It's Almost Impossible To "Get By" In The US Today

Zero Hedge ^ | 04/13/2010 | Graham Summers of Phoenix Capital Research

[mdmathis6]

Is that you Meghan McCain? Geeze you IVY LEAGUE fratboys think you are so smart and clever trying to pull one over on us “ poor hick, gun lovin’ God worshipping, bitter clingers”...

[Dick Holmes]

Right. The average cost is higher if you heat with electric, and it is certainly higher than just your electric bill if you also use gas or oil. By equating all heating, cooling, lighting and appliance costs with just electric, the author underestimates cost.

[yefragetuwrabrumuy]

That wouldn’t fly, for obvious reasons. Instead, there are a huge number of abandoned rural towns, especially in the low population States like the Dakotas. Towns that could have survived, but just faded away because, to be blunt, they were boring. As soon as children graduated high school, they left skid marks.

But right now is a golden opportunity for their revitalization. To start with, these States could make a deal with other States, that have high unemployment, to send their unemployed over, along with a years’ subsidy, which would be well worth the price. Not having to pay years or decades of welfare would be a great incentive for the excess States.

The underpopulated States, some of which have standing benefits waiting for anyone who agrees to move there, would take that one year’s benefits and add it to their own, to make resettlement a lot easier.

The first group to arrive would be carpenters, plumbers, and other construction types, who would be set to work fixing up accommodations and infrastructure for the other arrivals, while the State makes some corporate contracts, so there would be minimum wage Internet jobs for the bulk of new arrivals.

The State small business organization would be tasked with setting up shops and trades, as well as getting some of the more ambitious set to local farming. Low overhead farms like chicken and pigs.

Again, the priority is to turn it as much as possible into a low cost win-win. If it can’t be planned to work out that way, then you need a different place with a different plan.

[hcmama]

Fellow member of the tribe here, sweety.

It is a rarity for a poster to come off as the embodiment of every known facet of a negative stereotype in fewer than 25 posts. Marrying some geeky schlep for money, making over said geek, the primacy of the salon in one’s life—you hit ‘em all babe! And with astonishing speed! Congratulations!

[CSM]

Dang, I wish I could see it.

[Wissa]

This is sounding better all the time!

Do you live in one of those rural towns in a low-population state?

[netmilsmom]

You hit the nail on the head.

And now she slipped away. Whoda thunk it!

[yefragetuwrabrumuy]

I can imagine many worse places to live, especially if there are few or not jobs, little or no government relief, and you have a family to support. Circumstances the nation may be facing sooner rather than later.

[CIB-173RDABN]

There’s no way I could take a low wage job and not fall completely behind on my mortgage and loans.

---

I am sorry to hear that. I have never earned a lot of money over my working life. Because of that, I always found work, even if it was a low wage job. The truth is, it is not how much money you have earned, but how much money you spend.

My advice will not help you, but perhaps a younger freeper will read and learn.

Rule number 1 - spend less then you earn. An obvious observation but one many ignore. In other words do not use credit to increase your standard of living.

Rule number 2 - save for a rainy day because one day it will rain.

Rule number 3 - be happy with what you have.

[Smokin' Joe]

And what a great life that concept allows us to have when we understand keeping up with or outdoing every one else is not where happiness and security comes in to play. If more people understood that, our country would not be in the mess it is today.

I saw the end of the oil boom here in the early '80s, and the 'bust' was not pretty. I had marvelled at all the people with new vehicles, nicer homes, all the toys...and I marvelled at how much of that stuff went back to the bank. My vehicle was solid, old, and nearly paid for (one payment left, private sale). I paid it off and was grateful that the adjustments I had to make were not nearly so severe as those of others. I still drive older vehicles, live in a modest home, and the Jones' can chase their tails if they want, I'm not keeping up, not even trying to.

[OldPossum]

If you truly work hard and make smart decisions along the way, you can still have plenty in America, even after taxes.

Since this is a long thread and I've not read it all, perhaps someone has told you that what you did was not in the category of "hard work" but getting someone else to work hard for you. There are unattractive names for what you have accomplished.

[Smokin' Joe]

Most people make the choice to send their children to institutional schools, whether public or private, and that is sort of how the “system” is designed . . . to have Mom work . . .

Mom didn't used to work, even with the kids in the state schools.

That was an economic reaction to the 'two worker' family, where inflation made the second check worth less than the first had been, and when two paycheck families became more common, many needed to both work to maintain the same atandard of living.

In the '60s, a new car was 3-5,000, a new house was 30,000, and wages were less than now ($1.65 minimum) , but it was all do-able. Now a car is 25,000, a house 180,000, and base wages are 5X more, but still not quite enough--with two wage-earners, and day care to pay.

Funny how that works...

