A premise - working poor

[GREENBACK]

Ok but emergencies don't happen on a convienent schedule. What about the emergency that occurs one week into your new life before you've set up your ef. I'm just playing devil's advocate btw.

[wincrasher]

Understood.

I think we just have to assume they'd be ok for a month or two. Then again, he could knock her up in that time since they don't have money to go out for much entertainment.

Precarious, ain't it?

[snafu]

If I were that mom, I'd crave doing something to generate income. My advantage is that I write/teach on-line college courses. However, I could offer home care to another child whose age meshes with my DKs. I have been considering setting up a simple catering service, preparing home cooked, heat&eat dinners for working couples/families nearby. Currently my neighbor and I trade off meals because some family favorites require so many ingredients we end up far too much.

Monday I made Olive Garden type Pasta Fagioli soup with 15 ingredients & can't be made small enough for just 2 adults, 2 DKS

[disneysteve]

Originally Posted by snafu

Currently my neighbor and I trade off meals because some family favorites require so many ingredients we end up far too much.

Monday I made Olive Garden type Pasta Fagioli soup with 15 ingredients & can't be made small enough for just 2 adults, 2 DKS

That's why God invented the freezer.

Whenever I make soup, I make triple the recipe. Then I portion it off into single-serve containers and load up the freezer.

[Seeker]

In New York your premise of 50k would be poverty level.

NCCP | Measuring Income and Poverty in the United States (from the section titled: How much does it really take to make ends meet?"

Across the country, families on average need an income of about twice the official poverty level, or roughly $40,000 for a family of four, to meet basic needs. In a high-cost city like New York, the figure is over $50,000, whereas in rural areas, the figure is in the low $30,000s.

The above is just talking "basic needs"; not a middle class life.

I cannot fill out your above, because frankly I wanted to forget the details of the struggle. I can tell you that in the year 2006, I was earning 40k and DH was earning 20K, and we alone (no kids) were finding it very difficult to come up with 3k property taxes and manage day-to-day expenses and past debts.



Now with a combined income of $120k we don't have an issue... but we're used to much less.

[wincrasher]

Thanks Seeker.

Core to the premise is no debt, other than the car loan. They also don't own their home so tax payments are not an issue for them.

They aren't living large, but also not eating dog food.

[Seeker]

Originally Posted by wincrasher

Thanks Seeker.

Core to the premise is no debt, other than the car loan. They also don't own their home so tax payments are not an issue for them.

They aren't living large, but also not eating dog food.

Sorry wincrasher, but the fact remains that in this day and age, this hypothetical family of four would be considered living at Poverty Level if they happen to be residing in New York with a sole income of $50k.

Poverty level is by it's very definition, maybe, one step up from "eating dog food." Think BASIC human needs. Think about two or three families living in a one-room apartment. Think about children running rampant. Think about no health care and no child care.

The numbers you portray ARE poverty levels for many citiies in the US in today's terms. It may be different for the country areas.... but cities are where the majority of jobs are.

At poverty level, these people could not get any loan. They would not quality.

What becomes even more unsufferable, is the huge question.... one today becoming a whole lot more prevalent.... what happens if this one-income earning family, suddenly lost all income?

Middle class assumes more than a day-to-day living. Saving with a 50k income for a family of four? Do you really believe this is possible today?

IMO this would not be possible in any city in California... definitely not with a moderate lifestyle as you describe.

I'm thinking about the 70's when I was a teenager and my Dad earned maybe 35K and had a 40K mortgage, and three kids. We were middle class --- but there are no buildings fit for humanity at 40K TODAY. It was ok then, but today, he alone could not have supported anyone via rent nor mortgage. If he did not buy their home then, they'd have absolutely nothing today.

Your hypotehical family of four will be in poverty if not already! They could not sustain themselves with that limited an income and growing children. No way!

[wincrasher]

Seeker,

I agree with you. This does not apply in HCOLAs.

Everyone has a different definition of poverty. I was feeling poor making over $100k a year because I had so much debt and felt I had few choices. Still had a home, food, clothing, car, etc., but I felt I was 1 paycheck away from being out in the street.

[PrincessPerky]

I have to disagree Seeker...because I live in a (Medium COL area, and we make <50K (husband does, I do not get paid for anything)

We do not eat dog food nor the next best thing, We eat healthy whole wheat tons of frozen or fresh veggies/fruit, we own a home (well we will in 20 years of payments) I have cable internet, and a decent car, I donate to charity, and my kids are healthy happy stimulated and educated.

