Tuesday, August 26, 2014

Live the Wage Challenge, day 4

DAY 4 (Monday):
Total spent: $62.89
Total remaining: $31.48

After Sunday's dilemma about how to handle a utility bill, I ran into another version of the same problem on Monday with my phone bill. Or to be more precise, my phone/cable/Internet bill, since we pay for all three services together as part of a bundle (which is cheaper than buying just phone and Internet separately). The bundled bill comes to $96.56 per month, which is more money than we had left in our budget for the week, so paying it would mean failing the Live the Wage challenge instantly.

However, I'd already determined that "utilities" were included under housing for purposes of the challenge. So if my phone and Internet service could be considered utilities, then this bill, like my gas and electric bill, shouldn't count toward my $77 budget. But should they be? I tend to think of landline phone service as a basic utility and cable TV as a luxury, but broadband Internet service seems to fall somewhere in between. WebProNews argues that Internet service should be considered a basic utility, as does tech policy expert Susan Crawford in this Time magazine article—but the very fact that they have to make the argument suggests that it isn't universally accepted as such.

A search on "Live the Wage phone bills" provided no help. None of the various articles available online about the Live the Wage challenge addressed the topic of phone or Internet service in any way. However, my search led me to an interesting page at NYTimes.com, which is basically a virtual, interactive version of the Live the Wage challenge. This version of the challenge addresses most of the problems I identified with the real version. You use the minimum wage for your state, rather than the federal minimum; you use your actual expenses for housing, rather than some ill-defined "average"; and you calculate your budget over the course of an entire year, rather than just one week. However, like the real challenge, it's designed specifically for "a single childless worker," making it hard to figure out what your expenses should be if you share a home in real life.

Out of curiosity, I decided to fill in our expenses on this virtual form and see how we did. For most of the categories, I simply took our actual household expenses and divided them by two, since if we were both working minimum-wage jobs, we'd each be contributing exactly half of the household expenses. Since we don't currently pay for our health insurance out of pocket, I used this calculator from the Kaiser Family Foundation to estimate the amount we'd pay for premiums under the Affordable Care Act, then added in the amount we currently pay for out-of-pocket expenses. To estimate our taxes, I used the average weekly amount thoughtfully provided on the Live the Wage challenge page. I also adjusted our charitable donations down to 10 percent of our new imaginary income (after taxes).

Based on these figures, it looks like Brian and I could squeak by on a minimum-wage budget without cutting our current expenses, but it wouldn't leave us much wiggle room: just $854 a year in savings (or $1,708 for the two of us). However, if we cut back to the bare-bones budget that I worked out as an emergency backup plan (which includes other forms of government aid, such as heating assistance and a free emergency cell phone), we could manage to save as much as $7,420 per year. So it looks like in the real world, Brian and I could do okay if we were both earning minimum wage, with some judicious belt-tightening and a little help from our Uncle Sam.

None of this, however, was any help in figuring out how to deal with the immediate problem. Should I count my phone/cable/Internet bill as a utility expense, which is covered under housing, or as a discretionary expense, which comes out of the $77-per-person budget? Or should I just put off paying the bill, which isn't due until September 5, until the challenge was over? Technically, the notice I'd received from the bank wasn't my actual bill; ironically, my Internet provider is the only company I deal with that still refuses to send my monthly bill in electronic form, so in theory, I could just wait until I received the actual paper bill in the mail before paying it. Perhaps by then, the challenge would be over and I wouldn't have to worry about it. But that just felt like sidestepping the issue.

In the end, I decided that the fairest thing would be to cut out the portion of my bill that was for phone service, which everyone seems to agree is a true utility, and count only the cable and Internet portion against my minimum-wage budget. The total for those two services came to $62.89, so after paying it, I have only $31.48 to get through the next three days. All of a sudden, this challenge is starting to look like a real challenge.
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