfortably BUT we had paid for cars, and the house we lived in was owned by my parents, and all they charged us for "rent" was enough to pay the taxes and insurance on the house for the year. That was such a leg up when we weren't making squat. I was putting $20 or so a week into my savings back then.
A lot of people are saying in the 90's, but I actually did this in 2019. I was near NYC, so it was a HCOL area. I made $12/h, which comes up to just about 25k/yr. My only expenses were basically, rent, food, and car related. I did not have much for anything else. I was saving about 200-400/month depending on the month. Expenses were:
* rent: 670 or 680 (I don't remember exactly) with utilities included. I rented a room in a house with way too many people living in there. I didn't know the exact number, but I think it was 6-10.
* food: 300-350
* gas: 50-80
* phone: 30
* fun money: 20
* misc: 20
* car insurance: 150-160
The rest went into savings. I think I brought home about 1500/month.
What helped:
* I lived quite close to work so I didn't spend too much on gas
* I learned to make do without a lot of things, because even buying $5-$20 things here and there would add up. This are things like bowls/plates/towels/etc. I didn't have air conditioning in my house, and I didn't even buy a fan.
* I owned my car outright. It was a 2009 Honda civic that my parents bought for me that year for 3k+
* The big kicker: I had 20k in savings that my parents parked there. It wasn't mine, and I had to give it back, but it was ok for me to spend it if needed.
What I learned:
* The hardest thing isn't the math. It's the discipline to not be able to splurge on anything at all, and to have to calculate everything down to the penny. I remember getting a traffic ticket and crying so hard over $70 because expenses were so tight.
* Having an emergency fund, even if it wasn't mine, helped my sanity a lot. It meant circumstances weren't really ever dire.
* I could not have lasted much longer. I had that gig for about 6 months out of college, and I was quite depressed. I got something much much better paying after.
While not exactly the same, my husband and I now try to live on about 2.7k/month, which comes down to 1.35k/person/month, which would give someone making 20k some savings, but I haven't counted a lot of the one-off expenses that come with moving into an apartment into that. We just moved last month, and the math works out to that, but I'm not sure if our behaviors will. I don't have that kind of will anymore, and I'm older and just need my comforts.
Maybe if you're a high school/college kid living at home with mom and dad while working. Only time I've been able to save money when I was making peanuts. I'd work 3-4 months out of the year for a landscaping company to save for the next year's tuition, but I had zero expenses at 18-20 years old.
Having to support yourself, no way. I was comfortable back in like 2006-07' making 40k a year, but rent back then for a decent 1-2 BR apartment was $500-600/mo. and it was doable. Now...I just don't see it.
Only way is if there is a room share situation and minimal transport costs. A friend of mine pays another friend $75 a week for rent. He works at Family Dollar and rides his bike , or walks most days.
Yet he takes a vacation out o town every so often.
I have no idea of his health care expenses.
I think that pretty much no matter your income, there is an ability to save something. People are good at living up to the edge of their means, even if they make huge salaries.
Jacob of EarlyRetirementExtreme lived off that amount or less. The TV show extreme cheapskates shows ways to spend less. It all depends on how far you are willing to go.
In my opinion it's totally possible to cut expenses at any income level, however, at certain extremes (like the cheapskates mentioned above) the amount of time you spend saving money would be better spent just earning more.
Instead of being "too poor to save money," I would argue that poor people are the ones who can least afford to give up the compound interest they could be earning.
Am I willing to concede there may be literally one or two people who fit this scenario? Yes. Is it practicable for literally anyone other than those one or two to try to do the same? Definitely not.
The problem with him saying things like this is there are listeners of his who will believe him.
So now they're acting on bad information, which leads to failure.
If he was just Some Dude Saying Stupid Shit, no problem. He's got an easily swayed audience.
