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Not All Americans are Rich

Debt and cost of living are needed for real comparison

By Gene LassPublished about a month ago 16 min read
Not All Americans are Rich
Photo by Dan Meyers on Unsplash

There are two pop culture references that provide a good perspective on the how Americans are perceived versus reality.

The first comes from the classic film "The Quiet Man" (1952) in which John Wayne plays a professional boxer who leaves America for Ireland, where he decides to live in his family's ancestral cottage in a tiny village. When one of the locals actually meets Wayne's character, another of the locals later asks him what this new resident is like, and he replies,

"Oh, you know, he's a millionaire, like all Americans..."

In this case, Wayne's character may have actually been a millionaire. He was a successful prize fighter, and over the course of the film he pays to renovate and refurnish the run-down cottage and makes other purchases beyond the means of most if not all of the people in the village. But there are two things to consider:

1. His character is not an ordinary American. In 1952 to be sure, most Americans couldn't have afforded a trip to Ireland, much less afforded to go there and do what his character did. Even today, I know some people who have gone there, but those who did probably couldn't afford to drop everything, and buy, restore, and refurnish even a tiny cottage as seen in the film. I have friends who can't afford to go out to dinner, much less fly to Ireland.

2. It would be a lot less expensive for Wayne's character to do that in Ireland than in Boston, New York, or most states. Which brings us to our second example.

By Giorgio Trovato on Unsplash

In the 9th season of the reality show "90 Day Fiancee'", Kobe, a native of Cameroon, is trying to reassure his future father-in-law about his ability to provide for his family when it's revealed that Kobe's fiancee' Emily is pregnant. While he doesn't yet have an American work visa and thus can't get a job, Kobe says he won't need to work for a while. He is able to support himself and his family from his handsome savings. When asked, he proudly states he's saved up $4000.

His future father-in-law sighs, shakes his head, and says sadly,"$4,000 won't go very far in America. It will last you at most a couple of months." Kobe is shocked. But it's true.

In the same season, Venezuelan Guillermo is frustrated because he wants a lavish wedding with a full church ceremony but his fiancée Kara says they can only afford a simple wedding. When he doesn't believe her, she books an appointment with a local wedding planner who explains that in order to have the kind of wedding Guillermo is looking for, even if he tones it down a bit, it will cost them at least $12,000, and that's living in small town Virginia. Kara's total budget is $2,000. She has no secret stash, no extra savings, no rich uncle, $2,000 is what they have, and for that they can have a small wedding with a nice dress and tux and a simple reception at a local hall. Guillermo is stunned. Welcome to America.

How much it costs to be an American

In most of America, $4000 would get you a security deposit and first month's rent at an average apartment (average rent in America at this writing is $1517 per month). That would leave you $964 for the rest of the month, as you're standing in an unfurnished apartment. So, congratulations, you're off the street. Your apartment probably has running water that you won't be billed for yet, and some leases include water. You'll have to set up accounts for all other utilities, including internet and electricity. For simplicity sake, let's assume you're not going to get cable or satellite tv or any paid streaming services.

Let's also assume you have in-unit washer and dryer for your laundry, which is a big assumption. Many apartments have a shared laundry area, where residents pay per load (about $1.50) or they have to go to a laundromat, where they also pay per load. But we'll say you can do laundry in your unit, and you're in an area where utilities are fairly low and the climate is moderate. Someplace like rural Tennessee. There you may be able to pay as little as $120 per month for electricity and $40 for water. So we'll take that $160 out of your balance of $964. You now have $804.

Let's assume you have enough clothing to function. You still need to feed yourself. And for simplicity's sake we'll assume you're alone, and have a very basic grocery budget. No splurging, and you're making use of sales and coupons and cheap foods, not steak or organics. You're still looking at $250 per month, which brings you down to $554 total. What? You think you'd save money by going to McDonald's every day? Think again. Prices at McDonald's have increased, particularly in the last year. On average plan on paying at least $10 for any McDonald's meal. Do that 3 times for a month and your food budget is $900. So you see, with an average food budget of $250 per person per month for those who are working hard to save money, they're not at McDonald's.

