How I Survived On A Universal Basic Income For A Year in the United States
It was never my intention to live off a universal basic income (UBI) for a year. Last year I had a contact to hire position with a monthly retainer at $2500.00 and the promise of a salary when we received funding. We never received enough funding and a year later I was still making $2500.00 a month.
This is my story on how I survived on $2500.00 a month in Miami, FL where the average cost of living expenses, without rent, is around $1000.00 alone.
What’s Universal Basic Income?
I learned about UBI a few years ago when I started working in the tech sector but for those of you who are unfamiliar with it:
UBI: A regular, monthly, cash payment unconditionally delivered to all people in a society on an individual basis, without means-test or work requirements.
This means that everyone in your country would receive the same amount of money. There would be no extra money allocated to anyone with a job either, so you could decide what you worked on or if you worked at all. Elon Musk is a huge fan, as well as others in the tech sector, and there are many different ideas on how this would work in real life.
With more jobs headed towards automation (robotics) UBI has been discussed and debated by many. Some countries, like Finland, are testing it while others, like Switzerland, have rejected it.
In Switzerland the UBI number was posed at $2500.00 a month and so, from this number I can tentatively say that I lived off of a UBI.
Financial Facts About Me
I wanted to leave this part out because it’s not anyone's business yet I realized that without this, the journey on UBI doesn’t make sense. So, here’s some financial facts about me:
- I am a millennial without ANY financial debt.
- I have no children and no one is dependent on me, except me.
- I live with my boyfriend who owns his apartment, I pay him roughly $600–700.00 a month.
- When it comes to bills: My dad pays for my cellphone bill (it’s a family plan and works out to be cheaper that way), I pay for groceries, my boyfriend pays utilities and we alternate the internet bill (we don’t pay for cable), I pay my car insurance and anything else like that upfront.
- At the time, I did not have health insurance and paid out of pocket when I had to see a doctor, have eye surgery, and purchase medications.
How I Survived on Universal Basic Income
This was my situation when I started my job and in the beginning, I didn’t even make $2500.00 a month, I made around that by charging per project and freelancing on a few smaller projects. When I was told it would be $2500.00 a month retainer, I was okay with it because my living costs were pretty inexpensive. I figured, with my savings from previous years, that I could live off $2500.00 a month for three to four months and if there was an emergency I had some money to fall back on.
The first few months were a breeze and I made minor adjustments in my life to live off this amount. Every paycheck I put away roughly $700.00 into my savings. This money would be used later for taxes as my $2500.00 was not taxed and I knew I would have to pay somewhere between $3–5k to the IRS.
That left me with $1800.00 but after rent, groceries, gas, and the internet bill I was left with roughly $700.00-$800.00 a month. For someone without debt and children, that is enough money to do a lot of different things. What did I do with it? I saved it and traveled with it.
Traveling Around on UBI
After a few months, I was told that the funding we had expected wasn’t coming through, so the retainer at $2500.00 was the best they could do. There was still the promise of funding so I stuck around, I loved what I was working on, the product was interesting, and my team members were driven.
In late July I decided to go spend the rest of the summer in Maine. My boyfriend was traveling in Europe and my job was remote so, I figured why not go spend some time with my family.
In Massachusetts and in Maine I stayed at my parents homes, yet I was still paying rent to my boyfriend. However, I was saving because I didn’t have to pay for gas, food, etc. except for the few occasions that I was home alone.
In Maine, I took up my old part-time job asst. managing a candy store so that was a little bit of extra income. Most of that money I saved away for my niece and nephew, the rest of it went towards buying a plane ticket to Italy.
*Public transportation is not free, it’s encouraged to purchase bus and metro tickets however, often, people just hop on and off for free.
Living Overseas on Universal Basic Income
By the end of August, I was living in Rome with my boyfriend. We decided to rent our apartment in Miami, so that it could pay for itself, and we rented an apartment about 15 minutes outside of the touristy section of Rome. Our rent in Rome was less than in Miami and so we saved money.
I was nervous about living in Rome, an expensive city itself, on such a low income but there was nothing to be nervous about. Even with the euro being almost even matched to the dollar, the cost of living was way cheaper.
Going to the grocery store in America can easily cost a family of two $100.00 or more each visit. I shop around in Miami at farmer’s markets and European markets and spend roughly $150–200.00 a month on groceries, if not more. In Rome, we spent roughly $60–70.00 a month on groceries and we indulged. We bought better wine, excessive amounts of cheese, and splurged on gelato. We even ate one meal a day, every day, out. You can when pizza, outside of the touristy section, is 1–2 euros a slice and gelato is around the same with both portions are always big enough to share.
My boyfriend had his bike, and his parent’s car, in Rome so our transportation was paid for yet gas, or benzina, is expensive in Italy. Luckily, Rome also has amazing FREE* transportation. You can also walk almost everywhere, within certain sections.
