[Woebama]

I’m actually living this. I have been underemployed throughout this recession and it’s what happens when you have to take the lower end non-career path type jobs that are easily available. You barely DON’T make it . . .

[Atlas Sneezed]

Now, in 2008, the median home value was roughly $225K.

---

I suspect that this is the median sale price. But the median guy didn’t buy his house last year. Most people live(d) in houses that they bought for a lower price than their new neighbors did for a comparable house.

Yes, some bought at a peak, but the typical guy didn’t.

[Atlas Sneezed]

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.

---

More sloppy math. That cost per mile is lower when you drive 15,000 miles (more than typical) because the fixed costs like insurance are spread out more.

[RobRoy]

Interestingly, look at the average american’s lifestyle. And this part cracks me up: Look at the homes “average” people live in in american movies and TV shows and then look at the homes the average people live in in British, Japanese, Irish TV and movies. Look at the kitchen’s and living rooms of those homes. Their yards, where they keep the washer and dryer (if they have one). And interesting picture emerges.

All that said, our taxes and the way they are collected sent me to my own Galt’s Plateau. Just as the purpose of a tv show is to get me to watch commercials, I feel as if the purpose of my job is to get my company to pay me wages from which the government will take a sizeable chunk and leave me just enough to keep me from bringing out the pitchforks and torches. And then they tax what I DO spend to live.

I literally feel like an indentured slave to the government. The answer is to ween myself from this “let them eat healthcare” lifestyle and learn to get by with less, but it is MY less. Freedom is worth more than all the riches the government “lets me have”.

[Sleeping Freeper]

Good article. While I don’t agree with all the assumptions, most were spot on and the author was generous in leaving out some costs, especially related to raising kids.

[carton253]

I found the article fascinating, but thought the author’s typical electric bill very underpriced. I wish I had gas and electric bills like that!

[Freddd]

And you think it doesn’t pay to be an illegal alien here, not paying taxes???????

[Freddd]

‘running in the red every month’ , putting it on credit cards he couldn’t pay off...

[goldstategop]

The assumptions are calculated on a one breadwinner family. That may have been true in the 1950s but its not true today. Both husband and wife have to work of necessity to keep the family afloat and to make ends meet. If you’re the only provider and have kids then things begin to get tough. Life has never been easy and not even liberal policies are going to help most people “get by.” Just the opposite by adding more expenses they must figure out how to pay for on top of those they already have to take care of.

[yefragetuwrabrumuy]

I think a solution to many problems can be found in repopulating the “heartland” towns across the US. More than anything else, this adjustment is psychological, and boils down to a simple question:

“Are people willing to live in a place that is boring, in exchange for economic stability and solvency?”

Since about WWII, the answer to that question has been “No!”, but we may be entering into a time when for many there will be little choice.

There are many variables to an idea like this, but they are based on State-driven incentive programs to rebuild rural towns for former city dwellers with no place left to go. Who cannot afford to live in the city, who cannot get work, who the government can no longer support directly, and have run through their personal and family resources.

Previously, small town models were reliant on agriculture, but this is no longer entirely possible, as their main source of income. So more likely, such towns would be “Internet based subcontractors”, working for corporations doing things like data processing, and mechanical assembly. Whatever brings in income. And the people who support these people, such as shopkeepers, and *some* local agriculture to provide less expensive food.

While there are some start up costs for the State, the end result is both cost savings, and even some tax revenues after a while.

[668 - Neighbor of the Beast]

I know plenty of people who live very well on less than $1k/mo. They don’t have ANY mortgage, they bought a house they could afford. They don’t have cable tv, particularly if they have children, who are exposed to enough filth as it is without paying extra to bring it into their homes.
However, in one respect the writer is probably way off. $100/mo electric is really extraordinary. I know because I pay about that and I’m fanatical about keeping it low.
Avoid borrowing. Live within your means. Don’t pay for things that only pollute your kid’s brain, like cable tv and college tuition. Don’t live in an area with high crime and high taxes. Don’t smoke and you’ll save over $100/mo on cigs alone. (That will come in handy one day when Soc Sec has gone under, and you have to retire.)
Trouble is, nobody wants to change their habits.