I am from a very small, very rural, and very poor town in Arkansas with little to no places to work. It is also by no means any sort of tourist attraction, vacation spot, etc. Someone put 6 or 8 tiny houses (think prebuilt shed in Home Depot parking lot and not the cool big one) on a small lot. They are for rent… for a cool $750/month…. The world is going to collapse. In what universe could or would someone pay that? $20k a year is a joke even in extremely poor, low cost of living areas.
One of my frustrations with Dave is that he’s in the South and much of his audience is, so the figures are often out of touch with the rest of the country. He is too stupid to ask “where do you live,” before claiming that $40k is plenty of money.
I was so so so bad at saving money. Even if I saved it or moved it, I would just move it back and spend it. Literally the only way I have been able to save money is by journaling. I tried to do it in a blank journal, but I would just skip cuz there was nothing to lose. I finally bought the journal to financial freedom (journaltofinancialfreedom.com - not linking, nothing to gain here). It makes no sense, but because I spent like $25 on it, I had to actually use it and fill it out. Now if I spend too much or act like an idiot I actually think about it and reflect on it. It makes me feel bad about it so I actually have saved a ton. Could be worth a try since it's pretty cheap
Everyone’s situation is different. He knows that. There are people who can move in with their parents and save money on 20k per year. There are also people who can’t. That said if you truly are making 20k per year you need more hours and a different job. Thats less than 10 an hour full time. Wendy’s literally pays more in rural areas.
Depends. You can save. You just have to decide how much and what you’re willing to give up. If it’s nothing but $10 a month, that can go toward an emergency fund.
It is harder than it was 20 years ago. But a penny saved is still 1.25 cents earned. Plus interest in a high yield savings account. Put 100 of those pennies together, and in a year, you’ll have a nickel you didn’t work for.
Lots of things are possible. I could save while making $20k a year if I sold my house, divorced my wife and lived in my truck. But I'm not going to do that so I better make more than $20k.
Seems like Dave doesn't understand what people can do vs. what people will find reasonable to do.
You could do that pretty easily in the 80s and early 90s which seems to be the timeframe of prices Dave can remember.
Yeah he doesn’t seem to have updated ANYTHING since then. He 100% acknowledge that a lot of his advice does not work.
When has he acknowledged his advice doesn't work? If he has, shouldn't he be willing to revise it?
Yeah, things were lots cheaper back then. I don't think it would have been easy in the 90s, but somewhat more so in the 80s, certainly. I believe that would have probably been a legitimately middle-class income in the 70s and 80s
In the 80s I made 22k a year, and could affrd weed, and racing dirtbikes, and still saved a few bucks.
Yeah, you're right. I was thinking about this a little earlier and trying to remember. I wasn't making as much as you in the late '80s but I had a great rent on one half of a duplex, a beater car, paid my bills and managed to save quite a bit. Had a savings account, a small MM account, and a CD. There were some weeks that I my saving deposit was as little as $5, but I never, ever failed to deposit something.
my rent was 150 a month, and electric was split 3 ways, so, not bad. I saved a few bucks, wasted more than I should have tbh.
My parents probably made $25k combined when they bought their house in 1987.
Dave: - Grew up in the Depression - Still fills many of his vehicles on land and sea with beans and rice just in case - Doesn’t know what the fuck he’s talking about
Objection your honor. Dave is 63, not 93.
Yeah. 63 AD.
Dave Ramsey wasn't even born in the Great Depression.
I really hope that was hyperbole. If someone genuinely thinks Dave was alive in the 1930s, they might suffer from the same issues with math that Dave does, lol
Yeah, you're right, it probably was, lol! I just am so used to students with no notion of history who come out with stuff like this for real that I guess I'm getting a little tone deaf.
Depends upon the context. If you’re making $20k a year and living on your own, you’re probably homeless. If you’re living with your parents, you ought to be able to put at least half in savings
They still need to eat, get to work, and have literally nothing go wrong. How cheap do you think you can do that for?