I see no reason why my life would be called poverty. I know I have a safe place to call home, I know where my next meal will come from, and lead a full and active life.

We have no CC, and we do have savings, no not as pretty as yours, but quite nice thank you very much. We have health insurance, life insurance, car insurance, cell phones, and I could afford the newspaper if I wanted it. (I don't)

Oh and my real family is a bit bigger than your hypothetical one.

We are not in poverty regardless of what the govt would like to tell us. We can sustain ourselves on this 'perfectly adequate income' and with growing children. Yes way.

One more thing, you folk want to see poverty, check out a third world country.....or at the very least a local homeless shelter. Food shelter, and safety, these are necessities, cable TV and such are not.

Oh yeah, and there are buildings fit for humanity in PA for 40K, maybe not in CA, I never looked there, but CA is not the country, it is just one state out of 50.

[Goldy1]

yea well with property values going down the tubes, people dont' have to go house poor to get a nice place.
There are too many misc. items ie. sports team fees, bowling nights, eating out, clothing, entertainment.
life shouldn't be just work, sleep, eat.

[wincrasher]

Sigh..

Princess please re-read the thread. Seeker is talking about HCOLA areas - particularly NY.

Defining something as poverty is not an insult directed at anyone - neither is calling someone rich.

This premise I described is predicated on a young couple just starting out. It's hard to compare their case to someone who has worked and saved many years to buy their own place. That is a different case.

My particular cost of living is way below $50k. I own two homes and 3 cars.

Even so, it sounds like to me that most people have a hard time getting past the basics on an income of $50k or less, especially if they have any credit card or other debt. Health insurance is another factor.

[Seeker]

PrincessPerky -- 2007 info but here's a comparison:

I used this site to input city, state combinations:
Sperling's BestPlaces

City Overview
As of 2007, Charlotte's population is 630,478 people. Since 2000, it has had a population growth of 16.58 percent.

The median home cost in Charlotte is $253,600. Home appreciation the last year has been 2.10 percent.

Compared to the rest of the country, Charlotte's cost of living is 9.30% Lower than the U.S. average.

Charlotte public schools spend $5,961 per student. The average school expenditure in the U.S. is $6,058. There are about 15 students per teacher in Charlotte.

The unemployment rate in Charlotte is 3.90 percent(U.S. avg. is 4.60%). Recent job growth is Positive. Charlotte jobs have Increased by 2.14 percent.

City Overview
As of 2007, Los Angeles's population is 3,849,378 people. Since 2000, it has had a population growth of 4.18 percent.

The median home cost in Los Angeles is $760,600. Home appreciation the last year has been -1.46 percent.

Compared to the rest of the country, Los Angeles's cost of living is 55.66% Higher than the U.S. average.

Los Angeles public schools spend $6,133 per student. The average school expenditure in the U.S. is $6,058. There are about 21 students per teacher in Los Angeles.

The unemployment rate in Los Angeles is 4.90 percent(U.S. avg. is 4.60%). Recent job growth is Positive. Los Angeles jobs have Increased by 0.84 percent.

City Overview
As of 2007, New York's population is 8,214,426 people. Since 2000, it has had a population growth of 2.57 percent.

The median home cost in New York is $658,600. Home appreciation the last year has been -0.42 percent.

Compared to the rest of the country, New York's cost of living is 64.50% Higher than the U.S. average.

New York public schools spend $7,964 per student. The average school expenditure in the U.S. is $6,058. There are about 18 students per teacher in New York.

The unemployment rate in New York is 4.60 percent(U.S. avg. is 4.60%). Recent job growth is Negative. New York jobs have Decreased by 0.07 percent.

I'm in a suburban area of LA county. I can drive many directions and find poverty and also the extreme opposite; I need not go to a third world country. I am quite familiar with more than one family living in one physical location and even people renting out their garages to other people. I've seen it all here. And it's not limited to poor areas either.

California has some advantages, namely work/jobs and weather... but there are way too many people here and long-term there's no future here -- too many taxes and too much pollution. Retiring or losing our jobs means leaving this state, we won't have a choice.

PrincessPerky, I ask you if your house was transplanted to either LA, CA or NY, NY do you really beleieve that you and your family can thrive under +50% COL ratios and winchasers income numbers? With a $50k income and a minimum $12/k rental per year outgo for housing and children? And all that their care should be?

