minimum wage

Risking Death To Save Money? Day 2

January 2, 2013 By Jeffrey Strain 14 Comments

I learned today that if you want to save money by driving your car at a fuel efficient speed on the highway to get the most miles per gallon, you do so at your own risk. You will also have an untold number of angry driver’s violently making obscene gestures in your direction including a number of old ladies…

On the first day of this minimum wage challenge I mentioned that I was able to escape the day without spending any money. Several readers pointed out that although no money went out of my pocket, I used gas when I went to visit Montezuma Castle national monument which I would eventually need to pay. While that isn’t the case in this situation (I will explain below), I did think that trying to conserve gas when driving would be a good thing to begin doing since it’s likely to be one of my bigger expenses this year. To this end, I decided to try and drive the car today at 55 mph on the highway.

According to the Department of Energy, driving at 55 mph instead of the speed limit of 75 mph would give me approximately 23% more bang for my buck for each gallon of gas I purchased. With gas at $4 a gallon, by simply driving 20 mph slower, I could save approximately $0.92 for every gallon I put into the tank compared to if I drove at the speed limit. This seemed like a great way to get to where I wanted to go and save money over what others driving the same distance would spend in gas. At least it did until I actually tried it.

Apparently, other people hate slow driver’s with much more force than I anticipated. This seems to be especially true of truck drivers. While I figured that driving at a slow pace would upset a few from past experience, I thought that if I remained in the far right lane I could get away with my money saving strategy with only a minimum of problems. Oh, how wrong I was.

I was expecting that I might get a few obscene gestures, but I never thought I would get them from a pair of ladies each of who could have been my grandmother. And while there were plenty of other gestures from other drivers, it was the truckers that scared the hell out of me. There were a few that came up on my rear bumper so quickly that I thought they were going to hit me. There was absolutely nothing subtle about it — in their mind I was going too slow for even the far right lane and tailgating me was their way of letting me know.

I decided after a couple of close calls like this that it was only a matter of time before one actually hit me from behind, and that was something that would be far less beneficial than me spending a bit more money by driving at a less fuel efficient speed. I wasn’t willing to risk death or serious injury to save a bit of money as both of these would ensure I would lose the challenge (not to mention that it doesn’t sound like a fun way to spend 2013).

Instead, I increased my speed to flow with traffic (on the slow end) and that’s what I plan to do for the rest of the year. While I’m sure that this still frustrates some drivers, doing so seemed to reduce the pure anger I was feeling from drivers when going slower. This should save me some money over my usual driving habits (I usually drive slightly above the speed limit), while not endangering my life in the process. Sometimes it’s just not worth the risk to save some money.

One of the places I wanted to make sure to visit while house sitting out here was Petrified Forest national park since I had only been there once and enjoyed it tremendously. The issue was that it was a pretty good drive out there, so I had to make an early departure if I wanted to spend a decent amount of time hiking. I got up early, walked the dog and was out on the road by 7:00 am with a packed lunch and snacks from the fridge and cupboards so that there was no need to buy anything on the road. Again, my national parks pass allowed me to enter the park without paying any fees.

It was a great trip and I would love to visit there again. The north part of the park has amazing views of the painted desert:

Which was even more spectacular because recent snows had left the north facing slopes in the painted desert covered with snow:

I absolutely loved the views from Blue Mesa in the center part of the park:

Blue Mesa view from Petrified Forest national park

And then, of course, was the incredible colored petrified wood at the southern end:

Due to the distance, and the trip on the first day, I did have to stop and fill the tank with $30 worth of gas. While this may seem like it would be a personal expense, it actually isn’t in this case. Let me explain:

A couple of years ago I went on a rafting trip down the Colorado River through the Grand Canyon. One of the women on my raft trip was a journalist from Australia who had been sent to write a piece for her newspaper. Since the article she would be writing was part of her job, the newspaper paid for the trip. This got me thinking. Why couldn’t I do something similar? So I did.