Lastly, Italy has days where museums and famous tourist attractions are open for FREE to the public. Yes, the lines are longer and you have to start your day earlier but it is totally worth it when you are living on a budget. We took advantage of all the free cultural days and when there were none we spent time in the beautiful parks of Rome, like Villa Doria Pamphili, or strolling through the ancient city.
The Dark Ages
Just like Rome fell into the dark ages, so did my life. When we came home things got quite tough when it came to finances.
With the holidays coming up I knew I was going to have to get flight tickets to visit my family (twice) as well as presents. Of course, everyone in my family was super understanding and said presents weren’t necessary. Also, I decided to stay in NYC and back in MA for a few months with family members, to save money and spend quality time again with my family.
However, at this time other financial burdens came crashing down on me. My job also still had not gotten the necessary funding and holiday bonuses were not in discussion. I picked up another freelancing job to give me that bonus I needed.
I had planned an eye surgery which cost over $4k without health insurance to cover anything, including medicine. My car insurance was up and needed to be renewed and of course my car had a minor engine and break problem that was going to be another $1k dollars. Like I said, I saved my money and so I was somewhat okay but I started to freak.
I did not want to be in debt.
I also wanted to buy a home or an apartment however when you are a W2 employee turned freelancer, lenders question you and getting a loan is pretty much impossible. It is also almost impossible to rent, as I learned when an apartment in our area opened up. What seemed like a perfect opportunity to rent for a cheap price and Airbnb my boyfriend’s place out for extra money, turned into a failed idea. When the landlord learned that I made $2500.00 a month, before taxes, she was out. She was scared that the income wasn’t stable.
She was right… more on that later.
A New Year, A New Problem
So, let’s fast forward to the yearly anniversary of my job. I was still making only $2500 a month and it was getting tight. I decided to pick up some content strategy freelancing jobs to loosen the financial stress I started to feel. The IRS took almost $4,000.00 from my yearly savings, which I expected, but I realized that within the year I saved very little compared to previous jobs.
Then my job dropped a bombshell. Payments were delayed. I’m not going to get into that, however it was disheartening, scary, and a reality slap all at once. I thanked God I had found extra freelancing prior, but I also realized that $2500.00 was no longer enough.
I couldn’t buy a home, I could never have a family on this, and I was barely getting by without finding extra work which was now bringing me stress.
The Pros and Cons to Universal Basic Income
Believe it or not, there are pros and cons to my situation.
Pros:
- UBI forced me to reanalyze my budget and taught me better saving strategies.
- I realized how much money I had been spending, prior, on unnecessary THINGS and how many THINGS I had that I didn’t want.
- I realized who my good friends were because good friends will come drink wine at your house instead of insisting to go to a bar and spend money you don’t have.
- My job was remote and because of this I could live in another country and learn how my limited budget worked better in other places.
- Limited cash flow = exploring new places. Seriously, when you can’t buy tickets to a concert and you want to have fun you need to take some time to research your area and find free things to do. Usually, and in my case, this meant going to new places I didn’t know existed in Miami and making new friends.
- Reuse, recycle, and craft became my new favorite words. Instead of throwing a dress away, I challenged myself to find new ways to use it because I just didn’t have the income to buy whatever I wanted when I wanted it anymore.
- More quality time with my boyfriend. Yes, the lack of money in our relationship gave us more nights at home to talk, work on projects, and do more outdoor activities together.
- More time to work on my dreams. With the lack of cash to go out, I had more time to put towards my own company, which took off this year compared to when I was working in an office and making a lot more money.
Negatives
- Renting or buying a home, or an apartment, was out of the picture.
- Going on fun joy trips with my friends was scratched if the budget of the trip, with flights, was over $400.00 I passed up at least 20 trips.
- Sometimes the stress of my job was not worth the amount of money I was making.
- You cannot buy the best of the best products and you cannot buy what you want when you want it, or worse, when you NEED it.
- You have to prioritize every dollar that you make and sometimes that just gets really tiresome. When you have a cushy income, you don’t have to worry about that all the time and sometimes it’s just nice to say, yes I will buy those shoes and get that haircut because I deserve it instead of, I deserve it but I can’t afford it.
- Going back to get my masters was also scratched, and so was enhancing my job skills through courses and certifications. There is no extra money to go towards educating yourself without taking out a loan when your income is so small.
- Being healthy became a lot more difficult. I couldn’t get a gym membership, but I still worked out, however paying for healthier food was hard. When organic, non-GMO food is $5.00+ more per lb. than the other options, it’s hard to not purchase the bad stuff for $2.00 or less. However, I look at this as a pro because it gave me a new inside look into how some poor families are living in the U.S
My negative list isn’t that long but it’s because I don’t have the financial burden that most people carry. If I did, my list would be a lot longer and I probably would be stressed out all the time.