[Goldy1]

Some people in hcol areas don't want to move and won't. I have distant relatives (a family with a husband, wife, and 2 kids) living in Florida. They chose to rent a condo in Boca RAton for over $1200 a month which is nothing fancy and quite frankly, not a unit I would want to live in.
THey are very low income(mom is a maid and dad is chronically unemployed)
They could move here to MI and rent a very nice condo or house in a nice neighborhood for a lot less than what they pay. (possibly $800) and other things such as auto insurance may be cheaper.
But if you grew up somewhere, you don't always want to move.

[MonkeyMama]

Originally Posted by Seeker

Middle class assumes more than a day-to-day living. Saving with a 50k income for a family of four? Do you really believe this is possible today?

IMO this would not be possible in any city in California... definitely not with a moderate lifestyle as you describe.

I *get* what Seeker is saying when it comes to extreme HCOLAs like NY, SF & LA. No argument there.

But I know plenty of people who live in Cali on $50k (families of four or more). They are not remotely impoverished. There are some areas of the state that are quite affordable.

It just bugs me to lump the entire state in the way of LA or SF. I have to strongly disagree. I know people my age here (31) with $500/monthly mortgage payments for NICE homes.

I guess I find it even more absurd because I am from the Bay Area. God forbid anyone here had to live in an apartment. But apartment living can be very middle class and affordable here. In the Bay Area the rich live in apartments because it's all they can afford. It's just all so relative.

[LuxLiving]

Re - the new poverty guidelines:

2009 Federal Poverty Guidelines

[PrincessPerky]

Seeker your note made it seem like 50K was poverty..regardless of living area.

Middle class assumes more than a day-to-day living. Saving with a 50k income for a family of four? Do you really believe this is possible today?

No I do not find 50K adequate in NY city, however I am TIRED of folk thinking 50K is poor.

Life may be more than work and sleep, but it sure as #$#%% is more than fancy restaurants nannies, and limousines as well.

I do not need to live like James Bond to feel I have a full life.

Yes there are areas with ridiculous HCOL problems, and then there is my family, who thinks Charlotte is a HCOL area (it isn't it is higher than theirs though). It is all relative, but there are some assumptions that need to change, for one thing, poor is a LOT worse off than I am.

[BCHGRL]

I grew up in a family of four living on less than that (~$40K). Now hubby and I earn upwards of $125K. I had all I needed as a child (love, support, food, clothes, and shelter) BUT it was HARD. I don't ever want to go back to that lifestyle. I enjoy not worrying and not fighting about money.

[isthisused]

I was able to support my family of 4 with $17.50 per hour and was able to buy a house. We had all the things on the list and did a few camping trips per year. When I lost that job and took one for $14.00 per hour my wife started her baby-sitting to make up the difference. Our monthly budget was $1,700 + whatever we spent on food. We didn’t buy a lot of fancy stuff but we were quite happy. Then I started getting lots of OT and some really big profit sharing checks at the same time as my wife’s business took off so last year we made about $25,000 more than we ever have before. We have kept our cost of living about the same and we pumped the extra into making the house more energy efficient and the rest into retirement.

[whitestripe]

the one thing that is bugging me with your exercise is that when anyone suggests anything other than the house with the picket fence and trying to frugally reduce amounts of different things you shut them down with 'this is not a how low can you go exercise'. i think everyone gets that now, but to be honest with the way things are now with the economy, and they WILL be like this for years to come, there are a LOT more people living frugally than there was before. so, in the interests of 'average' i would beg you to safely assume that this 'average' family will practise 'average' methods of frugality.

[tripods68]

Originally Posted by MonkeyMama

It just bugs me to lump the entire state in the way of LA or SF. I have to strongly disagree. I know people my age here (31) with $500/monthly mortgage payments for NICE homes.

I guess I find it even more absurd because I am from the Bay Area. God forbid anyone here had to live in an apartment. But apartment living can be very middle class and affordable here. In the Bay Area the rich live in apartments because it's all they can afford. It's just all so relative.

I agree. Let me also add its about timing. Few of my buddies from college bought houses in mid 90s before home prices skyrocketed early 2000. They paid anywhere from $70K to 140K (foreclosed homes) in some nicest area in Sacramento, not ghetto. They were renting their investment properties more than they actually paid for. Making $200 to $400K extra a month profit while the equity slowly went up over the years. All of them now quite the business while took more 9-5 regular jobs.