It is an assumption that if one is living at/below the poverty level that the person doing so is going through life without basic necessities.
The government defines the “absolute poverty line” is the threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health.
So the government thinks that if you are living below the poverty line, you are not able to survive. But has anyone ever stopped to think about what one could have while living at the poverty level? The poverty level in the US is $10,400 per yr. This year I will spend approx $1050 a month and live very near the poverty level by doing so. That must mean I am suffering and going without all kinds of necessities though right? How could one live a normal life while spending only $10,400 a yr? It would be impossible right?
In truth, I will afford myself everything I want throughout the yr while living near the poverty level. I will do so without a budget and without even trying to curb my spending habits (but I have different habits than most).
Monthly bills:
- Rent for apartment: $600
- Gas bill: $35
- Electric bill: $35
- Cell phone: $40
- Internet: $45
- Gas for auto: $50
- Insurance for auto: $70
- Groceries: $152
- Netflix: $17
Note: I live very close to where I work and as a result only put gas in my car every 3 weeks. This is not an accident though, I chose the place I live based on 2 factors: cost and distance to work. The place I chose is close to work and inexpensive.
I could find ways to spend less money (NFLX is not a necessity, bike to work, eat cheaper foods, get a less nice apartment). Doing these things could drop my spending the $177 to get me to the poverty level. But I am still living near the poverty level (spending $1044 a month and poverty level is $867). Note: This assumes that people living at/below the poverty level pay zero or negative taxes, but I think that is a safe assumption to make.
Just wanted to point out that living at the poverty level is not an impossible task. There are exceptions to this rule, if you live in NYC then you probably can’t do this, but most of you out there in www-land could live fairly normal lives at the poverty level.
We Americans are very adept at living above our means and buying all kinds of extra stuff. I think that living life more simplistically makes life happier, less stressful and makes us more grateful for those things that we do have.
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Wonderful budget. I think it’s even possible to survive on much less money, and Gandhi is a wonderful example of this. He ate just three bowls of white rice each day for most of his life, and lived to be 78, when he was assassinated. Oh, and he didn’t have health insurance either.
Also, our idea of “shelter” has become so luxurious that it sickens me sometimes. Before we even settled in this glorious land, the native Americans survived JUST FINE in tipis that were only an inch thick. Somehow, they SURVIVED and lived HAPPILY inside these tipis in extremely cold weather.
Boy, you must be getting a lot of adult videos from the Netflix…you can’t be much of a ladies man on $1050 a month. And that’s sad.
Where are your taxes? Most people on welfare are older and have disabilities or a women with small children – Where are your medical, child care expenses? Maybe you should leave that tooth that’s been hurting until you can afford it – then you can see how much that costs. Who else is paying for your food? Does mommy take care of you? And if you have a job (most of us do and have to pay for social security, etc.) where are the expenses of your job? You’re driving a car – How are you saving for that? Your car has no expenses except for gas? No new tires? How are you going to afford a car when this one is no longer drivable? Do you ever want to get out of your hovel? Or don’t you think that those controlled rent places will put up with you forever? Should I mention savings – or don’t those trust babies think about such things? Any education expenses?
This article is nonsense! I think you are suffering from oxygen depletion.
You made alot of different points. I will try to address them all.
I have health care w/ my job. Dental too. Most full-time employees do.
There is no rent control in ABQ, NM. And my apartment isn’t lavish, but it is good enough. It is clean, close to work, safe, etc. It even has a Washer/Dryer in it.
I was out of the house on college scholarship 2 weeks after high school and have been self-sufficient since then (no money from parents since high school). And I’m employed. And I’m paying taxes. And I’m insured.
As far as taxes go, people who make less than $32K/yr do not pay taxes (only 60M Americans out of 300M Americans pay taxes). So people close to poverty level don’t have to worry about paying taxes, actually they receive subsidies from the gov’t. The US has spent $10T on those people in the last 50 yrs. You can’t really say that people close to the poverty line need to worry about paying taxes.
My financial situation is much improved since publishing the article. I now have a roommate and my rent/utilities are cut in half. I now have $335 more dollars a month. We can dump that money into car expenses, savings, etc.
