Another Very Sad Day for the USA

[H D]

I have found a way! I spend less than I make.



I completely turned around my finances using Dave Ramsey's Total Money Makeover. I only wish I had done it before I borrowed money for college. I'd be doing much better if I hadn't, but I am paying cash for grad school now. Everything else as well. And I'm paying down debt at an incredible rate.

 

[H D]

And I wish I was making $12 an hour...or even full time.:banghead:

 

[Thomas Rogers]

Caymen,



I submit that a single person can make $12/hour, save for retirement and pay 100% of their medical coverage, depending on where they live and what their lifestyle is.



That rate of pay is just under $25K/year. Expect to take home about $20k during the year after taxes (20% tax rate).



I've done some research, and quotes for health insurance for an individual 21 year old, non-tobacco user, in my area of PA range from $75 to $190/month from reputable insurers like Blue Cross, Aetna, United Healthcare, etc. If all one wants is catastrophic care with a high deductible (perfect as bridge insurance for some young people until they get married) then $38/mo is all that is needed. Source for the quotes above is ehealthinsurance.com.



So, how can someone live on $25,000 a year, or $20,000/year take home?



Well, first things first...start with the big-nut items and the available $20,000 annual take-home:



1. Housing of up to 1/3 take-home pay, $500/mo, $6,000 annually. Balance....$14,000



2. Food of $100/week, $5,200 annually. Balance.... $8,800



3. Savings of 10% of gross, or $2,500/year. Balance..... $6,300



4. Insurance is $150/month or $1,800 annually. Balance.... $4,500



5. Utilities, cable, cellphone, etc. at $150/month, $1,800 annually. Balance... $2,700



That leaves $225/month for spending money (entertainment, beer, etc).



Note that in the above, transportation is not included. If using mass transit, then that would eat into that $225/month. Or, one would have to save for a used car, and purchase and insure it. Insurance too would cut into that $225/month "throwing around" money.



Can it be done? The simple math of it says that it can. Can it be done by all, everywhere? Of course not. But it CAN be done.



If one wants more, well then they need to make themselves more marketable than the skills that $12/hour dictate.



Also, of all the items above, the $100/week for food for an individual has one living pretty good. My family of 5 doesn't spend anywhere near that per person...not even close. The $500/month for rent is tough for some parts, but not if all you want is a room, a batch and a kitchette...they can be found in most places.



TJR

 

[Rick Kent]

 

[Tom Schindler]

TJR,



You have actually proven that it can't be done. Unless you live in NYC, Chicago, or any other large metropolis with a good public transportation system, you will be required to have a car.



A 21 year old will be spending about $100 to $150/month in car insurance and by the time you figure in fuel and maintenance, it is impossible.



If this person DID live with their parents for free or lived with roommates, then anything is possible.



Don't expect anyone living off that type os budget will be getting anywhere finaicially, anytime soon.





Tom

 

[Thomas Rogers]

Caymen,



I beg to differ. There are places in this country outside of the major metro areas you mention where people can rent, and use mass transit to get to a $12/hour job. In the distant suburbs of Philadelphia, we have pretty good suburban mass transit (buses) that take people between several small cities and various retail hubs (malls). There are a lot of rental units in these "bedroom" communities, and a lot of big-box retail jobs 5, 10, 15 miles away in neighboring towns and small cities. These are linked by mass transit. There is a bus line between King of Prussia, Montgomeryville, Plymouth Meeting, etc, all of which have very large retail outlets and big box stores, and these bus lines service all the nearby towns.



A car is not a requirement for a job. It all depends on where you live, and the proximity to mass transit (or walking distance) between where you live and work. Those that can't afford cars simply factor that in. Yes, it narrows down one's options, but they still have options.



It can be done. Another option is "ride sharing". You know, find someone that works where you want to work or you do work, and that lives somewhat close to you and pay that person for a ride. I know, not very "American", but again, when there are few other options, that one works well.



Granted, you won't get ahead, financially, anytime soon, making that kind of money or living on that kind of budget. But, if people want to get ahead, they have to make their own prosperity.



I wouldn't want to live on $25k/year. But there was a time when I did.



TJR

 

[H D]

I am proof. And I do have a payment on my ST and I pay $83/mo. for full coverage. And I don't live with my parents, and I do pay rent.



I should mention that I have two of these such incomes as my fiance and I have been budgeting together since November, but neither of us is making much. She got on board with me when I mentioned my goals to be entirely debt free in less than 3 years and buy a house after saving a nice portion for a down payment. Then, of course, only a 15 year mortgage will do. It's going to happen and our incomes are only going to increase in that amount of time. Proving that we can live comfortably on our current amount will only rapidly increase wealth building when we are making more.



I actually got offered a job making roughly $47k/yr and turned it down last week because it would have delayed getting my Master's degree. That's how financially secure I feel, even with my low salary. It's more about how much you spend than it is about how much you make.



And I would argue that I am getting ahead. I bet I have more in my savings account right now than a great many and also have less debt. Couple those two criteria together and I feel like a millionaire.



