What you can buy with Democrat Andrew Yang’s $1,000-a-month Freedom Dividend

Andrew Yang's rivals for the Democratic presidential nomination laughed when he offered to give $1,000 a month to 10 people to illustrate how his plan for universal basic income would work.

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The audience, however, applauded -- no doubt preoccupied with what an extra grand a month could buy.

Recipients of the cash, which the candidate calls a "Freedom Dividend," will be chosen at random from submissions to Yang's campaign website, yang2020.com.

While his campaign account will pay out the $120,000, the candidate was already using personal funds to pay the $12,000-a-year dividend to three families in Florida, New Hampshire and Iowa. Here's a look at some of the things they could do with the money:

Rent a one-bedroom apartment

An extra $1,000 would cover the $960 median rent for a one-bedroom apartment, according Apartment List’s September 2019 National Rent Report. 

Yang's Freedom Dividend would cover the rent for a one-bedroom apartment. (iStock)

Pay student loan debt

The average monthly student loan payment among borrowers not in deferment is $393, according to Student Loan Hero. The freedom dividend would pay nearly three months of that.

The average student loan payment is $393 per month, according to Student Loan Hero. 

Pay a gym membership for a year

Health is wealth. The average gym membership costs about $696 per year, or $58 a month, not including the monthly initiation fees most gyms charge.

Americans would be able to afford a gym membership for a year with an extra $1,000.

Save for an emergency

An emergency room visit typically costs $150 to $3,000 or more for patients without health insurance. Just 39% of Americans said they would be able to cover a $1,000 setback using their savings, according to Bankrate’s financial security index survey from 2018. 

The average American doesn't have $1,000 saved up in case of an emergency.

Save for retirement

An investment of just $1,000 in an individual retirement account, or IRA, can grow at an average annual rate of 6.5% over the next 25 years, so you could end up with more than $5,000, according to Interest.com.

Americans can contribute up to $6,000 a year, or $7,000 if they’re 50 or older.

Buy hundreds of lattes 

The average price of a latte is $4.50, and Americans would be able to buy more than 200 with $1,000.

Americans drink a whopping 400 million cups of coffee per day, according to the International Coffee Organization. And with a latte costing around $4.50, Americans could buy around 225 with $1,000.