What would it take?
*$6.55 (Federal minimum wage) an hour, 40 hours a week max.
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M$4 Answers
$6.55 x 80 = $524 every two weeks
After taxes (15% federal, 2.59% state)
843.88
Rent (You'll never get a mortgage with this income)
Studio apartment $450-500/month
Food
Typically, you'll spend around $80/week on groceries, if you get EXTREMELY efficient, I could see going down to $60/week
$240 month
100 Watts X 24 hours / 1,000 KWH X elec rate .08 = .192 per day.
2 light bulbs = .192/day X 30 = $5.76/month
Typical electric oven uses 2KWH per hour of cooktime...assume 2 hours/day = 0.16 X 30 = $4.80 / month
(Note, this does not include heat/AC which will depend HEAVILY on location, in AZ with a small child, no AC could be bad for the kid...although fans and wet towels would be used with additional $10ish a month for fans electricity).
Water $30 estimate - This assumes normal use for toiletries, drinking, cooking, and doing wash by hand and hang drying.
Rent - $450
Food - $250
Elec = $10.56
Water - $30
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$740.56
$843.88-$740.56 = $103.32/month for clothing, incidentals, entertainment.
If child is still in diapers....
Typical child uses 224 diapers/month (avg $90/month)
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As you can see...it IS doable in theory...but probably not in reality. One bad break, mis-step in budgeting, late fee on utilities bill, hospital visit, or sick day from work and they would approach over-running their budget. Even if they manage to stay in budget, they will be living in a single room apartment, with 2 light bulbs extreme minimal water usage and no entertainment. They also, likely, would not be able to keep up with the child's growth for clothing without some assistance from family/friends. Also, food consumption at these low levels would border on malnutrition as healthy balance would be traded for cheapest price. Also, you'll be living in a neighborhood you don't necessarily want to raise a child in...
Note: There is cheaper rent out there with section 8 housing, but that requires government assistance.
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M$
The minimum wage here is $8.00 per hr.= around $1280.00 per month before taxes
after takes about = $1050 per month
average rent (Outside of L.A. - the closer you live to LA the higher it gets)
1 Bedroom in a so so neighborhood = $700 to $800 if your lucky you may be able to find $600 some will argue you can get lower but you wouldn't want to live in those areas actually pitching a tent anywhere would probably be safer.
You can get a bachelor cheaper but most places will not rent a bachelor to more the one person.
so let's go with $700.00 for Rent
Being very conservative on electric $40.00 per month in the winter, summer is a different story especially if you live inland (my electric bill in the summer averages about $300.00 per month) during the months of July & August and most of September it is Hot average temp in Aug is about 100 degrees inland and can go up to 107 and it doesn't cool down that much at night. you can not live without air conditioning during the summer. I've tried it and it's miserable. so on the safe side say on average electric $100.00 per month
Gas not to bad our winters are mild so average gas bill about $25.00
So far we have
Wages $1050.00 per month
$1050.00
- 700.00 Rent
- 100.00 Electric
- 25.00 Gas
leaving $225.00 for Food, Medical insurance, Phone and in southern cali you really have to have a car transportation is terrible
even if you lived on $1.00 per day for food for each person (see link on dollar a day eating) that would cost $90.00 for 3 people.
$225.00
- 90.00 Food (good luck on that)
leaves you $135.00
wait we need to purchase some cleaning, laundry & paper supplies
Since you won't have a washer in you apartment you will have to either go to the laundrmat or the provide washers in the apartment complex
lets say $35.00 per month
your down to
$100.00
Medical insurance even if your employer pays some for a family of 3 you are looking at at least $400.00 per month why do I say this I am single and my HMO in California part of it paid by my employer is $120.00 per month just for my self.
Well that leaves a grand total of ZERO left
Hope you can find a job that you can walk to work because there is nothing left for a car, car insurance, Gas or even bus fare.
also your shopping did not include any personal hygiene such as deodorant, soap, shampoo
No money for clothing, school supplies for children, no outings
you also have no phone, no cable television, and no direct hook up to the internet ( but I guess you can hope that you can pick-up wifi at your apt)
and if you get sick one day and do not get sick pay you are now in the hole even more so.
In California to live an average lifestyle it takes 2 incomes that make more then minimum wage
http://earthfirst.com/eating-on-a-dollar-a-day-the-one-dollar-diet-project/
http://www.payscale.com/cost-of-living-calculator/California-San-Diego/
http://www.payscale.com/cost-of-living-calculator/California-Los-Angeles
http://www.doctorhousingbubble.com/living-large-on-25000-a-year-in-southern...
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M$Very little electricity would be used in the house as the family would not be able to spend money on massive electricity bills. It would be likely the family would have no mobile phones (maybe a home phone) - with possibilities of lack of internet and limited amounts of TV for the child.
They would probably have to do without baths - of course, showers would have to be taken - but it would be short as they would have to save as much water as they possibly can.
They will probably walk everywhere - rather than take car and have to spend money on petrol. It would save money.
The child will probably lack "valuables" - if a child a games console, maybe a teenager an iPod.
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M$
"The child will probably lack "valuables" - if a child a games console, maybe a teenager an iPod."
Does this mean the kids will have one game console and then an i-pod when they grow up?
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Do you think the family could afford bikes?
Do you think they could get clothes and toys from freecycle?
What would they do for entertainment if anything?
I like your comment about showers- water is really cheap where I live, but I imagine in some places, you would have to go without baths.
The family could purchase bikes - but their main way of getting from A to B would be by walking. However, it seems like the family could purchase a bike (even secondhand) and would be a good way of getting to work and for the child to get to school.
Plus - if the child was a teenager, he/she could go out and do the paper round or do some work in the winter by shoveling snow. By helping, he/she could help earn some extra money to spend on himself/herself - maybe to save up for a console or a weeks worth of TV or a iPod.
