Could You Live on $500 a Month?

PARIS – We took the Eurostar train back to Paris from London last night.

In our wagon was a group of Chinese businessmen.

Drinking, laughing… they were a bit uncouth by European standards. But they were having a good time.

While we were in London, the cabbies were remonstrating against something – ride-sharing app Uber, we suppose. A dozen cabs must have passed before one stopped to pick us up on our way to St. Pancras railway station.

Arriving at the Gare du Nord, we feared something similar.

How to Live on $500 a Month

We continue to get emails from readers who have suffered fender benders – or serious accidents – on life’s financial highway.

More than any other factor, divorce seems to leave the pavement slick and treacherous. Now, readers report that they are at or near retirement age… with few resources.

What should they do?

You will not miss the irony: Your editor is not a poor man, far from it.

What expertise has he in this area?

But he remembers with fondness the poverty of his youth. And he uses his imagination to think about how he might recapture the poverty, if not the youth.

And he put the question to his team of crack researchers: What if you wanted to live well on $500 a month? What would you do?

We take $500 as a starting point. Most of the readers we’ve heard from report struggling to live on around $1,000 a month in income.

We will aim to live on $500… and save $500. In five years, we will have $30,000 (the significance of which will become apparent later on).

Our researcher Nick Rokke responded quickly:

Here’s what I found for living on $500 a month. There is nothing conventional about it. But it could be done…

It is impossible to live on $500 a month in the U.S. the way we are accustomed to living. Forget about renting a house or apartment. Even if you had a roommate in a 1-bedroom apartment, you’d each pay $385 on average. That, together with an average $71 cellphone plan, and you only have $44 left for food.

A much cheaper alternative is to buy a used motor home. I found a 1998 Fourwinds Windsport for $14,500. You can finance that over 12 years at 5% interest, for a monthly payment of $135. You can get insurance for as little as $65 a month.

Your accommodation expenses = $200 a month.

A spot in a trailer park can run upward of $200 a month. But some Walmart stores allow you to park your RV in their parking lot for free. They think you will become their best customer if you live so close.

Now that you’re Walmart’s No. 1 customer, you should be able to buy some of their past-expiration food at a discount. By eating cheap, you could reasonably feed yourself for $150 a month. Include a multivitamin if you’re worried about malnutrition.

Total house and food expenses = $350 a month.

You are going to need a bike to get around to places. You can’t take your RV out for leisure rides. This will be important for errands or visiting friends. And to use a different bathroom to avoid getting funny looks from Walmart employees.

I found a used bike online for $1.

Other odds and ends:

• $50 a month for RV and bike maintenance
• $25 a month for gas – that will get you 10 gallons of gas or about 80 miles in the average motor home
• $10 for gym membership (you need to shower somewhere).
• $10 for prepaid phone through Tracfone
• $0 for Internet – go to the library or other public area… or use data services such as Skype for your calls
• $10 for batteries to power things at night in your motor home
• $10 for soap and toiletries
• $35 miscellaneous expenses

Total = $500

There are few dinners at the Terminus Nord in this budget. But we’re making progress.

Tomorrow – container houses… gypsy wagons… and more!

Reprinted with permission from Bonner & Partners.