By Isaac Benhesed on Unsplash

I have to note that on all three of those costs (electricity, water, food), you'd be lucky to find rates that low. Cities of course are much more expensive. But even in some less-expensive states, utilities can be much higher. I know a family in Mississippi that pays $300 per month for electricity, which is also what a pastor I know in the Miami area pays at a minimum. He says his bill is often $300 in the cooler months. In summer, it can be more than $500. My grandparents, who lived in the Chicago area, were paying $300 per month for electricity in summer 40 years ago. I shudder to think of what it would be now. For groceries, if I lived alone I might be able to live on $250 a month. I can get by on a lot of sandwiches, cereal, and toast and I drink tea I brew at home. But since I'm married, our groceries are easily $500 per month on a normal month.

Next, a phone. Let's assume you have one. Landline service is no longer an option in the US, and it's almost impossible to function without a phone of any kind. We'll set you up with a budget plan with unlimited texting and normal data limits. I have such a plan. $40. You're at $514.

We won't factor in entertainment. You can go to a park, go for a walk, or get a library card for free and read whatever you want.

We'll also assume you're healthy. No regular medication costs, no co-pays, nothing like that.

We'll also forget about renter's insurance. Some apartments make renter's insurance mandatory, and it may be for as little as $5 per month. But it's not always mandatory, so we'll skip that.

No pet for you. Not even a fish. If you like animals, you can look out the window. If you're in some areas, your reasonably-priced apartment may come with pets of different kinds, like mice, rats, ants, or cockroaches. They'll eat any crumbs you leave behind, the hair in your drain, and any food that isn't in your hand right now. You can keep those for free. If you want to get rid of them, you'll have to pay. My friends who live in the area of Tampa, Florida have a very modest 1 bedroom apartment that costs them $1200 a month and has plenty of pets like that, plus a significant amount of crime. If they want to live in an apartment that's safe and pestilence-free, it will cost them $3000 per month, and as with them, your budget won't even get you in the door. As it is, their two combined salaries makes it a struggle to stay in their apartment, keep their old car running so they can get to work, and keep cheap food on the table.

And you're not dating. That can be expensive, but not always. If you're lucky you might be able to date someone who will be happy to just go on romantic walks, go hiking, have candlelit dinners, and spend time getting to know each other just like everyone's dating app profile says.

By Phil on Unsplash

So, now you have a place to live, clothes to wear, light, heat, water, and food for the month, and you have $514 left. Great! However, you have two things left to consider:

1. You still have no furniture in your place. You've been sleeping on the floor, sitting on the floor, using the clothes you're not wearing for both your pillow and blanket. You also have no plates, no cutlery, no glasses. You've been eating food with your hands, drinking water from the tap, drinking milk and juice (when you can afford it) from the container. So, if you want to take care of that, head down to your local thrift store or head out to some rummage sales and get a cheap couch and some dishes. Then kiss your $514 goodbye. Also,

2. It's the end of the month, you now have to pay another $1517 to stay next month, which leaves you more than $1000 short. So you can either go to the homeless shelter, buy a tent, or get a job.

The cost of working

According to the US Department of Labor, the average income in the US at the end of 2023 was $59,384.00. Depending on where you live in the world, that may sound great. And it's not bad. Again this is AVERAGE. So plenty of people make a lot less, and plenty make a lot more. And depending on where you're living, this could be a really good salary (like in the rural South) or it could have you working hard but still on the street (like in Los Angeles or New York). But, we'll give you that average salary.

And guess what? That's enough for you to make your $1517 rent!

By Jon Tyson on Unsplash

Guess what else? No matter where you live in the US, if you're making that much, you'll have to pay federal income tax on it. So your $59,384 just turned into $49,009, or $4084 per month.

Since we started you off with Kobe's nest egg of $4000, we already know you can live in a modest place on a modest budget and get by on that with about $500 left over per month.

You may also have to pay state income tax, or, in places like Maryland, local income tax. These would eat into your monthly salary, sometimes quite a bit, depending on the state you were in. However, there are several states, such as Tennessee and Florida, with no state income tax. So once again we'll say you've moved there.