Entertainment = Visit parks and free nature sites, board games,
They could easily get clothes from charity shops or in the discounts. The problem would probably be washing. Will it be expensive to wash the clothes?
Toys of course would be cheap - and would amuse a child and keep him/her entertained. Cheap ones or even free ones could be found in charity shops or in sales in most stores.
I did find this in Bedford, Indiana. Bedford is a nice town, but I don't know what the job situation is.
BEDFORD- 2 BR, unfin. bsmnt, gas heat, 1707 25th St., $350 mo., $300 dam. dep. Call (812) 279-6310.
I found it here;
http://www.tmnews.com/shop/class.php?get=cls&n=409
I tried to get info on food stamps, but I could not find it on the terrible Indiana gov website. A reasonable automobile can be found for about $1500. There is a Big Lots in Bedford that sells furniture fairly reasonable.
Household items like tv, kitchen stuff and other items can probably be found cheaper in a small town like Bedford.
For a cell phone, go with Net10. For a computer, get an older XP. Internet? Well you can ask if your neighbor has broadband and then if they do, offer them $10 a month to run an access point close to your house.
All this is to say that the most significant financial decision I might have ever made was to move from California to New Mexico. That was the beginning of my road out of poverty to the comfortable lifestyle that I enjoy today. If had it to do all over though, I would have moved to Albuquerque because there would have been more job opportunities. That is the biggest drawback to Bedford, Indiana.
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M$
albanian- I guess my thought on the matter is- you need food before you'll need health insurance. Know what I mean?
Also there was clothes included in this answer.
@hushnow : My guess is that the state would attempt to make them go onto government assistance. If they flat out refused, they would probably seek to take the child into protective custody due to the poor living conditions.
Wow that was really well done!
Our rent is $400 a month 2 bedrooms 1 1/2 bathrooms and it's not Section 8 housing. And it is a fairly nice neighborhood. (Of course this depends on where you live.)
Maybe there's something wrong with us, but we only spend $150 a month for food. Another $50 for bulk foods, garbage bags, and toiletry items.
We also spend $40 a month on diapers.
I was wondering where you came up with the 15% Federal Tax. do you pay Federal taxes with an income that low?
Thank you so much for your answer. It was really really well done.
General Federal tax bracket:
http://www.moneychimp.com/features/tax_brackets.htm
They still get taxed on their check unless they do some real guestimates on final taxes due at the end of the year and overstate their dependents to receive the extra on paychecks...risky, but possible
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@albanian
"You left out health insurance or health care in whatever combination. The kid will need it. "
You can actually get away without this. The parents will just have to suffer through all but the most drastic of things...however, the kid can be taken to a shriner's hospital(or others of that type) if nearby. They offer free service for children. There are also inner-city hospitals which cater to low-income families...the drawback is that there is usually a 6+ hour wait.
Also,there are school fees and supplies.
Most schools offer free supplies to children of low-income families...this isn't a state run assistance program.
I see that the family lives where nudity is legal or there would have to be a clothing budget.
Then you didn't read very carefully, "$843.88-$740.56 = $103.32/month for clothing, incidentals, entertainment. " They aren't going to be sporting the latest nikes, but you can get by with secondhand goods from goodwill, savers, garage sales, etc. Each clothing item can be purchased for under $1 if your smart about it.
Very few places in the US are habitable without winter heating (and those areas are expensive)
More than you think. Most people think that being a little cold and uncomfortable makes a place uninhabitable...but humans are more resilient than you think. In our small urban apartment, the family won't be comfortable, but won't freeze either if they take proper steps to insulate their place against the cold. Body heat does build up over time...but just like the fridge, don't leave the door open. In rural areas...there is always the wood heating option...this is what many families back home(up until a few years ago, the majority of homes didn't have running water or electricity).
On the other hand, there are bunches of government programs which may help.
I think the point of this exercise was to show the hardship of poverty to those who turn their nose up at government assistance.
And I think the income tax would actually be zero or even get earned income credits. The total income is less than the standard deduction.
Yup, they will get a refund when it is all calculated out. If they know enough of taxes, they can likely fudge on their deductions a bit and get a small bit extra on paychecks...and hopefully they don't overestimate.
Anyway, as the saying goes "Don't try this at home!" "
Amen...
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Someone asked of qualifications of food stamps/ebt. Here it is for arizona:
http://phoenix.about.com/od/govtoff/a/foodstamps.htm
"In order to qualify for Food Stamps, you must be a resident of the State of Arizona and fall into one of two groups: (1) those with a current total bank balance under $2,001, or (2) those with a current bank balance under $3,001 who share their household with a person or persons age 60 and over, or with a person with a disability. For either group, you must also have an annual household income of less than $11,677 if one person lives in the household; $15,757 if two people live in the household; $19,849 if three people live in the household; $23,929 if four people live in the household; $28,009 if five people live in the household; $32,089 if six people live in the household; $36,169 if seven people live in the household; or $40,249 if more than seven people live in the household. "
Our family in question would more than qualify for most federal assistance programs...however, they would also risk losing their child due to their poverty.
What do you mean by losing their child. Do you think the state would take them away? Would they die because they are malnourished?
Again, thank you for all the effort you are putting into this question. Great answers.
You left out health insurance or health care in whatever combination. The kid will need it. Also,there are school fees and supplies. I see that the family lives where nudity is legal or there would have to be a clothing budget. Very few places in the US are habitable without winter heating (and those areas are expensive)
On the other hand, there are bunches of government programs which may help. And I think the income tax would actually be zero or even get earned income credits. The total income is less than the standard deduction.
Anyway, as the saying goes "Don't try this at home!"