Don’t have any kids. But having kids does make you eligible for much more subsidies and health care benefits than without kids (and by that I mean health care/subsidies at someone else’s expense). Having kids would increase my cost of living, but being a male I couldn’t have them on my own. So there would be a female in the picture who could help on some of the expenses, either through a job of her own or by providing child care, etc. Adding a female & kid to my equation wouldn’t just be adding expenses only, there would be some added income or less expenses that would go along with the kid.
I currently have, and have had for most of my adult life, 2 jobs. I teach college math at night as a second job. And I currently save ~ $5000 month (80+% of my income).
Like I said, I was on academic scholarship for my undergrad education and paid cash for my graduate degrees. So no education expenses.
I think that covers most every one of your comments/questions.
I think the biggest difference between me and the rest of the world is that I spend what I need to spend, not what I can spend. Thats the main difference. I could spend a whole lot more money if I wanted/needed to, but I don’t.
No, you have ignored most of my questions and most important, you ignored the jist of my comment. The taxes are ONE expense that you have ignored in your fantasy budget. But, since you are fixated on taxes – I do believe that you should look at IRS.gov and search for tax tables. With the income that you say you have, I think that taxes would show up on your expense list.
But, by ignoring the questions, you have answered them. You don’t have kids, yet. You’re not married, yet. You don’t have any medical problems, yet. You’re not old, yet. You are afraid of home ownership – and who can blame you. You have a job that is paying well, for the time being. Not a person with a lot of life experiences and no inclination of finding out how the money flows.
You have been sheltered from the problems that most of people have. I’m not losing sleep because of your situation and I’m glad that you got welfare in the form of a scholarship – but to suggest that other people want to live in horrible conditions, is wrong. I believe it was George Carlin that said “The problem with the American Dream is that you have to be asleep.”
Yes, sometimes people make stupid mistakes. To suggest that everyone is where they invisioned, hoped for and worked for, is delusional.
And, yes, the government has wasted trillions on the illusion that they are doing something, by creating agency after agency to deny “benefits” and by paying for study after study on why this doesn’t work, so they can ignore the information that they collected. The only benefectors of this is the government workers, who are employed by the government. And the fortunate of us are lulled into a stupor of thinking that a “safety net” actually exists.
The illusion that government actually does good for America’s poor is nuts. $10 trillion later and nothing to show for it. Poverty rates were declining all the way UP TO the birth of institutionalized welfare in the 60′s.
Yet people still cling to the notion that confiscating private property and giving it to the welfare system is going to make the world better…pure insanity!
A few things to consider:
-many payroll taxes are mandatory and still paid even by those at or below poverty line (I’m assuming you’re working here to make the $1K/mth for expenses). Not huge, but still adds up to more than $100 in this example depending where you live (7.2% for SSA and another 1.35% for Medicare alone)
-you’re not factoring in amortization of capital costs, like car, TV/DVD player for playing NFLX movies, cell phone, refrigerator, washer/dryer, trash can, some minimal clothes expense, etc. Doesn’t have to be a lot each month, but likely to come in at least $100 for your example here.
-you’re missing water and trash utilities, although I understand that some municipalities provide these free, so maybe you’re fortunate there?
There are a couple others that would make your example more realistic, but you get the idea. Regardless, none of that changes the point of showing people that they can live on a lot less than they likely do currently.
It might be useful also to think about your version as a short term (eventually unsustainable without capital purchases) subsistence budget paired with a longer term budget including capital items for rosier times.
I think the other good add to this would be talking about how people can actually make something like this happen, since most people wouldn’t be able to adjust their lifestyle to this without some practical help. My personal opinion is that it boils down to your surroundings and social circle, but at root is about your own self-image. If you’re in an expensive locale and surrounded by friends wanting to go out and spend money all the time, you’re going to have a very hard time practicing a budget like this. To successfully live this, you’ll need an internal strength of belief in your self-image (not defined by outward things) and priorities in life that let you confidently live in a different fashion from almost everyone you know. That’s the biggest point people don’t understand in making these types of changes, not the budget numbers.
Yes, Rob and John, I do agree with you for most of what you were saying.
I have worked for 38 yrs, most of that time I had two jobs and a great deal of overtime; no financial help from anyone, but I was getting close to retirement and THEN the bottom fell out.