And I also tithe 10% to the church. Then there are other charitable things I do with my money as well.



You say that it absolutely is impossible.

I say that I am doing it.



Again, Total Money Makeover by Dave Ramsey is, I believe, foolproof.



Don't worry, my parents think I'm crazy and don't believe me either. They say I have good goals but they're impossible in today's world. I just say I have the right goals and they're necessary in today's world.

 

[Tom Schindler]

I am proof. And I do have a payment on my ST and I pay $83/mo. for full coverage. And I don't live with my parents, and I do pay rent.



I should mention that I have two of these such incomes as my fiance and I have been budgeting together since November, but neither of us is making much.

You are doing this with 2 incomes, that is a different story. I assume you are living with your fiance, or at least sharing your finances.



I still stand behind my starement that a single person, living alone, would be impossible unless you eat raman noodels 3 times a day.



If my wife and I each had $12.00/hr jobs, that comes out to $24.00/hr. That is livable, though many sacrifices must be made.



Even if you and your fiance are making $10.00/hr, together you are making $20.00/hr.



Totally different scenerio. Try living on only 1 income, then things would be different.





Tom

 

[Thomas Rogers]

Caymen,



You can stand behind it, but the math I showed above shows that it can be done. Rideshare and mass transit are options for some. Walking to work is an option for some. A beater car and cheap insurance is an option for some. All of these will work with the "math" I showed above.



Granted, they won't work for everyone, in every town, for every location, with every type of car, or every mass transit system.



But you said without any qualifications, in other words, as an absolute that with $12/hr one can't pay for their own insurance AND save towards retirement.



Also, I showed how it could be done and pay $100/week in groceries. That is definately more than Ramen Noodles.



The problem with making absolute, unqualified statements is you need only be shown a few (possibly extreme), or even one single case that contradicts your statement and you are essentially wrong.



It can be done. There are people doing it.



Also, I think if you reread what Hugh said, the pivotal point he was making was that he only pays $83/month for car insurance. That fits within the left-over sum in my figures above, the amount remaining for transportation, miscellaneous. Liability insurance alone, even for a young driver, is not as expensive as one might think, if one has a clean record. $100/month is doable.



We all agree that it is very difficult to make ends meet. But impossible? One need only find ONE person doing it. There has to be one....ONE, in a country of about 300M.



TJR

 

[Tom Schindler]

Liability insurance alone, even for a young driver, is not as expensive as one might think, if one has a clean record. $100/month is doable.

I hope Hugh does not just have liability on his vehicle since he said he has a payment on it.



I still stand behind my statement. You can find one person somewhere doing it, but that is only 0.1% that could pull it off.





Tom

 

[H D]

You can find one person somewhere doing it, but that is only 0.1% that could pull it off.

That would only reaffirm my thoughts that 99.9% of the U.S. population is living outside their means.



I was doing it by myself on one income. I was making more at the time but it was still within the range we're talking about here.



We're not living together, but we are working on finances together. It was important to me to get started on budgeting before we get married. I didn't want to surprise her and say, here's how I handle money - live with it. She thought I was crazy at first, too. She surprised me and gave up her iPhone when she saw that what I was saying does work. Of course, I had mentioned that on our salaries, when we were married, an iPhone just wasn't going to make the necessity list. She'll probably go back to it as soon as she gets a little more cushion in her interior design business but it will be worked in as a business expense. I'm ok with that. Plus, she can charge up to $75/hr for that work, even in this economy. It's going to come around.



I mentioned I have full coverage. Collision and all the other little goodies. $1,000 deductible, but guess what? A $1,000 check isnt' going to hurt me one bit. It'll disappoint, but it's there. This time last year I was paying $165/mo. Turning 25 helped a lot. I was going at it alone when it was that much. Be faithful, prayerful and a joyful giver with your finances and God will provide.



You found someone doing it. I'm not the only one either. Dave Ramsey has a radio show where people call in and talk about their experiences. There are couples living on $30k-$40k, in their mid 30s (some younger) that own their house outright, have no debt, and have $30k or more to just spend as they wish each year. That's what I'm working toward. I can already pay cash for most anything that will pop up in my life right now. I look forward to the day when I can write a $30k check for a vehicle and never feel it leave my pocket. Call me ambitious, optimistic, or naive, whatever you want, but the plan is working for me so far - beyond what I even imagined it could have.



"Live like no one else, so later, you can live like no one else." - Dave Ramsey

 

[Thomas Rogers]

Caymen said:

You can find one person somewhere doing it, but that is only 0.1% that could pull it off

Okay, so now you are agree that if you look hard enough you can find some that can live and save on $12/hour. The 0.1% you quote is pulled out of the air (I suspect), so it really doesn't matter for this discussion (I submit). The point is that we agree now that it can be done. Good, that's progress. I'm sure one doesn't have to go far to find individuals living on $12/hour, paying for health insurance, and saving money. Might not be a lot, but surely there are a few in this country.