[DCPatriot]

They only cited the Principle and Interest (P&I) on the scenario of a home with a price of $225,000, putting 20% down. (80% LTV).

What about the taxes and insurance that’s due every month? (T&I).

PITI in Montgomery County, Maryland on that $180,000 mortgage would be and additional $500 monthly...to $1,522....not $1,022 as cited.

[Smokin' Joe]

There is something to be said for the woman that sees the best in her husband and not as the “geek” with great earning potential. (Incidentally, being 'geeky' isn't necessarily a put-down.) Personally, I’d rather live in a trailer filled with love than a McMansion filled stuff.

Maybe she has both. A McMansion filled with love. That's be cool. Not going through a sh*tty first marriage, misery and heartbreak to learn what would make her happy is OK with me, too, if she loves the guy, no matter how flippant she may appear.

If she is a Hufpo plant, it will come out. She sounds fairly young, and lucky, but we make our own luck to a point, too, and that includes smart choices. Taking care of herself is just good practice, sound mind, sound body and all that. Not getting hitched to some pretty boy loser seems smart too, and if the guy who really cared was 'geeky', that isn't a bad thing either.

If she keeps herself in shape to please him, more power to her--I can't tell you how much how many guys would appreciate that.

I have not, in the time I have been here, seen anyone so excoriated for making good choices. Sheesh.

I am downright happy that some people don't have to learn the hard way, unlike some of us who did.

It gives me hope for my nine granddaughters, three grandsons, and my great granddaughter. Maybe a few of them will likewise avoid the pitfalls and get it right the first time.

Many are not so fortunate.

[Smokin' Joe]

That wouldn’t fly, for obvious reasons. Instead, there are a huge number of abandoned rural towns, especially in the low population States like the Dakotas.

Sorry, but we have an oil boom going out here in the western part of the state. Even the little towns are pretty well full, rents going for $500/mo. and better.

Maybe in Iowa or somewhere. Better yet, have the city folks clean up their own back yards, paint the walls, fix the windows and tend the lawns. There is plenty of decay in the cities and the burbs with better underlying infrastructure, and a lot less culture shock.

The underpopulated States, some of which have standing benefits waiting for anyone who agrees to move there, would take that one year’s benefits and add it to their own, to make resettlement a lot easier.

But we aren't underpopulated. Thirty below zero winters just aren't for everyone.

[Smokin' Joe]

perhaps someone has told you that what you did was not in the category of "hard work" but getting someone else to work hard for you. There are unattractive names for what you have accomplished.

District Manager? Boss? CEO?

LOL! You all crack me up.

Since Eve there has not been a woman who does not, has not sought to get a man to work hard for her, except the disfunctional ones who work hard for him, while he freeloads, who get reamed for being stupid and getting used.

[netmilsmom]

Ya know I respect you Joe, but on this one, I can’t agree with you.

IF, and that’s a big if, this chick is not a plant, she is like many of the ladies I know who were born in the late 70’s, early 80’s. It’s all about them. They get the guy, thinking they are God’s gift, then demand the “stuff” they left behind at Moms. The guys work like dogs while they live their entitled life, with hair and nail appointments and the kids are dumped into soccer and ballet. Whining the whole time about how (pick one) stupid, lazy, or disgusting their husband is. Their world is them. Hubby is doing laundry while she sits on her cell and tells her friends on Facebook how put upon she is.

She told us how wonderful she is and how she is such an asset. Basically, if she is for real, she’ll dump the hubby as soon as she no longer needs to be a SAHM. I’ve seen it happen MORE than once.

Nice life. I’ll stick with my covenant marriage.

[ExGeeEye]

Interesting. I wonder if you're interested in the "lower half"'s math.

(BTW this is not a plea for pity, or government handout, or private handout, or anything other than a little perspective on the part of people who seem to think the median income is insufficient to support life.)

In 2008, the median US household income was $50,300.

Mine-- or really ours-- just under $31,500.

Assuming that the person filing is the “head of household” and has two children (dependents),

Well, we're "TINK"s-- two income no kids.

this means a 1040 tax bill of $4,100,

Tax liability $1273

which leaves about $45K in income after taxes (we’re not bothering with state taxes).

$30,227.

I realize this is a simplistic calculation, but it’s a decent proxy for income in the US in 2008.

So far, so good. Wouldn't mind some of that here, especially if it's from a single paycheck.

Now, $45K in income spread out over 26 pay periods (every two weeks), means a bi-weekly paycheck of $1,730 and monthly income of $3,460. This is the money “Joe America” and his family to live off of in 2008.

Try $2,523. Call it $2500.

Now, in 2008, the median home value was roughly $225K. Assuming our “median” household put down 20% on their home (unlikely, but it used to be considered the norm), this means a $180K mortgage. Using a 5.5% fixed rate 30-year mortgage, this means Joe America’s 2008 monthly mortgage payments were roughly $1,022.