The misperceptions of the “poor” are so exagerated that it really makes it impossible to live.
For instance, I was REQUIRED to get a disability designation. This was NOT my choice, it had nothing to do with helping me – It was my employer’s choice to fire me. No help from ANY governmental agency to protect my job. No help from the legal sector. The excuses to do this to me was, “there is always welfare” and “we was jus’ a tryin’ to he’p”. The insurance company took away my retirement (ALL of it and FOREVER – no help anywhere to protect my retirement) and gave me a tiny benefit. Now the government and the media seems to think that because I have some medical issues (again, not preventing me from doing anything for my job), it was just okay to do this. Someone that is 20 yrs old can live like this, why can’t you? I do not have the money to pay for things like clothes (I did spend $35 last year), shoes (six years old) dental (six teeth were broken out in an assault), glasses (8 yrs old), insurance ($900/mo. when I was fired, alot more now that I’m “disabled”), my internet connection and phone are borrowed expenses and I have to pay for the doctors that I was FORCED to get, in order for my employer to fire me, and BARRED from working for anyone. Yes, I should have been in a better climate because my heating bills is a bit more that this article thinks that I can afford. I am cold all of the time (even though I wear a coat at home), starving, ill and I have no hope for the future and there is NOTHING that I can do to help myself.
I’m sorry that I reacted with a bit of vengeance, because not everyone is in this situation. I did save money for throughout my life. All of this work was for not, because I have lost all of my financial security by GOVERNMENTAL scams. Now they are trying to get my house. I’m one step from losing my home, because I don’t have the money to pay MORE doctors to tell me that I’m still ill. This enables the medical industry to take my paid-off-home. If I don’t do this I will lose this tiny “benefit” and ALL of the money that I have already gotten. The DFS tells me it’s okay, because, although they don’t have any housing here, they will pay (YOUR) money ($75,000/yr.) to live in. And, she smiles, all the drugs that you want (like I want to live that), you will get $10/mo for “personal expenses”! Wow, what a system. It makes a difference on who to blame, when we are griping about where the money goes. And it surely doesn’t go to the “poor”. You might know someone who has the resources, the health and the support to live without money. Not everyone has that. No word about what Obama’s “help” is going to do. I do not qualify for the $250 for “the disabled” and I know that he has cut some “services”, which did not help me, I cannot speak for anyone else.
Ghandi and Jesus would be institutionalized in this country for the crime of poverty.
@John K. Lunde – John, excellent points you brought up, especially about the breakout btw short-term and long-term budgeting. Short term most of us can cut back on expenses, and long-term it helps to plan out a capital replacement savings strategy.
Thanks for the input!
@Kittyfool – Can you explain in a bit more detail, maybe starting from the beginning what happened with the “forced” disability, losing your job, and the insurance company erasing your retirement account?
This all sounds like grounds for legal action.
I don’t have a short way to explain all of the heinous things that have been done to me. But I will try to explain the SOME of the legal issues that are aimed at harming the “poor”, as it has been explained to me. The myth of “pro bono” is one of those things that I was unable to find. I did search for a lawyer that would help; I called everyone in the phone book, I searched and requested help through the internet, I even called the prolific lawyers on TV. I did not find anyone to help. Another perception that we have and are told by the government is that the “poor” can get legal assistance. This is true for an extremely narrow definition. They will help for things like domestic violence, landlord-renter problems, etc. They will NOT help me, because I “might be able to get a judgement” that COULD help me (like keeping my job or retirement). We surely don’t want to actually help the poor!
Yes, it is definitely illegal to fire a person because of a disability, according to the Federal statues. They even say that the Federal is above the state law. In practice and reality they send all complaints to the EEOC. The EEOC is a STATE entity, so they follow their state laws. In my case, EEOC said that since I reside in a “right-to-work” state that my employer had the right to fire anyone for anything, including the color that they had, the sex they were, even if they “wore the wrong color of socks to work”. (I did call the national EEOC to complain – they said that all of that is done state to state, the only thing that the national EEOC does is to give out the phone number for your state).
