It is possible to live on very little, but you have to respect cheapness.
We were at Wally World the other day, in Black River Falls, Wisconsin, and Mark saw two hiking t-shirts in my size on "closeout" for $4 apiece, as it was "end of the season" and they were already putting up Christmas displays. The shirts are made of some highly flammable fabric (no doubt) but are very good for outdoor activities as they can be rinsed out and dried in the sun in a matter of minutes. So we bought two.
When we got to checkout, they scanned in at $1.50 each (!) which we noted, was probably less than the cost of washing them at the coin-op laundromat. At that price, you could afford to simply throw away the shirt when it was dirty.
But of course, I have no intention of doing that.
That is the problem with super-cheap things. If something is inexpensive, you tend not to treat it with respect. If that shirt was from Patagonia, it would have cost $100 and I would have it dry-cleaned (not really, I own one Patagonia shirt I got on sale, and it goes in the wash with everything else). But the temptation is to treat cheap things cheaply.
For example, cars. People like to run down cheap, entry-level cars as "pieces of crap" when in fact, they were often quite durable for the money (the Vega excepted). The problem was (and is) that when people don't pay much for something, they don't value it as much. So they neglect maintenance and beat the crap out of a cheap car, and the "piece of crap" becomes a self-fulfilling prophesy.
Take the Yugo, for example. Malcom Bricklin sold those initially for an alarmingly low price. People bought them and never bothered to even change the oil. Since they were a cheap car to begin with, they depreciated down to nothing in a hurry, so it made no sense to repair them. If the engine blows up on a Maserati, you rebuild the engine. When the engine blows up on a Yugo, you throw away the car.
This is not to say the Yugo was a great car, only that its reputation was not entirely deserved.
We love our Hamster (Kia Soul) and keep it in the garage, waxed and washed, and change the oil regularly. It is a nice car, reliable and durable. But some folks argue that KIA's are "crap cars" only because they've seen in their neighborhood, cheaper models that were not taken care of - with predictable results. Our lowly Hamster, fully optioned, has an Infinity sound system, heated and cooled leather seats, a panoramic sunroof, and so on and so forth - all the high-end options you can get on a "luxury car" for a lot less money.
But most folks buy the low-end model (which, with a keyed ignition, is pathetically easy to steal, as are any Japanese car from before 2000 as the ignition column steering lock was bolted on) and then treat them poorly. Again, the reputation becomes self-fulfilling.
You can live on not a lot of money, but you have to respect cheapness. Just because you paid very little for something doesn't mean it is disposable. If you treat cheap things this way, you defeat the whole point of cheapness. You end up unwinding the bargain, as the "great deal!" turns into a so-so deal because you've squandered an opportunity. You might as well set money on fire.
I will enjoy my $1.50 t-shirts, but I will treat them the same as more expensive clothing and get a good service life out of them. At $1.50, it is tempting to use them as oil rags or lawn-mowing shirts and then throw them away. But the catch is, there won't necessarily be another $1.50 shirt down the road to replace it with.
Respect cheapness and don't denigrate your own bargains!