Challenge::Live on $5.15 an hour::

[tinapbeana]

Re: Challenge::Live on $5.15 an hour::

here here, mimi!

thanks for stepping forward and putting some real numbers on the board. as i said earlier, it is possible to 'live' on this type of wage, but it is hard to 'make a living' (i.e. save for education/retirement, pay off debt, save for a house, etc).

[disneysteve]

Re: Challenge::Live on $5.15 an hour::

mimi - Thanks for posting your situation. Can you elaborate on what you've posted? You show a budget that exceeds your income. How are you filling the gap? If you are using credit cards, are you able to make the payments? Are you getting any family help? You say your budget isn't possible, but you're doing it. Not trying to be difficult. I'm really curious how someone in that situation makes ends meet. That's exactly what this thread is all about.

Is it possible to consolidate or refinance the student loans. I know my loans had a 25-30 year repayment schedule, not 15 years. Forbearance would be a temporary help until your income increases, but refinancing would permanently lower your payments. It might increase the total amount you would eventually repay, but at least it would take a little strain off your budget.

You mention squeezing 4 people into the apartment, but what about just a third person? That could lower your share of the rent to $333 and free up $167/month, plus lower your share of the utilities.

Do you qualify for energy assistance? Most utilties have special programs for low income earners.

[mom-from-missouri]

Re: Challenge::Live on $5.15 an hour::

I dont think she is saying she is in that situation, she is just showing the numbers for if that is what she made, for her expenses.
I do know a couple of people who do earn min wage of $5.15 and are not on any type of public assistance. Both are single and have no children. One is a man from our church in his 30's who rents a room with a kitchenette in the corner and a bath for $75 a week. He has no computer, no internet, no cable or dish, no phone, but does have a prepaid cell phone only. Allows himself very few calls. He does have a TV, but uses antenna only. BUT, note that in his situation of renting a room-he has no electric, gas or water, sewer or trash to pay. He does have insurance thru his work, but has high deductables. He drives an older car, but keeps it running. Often you see him walking to work, but he does drive it to church. I really doubt he has any savings, but I don't know that for sure.
The other is a 29 year old female, and she still lives at home and probably always will. She gives her parents $200 a month and buys her own food. She has no insurance and suffers for it. But, she does have quite a bit in savings. She has always said if something happened to her parents she would get the house (only child) but I don't think she realizes she doesnt earn enough to pay the utilities, upkeep and taxes herself.

[amberfocus]

Re: Challenge::Live on $5.15 an hour::

mimi - Thanks for posting your situation. Can you elaborate on what you've posted? You show a budget that exceeds your income. How are you filling the gap? If you are using credit cards, are you able to make the payments? Are you getting any family help? You say your budget isn't possible, but you're doing it. Not trying to be difficult. I'm really curious how someone in that situation makes ends meet. That's exactly what this thread is all about.

Whoops, now I feel silly. I never meant to imply that I was on minimum wage. I actually make three times that, and I am doing FINE.

I was just trying to imagine if I *could* live on federal minimum wage, and I don't think I can (as per the challenge). The figures I posted as base expenses are all true. Part of it is probably due to the fact that I do try to budget according to minimum wage as a "worst case scenario". But even with my best efforts, I won't be able to do it, short of taking a second job.

But of course, since I do make significantly more than minimum wage, I do have money left over at the end of the day for clothing, household items, fun, retirement, and savings. And I am *incredibly* grateful for that.

I'm sure there are plenty of people (millions, in fact) who *are* actually living on minimum wage. But they're probably not browsing this forum, because they're too busy or exhausted, out working two jobs, feeding a family, and don't have the money for a computer or an internet connection.

We lose sight of how lucky we are, here. That was the point I was trying to make.

best,
~mimi, who is not a preacher, she swears!

[b4freedom]

Re: Challenge::Live on $5.15 an hour::

$5.15/hour wouldn’t even cover the cost of day care. Luckily, in NJ, minimum wage is $7.15/hour. So, that would barely cover the cost of day care (if I worked 42 hours/week). But, I couldn’t afford to pay my income tax, social security tax, disability tax, and/or all the other miscellaneous taxes/fees that I pay. So, after they took out taxes, I still wouldn’t have enough to pay for 1 week of day care. So, why should I work? Working costs more then not working. I’ll stay home and take care of my kid and live off of welfare and special programs provided by the revenue pulled out of your taxes. Thanks!