I created a national parks blog so that part of my work is writing about national parks. That means that expenses which are directly related to me writing articles about national parks are business expenses, not personal expenses — just like a journalist doesn’t pay for the cost of writing an article or a pizza delivery person doesn’t pay for the gas (or gets reimbursed) when delivering pizzas. Since the only driving I’ve done thus far has been to visit national parks (which I will write about for the blog), the $30 in gas it took to fill up the tank is 100% a business expense.

While today could have very well be another no spend day, I did up spending $1.20 for three postcards. One of the things that I have been doing for a couple of years now is sending postcards to my two nieces and the daughter of my best friend from the places that I travel to. This is something that I have decided I’m not willing to stop doing to save money even though it’s not essential. I know the girls love to get mail and it’s something that I’m willing to do and sacrifice in other areas if needed to continue doing it. It’s a priority to me.

Since I already have a supply of postcard stamps which I purchased well before this challenge ever came into being, there is no cost for sending them (at least for the moment). That leaves my spending for the first two days of the year at $1.20 while visiting and hiking two national parks — a start that I’m extremely happy with and will enjoy until the inevitable obstacles begin to appear.

Today’s Spending

Food: $0.00
Car: $0.00
Housing: $0.00
Travel: $0.00
Misc: $1.20

Total Spending

Food: $0.00
Car: $0.00
Housing: $0.00
Travel: $0.00
Misc: $1.20

Next article: Day Three: First Difficult Choice

Preparation: Minimum Wage Challenge

December 21, 2012 By Jeffrey Strain 14 Comments

Apparently I am already cheating on the minimum wage challenge even though I haven’t even started it. At least, this is the argument my sister has decided to make. I recently sent out a “Christmas wish list” to friends and family for what I would like this Christmas. My sister didn’t like my choices of 1) pizza gift cards or 2) beer, wine or any other assorted types of alcohol.

Her first argument is that those are things that I will use during the challenge to circumvent the spirit of the minimum wage challenge allowing me to have (beer wine and alcohol) or buy things (pizza) that I wouldn’t normally be able to afford. She feels that I should go in with nothing (because it’s her job to make this as difficult and miserable an experience as possible on me) and that by doing any type of preparation, I’m bending the rules.

I, on the other hand, feel that if you know things are going to be tight, you should leverage all events to your benefit as much as possible. Yes, I could ask for a salt gun fly killer which I probably would have asked for had I’d not known I was going to be attempting this challenge. While I think it would be a lot of fun, the upcoming challenge has changed my perspective a bit. I don’t think that I would enjoy it nearly as much as the other gifts I requested knowing that I won’t be able to buy them anytime I want next year. In fact, I think that the better I’m able to leverage these events, the more likely it will be that I can succeed at this challenge. When times are tough and money limited, there is no shame (in my opinion) in getting things that would be useful for your current conditions rather than things that would not.

My sister’s second argument is that these aren’t really “gifts” but simply things that will help me get around the minimum wage challenge. I disagree. While there is no doubt that I like pizza and alcohol and would never turn them down, the fact is that I doubt that I will be buying much of either during the challenge simple because I know I can get a better value for my money purchasing other things. I view both more like a treat — something that is really nice to have, but something I can live without if it isn’t there.

All of which brings to the forefront a very good questions about preparation. If you know that you have the possibility of losing your job or that a pay decrease is coming, you would make preparations for the inevitable decrease in income. To that extent, what do you think it’s allowable for me to do in preparation and what would be off-limits? For example, I think that going to the grocery store and buying a bunch of food at full price just so I had it when the New Year began would be cheating at this point. On the other hand, I don’t believe that if I saw a great deal at the grocery store and bought a bunch of that food at that great price I would be cheating since that is something I would do that anyway.

If you were in the position of previously not living on a minimum wage budget, but know that this reality was coming, what things would you do to prepare? What are some of the steps that I should be taking in these last few days before I begin the challenge that you feel are acceptable preparations that don’t go against the spirit of the challenge? And lastly, do you agree with me or my sister when it comes to my Christmas gift request from family and friends?