By Hush Naidoo Jade Photography on Unsplash

But wait, what about health insurance? Even if you're healthy, you might get sick or injured at some point. Many jobs provide health insurance, which doesn't usually pay for the cost of insurance entirely, though sometimes it does. And sometimes it doesn't. Some jobs don't pay for insurance at all, and rates can vary. However, according to the Kaiser Family Foundation, the average cost of health insurance per month in 2024 is $477. And that's under the Affordable Care Act (aka Obamacare) plans. You could pay more. So, if you have insurance, that just ate into what you have left over per month. Let's assume, like many Americans, you don't. You'll risk it, and if you get sick you'll go to a walk-in clinic or ER. Keep in mind, if you do get sick or injured, and you need care, without insurance that care may bankrupt you. Most Americans are one emergency event away from bankruptcy at any time. According to a survey by Bankrate, only 44% of Americans could afford to pay a $1000 emergency expense from their savings. Even those with insurance. Because with insurance you have the deductible and co-pays. Slip and fall, get hit by a bus or otherwise injured, or get sick, and you have new bills you may not be able to afford.

Now, how are you going to get to your job? America is a big place. Sure, you could live in a city like New York or Chicago, where you can take public transportation anywhere. Ubers, Lyfts, cabs, buses, subways, all those things cost money. Maybe you would be lucky enough to have a job within walking distance to your apartment. Good for you! If that's the case, you're probably paying more than the $1517 we talked about in order to live in a city like that, and it's also going to up your grocery cost, etc. Everything goes up when you live in a city. I had friends who lived in a studio apartment in Manhattan 25 years ago. One was an editor for a well-known book publisher, one was a high school teacher. They were struggling to pay the rent on a studio apartment for $1500 per month and they decided to move when (this is true), as my friend was doing their dinner dishes, a cockroach came out from behind the stove - when then lights were on- and tried to take bits of food off of the plate he was cleaning. But hey, they were living the dream in New York and they could walk to the deli and laundromat on the corner. That apartment now would cost far more than $1500 per month. I've seen some where their apartment is literally just big enough for a toilet, a bed, and a hot plate. No closet. $1500. I recently read of a barista in LA who was paying $1500 to sleep on his friend's floor, and his friend lived 10 miles from where the barista worked. The barista was working 2 jobs to afford that $1500 spot of floor, making much less than the average American wage, with no insurance.

By Jim Witkowski on Unsplash

So let's say that in order to save money you're not living in a big city, in a state with no income tax. So again, suburban or rural Florida or Tennessee would be good examples. Well, surprise, when you're outside of a city you'll probably have to drive. Some smaller towns and cities do have public transportation like buses and such, but far more don't. In the small town I live in, there's a trolley that goes around to some of the surrounding towns that serves seniors in particular, and that's free, but you can't find that everywhere. Plus, that trolley doesn't stop where I live. I'd have to walk at least a mile to get where that trolley stops, and it doesn't run 24/7. However, walking that far would get me to a grocery store, a dentist, a clinic, and a laundromat. If I lived in the rural area where one of my friends does, I'd have to walk a mile to get to a gas station that has some groceries, and 5-7 miles to get to regular stores. If I bought any perishables from any place other than that gas station and convenience mart, they'd be melted or spoiled by the time I got back.

Many rural areas, where the cost of living is lower, are far more spread out than that. In areas of Texas, Montana, Wyoming, Alaska, your nearest neighbor could be 3-5 miles away and a store could be even further away. Plus, there, apartments aren't an option. My friend in rural Tennessee is in an old house. There are some apartments in town there, but they're still far enough from stores or laundry facilities that you'd want to drive. Sure, you could have your groceries delivered, and some do, but that usually isn't free, and it's not available everywhere.

If you did get a car, a used one, the average car payment in the US in 2024 is $523 per month. That wipes out your remaining monthly budget, and you haven't even put gas in it yet. You're also legally obligated to have insurance. Count on that being at least $38 per month. Plenty of people take their chances and don't insure their car. If so, and you get in an accident, the fines you get for driving an uninsured vehicle can make things more difficult for you.

But maybe you're really stoic, and kind of athletic. You decide to skip the car and walk everywhere. Good for you.

And, you're lucky enough to have that job close to where you live. Or maybe you are able to work remotely. I work remotely, which keeps many of my expenses low. But, I need internet and a phone for sure. My internet costs $75 per month, and I'm fortunate enough to have my computer provided by my employer. What if you're really really lucky and you also have a computer from your employer, and a coffee shop nearby with free wi-fi, or, as is often the case, the local library has free wi-fi. Good for you. We'll say you work at the library every day. Cheaper than being tempted by the pastries and lattes at the coffee shop.