[Aleta]

Re: Challenge::Live on $5.15 an hour::

Our private health insurance just increased to $1256.75 a month. Even if I grossed $7.15 an hour, worked 40 hours a week, times 4 weeks, I couldn't pay for health insurance. At $7.15 an hour, I'd GROSS $1144.00 a month. Wouldn't even cover my health insurance. Forget about taxes and the rest. There should be a law that health insurance cannot cost more than minimum wage. Don't you agree?

[disneysteve]

Re: Challenge::Live on $5.15 an hour::

Whoops, now I feel silly. I never meant to imply that I was on minimum wage.

I was just trying to imagine if I *could* live on federal minimum wage, and I don't think I can (as per the challenge).

Oops! I'm the one who should feel silly for misreading that. I didn't realize you were being hypothetical.

To take another look at your example, then, someone truly earning that amount would really need to reconsider the living situation. Spending over 60% of income on rent just isn't feasible. Whether a 3rd or 4th roommate is desirable becomes irrelevant. It is mandatory to continue living in that location.

I also suspect most people earning $5.15 don't have substantial student loans since folks with college degrees are generally earning better wages (though there are certainly exceptions to that generalization).

Internet access is a luxury item, so I would cross that one off the budget. I know plenty of people who don't have home computers or Internet access and they get through life just fine. The cell phone can go either way. If it is cheaper than the most limited basic home phone service, that's great. Otherwise, I'd ditch the cell phone and go the traditional way.

One other point - The minimum wage in CT is $7.40. So to make your example accurate, the income after taxes would be about $1,180, not $820, which is an extra $360/month. That's a big difference.

In no way am I defending paying people $5/hour. Just making sure we're using realistic numbers in our examples.

[amberfocus]

Re: Challenge::Live on $5.15 an hour::

Oops! I'm the one who should feel silly for misreading that. I didn't realize you were being hypothetical.

Oh, no worries! This is the internet. Where people NEVER misunderstand ANYONE, EVER.

But I'm rather enjoying this conversation; this is a fun exercise, so I'll run with it--you don't mind, of course.

To take another look at your example, then, someone truly earning that amount would really need to reconsider the living situation. Spending over 60% of income on rent just isn't feasible. Whether a 3rd or 4th roommate is desirable becomes irrelevant. It is mandatory to continue living in that location.

I agree, rent is the most obvious place to cut back. Even with the CT minimum wage of $7.40, I'd say that $500/mo is too much. But it's easier said than done to find cheap housing, especially when one considers the limitations involved of not having wheels.

To start off with the obvious, there must be cheaper housing *available*. And for all of my looking, I was able to find precious few (I was ready to accept a tiny $550 studio before I found my current place, which is a shared 2 BR apt.).

I think most of the cheaper rates around here are "legacy" rates inherited by long-term renters. The moment someone moves out, the landlord jacks up the rent. The previous person living in my apartment was paying $430, which was what I'd hoped to get. But nope! It's $500 for me. I was quite dismayed.

What cheaper housing you do find is almost certainly disqualified for one (or more) of the following criteria:

- Crappy neighborhoods. I think it's understandable not wanting to be mugged or have your windows/house broken into or your bike stolen. And my physical looks practically scream "HELPLESS VICTIM!" Oh, and my parents will never stand for it. Would you want your kids to do this to themselves?

- Too far away from transportation. The cheapest housing is definitely *not* close to the downtown/business districts where my/most of the jobs are, and not having a car makes you dependent on shuttles and buses. The free shuttles have the most limited routes. If you go beyond those routes, you'll add $50/mo in public bus fares. Go out even further, and the train is even more expensive. The decrease in rent is effectively negated. Plus, it's a huge hassle.

- Too far away from grocery stores. Without a car, you must walk to the grocery store and carry groceries home on your back. My BF walks 1.5 miles per way to do his shopping. Unfortunately, I am a pathetic, wimpy weakling. And I do not relish carrying home groceries through two feet of snow in the winter, or 100 degree weather in the summer.

