Category Archives: Budgeting

Dec9

On Living in the Median

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U.S. Census Bureau

Over on msnbc.com, the Life Inc. section has a fascinating series of articles on living on a salary of around $50K/year, which is roughly the median income in the U.S. It is very interesting, because they have interviewed people from different parts of the country in different stages of life with differing family sizes, which creates a fuller picture of the complexity of this sort of measurement. $50K in Manhattan is not the same thing as $50K in rural Kansas, and supporting a single person on that salary is far different than supporting a family of 6 people.

There are several interesting things this series is making me think about, some about the people being profiled, and some about the commenters.

Many of the people interviewed are doing fairly well. None of them are claiming poverty, which is good, because this is clearly not a poverty level salary, even in New York City. The woman living in NYC is moving in with a friend temporarily, but she is also helping her son to pay for college. Overall, the people interviewed seem to think that this level of salary is doable and it is even possible to get ahead with careful planning.

However, most of the people interviewed couch their discussions in terms of the struggle and effort of living on their salaries. Many have debt, and not all are saving for the future. Even those that are doing well in terms of debt and savings describe the work they do to maintain their lowered bills. Many of the parents talk about not being able to afford another child, and lots of people are trying to pursue education to get a higher paying job. One family even mentions that they would love to have a dog, but can’t take on the extra expense.

In my mind, the worst part is the families that worry about medical bills. So many people are one major medical event away from poverty, which is really frightening. This sort of thing can happen to anyone, no matter how healthy their lifestyle is, or how careful they are. Cancer hits people who eat healthy food and don’t smoke and buses hit people who are careful drivers. Even a relatively minor illness like pneumonia or mononucleosis can be devastating for people who live from paycheck to paycheck with no paid sick days. Add on big medical bills, and savings aren’t much help, either. It is frightening to me to think how easy it is to lose a relatively modest lifestyle, even if you are doing the right things.

I find the comments interesting as well. I am a bit surprised at how many people think that moving away from an expensive place to live is a good option for everyone else. First of all, it is hard to leave a place where you know people and have family to move somewhere else, even if everything else were equal. Secondly, jobs aren’t easy to come by anywhere, so moving seems like a poor choice without a guaranteed job. And finally, moving is expensive! Most people don’t have the kind of money an out-of-state (or even out-of-town) move costs just sitting around.

The other thing that commenters don’t seem to take into account is the idea of paying to live in a good neighborhood, with good public schools. I make a bit over the median, but I still feel like I am struggling at times, because I pay a lot for my mortgage. I am not complaining, because this is how I chose to spend my money. I want my kids to go to good schools, surrounded by kids who come from families that value education. I want to live near cultural opportunities, like the zoo, theaters and museums. I want to give my kids options in extracurricular activities like sports, music and art. I wish everyone could do these things. I don’t understand people who act like doing this sort of thing makes you an elitist that is spoiling your children.

One of the things that I find most interesting about these articles, though, is that these families seem so much more real than the hypothetical family that so many lifestyle articles are aimed at. When I read about all the latest technology gear, and vacations in exotic places, I wonder where all the people that can afford these things are. Even cheap room makeovers seem unrealistic. Who has $1000 sitting around to redo one room in the house? Obviously, there are people that do, and since they are spending more money, it isn’t surprising to see a lot of media directed at them. It is nice to see more normal families in the media, though, and a realistic depiction of what their lives are like.

Nov15

Setting up a Budget Part One: Getting Started

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Lately, I am all about living intentionally. A few years ago I had fallen in a rut of work, dinner, tv during the week, and going with the flow on the weekends. This was not working for me in so many ways. Practically, I was always unprepared for everything. No water bottles at the soccer game, nothing to bring for lunch, so I was spending extra money at work, a messy house when people stopped by. Personally, I was wasting so much time on things that didn’t really matter to me. I actually spent time channel surfing and settling on shows I didn’t really care about, and in that same time frame, I didn’t do crafts or writing because I was convinced I just didn’t have time for that. Professionally, I was finding that I wasn’t as organized or proactive as I used to be, which is disastrous for a project manager. My life was a mess.

Over the last year or so, I have been trying to change all that. The first thing I did was go to the doctor to get a prescription for my Attention Deficit issues. The problems I was having with completing tasks or organizing my life were beyond normal, and I could remember having them all my life. I actually had a wide range of coping skills that helped some, but not all the way. I could master one or two areas of my life for a while, but when I would try to add something else, one of the original balls would fall. See the brilliant chart at the beginning of this Hyerbole and a Half post (heck, read the whole thing! It’s all brilliant!) for a completely accurate portrayal of the first 20 or so years of my adulthood. It is a really funny story (at least in Allie’s hands), but an exhausting way to live life. Other people manage to do things. So, I went off to the doctor, and she totally agreed that medication might help me. I was excited, my life would be in order!

That night, I broke my hand, :( .

No matter, after surgery and physical therapy, I got on board with my life organizing path. I started menu planning. I do laundry regularly now. I started recording the TV shows that I wanted to watch. If I skipped over them too many times when choosing what to watch, I erased them. Now that I don’t watch as much tv, I am much more picky about what I watch. I am caught up on most tasks at work. I crochet. I am able to take the kids to special events they are interested in, or do other fun things with them. I started writing for Gaming Angels. Life still isn’t perfect, but it is more manageable. I do more of the things that I want to do, the things that are important to me.

Now that I am starting to feel that I have some basic organization under control, I am feeling the need to do something about my finances. They are not in terrible shape–I am contributing to my 401K to get the company match, I don’t carry credit card debt–but they are not in good shape exactly, either. My savings account is so anemic I almost might not even bother to keep it. I am constantly coming to the end of my fiscal month with barely enough money to limp along to the next paycheck. Then, when I get paid, I have built up shopping needs, so I go out and spend just a bit too much money.

This is ridiculous, because I make pretty good money. Not wealthy money, but more than enough to get by, save some money and have a few extras. It is true that my mortgage payment is high, but there is no doubt in my mind that my paycheck-to-paycheck living is solely due to the fact that I am just not paying attention to where my money goes. I am coasting along, not doing what I want to do with my money because I am not being intentional. I am committing now to working up a real budget. I wrote out all of my recurring bills, and I am looking at what I can do to reduce those. I don’t think we actually need 400 Uverse channels for instance, and it is past time to cancel the Consumer Reports account I got when I was researching a car purchase nearly three years ago. There are a few other changes I can make, too.

Once I am done with that, I am going to work on setting up a monthly amount to budget for other categories, like groceries, eating out/going out with friends, kids allowance, books, household items, gas, and whatever else we need to get. I want to start saving as much as possible. My first goal will be a much bigger emergency fund. I also want to start a vacation fund, so that we can go on a vacation that doesn’t necessarily involve camping. Not that we are going to stop camping; I just want to do something else, too.

This will be a work in progress, but I feel better about at least starting to focus on this. All of my organization up to this point has put me in a position to be more successful here, too. I have good habits for bringing my lunch to work, and cooking at home, for instance. I am building on what I already have done to make my life even more what I want it to be.