If you have children, student debt, or any debt in general, UBI in the CURRENT U.S economy would not work. I have it good, and I know that. I live in Miami and pay a pretty fair amount for rent, lower than 90% of the population for sure and I don’t have debt or kids. If my rent had been $1100 and I had a child, plus student debt and the UBI was $2500.00 a month I’d be screwed.
Will Universal Basic Income Work?
If, and when, UBI becomes a world reality, life would be very different. The circumstances that I was up against will be eliminated, mostly due the advancements in the tech sector and automation removing the need of all these additional costs we pay in our purchases. Example, groceries cost more because of the man power needed to ship and stock the store. That’s why stores, like Aldi, are cheaper.
I’m not saying UBI won’t ever work, it very well could in the future when the economy is different and everyone is on board with the idea. The amount could even be more than $2500 a month and perhaps all debts would be forgiven, who knows, but right now it just doesn’t make sense.
Also, I know there are people in the United States, in Miami, who make less than what I was making and have kids. This isn’t a poor me millennial story, but just something I thought would be interesting to share with others who are wondering about UBI.
How This Effects Millennials
I am privileged, I chose to do this when I did not have to whereas others have to live a life of poverty without choice. However, as I am a millennial writer, millennials may have to live with a UBI without choice. It is very likely that if automation starts clearing out jobs, a new president will push for UBI and millennials will be the lab rats.
That’s why I have been watching Mark Zuckerberg, the creator of Facebook, recently. Not only does he support UBI but Zuckerberg very well may be setting up a campaign trail to run for President. While Zuckerberg has not formally announced that he is running, he hasn’t said he wouldn’t either. He did however make it his 2017 goal to visit every state and speak with people in those states. His Facebook page has been alive with photos of him doing the ‘blue collar thing’, just like Trump.
If Zuckerburg, or someone like him who supports UBI, becomes President of the U.S.A then I think it would be likely that UBI’s implementation would start. I don’t know how that would start but I would assume it would have to be through debt forgiveness, tax analysis, and small UBI income that would steadily increase. I think our current social plans, like health care and education, would also have to drastically change and our transportation would have to be rethought. Large businesses and citizens would possibly be in uproar and I’m sure we’d see a lot of riots and protests. It could also start with a small sample size and put selected groups of people, like those currently on welfare, on UBI.
From the reading I have done, it seems like most millennials in the world support UBI according to surveys. I think we all learned, from the last election, that online surveys are not always true. However, millennials have had to deal with a crumbling economy, a shift in technology, and a lot of debt.
UBI may seem appealing to us because it encourages a higher use of technology in our lives and guarantees everyone a job, social security, an income, and health care. However, that’s just an idea and no one knows if it would be implemented or executed in that way, or even work. We live in a country that capitalizes on capitalism, which has brought a certain mentality to Americans. UBI isn’t in support of that and that mindset of achieving your own success and living the lux life isn’t easily going to go away.
Is Universal Basic Income Good or Bad?
Okay so clearly, again, my whole experience was tentative as we don’t live in a UBI driven society. However, I still feel like I got an insight into how UBI (and also poverty in the U.S) could kind of feel like.
In the end, I think that if UBI is executed and implemented correctly in the U.S.A, at least, that it could work. I’m not opposed to it, however I think every single citizen would have to be on board. There could no longer be a rich, middle, and poor class. We would all have to be equal and live in some type of utopian society. I am not sure if that is possible, but it sounds nice.
Nice doesn’t always mean functional or real and I think in reality a UBI system will be optional or for a certain class of people. I don’t think a functioning UBI program would be as simple or as black and white as it is currently discussed or explained today. It would have to be a slow transition, with many things changing in our society, mindsets, government, and within our businesses, that would take many years to get right. I mean, look how hard it is to figure out healthcare for everyone.
However, UBI arises so many questions like…
- Would it eliminate product and lifestyle diversity in our life?
- Would we no longer have luxury items and would that stiffen creatives from creating?
- Would people resort to trading and would this lead to money disappearing altogether?
- Would everything become generic, like would we all drive the same type of self-driving car, and would companies start to monopolize an industry? Or, would that even happen because how could you purchase a car on $2500 a month and would monopolization and inflation even be a problem anymore?
- How would we work with other countries who weren’t part of the UBI?
- Would the free market disappear?
- Would crime increase and would there be more problems with an underground market?
- Would people feel like they have purpose? Would people actually go out and create and work on things that they love and would that be enough?
- How would school change? What job and life skills would we teach?
I have more questions than this but we can discuss more in the comments. Living on a standardized small income, without debt, for a remote job, really gave me an insight I think that others don’t have when talking about UBI and if anything, it taught me how to better manage my money and prioritize things in my life.
Regardless of the hardships I went through, I know that if UBI became a reality it would be a lot different from my experience. In the end, last year was one of the most life fulfilling years I have ever lived and it changed my perception on why I should work.
What do you think about UBI and would you be open to a life with it? Let’s discuss in the comments below :)
