The point is that we(as a people) can get by on a lot less. But we have to be "comfortable" so we spend way more than we HAVE to. My beer, which is not a necessity, bill is almost the same as my grocery bill.
We don't need cable, HDTV, mobile phones, two cars, steak dinners, etc, etc, to live, we just want those things. $500 a month with living space taken care of, is plenty to live on.