And as a side note, for all of you that haven’t purchased gifts for those you know, I would suggest getting them a gift that saves money as this ends up being a win-win for all involved.

Next entry: Frequently Asked Questions

(Photo courtesy of Calsidyrose)

Renting or Homeless? Minimum Wage Challenge

December 11, 2012 By Jeffrey Strain 18 Comments

One of the biggest decisions I need to make that will determine whether this living well on minimum wage challenge will be successful or not is my living conditions. I’ve spent a lot of time thinking about this and there is little doubt that renting would definitely be the safer, cheaper option.

The first question I asked myself was do I really need to pay for a place to live? Could I create an arrangement where I could live someplace for free? Would it be possible to find someone leaving the country for a year and housesit for them in exchange for a place to live? Could I find a family that would let me live rent free if I was willing to do their grocery shopping for them since they would end up getting thousands of dollars worth of food each month for pennies on the dollar? Could I find a place with an older couple that would trade basic maintenance for a room? While I think these possibilities are out there and that it’s worthwhile keeping my eyes open for them as I do this challenge, they probably are not ones that I could arrange before the beginning of the year. So while I will keep these in the back of my mind, I needed to look at some more realistic possibilities for the beginning of the New Year.

The next question became what type of rental could I get that was inexpensive, yet still a decent place to live. Looking through advertisements it quickly became apparent that renting an apartment for myself, even if just a studio, was going to be $400+. Then there would be the need to furnish and to pay utilities and other fees. Even worse, most had a minimum of a 6 month commitment, with most wanting a year. While this certainly could be done, it would be pretty basic and wouldn’t allow me to take advantage of other opportunities if they arose.

As I continued to explore, it became apparent that renting a room within a house was often priced in about the same range, but often came with furnishing and sometimes with utilities and other fees included. There were still time commitments on most, but many would allow for a month to month for a slightly higher price. The trade-off was that there would be a lot less privacy since the kitchen and other rooms would be communal. While ideally I would prefer a place all to myself, I think that the better house conditions and locations would make a room in a house a better overall deal given the right circumstances. I began to search to see what I could find in this area.

After sending out some emails and making some calls to family and friends, I was able to find someone who was looking to rent an extra room in their house for $400 a month with a six month commitment which would include all utilities. They would be willing to do a month to month arrangement for $475 a month. It’s already furnished so I wouldn’t need to buy anything extra which would be a great savings. I would have my own bathroom and shower, but the kitchen and living room would be shared. That would be a flat $4800 for the entire year if I went with the 6 month commitment, it would be easy to budget, and there would be little risk involved with additional or unexpected charges hitting me from out of the blue.

If this was simply a “minimum wage challenge,” this is probably the choice I would make without hesitation. If finances were the only aspect to the challenge, it would be a no brainer. However, an essential part of this challenge is the “living well” portion. For me, that means getting out and traveling a fair amount. Living in a set place would greatly inhibit my ability to do this, especially on such a restrictive budget.

With this in mind, I have decided to stay purposely homeless for a three-month trial period. While there is a chance that the room will get rented out while I’m doing this trial period, I know that the person is only willing to rent out the room to someone they know well which means that there is a fairly good chance that it will still be available in three months if I need it. It’s a risk, but one that I think is worth taking to see if I can make the full-time traveling work. Basically, I’ll have an opportunity to try to do the traveling that I love to do, and have a back up plan if it isn’t working out quite as well financially as I hoped.

Of course, as soon as my sister heard I made this decision, she cried foul and said I was trying to cheat. She immediately demanded that we set a new rule to the challenge that I’m not allowed to spend more than a week with the same family member or friend per month (with the one exception being at her house where I am more than welcome to stay as long as I want to babysit her kids). Basically, she was afraid that I was going to stay long periods of time with someone for free, and that wouldn’t have made the challenge hard enough in her eyes (because, apparently, that is her main concern in all our bets — to make things as difficult as possible for me so that she can win). I figured that since doing so would defeat the purpose of why I decided to choose “homeless” in the first place (to travel more) that it was something not worth fighting over and accepted the new rule.