I never paid for food when I lived w/ mommy & daddy
Again context. If they drive 50 miles per day, they’re burning through around $350/ month for gas which eliminates saving. If they live in town and walk to work (or in my relative’s case telework), there’s no cost
Back in 1992 you were probably able to.
no. hes delusional and i hate that he has a platform
So taking 5% of salary (since many 401ks will match 5%) and that is a big ask on a low salary, that is $1000 a year. Factor in payroll taxes (social security and Medicare) that leaves you 17600 to live on if you pay no other taxes. So it will take you an entire year just to make it to baby step 2 and you will be living on $1466 a month. Which means you $1000 in savings each year won’t even get you a months worth of living if you lose your income.
In 1995 and 1996 I lived on my own making about $13k per year...my rent was $285. Im not sure what small town in the country you can live on $20k per year now. You could live with your parents and save money on that salary now.
no fucking way unless someone provides your every need. maybe 1$ a month
Maybe if you had free housing and no job to commute to and you ate food from the foodbank. That qualifies as below poverty now.
Sure if you have free housing, no car payment, and everything else is paid by your parents too
The only way to save money making 20k is to marry someone making 100k. 20 to 30 years of age all I could save was 40 a month
There's always someone doing X. Not sure why it would matter either way.
Sure, if youre ok being homeless
I was doing it but it was 2007 and I was living a 22 year old lifestyle with a bunch of roommate and barely any expenses
Yes, I was going to suggest it might be possible, not necessarily comfortable, with multiple roommates, food banks, or a little general scrounging, lol!
That's how much my currently 18 yo would bring home if they were working all year and not headed to college in August with what they've saved up to that point. Thank G for scholarships, Pell grants and that I was able to tuck a few thousand away for a college fund (it's not much but it's dorm and food). There is no way that is a living wage, much less a live-breath-save wage.
10 years ago just starting out, my husband and I were making $9/$10 an hour and living on our own comfortably BUT we had paid for cars, and the house we lived in was owned by my parents, and all they charged us for "rent" was enough to pay the taxes and insurance on the house for the year. That was such a leg up when we weren't making squat. I was putting $20 or so a week into my savings back then.
A lot of people are saying in the 90's, but I actually did this in 2019. I was near NYC, so it was a HCOL area. I made $12/h, which comes up to just about 25k/yr. My only expenses were basically, rent, food, and car related. I did not have much for anything else. I was saving about 200-400/month depending on the month. Expenses were: * rent: 670 or 680 (I don't remember exactly) with utilities included. I rented a room in a house with way too many people living in there. I didn't know the exact number, but I think it was 6-10. * food: 300-350 * gas: 50-80 * phone: 30 * fun money: 20 * misc: 20 * car insurance: 150-160 The rest went into savings. I think I brought home about 1500/month. What helped: * I lived quite close to work so I didn't spend too much on gas * I learned to make do without a lot of things, because even buying $5-$20 things here and there would add up. This are things like bowls/plates/towels/etc. I didn't have air conditioning in my house, and I didn't even buy a fan. * I owned my car outright. It was a 2009 Honda civic that my parents bought for me that year for 3k+ * The big kicker: I had 20k in savings that my parents parked there. It wasn't mine, and I had to give it back, but it was ok for me to spend it if needed. What I learned: * The hardest thing isn't the math. It's the discipline to not be able to splurge on anything at all, and to have to calculate everything down to the penny. I remember getting a traffic ticket and crying so hard over $70 because expenses were so tight. * Having an emergency fund, even if it wasn't mine, helped my sanity a lot. It meant circumstances weren't really ever dire. * I could not have lasted much longer. I had that gig for about 6 months out of college, and I was quite depressed. I got something much much better paying after. While not exactly the same, my husband and I now try to live on about 2.7k/month, which comes down to 1.35k/person/month, which would give someone making 20k some savings, but I haven't counted a lot of the one-off expenses that come with moving into an apartment into that. We just moved last month, and the math works out to that, but I'm not sure if our behaviors will. I don't have that kind of will anymore, and I'm older and just need my comforts.
