It all started with Donna Freedman.

This frugalist blogger spent years living on a less-than-generous income while she went back to college, managed an apartment house (for her rent), then began stints as a columnist for MSN, as well as Get Rich Slowly, both popular financial sites.

    Now Donna’s in better circumstances, living in Alaska with her partnerand apparently more than willing to back the idea that you must be making more than $50,000 in order to live comfortably. No matter what. Or where. In fact, she makes fun of “wealthy people” (i.e., those living on $200,000 or more) for positing that $25,000-50,000 is enough. (Okay, maybe in rural Mississippi, she concedes.) And she likes to say, “If you think you’re broke — you probably aren’t.” This, from a woman who proudly “thrived” on $12,000 a year — and wrote about it.

Donna’s question, though, got me to thinking:

How much do you really need? Not just get by onbut really live? 

*Depends on where that living is happening. Cambodia, Thailand and the Philippines are considered some of the cheapest places in the world to liveat an average cost of $500USD a month. Of the U.S. spots, Harlingen, TX, at approx. 20% less than the national average, should stretch your dollars a little further. (Go here for the top 10 American cities.)

*Do you have an income that will keep going, regardless of where you live? Odds are good that this won’t be happening, unless you’re retired or basing your income on mail order, freelance or computer work. Not many of us have that option.

*Are your job skills best served by living in — or near — a big city? For decades, Husband was a mechnical engineer who worked for military contractors or universities. When we moved to a smaller town, his commute went to 1 1/2 hours each way. And that soon became too much. Many skilled positions demand proximity to a big city, international airportor at the very least, access to cellphones and faster computer service.

*What about family? Will you need to stay near older relatives, because of their health? Do you have younger children or teenagers who could really benefit from growing up near Grandpa and Grandma? Not to mention the help they could give financially, babysitting, rescuing from stupid decisions, etc. (Unless, that is, you’d like to stand on your own two feet.)

*What about culture? In his will, Philip Seymour Hoffman stated,

     “It is my strong desirethat my son, Cooper Hoffman, be raised and reside in or near the borough of Manhattanor Chicago, Illinois, or San Francisco, California.

     “The purpose of this request is so that my son will be exposed to the culture, arts and architecture that such cities offer,” the screen and stage star wrote.

     You may not feel as strongly about it as Hoffman — but you’re not going to be going to as many concerts or movies in a tiny town versus a metropolis.

     And finally:

*What’s important to you? What makes a real difference in your lifeor your family?

Answer those questions first. Then it’s time to consider the basics, bareboned ones first:

    Housing:   rent or mortgage

    Utilities:   heating/cooling, lighting, water and sewer

    Transportation:  bicycle, vehicle — or public transit

     Food:   How much have you spent in the past six months? Divide this amount by 6, and you should have a pretty good notion of what you usually spend. (Not that it couldn’t be lower…)

     Insurance:  Go without — and you run the real risk of losing everything, especially with health insurance. Fortunately, Obamacare has made it easier to get health insurance for those with lower incomes.

Now you can add in the next layers of basics, like clothing, entertainment (including eating out and cable tv), travel and the holidays.

And finally, there’s retirement. Kevin McKinley posits adding up your monthly expenses (see above), and subtracting whatever income you expect to receive (Social Security, pension, etc.). Multiply that figure by 200 (10 if you’re in your twenties, 25 if in your thirties, or 50 in your forties)and you’ve got the target amount you’ll need for retirement. You can skimp here for nowmany people do. But the earlier you begin to save, the easier it is.

  At least these items will not only point out what you currently need for living expenses — but whether you’re making the best choices now. Can you really afford what you’re spending on? If not, can you add another source of income — or make better purchases to stretch your money further? (“In order to thrive, you have to hustle, too, always looking for ways to save a dime or to make one,” Donna Freedman reminds.)

    There really is no definitive answer on how much you need to live on. Besides, what’s important to you now may not be in a decade — or vice versa. Taking the time to analyze your current situation can give you a much-needed chance to consider future possibilities and opportunities before they happen. Are you meeting the goals you planned on? If not, can you start with small changes, at least, to get yourself back on track?

Then you’ll really be living.

A series of steps, a series of doors — all leading to Opportunity


Pizza: The Perfect Food

pizza the perfect food

Here at Midlife Finance, we make sure we cover the serious issues in your life: money, retirement, kids, and much more. Here’s a look at an important issue we haven’t covered yet: Pizza.  It may just be the perfect food. Well-made pizza is easy on the budget. It can be a meal-in-one, and makes good use of fresh local ingredients. Best of all, good pizza is also easy to make.      The Internet’s full of recipes for this crunchy, garlicky delicacy. Few, though, make a pizza that looks, as well as tastes good. Some tricks help:      *Let your pizza dough [...]

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Financing a Fixer Upper Home

Financing a Fixer Upper Home

I’m searching for a new home and it’s been quite interesting. Our area has been a seller’s market for quite a few years now and the price keeps increasing. We looked at a few homes and the nice ones are priced out of range, so I’m considering a fixer upper. The prices of homes that need repairs are much more affordable, but some of them really need extensive repairs. One home we visited had the whole kitchen ripped out and I’m pretty sure our credit union wouldn’t finance that kind of property. Unless you have cash, it can be difficult [...]

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Ten Ways To Save On Back To School

ten ways to save on back to school

It’s here.  The weather still thinks it’s summer outside, but in the eyes of many school districts, school is just days away from a new calendar year. Even if your area isn’t there yet, you’ve got only a few weeks left — maybe a month, if you’re lucky. Somehow you must come up with creative ways to get clothes, school supplies and more, without breaking the budget. Here’s a start, before your kids trudge off: *Clean out their closets. Not only will it give them a clean place to start the year from, but you can donate their gently-worn items to [...]

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A Closer Look at Bitcoin

a closer look at bitcoin

Hang around the world’s financial markets, and sooner or later you’ll hear the word “bitcoin.” What does it mean?      Technically speaking, bitcoin was first introduced in 2008 by Satoshi Nakamoto, then released as an open software system in 2009. It’s also known as virtual currency, cryptocurrency or digital currency: it acts as a substitute for a variety of money exchanges, including the U.S. dollar and the Canadian loonie.      Not only have investors been speculating in this new ‘money,’ but they’ve been using it to pay for their expenses, including plane tickets, hotels, etc. The first ATM for bitcoin recently opened in [...]

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