I’ve been unable to find anything that supports what an insurance company can do or not. I was even in the dark about my retirement – I believed, all of these years, that this was maintained by my employer. I looked at all of the paperwork and NONE of that said anything about the insurance company. So that came as a rude awakening to me that the insurance had all of the control of my retirement. Since the “disability benefit” was a great deal LESS, you can guess which they did. I’ve been told that I had “disability insurance”. I cannot find ANYTHING that says that they could take away my retirement, because of a disability. So, all by myself, I was placed in the position to fight for my job and my retirement and my health against “the system” without any support from anywhere. I’ve written the insurance company to find out how to get the regulations or laws numerous times and they have ignored me. Now, because I don’t have the money to pay for the doctors (and they are NOT cheap, just because I’m po’) that are REQUIRED every year, they are threatening to take ALL of the “benefits” that I have received in the past two years. The endless government agencies that are in place to “protect and advocate” the poor, could care less.
Yes, the government is throwing away our money, it surely is NOT going to the “poor”. The system is fraught with hands to grease: doctors, hospitals, nurses, researchers, policemen, government workers, nonprofits, insurance companies, nursing homes, big pharma, lawyers, etc. All of these people are taking money from the government. All of these people stand to lose their income, by actually helping the poor. So we do NOT help the poor. We make sure that all of our legislation is against self sufficiency. We make sure that the machinery is greased. And the public lives in la-la land assuming that since we are paying for it and the government is saying it, it must be true that the “poor” are taking too much from us.
I do not need any more medical invention.
I do not need any more worthless “training” from government.
I do not need any more “insurance”.
I do not need any “technical assistance”.
I do not need anyone to come to my home to “help”.
I do not need any more tax “benefits”. The $250 missed me completely.
I do not need any more nursing homes.
I do not need any more drugs.
I do not need any more non-existent legal help.
What I NEED is a viable, living wage, HOME job or business. Everything that I have worked for has been taken away from me by the government, so I do not need more scammers. I’m UNABLE to do telephone work. I am ABLE to do everything else that everyone else does. Does the government try to help? NO. NO. NO. and NO.
I WANT some justice. In the current state of the country, I think that is a faint hope.
1. If below the poverty level, you do in fact pay taxes. Actually, those in lower income strata are also more likely to get audited.
2. Your budget presumes never going out and never buying any new stuff. This is not realistic: what happens when the alternator goes out in your car? Even if you *are* a mechanic and can do the repair for free, the parts ain’t cheap. This also goes for your computer (if it breaks or needs costly repairs) and healthcare deductibles (see below).
Also, this presumes no new clothes/shoes/kitchen utensils/etc. Again, this is not realistic.
3. Health insurance, health insurance, health insurance. You obviously have it through work, or it would be on your list. Add a few hundred bucks per month, then, because if you have a minimum-wage job, you likely don’t have health coverage through work. Also, pray that you never get really sick or seriously injured, or you’re toast: #1 cause of bankruptcy in the US is healthcare costs.
This is the elephant in the room, right? Until we, as a nation deal with our broken healthcare system, shaving a few bucks off by dropping Neflix is more or less pointless.
4. So the budget above is for a single person… (Dating isn’t cheap; even cheap dating isn’t cheap!)
There are probably more, but you get the idea. Your writing is good, and I see your point, but the argument fails because it excludes both currently-existing but unlisted costs as well as unforeseen expenses, which occur to all of us at least once a month, unless you’re *extremely* lucky.
On paper, you can make it look easy, but real life is a totally different story– that’s because life does not feel the need to constrain itself to your budget projections.
hahhaha!!!
spending $1044 a month and at Poverty Line?
Now read this –
Here in India if someone has that capacity (to spend $1050 a month) means he / she is an UPPER MIDDLE CLASS fellow !
For more info look here – http://en.wikipedia.org/wiki/Below_Poverty_Line
God created us? really? Thank God!
@jordan – I agree there are some deficiencies in Mr. Bennett’s analysis, but the point he was trying to convey was that we should all take responsibility for our lives and ‘if there is a will there is a way.’
Mr. Lunde’s comment best summarized the deficiencies by breaking into long-term and short-term budgeting. Mr. Bennett captured the short-term aspect quite well, but left out planning for capital items that need replacement. These costs should be forecast and amortized to include in the budget estimate.