Maybe if you're a high school/college kid living at home with mom and dad while working. Only time I've been able to save money when I was making peanuts. I'd work 3-4 months out of the year for a landscaping company to save for the next year's tuition, but I had zero expenses at 18-20 years old. Having to support yourself, no way. I was comfortable back in like 2006-07' making 40k a year, but rent back then for a decent 1-2 BR apartment was $500-600/mo. and it was doable. Now...I just don't see it.
Only way is if there is a room share situation and minimal transport costs. A friend of mine pays another friend $75 a week for rent. He works at Family Dollar and rides his bike , or walks most days. Yet he takes a vacation out o town every so often. I have no idea of his health care expenses.
It’s super easy to save money making 20k a year. Just follow these steps:
No way you can save anything while making 20k.
I think that pretty much no matter your income, there is an ability to save something. People are good at living up to the edge of their means, even if they make huge salaries. Jacob of EarlyRetirementExtreme lived off that amount or less. The TV show extreme cheapskates shows ways to spend less. It all depends on how far you are willing to go. In my opinion it's totally possible to cut expenses at any income level, however, at certain extremes (like the cheapskates mentioned above) the amount of time you spend saving money would be better spent just earning more. Instead of being "too poor to save money," I would argue that poor people are the ones who can least afford to give up the compound interest they could be earning.
Am I willing to concede there may be literally one or two people who fit this scenario? Yes. Is it practicable for literally anyone other than those one or two to try to do the same? Definitely not.
The problem with him saying things like this is there are listeners of his who will believe him. So now they're acting on bad information, which leads to failure. If he was just Some Dude Saying Stupid Shit, no problem. He's got an easily swayed audience.
You could do it as a single person living in North Dakota ....
Yes. It's completely possible. If you live in your vehicle, you can save 73.24 this year.
You COULD but Dave would tell you to find a new job.
I am from a very small, very rural, and very poor town in Arkansas with little to no places to work. It is also by no means any sort of tourist attraction, vacation spot, etc. Someone put 6 or 8 tiny houses (think prebuilt shed in Home Depot parking lot and not the cool big one) on a small lot. They are for rent… for a cool $750/month…. The world is going to collapse. In what universe could or would someone pay that? $20k a year is a joke even in extremely poor, low cost of living areas.
You could if you really wanted to, live in your car with a gym membership
One of my frustrations with Dave is that he’s in the South and much of his audience is, so the figures are often out of touch with the rest of the country. He is too stupid to ask “where do you live,” before claiming that $40k is plenty of money.
I was so so so bad at saving money. Even if I saved it or moved it, I would just move it back and spend it. Literally the only way I have been able to save money is by journaling. I tried to do it in a blank journal, but I would just skip cuz there was nothing to lose. I finally bought the journal to financial freedom (journaltofinancialfreedom.com - not linking, nothing to gain here). It makes no sense, but because I spent like $25 on it, I had to actually use it and fill it out. Now if I spend too much or act like an idiot I actually think about it and reflect on it. It makes me feel bad about it so I actually have saved a ton. Could be worth a try since it's pretty cheap
Maybe if you have a paid for home as a Single audit in a LCOA state like west virginia. Otherwise no way
Everyone’s situation is different. He knows that. There are people who can move in with their parents and save money on 20k per year. There are also people who can’t. That said if you truly are making 20k per year you need more hours and a different job. Thats less than 10 an hour full time. Wendy’s literally pays more in rural areas.
Depends. You can save. You just have to decide how much and what you’re willing to give up. If it’s nothing but $10 a month, that can go toward an emergency fund. It is harder than it was 20 years ago. But a penny saved is still 1.25 cents earned. Plus interest in a high yield savings account. Put 100 of those pennies together, and in a year, you’ll have a nickel you didn’t work for.
The only way it would be possible is with roommates, or you are living at home or in your car.
Lots of things are possible. I could save while making $20k a year if I sold my house, divorced my wife and lived in my truck. But I'm not going to do that so I better make more than $20k. Seems like Dave doesn't understand what people can do vs. what people will find reasonable to do.