I paid cash for a mobile home in moderate condition, and pay lot rent of $250 monthly. Now I can hear you saying "well then it's apples and oranges--" But remember, the title of this piece is It's Almost Impossible To "Get By" In The US Today. All I'm saying is that it's quite possible, and showing how you could live right well on the median income, since I get by on 3/5ths of it.

So, right off the bat, Joe’s monthly income is cut to $2,438.

And mine to $2,250. I've almost caught up already, just by virtue of where I live. And yes, there's room for a family of four here, if we got rid of some tchotchkes(sp?)

According to the US Department of Agriculture, the average 2008 monthly food bill for a family of four ranged from $512-$986 depending on how “liberal” you are with your purchases. For simplicity’s sake we’ll take the mid-point of this range ($750) as a monthly food bill.

What the heck're they eating? My wife and I are, to be blunt, great big fat people who eat too much. Our grocery budget is $62.50 a week, or $270.83 per month. Double that for the two Kinder we don't have, and it's still just into the USDA's range. My advice: lay off the wagyu, and settle for store brands and generics of most products. We drink real Coca-Cola and Folger's coffee, but brand names on other stuff don't mean as much. For the continued calculations, I'll use the calculated figure for four of us instead of two, and round up to the next dollar: $542 for gross-eries.

This brings Joe’s monthly income to $1,688.

Mine to $1,708. Pulling ahead...

Now, Joe needs light, energy, heat, and air conditioning to run his home...this comes to a monthly electrical bill of $101.20.

In summer, I do about that much in electric, and cook/heat water with about $30 in gas. In winter, it flips: the AC goes off, the furnace comes on, and the electric goes to about $30 and the gas to about $100. Figure $130 for heat, air, cooking, and hot water per month.

Joe’s now down to $1,587.

And I'm at $1,578. Joe is catching up!

Let's see what's next. Now Joe needs to drive to work to make a living. Similarly, he needs to be able to drive to the grocery store, doctor, etc. According to AAA, the average cost per mile of driving a minivan (Joe’s a family man) in 2008 was 57 cents per mile. This cost is based on average fuel consumption, tires, maintenance, insurance, license and registration, and average loan finance charges. Multiply this cost by 15,000 miles per year and you’ve got an annual driving bill of $8,550. Divide this into months (by 12) and you’ve got a monthly driving bill of $712.

I'm going to assume that's about right. I haven't worked that all out, and I may actually be saving some through use of a smaller (still five-passenger) and older car. Also we have two such cars, but in this instance I'll follow Joe's math.

Joe’s now down to $877 (I’m also assuming Joe’s family only has ONE car). Indeed, if Joe’s family has two cars (one minivan and one sedan) he’s already run out of money for the month.

Somehow, with my two cars, I still managed to avoid Joe's fate.

Now...the average monthly premium for family policies in February 2008 was $369.

Tricky. My insurance premium-- for the two of us older fat people-- covering medical, dental and optical-- runs to about $60 an month and is deducted from the paycheck. Yes, the insurance actually costs more, but the company "pays it" by paying me less than the cost of employing me.

So if Joe has medical insurance on his family, he’s now down to $508. Throw in cell phone bills,

TracFone costs $10.00 when you by their cheapest phone-that-is-only-a-phone, and then you control the cost by buying minutes ahead of use. I have 500 minutes on my phone right now, and if I never use it between now and March 2011, the only cost will be the electricity to keep it charged. I'm still at $866.

cable TV and Internet bills,

I pay $130 a month for that, and feel robbed. Paying more? You're being raped-- or spending foolishly.

and the like, and he’s maybe got $100-200 discretionary income left at the end of the month.

Sound good to me. In fact, according to the above, I should be sitting pretty with $736 of uncommitted cash every month. Fact is, though, we're saving up for the next car and paying off an old-- but not troublesome-- credit card bill. This past payday I cut my discretionary budget of $50 per week in half, and my wife is mulling doing the same.

This analysis covers all of the basic necessities...It also assumes that Joe...Doesn’t take vacations.

I take vacations. My next one will cost us about $500.

Suffice to say...you’re still only looking at $100-200 in “wiggle” room for spending per month!

Again, $100-200 a month in uncommitted cash looks pretty darn good to me. Now if you were to hand me Joe's paycheck of $3460/mo, that would be $960 more per month that I would literally have trouble finding use for. I'd probably just save it up and take a trip to Europe next year.

Remember, my only goal was to give the reader some perspective. I hope no one feels offended, or worse, feels sorry for me.

I'm getting by just fine.

[netmilsmom]

Uh-huh. See if you would have read a while, you would know that every troll spouts that.

Bought Sarah Palin’s book too.