Finally, the few places that might be acceptable are gobbled up really quickly, and without a car, you can't even easily VISIT a lot of the them to look at them. (This was a problem for me personally, actually.) Furthermore, those good places are RARE. One must look for a long time to spot one, but real life is often not so accomodating, schedule-wise.

Erm, so that was my really, really long-winded way of saying, "Easier said than done." I actually got a pretty good rent deal, all things considered.

I also suspect most people earning $5.15 don't have substantial student loans since folks with college degrees are generally earning better wages (though there are certainly exceptions to that generalization).

Again, I agree that most college grads probably make more than $5.15. But $5.15 is the challenge, and my loans are my loans, and I can't pretend that they don't exist (although I'd love to so!).

To address your previous suggestion of consolidation/refinancing, my loans are already consolidated at 4.5%. Interest rates were much lower three years ago, when they were 3%. If I refinance, I risk losing my ability to defer them if I go to graduate school in a couple of years. And yes, I could extend the term, but like you said, there's an ultimately higher price to pay for that.

Which just goes to show that it costs MORE to be poor. So, so backwards.

Internet access is a luxury item, so I would cross that one off the budget. I know plenty of people who don't have home computers or Internet access and they get through life just fine.

Gah, you're talking to a computer techie who owns three computers. What you're suggesting is HERESY! Heresy, I tell you! I'll drop dead within the week! All joy will be leeched from my life! You have stabbed me through the heart, you foul, cruel--

Okay, back to the seriousness... Taking off internet would save $25/mo--if you can get your roommate(s) to agree--and therein lies the problem. We the younger generation are hooked on the internet, and I doubt any roommate of mine would be willing or budget-conscious enough to make the sacrifice. My roommate is actually signed up for a more expensive, higher bandwidth package of service. I would have chosen the lower tier, but what can I do? Refuse to pay my half? I already feel bad enough refusing to pay for cable (but at least I can cite the fact that I don't own a TV and NEVER watch his).

The cell phone can go either way. If it is cheaper than the most limited basic home phone service, that's great. Otherwise, I'd ditch the cell phone and go the traditional way.

A cellphone has several advantages over landlines.

- Free long distance. When your family and/or most of your friends are out of state, this advantage becomes quite significant. Especially when you can't get them to stop calling you.

- Flexibility. If you're rarely home, it's hard to reach you on a landline. And if you go out or travel and need to meet up or keep in touch with someone, a cellphone comes in mighty handy. Finally, if you haven't settled down and change residences often, your phone number stays constant for those who have you in their phone books.

My cellphone is only $10/mo with my family plan, and we have plenty of minutes. My old landline cost $15/mo with no long distance. I think my cellphone is worth it.

One other point - The minimum wage in CT is $7.40.

I know. I earned that for years while in college. Actually, it was $6.70 four years ago, and rose year after year ($6.90, then $7.10, then $7.40). The federal government should take notice.

But to address your point, yes, when I made my budget, I did first try to use federal minimum wage for a "lower bound", and then gave up and settled for CT minimum wage, which explains why my bare-bones budget *does* fall within that limit. I always think in terms of worst-case scenarios--if I'm suddenly fired and I had to pick up something, anything, on minimum wage, I need to be able to survive on that.

But the challenge is $5.15, the federal minimum wage. CT minimum wage is 43.7% higher. Maybe the challenge should be minimum wage IN YOUR AREA, to even out sometimes vast differences in cost of living. Then I'm totally in!

best,
~mimi

[Snoopy2645]

Re: Challenge::Live on $5.15 an hour::

Well went I first went out on my own around 18 or 19 I paid all my own bills including daycare for my baby & I was making about $6.50 maybe $7 an hour no childsupport no state help nothing from ANYONE!!! And BTW this wasnt very long ago i.e. 10yrs ago & I was saving money!!! I used to put my tax return in the bank every year as I hit it big with EIC & childcare tax credit!!! Beings it was just my baby & I our grocerys bill ran $25 a week!!! My dh says now he dont know how we ever made it on that grocery budget lets put it this way my dd & I shared alot of $1 frozen pizzas & ate alot of potatoes so many that if I smell one of those $1 frozen pizzas now I about gag LOL!!! Well with 3 kids now & a growing big boy (my husband) we spend a ton on food!!!