[Hoosier Catholic Momma]

I thought this might be of interest to the Dave Ramsey ping list perhaps.

My husband brings home about the amount they quote in this article, only we are raising four kids on that, and three of those are in Catholic school (one heads off to the Catholic junior high in fall of ‘11, so there goes more money, LOL). It is entirely doable.

It is especially easy when you have no car payments, no credit cards, no student loans or any other debt except the house. Do we eat out much? Rarely, but somehow we manage to put away money in savings every month for emergencies, car and home maintenance, pet care, and Christmas.

It makes me want to bang my head against a wall when I hear people—especially within my kids’ school families—complain they ‘have’ to have two incomes. Of course they do, they have several hundred dollars of car payments and give their kids too much stuff. My kids were thrilled to get the Wii for Christmas and we were proud to be able to give it to them after saving up for it. They may not get ‘stuff’ all the time, but they appreciate it more when they do. Our cars may be 10 and 13 years old, but they belong to us, not the bank.

My husband hasn’t seen a raise in over 2 years (something he’s fighting for right now—especially since he’s doing the work of two engineers right now), but right now I consider us lucky to be doing as well as we are.

The economy sucks, to be sure, but considering how we’ve altered our lifestyle in the last couple of years, we’ve learned about what it really takes to survive in tougher times.

[Little Ray]

This is why Joe’s wife has to work, too.

[ctdonath2]

I am assuming Joe maintains EXTREMELY conservative spending habits.

Yeah, starting with diving $180,000 into debt.

Right.

Mortgages are the biggest d@mn scam. Everyone has been conned into this mindset of "you've GOT to have a quarter-million-dollar house". BS. No you don't. Buy what you can afford, CASH, OUTRIGHT. Biggest mistake of my life was falling for that when I very nearly owned a home free-and-clear.

Mortgage is d@mn near indentured servitude. You MUST make that payment EVERY MONTH or you lose EVERYTHING. You MUST hand over a huge chunk of your paycheck - a chunk you could have a very good & comfortable time with - to pay 3x for something you didn't need that much of in the first place. You're STUCK in your job because you MUST pay, you CANNOT risk financial uncertainty.

And it's going to take decades, if not centuries, for this nation to figure it out - or die in ignorance.

Conservatism: the realization that right behavior was learned at great cost to generations, and that if we forget it now we'll take as long at as high a price learning it again.

[Dick Holmes]

Now, Joe needs light, energy, heat, and air conditioning to run his home. According to the Energy Information Administration, the average US household used about 920 kilowatt-hours per month in 2008. At a national average price of 11 cents per kilowatt-hour this comes to a monthly electrical bill of $101.20.

The mistake here is that a lot of houses don't heat with electric. They burn gas or oil.

Later in the article, Joe needs to pay 300-400 a month for cell phones, cable TV, internet and such. This is not a need. My wife and I have prepaid cellphones. A thousand minutes lasts a year, for $100. Mine carry over and I pay less than $100 a year. My wife uses her cell phone more, but still keeps it down to ~250 a year. This is about $30 a month for both. Our TV, Internet and land line are bundled for $100 a month plus fees, but in a pinch we would just have Internet and use Vonage for phone; there is no reason to "need" cable TV, especially if you have Internet.

[Salvation]

And it is going to become more difficult. Especially for senior citizens.

[cynwoody]

FWIW, I just ran a whois on the article site, zerohedge.com. It's hosted in Sweden and registered to a Liechtenstein address:

Administrative Contact:
    Singer, Marla  
    Hag 52
    Trisenberg, Trisenberg LI-FL-9497
    LI
    4232368531

Marla's no hag, nor is she 52, if this is really her:

[petercooper]

bttt

[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.

[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.