The cost of education

However, what are you doing as that work remotely job? It's not pumping gas, waitressing, making coffee, flipping burgers, or driving an Uber (you'll need an insured car for that last one, and not a crappy car either). Chances are you have a job with a degree, which means you probably had student loans.

The average student loan payment in America right now is $503. If that's what you're paying, awesome, you have $11 left at the end of the month. Go treat yourself to a Big Mac meal, a cheap bottle of wine, or a 6 pack of beer. Or go to a movie, probably a matinee, because it's cheaper. You may not be able to afford popcorn.

Reality bites

Does this sound grim? Sure it does. Not every apartment has rats and roaches. Mine doesn't, but I pay almost $1700 a month for it, and I was lucky to find one as nice as it is this cheap.

However, this is realistic. The reality is, that average pay we're assuming you would have, plenty of people don't have. And they're not just young people fresh out of school. My friends I mentioned in Tampa, neither of them are making that much. One is a mechanic, the other is a call center manager. They used to be able to afford where they could live, but the cost of living went up more than 30% in the last few years as people from far more expensive parts of the country flocked there because they couldn't afford to live in New York, Chicago, Milwaukee, Boston, or any part of California anymore.

Similarly, I have friends in Milwaukee who are in their early 30s. They live in a pretty rough neighborhood, 5-7 of them renting the same house, barely getting by. Two winters ago they found a dead guy on their back porch. First he was stabbed, then he froze to death. They hear gun shots in their area every day. One of my friends there is an artist whose main job is a Human Resources manager. She hopes to move out of there with her boyfriend this year. To save money she makes two buckets of food per week, a bucket of spaghetti and a bucket of salad. She likes to make soft but healthy food because she has a lot of dental problems. She couldn't afford to see a dentist until she was 28.

Also in that area there's my best friend who's 42. She's been the executive assistant for a union coordinator for the past 8 years. She has decent pay with good benefits but she's still not making that American average salary. She lives in a crappy little apartment that's pest free but still not ideal. Except for her apartment, the whole building smells like a warm trash can full of cigarette butts and it looks like it was last updated in the 1970s, because it probably was. there are 8 units in the building, and residents share 2 washers, 2 dryers, and at least one of those is broken at all times.

At the other end of the spectrum I have cousins who are doing very well. Two of them are investment professionals living in far suburban Chicago. They can't afford to live in the city, and wouldn't if they could. They're lucky enough to be able to work remotely most of the time now, but when they do have to go into the office, they're more than 20 miles out, so they have to drive to the train station, leave their car there for the day, take the train in, then walk or cab from the train station to their actual office. Cab is safer. A friend of mine in New Jersey who works in New York City does much the same thing. It takes him an hour to get to work when he has to go in, and he hates going. In both cases, the contrast between highly-paid workers and homeless people living in abject poverty, plus the criminal element has them counting the days until they never have to go to the city again.

I also have three friends in their 50s who are doing well because the field they went into enabled them to get a good paying job fairly quickly, and they were very very frugal in their teens and 20s. They always saved, they lived with their parents, and as I said, their job in insurance, medicine, or engineering was giving them a decent life by the time they were in their mid to late 20s. Their health was good, they had no other issues. In contrast, one person I know was on her way to a good career in marketing, possibly bridging in to politics. At 25, just as things were going well, her health declined. She hasn't been able to work since. Another guy was a publishing professional, doing fine, until the company he worked for restructured and laid off 1/3 of the people, shutting down most of what they did. He took a better-paying job in a financial services company, then another job in a global staffing company. That staffing company then went through a series of layoffs as the market changed and he was left working retail for 20 years as he struggled to find another job. Life is hard.

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About the Creator

Gene Lass

Gene Lass is a professional writer, writing and editing numerous books of non-fiction, poetry, and fiction. Several have been Top 100 Amazon Best Sellers. His short story, “Fence Sitter” was nominated for Best of the Net 2020.

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Comments (1)

  • Scott Christensonabout a month ago

    The US is like the empire in star wars, or the Citadel (?) in the Hunger Games. In the mad rush of competition to make it to the top, a few people become fabulously rich, and the rest live in chaos.

Gene LassWritten by Gene Lass

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