This choice comes with some risks, especially when compared to having a fixed living cost of renting. The main one will be the cost of hotels. There are times when the unexpected happens and I find myself in a position where I end up having to pay far more than I expected for accommodations. A perfect example was on one trip I took when I pulled into a small town mid-week where I was sure I could find a cheap place to stay only to find out that there was a popular festival going on that had most of the rooms in town booked. I ended up having to pay $150 at a dive motel, and if something like this happens too often, it could quickly ruin the budget. I think with better planning and less of the “OK, let’s just start driving as see where I end up” attitude I usually have, I should be able to avoid most of these costly mistakes.

This will also raise the cost of my food. Although I think that I can still keep costs at pretty low levels, living on the road means that couponing will be a lot more difficult (it’s hard to find deals in areas where you aren’t familiar with the stores) and it won’t be possible to stockpile the great deals the way I could if I had a place of my own. This is another area I will need to think through since it does get easy to spend a lot on food through convenience and restaurants when on the road.

So the question is, will I be able to cut down the costs of my current living lifestyle to the $400 – $500 a month range? I would estimate that these expenses are currently running in the $1000 – $1500 a month range (again, I don’t usually budget, so I’m not exactly sure), if not a bit more. There are certainly things that I can do to bring these costs down, but I’m not sure if it will be enough. That is why I will be giving it a 3 month trial period, then go onto plan B if I find that it’s just not possible for me to get down to a spending level that will allow me to remain within the budget.

While I’m aware that me choosing this option means that it’s extremely unlikely that is will apply directly to the vast majority of the readers of this challenge, and not nearly as much as renting a place would, my hope is that it ends up proving to be much more inspirational than renting would (and who knows, I may end up being there in a few months anyway). While renting would be the safe bet and be more applicable, it would also be a pretty boring choice in that I have locked in everything I could (no fluctuating utilities, no need to buy furnishing, etc). Locking in these costs when renting is the financially prudent thing to do, but it also doesn’t allow for many situations where I would need to make hard choices. I believe that by traveling, I will have much more opportunity to go through the decision-making process of choices before me. I believe it’s that decision process and looking at options creatively that ends up being a fundamental skill that can help people save money no matter the situation. I will certainly have to have my creative money-saving juices flowing to make this work…

Next entry: Car or Carless

(Photo courtesy of katerha)

Preliminary Basic Budget Minimum Wage Challenge

December 10, 2012 By Jeffrey Strain 6 Comments

I hate budgeting. I simply don’t like taking the time out of my day to run through the numbers when I could be doing so many more interesting things. One of the reasons that I think that I am relatively frugal is that by being so, I haven’t needed to budget for years. I don’t buy a whole lot of “things” so, within reason, I have been able to basically do whatever I wanted and still be well under the amount I was earning. There was never an issue of having to find where the money was going because I was spending far less than I was making. This is one of the wonderful perks of having my finances in order.

Of course, this minimum wage challenge bet changes all that. With a greatly limited amount to live on in 2013, the first thing that I really need to do is create myself a basic budget to help me make sure I have a plan to make it work. I started the process today and this is what I have quickly come up with:

Income: $17,160
Taxes: ???
Self Employment Tax: ???

Spendable Income: ???

With congress still undecided what they are going to do about tax rates, I will have to wait a few months to be able to determine both of these. I guess I could place in 2011 numbers and then adjust when this has been settled. I will go ahead and do that when I have a chance.

Rent: ???
Homeowners/Renters Insurance: $0
Property Taxes: $0
Home Repairs/Maintenance/HOA Dues: $0
Home Improvements: $0
Electricity: ???
Water and Sewer: ???
Natural Gas or Oil: ???
Telephone (Land Line, Cell): ???

One of the first things that I need to do is sit down and decide whether it makes more financial sense to remain homeless or whether renting out an inexpensive place makes more financial sense. I’ve started to run the numbers through my head on my walks, as well as the pros and cons, but I haven’t come to a decision yet…

Groceries: ???
Eating Out, Lunches, Snacks: ???