However, you still cling to your absolutes and a seeming inability to restate things so that you don't contradict yourself.



Even above you said:

I still stand behind my statement.

Really? Why? Why stand behind it when you are so close to admitting (or have admitted) that you were a little dramatic in your statement?



To review; that original statement was:

...there is no way ANYONE could live off of that amount of pay WHILE paying for health coverage and saving for retirement.

Well, that takes me to my big finish.



How, exactly can you stand behind your original, absolute "no way ANYONE can" statement, but then conceed that if you look hard enough you can find someone doing it?



Caymen, if I do anything on this website, it will be to enlighten you and others exactly of the fallacy of speaking and thinking in absolutes.



TJR

 

[Les]

Dave Ramsey, not magic or innovative, just common sense.

 

[Thomas Rogers]

Les,



Must be magic, must be innovative if only 1/10th of 1% can do it. :banana:

 

[Tom Schindler]

Caymen, if I do anything on this website, it will be to enlighten you and others exactly of the fallacy of speaking and thinking in absolutes.

It isn't enlightening anything. You are simply twisting everyones words to find an out. You get your kicks off of it.



Simply put, it is impossible for the average person to do. You can live in the ghetto, drive a POS, etc. and make it off of 10 bucks an hour.



Homeless people live off of much less.



Fact is, nobody making $12.00/hr is living with any type of future. Hugh can say he is, but he is sharing finances with his fiance, so he is actually making more than he leads on to.



I live a very consertive life. I have many toys I could get rid of, but I live on the cheap.



I have a small house (510 sq ft) with a meager $500/month mortgage.

All of my vehicles are paid for with all of them with over 100,000 miles.

I only owe, water, gas, electric, phone, and cable. Nothing else.



Fact of the matter is, in 99%+ of this country, it can't be done. We do not have a decent public transportation in my town. Work is mostly in the suburbs. The suburbs are expensive to live.



It is cheaper to buy a house than it is to rent an apartment.



TJR, as you said it yourself. Figures don't lie, but liars figure.





Tom

 

[Thomas Rogers]

Caymen,



Take a deep breath. Read with an open mind. You just might make yourself a better online communicator if you take this all constructively.



I didn't twist a single word. I restated each and every word as typed them. I didn't characterize you as saying anything you didn't say. I didn't extrapolate, I didn't infer. If anything you have been the one bending and reshaping what you have said.



Caymen, for example, above you say:

Fact is, nobody making $12.00/hr is living with any type of future.

That statement is simply not something you can back up. Why, because:



a) You start by saying it is a fact. Facts are indisputable and void of opinion. But what you said isn't a fact, because...



b)... you then follow it up with the "nobody" quantifier, meaning one only needs to find ONE person to disprove the so-called fact, which arguably one can no doubt do, especially since, and lastly....



c) ...you further qualify the person that you say can't exist one not having "any type of" a future. That qualification is subjective. It turns the whole so-called fact into a matter of opinion.



You see, what one person might consider "some type of a future", you might very will not consider to be "any type of a future." This so-called fact simply becomes a not so thinly-veiled matter of opinion. It essentially is the fodder for a pi$$ing contest.



Do you SEE what I am saying?



Now, if you had said:

I believe that most would agree, anybody facing a lifetime of making $12/hr is probably not looking at that prosperous a future.

Now, what is nice about the statement above is that it isn't presented as a fact. The person stating it is clearly saying what they believe, and what he or she feels most would believe. There is no real way to debate it, discuss, yes, but debate, no.



Do you see how simply dropping the words "The fact is...", and replacing them with "I believe that..." makes one a lot better communicator?



P.S. I am sure you aren't calling me a liar above, right?



P.S.S. My 17yo son is currently making $8/hour, and he is living with a most excellent future ahead of him. Again, not twisting anything, just saying that he is one exception to the "Nobody working for $12/hour is living with any kind of a future." statement.



TJR

 

[Tom Schindler]

I lived with my parents making $4.21/hr. Your son is living with you and I am guessing rent free, or close to it.



You can't compare that to our discussion.





Tom

 

[Thomas Rogers]

Caymen,



Respectfully, when you made your assertion you never qualified any type of living arrangement, an area of the country being lived in, whether a car is assumed required, etc. All of those things are fair game for considering, or not.



TJR

 

[Tom Schindler]

I live off of $4.21/hr while I was 16. My parents parents paid for my food, clothing, shelter, electric, etc. I paid for auto insurance and gas.



I was rich, but that is not "making it" on $4.21/hr.





Tom

 

[Thomas Rogers]

Caymen,



Agreed, it's unlikely that anyone can "make it" by your definition, earning $4.21/hr today, if making it means paying their own way, their own housing, their own food, etc, without assistance.



But, technically, you were talking about $12/hr originally, and you never qualified anything else but paying for health insurance and saving some money. That was it. Those two things can be done when only making $12/hr. You might need to have roomies, you might need to thumb a ride to work or rideshare, etc. But you never qualified those things.



Have a good one...



TJR