Oh yes & I was also going to school we cooked those frozen pizzas between me going to work & her in between babysitters!!! It was a different world for me than where we are now in a way it was easier simpler.

[lrjohnson]

Re: Challenge::Live on $5.15 an hour::

But the challenge is $5.15, the federal minimum wage. CT minimum wage is 43.7% higher. Maybe the challenge should be minimum wage IN YOUR AREA, to even out sometimes vast differences in cost of living. Then I'm totally in!

Oh I'm in in in, if we are doing the minimum wage where we live!

[disneysteve]

Re: Challenge::Live on $5.15 an hour::

Which just goes to show that it costs MORE to be poor. So, so backwards.

I agree. I have read numerous articles discussing how the poor pay more for basic goods and services. Money definitely buys opportunity. I can hop in my car and drive to the cheaper stores. I can use my computer to find higher rates for my savings.

Taking off internet would save $25/mo--if you can get your roommate(s) to agree--and therein lies the problem. We the younger generation are hooked on the internet, and I doubt any roommate of mine would be willing or budget-conscious enough to make the sacrifice.

But you are looking at that through the eyes of someone earning well above minimum wage. If you and your roommate were actually earning $5.15, your opinion might be different.

A cellphone has several advantages over landlines.
My cellphone is only $10/mo with my family plan

Of course, that means you are actually on somebody else's plan, your parent's I suspect. If you had to get your own individual plan, it wouldn't be $10. It might still be the most economical way to go. You would just have to run the numbers.

But the challenge is $5.15, the federal minimum wage. CT minimum wage is 43.7% higher. Maybe the challenge should be minimum wage IN YOUR AREA, to even out sometimes vast differences in cost of living.

I definitely agree with you here. As we've illustrated, there is a big difference between the federal minimum and, for example, the CT minimum.

[tinapbeana]

Re: Challenge::Live on $5.15 an hour::

regarding whether or not to cut the internet: i would consider leaving it on as it's the easiest way to search for another job, prepare for an interview, etc. it could be a tool for getting oneself out of the minimum wage trap.

[Broken Arrow]

Re: Challenge::Live on $5.15 an hour::

Some libraries offer the internet for free. Many more wireless hotspots are available for free if you have a laptop with wireles capabilities....

Just a thought. Your Mileage May Vary of course.

[joesbaby]

Re: Challenge::Live on $5.15 an hour::

ok, in our state min wage is 6.50 an hour. i make 7.15 at my job, but i only work 20 to 25 hours a week. i have about 800 ish in paychecks. my bills are aprox....

trailer 150.00
utility 150.00 this is an average of the year
credit cards 20.00 ( have them mostly paid off, use to keep credit growing and pay off at end of month)
student loan 50.00
van payment 85.00
other loan 100.00
cellphones 100.00
satalite dish 100.00
car ins 50.00

thats a total of 800.00 a month. it doesnt include my gas, or other necesary items. i own 4 horses, and i have 3 kids. but you will note, i dont have child care expences. my husband is a stay at home dad. he has effects from falling out of a tree 2 yrs ago and doesnt drive anymore.

i do make an extra 100 a month or so doing inhome care for a family friend. that covers most of my gas, and extra expnces. i dont have a dsl at home, but i DO live on my moms property in the country. so i dont pay lot rent, pasture rent or things like that. i use moms dsl for my computer, wich is set up in her house, and i dont even have a checking account. i use moms to pay the bills, but put all the money i take out, back in. it saves me money that way. i also use moms library card to get free books movies and other things from the library.

i hope that helps. its my true situation, not a hypothetical.

almost makes me sad to read it. lol.

have a good day
ericka

[Broken Arrow]

Re: Challenge::Live on $5.15 an hour::

Turn $5.00 Into Thousands Here's how the program works.

Hehe. It'll probably be deleted soon, but... heck of a place to find a spam here.