The big takeaway, however, is that we must do everything we can to succeed on our own. If you cannot afford to take a date out to dinner, cook in or settle on meeting for coffee. If your income falls short find a second job and learn new skills that will advance your career.
Until this country goes entirely Socialist we all have the chance to succeed. No matter how much it sucks at any given time we can cut back, push harder, and make the futures we want.
I make about $8000/year. I have to pay just over $1000 in taxes. This seems absurd to me, but I have to do it. I completely agree that people live outside of their means, and I have decided to live simply. My combines monthly expenses with my partner is only $1000/month. He also makes about the same as I do. I get your point, but you are mistaken when you say that people around and below the poverty line don’t have to pay taxes and that we actually get money from the government. Ha! That will be they day. Maybe I just don’t know what program to look into, but every year I get slapped with a huge tax bill. I am technically self-employed (as in I get a 1099 because my employer doesn’t want to have to deal with taxes) so I get penalized for making any money. I could make $100/year and still have to pay 15.3%. You could say to get a new job, but that just isn’t possible. I look everyday for jobs – for the past 9 months. I live in Oregon where the job market is horrible but this is where my family is and if I moved, I would incur more expenses traveling to see them. I do the best I can on what I have, but Kittyfool is right. What happens when I need to go to the doctor. I have no health insurance. I don’t drive a car so I don’t need to worry about that, but the brakes recently went out on my bike and that is costing me $50 to fix. I am young and healthy, with no kids, but what if that changes. I couldn’t afford to live.
@Andee – Let’s not forget that the most insidious tax of all, which disproportionately effects low-mid income earners is inflation. The Federal Reserve, in coordination with Congress, annually dilutes purchasing power, transferring the difference to government spending.
Most people are unaware of the process, but inflation taxes us all and most hurts those least able to bear the burden.
I applaud you for living within your means! That is more than most Americans can say.
I understand where Bennett is going with this but even short term where in his budget is the cost of everyday necessities. You know shampoo, soap, toilet paper,ect.
I have a family of four with two working adults and I work two jobs. That being said we average 1,800 dollars a month. We have two car payments, daycare expenses, electiric bill, car insurance, phone bill, rent, gas to get from our low income rural home to work and back, food, daily necessities, cost for the kids school fuctions(feild trips are no longer free thanks to government cuts) car maintenence, ect.
We have no health or dental insurance as we are not offered it through either of our jobs and we can not afford the out of pocket expence of puchasing it ourselves. We pay our taxes and do our best to make ends meet at the end of each month.
I know how it feels to not be able to miss a day of work because your sick. I recently had an absessed tooth that eventually infected three of my theeth due to not being able to afford to get it fixed. For three months I went in to work in pain, living off ibuprofen. I finally had to get a loan to be able to afford the $500.00 dollars it cost me to get the teeth pulled. We do not live beyond our means but instead are trying to find the means to live.
We dont go out to eat and we scrimp and save to make sure our children have the basic necessities like clothes, shoes, ect. We have learned how to do without the extras, and make the best of what we have. Living this way was never my dream. I wanted to be able to give my children a better life than this.
The truth of the matter is that while the rich keep getting richer the poor keep getting poorer and no one really wants to do anything about it. They all say “Oh we need to help these people” but then no action is taken to do so.
The government put in all these stipulations so the agencies that are suppose to help you actually get bonuses for the less number of people they help and the state agencies get bonuses for the more people they kick out of the system. How can the government be expected to help the poor when they are rewarded for turning them away. Kitty I am so sorry that you are going through that. We as a country should be more concerned with making sure thing like that aren’t allowed to happen.
I am still striving for a better life for my family and I. I am looking into going to college, and someday opening my own business. But untill then I will continue to sacrifice for the good of my children and help them achieve their dreams and ambitions.
I am actually living at the “poverty” threshold right now as a waiter/host at a restaurant- I have a nice apartment with all the nice ammenities though- free heat, even a car port, I only spend money on monthly rent and food really. I still go out and have money on the weekends. I do all this with $800 bucks a month after taxes. It can definitly be done- there are some very cheap yet healthy food items like frozen vegetable packages for $1 each.
And how happy are you? There is more to life than survival