This will be determined by whether I rent a place or not. If I rent a place, my food costs will be much less as I know I can get plenty of food for virtually nothing if I have to. If I don’t have a place to stay full-time, my food costs will rise quite a bit as it’s much more difficult to coupon while on the go, and there is no place to stockpile good deals.

Medical Insurance: ???
Unreimbursed Medical Expenses, Copays: ???
Fitness Memberships: $0

Currently I have my own medical insurance and since I’m self-employed, I can deduct this from my earnings. Because the earnings will be so low, I will need to run the numbers to see how much will be my responsibility for the year and how much can be written off as a business expense.

Car Payments: $0
Gasoline/Oil: ???
Auto Repairs/Maintenance/Fees: ???
Auto Insurance: ???
Other Transportation (tolls, bus, subway, taxis): ???

I currently have a car, but I have lived without a car for long periods of time. I need to make the decision whether I should sell the car and get rid of all the expenses that go with it, or if it makes sense to work it into the budget. There are a number of things that I need to think through because even though the first appearance is that not having the car would save a lot of money, it also comes with some inherent risks that could prove much more costly than owning a car. I will need to weigh them and come to a decision.

Cable TV/Videos/Movies: $0
Computer Expense: $0
Hobbies: ???
Subscriptions and Dues: $0
Vacations: ???

I’m pretty sure that all these will be minimal to none. I very rarely watch TV and can’t remember the last time I went to see a movie in a theater (out of choice — I stopped watching them when I lived in Japan and they cost $20 a ticket and that didn’t guarantee you a seat in the theater…)

Clothing: ???

I will have to think hard about this. I rarely buy clothes (maybe once a year), but I do go through hiking and running shoes fairly quickly since I do a lot of both. My guess is that there will be some costs here, but not a lot. I will have to try to place an accurate number on this for the purpose of budgeting.

Toiletries, Household Products: ???

This is an area that I may simply put down a token amount just in case. Most toiletries I get for free using coupons or when I stay at hotels, but there are times that I do need to buy something. I think that if I pay a bit more attention, I can keep this down to $0 for the most part.

Charity: ???

This is going to be a tough one. I usually give quite a bit in charity and think I can continue to do so using methods I have used in the past without it costing me a lot of money. I may need to change things a bit to make sure that it is still Kosher with the rules of the challenge, and in a worst case scenario, I can volunteer or do other free methods to help charities.

Miscellaneous Expense: ???

This is actually the area that scares me the most with this challenge. These won’t be the leaks that most people think about when they place this into their budget, but the emergencies that inevitably happen in everybody’s life. The way that I am currently looking at it is that all the money that I don’t have committed to other areas in the budget needs to be my “emergency fund” and the goal is to make this as big as possible.

I know that there are a lot of numbers missing which need to be filled in. I would welcome any suggestions that you have in any of the areas, as well as the numbers you would shoot for in each area. Even more importantly, have I missed any important expenses that I need to add to this list?

I have always been of the mind that while I am the one that will be doing this challenge, all those that read along are my supporting cast and I expect that I will get a lot of valuable information from all of you that I would not have considered on my own. With that in mind, please feel free to comment and let me know which budget areas you see as those which should be viewed with the most concern. And the first steps of the journey begin…

Next entry: Renting or Homeless

(Photo courtesy of http://www.flickr.com/photos/wonderlane/5582186621/”>Wonderlane)

The Minimum Wage Machine

December 1, 2009 By Jeffrey Strain 15 Comments

I love this idea as a way to physical show what it’s like to earn minimum wage in the US today. Blake Fall-Conroy put together a machine that dispenses pennies and allows any person to work for minimum wage.

The concept is simple. An individual cranks a handle on the machine and pennies drop out of it at a pace of every 5.04 seconds which will give the person $7.15 an hour, the current minimum wage for New York state. If the individual stops cranking, then the person stops receiving money.

I think that anyone that had to use this machine for a few hours would gain a new respect for the working poor of our nation.

Source: Blake Fall-Conroy