Some of these things you list do sound like crazy amounts, for anyone starting out that is (and perhaps for most other people, too) ...sorry, but I had to compare with our previous life in Australia:
Utilities $500 per month? (Is this mainly electricity? How much is the kWh in the US? In AUS, we used to pay less than $100 per month in electricity, despite crazy skyrocketing prices (thanks to dumb privatization)...as we had relatively low consumption, because we had solar hot water and gas cooking and NO air con! ; water was relatively cheap...perhaps a few hundred $$ for the whole year...but then again, in Australia people are used to conserving water more)
Health insurance $600/single person? (that means even more for a married couple? That IS insane, given that I would intend to move to the states, starting out self-employed...who could afford to start out if health insurance alone is such a burden already right from start? Even with high deductibles!!)
Food and necessities....$1k/person? (I know that we spent max $500 per month for the two of us on grocery, and that is DESPITE extremely high grocery prices and we did a lot of home cooking...it's my hobby, which is why I had gas cooking installed
We actually NEVER bought any veggies/fruit at the grocery chains...as they charge 3x of what is even fresher and more natural at the markets!
BTW...I always thought Woolworths and Coles in Australia (the main two players until Aldi arrived in 2001) were EXTREMELY expensive, compared to what grocery costs in Germany) ... until we were visiting Florida last year....it appeared the predominant player is PUBLIX and boy, that is an expensive grocery chain! Not that much difference to Aussie grocery shops! Thankfully, we found alternatives like Walmart, Presidente and Aldi (but you really had to look out for them...they don't seem to be in most areas).
So I guess if we were not actively checking prices and buy at different stores consciously, it might even be "easy" to spend that much as you quoted...just on food alone.
Re: Your brother's spending budget and the 'large chunk' of it for health cover....may I ask why his health cover would cost $$Thousands per month?
I am really worried about the prospect of high costs when it comes to starting out in the US, mainly due to insane costs associated with health insurance and what I feel is a high mandatory Social Security and Medicare Taxes (a.k.a. 'self employment tax' in that case) of 15.3% right from the first dollar. The craziest thing I think is, that while someone starting out self-employed is required to pay the full tax rate, they are unlikely to get any benefits themselves because let's face it...who starts out self-employed in the US without some savings as a back up? So it would be a matter of 'spend your savings' before you ever became eligible for help (if there is such a thing). The 2.9% part of the 15.3% tax is medicare tax ... yet it doesn't even provide me or my wife with any cover, as only people aged 65 and over and the disabled (I believe) are eligible. So effectively, up to around the $120,000 income level, everybody has to pay these social contributions (in addition to state and federal income taxes), yet the sole beneficiaries are those on no income, those with no savings and the elderly?? I think that's really an unfair system.
It's not that we have no savings...quite the opposite. You see, I could easily buy a house (or two) in Florida in cash (however, our life savings would go into them). In AUS we were both on real average salaries, we have no kids and we kept our spending minimal (yes, I'd say we lived a rather frugal life for a number of years, as rents for nicer properties are EXTREMELY high in Australian capital cities and beyond!)...we preferred to build up assets first. We did reasonably well with real estate investment and I am glad about that (despite no profit and lots of hassles with two properties).
But I have a sense of the USA being a better place to live "once you had your income breakthrough" ... yet it is a bit of a scary place to "start out at" due to the high cost of initial taxation requirements and health costs!
(ex. Australia not only has a universal health care system where it costs 1.5 to 3% currently of anyone's taxable income to be insured, it also continues to provide this cover if you are unemployed with no requirement to pay contributions -- but they also increased the annual tax free threshold from $6,000 to now $18,200! ... these are the things that I think make it so much easier for people starting out to have some peace of mind and much less STRESS about SURVIVAL! The downside is that everything costs so much more in Australia in terms of consumables...there is even a 'luxury car tax' ... stupid socialist idea...where by any car costing more than around $80k or so, attracts a 33% tax!...that alone cannot be the reason why often the same car costs 2 to 3 times of what it costs in the US!! Ex: 2013 Porsche 911 = USA price = $80,000 / AUS price = $206,000 to $287,000! --- now THAT is crazy!
