California's Perfect $46,000 Budget?

The Perfect $46,000 Budget: Learning to Live in California for Under $50,000.

Rent: $1,250
Food: $400
Automobile Gas: $133
Entertainment: $100
Vacations: $50

Wow! That's 67% of the budget. How does he do it?

Car Insurance: $30 *Liability Only
Car Maintenance: $0
Parking: $0
Health Insurance: $0
Out of Pocket Medical Costs: $0
Dental: $0
Renters Insurance: $0
Charity: $0
Gifts: $0

Hmmm. That's only 1% of the budget.

As seen in the comments, he's got a reason for spending so little money on health care though.

In regards to health insurance, you can see why so many people go without coverage. Keep in mind that this is the median income. There are people living on $25,000 a year. Coverage for a healthy couple can go for $250 to $300 so there is money in the budget for this. They would have to chop back a bit on the emergency fund or the Roth IRA.

They might even need to spend less than $1,800 on rent, food, entertainment, and vacations. Just a thought.

Either way, the overall arching point is you can live on $46,000 a year in California with no debt. I keep hearing people that make $75,000 a year say it is impossible to live in California with no debt. Well, here is the proof. All the other nuisances are simply personal quality of life items (i.e., new car, McMansion, or iPhones).

I see no "proof".

If he's in a car accident and it is his fault (50% chance say), then he might not have a working car. He doesn't have collision insurance.

If his apartment complex burns down, then he will most likely lose all his personal possessions. He doesn't have renters insurance.

That's nothing compared to his lack of medical insurance though. He is one major medical expense away from taking on a serious amount of debt. I'm 45. I've been in the hospital about once per decade. I'm about average.

Hospital Admissions per 1,000 Population, 2007

United States: 117

AHRQ: Hospital Statistics

The average charge for a hospital stay is over $11,000 and the average hospital stay is about 5 days long.

Medical Bills Leading Cause of Bankruptcy, Harvard Study Finds

Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.