NOTE: The search function on the blog seems to be acting up again. If you're trying to find a specific entry, I'd recommend either using the labels in the word cloud at right or looking for the title in the list of archived articles. Sooner or later Google will get it sorted out, but there's little I can do to make them fix it any faster.
Every so often, as a reward for taking online surveys, I'll be offered a free or nearly-free magazine subscription. I'm probably confusing the heck out of our mail carrier, because my monthly mail currently includes Mother Earth News (which I actually paid for), the highly intellectual monthly The Atlantic, the almost entirely vapid Redbook, and Kiplinger's Personal Finance. This last one was a sort of impulse purchase; I feel like I'm already pretty good at saving money, but I wondered whether a finance magazine could help me get better at getting my savings to work for me. I have already branched out a bit beyond "stick it in the bank and forget about it," which isn't really a viable strategy when the best annual rate you can possibly get on a savings account is less than 1 percent, but I know I still have a lot to learn.
So far, my reaction to the magazine has been mixed. I find some of the longer articles, like this month's cover story on "How Much You Really Need to Retire," quite interesting and at least somewhat useful. However, most of the articles in the "Investing" section are way too specific to be helpful to me. They tend to focus on which individual stocks are the best choices, while overlooking the rather glaring fact that most investors shouldn't be trying to pick individual stocks at all. (Indeed, as this Forbes article points out, even most professional money managers can't do it well enough to beat the performance of the market as a whole.) So usually, I just skim the articles in this section.
This month, however, I happened across a piece of advice that made me stop and take notice. It was in an article called "7 Stocks for the Next 15 Years," which is all about specific stocks that are good picks for investors who like to "buy and hold" (i.e., buy a stock and then just sit there and collect dividends, rather than wait for it to go up so they can sell it again). What struck me about it was that two of the seven picks were companies with a green focus. Whole Foods Market, according to author James K. Glassman, is poised for growth as "organic, fresh and local food goes mainstream," while Chipotle Mexican Grill, which uses locally sourced veggies and organic pork and chicken, is "growing like crazy" and still has plenty of room to expand further.
Given that so few large companies have a strong focus on sustainability, why is it that such a large percentage of Glassman's favorites for long-term growth fall into this category? He offers a hint in saying, as an intro to his recommendation for Whole Foods, "I love companies that forge an emotional connection with their customers." A company like Chipotle doesn't just sell burritos; it sells ideals. People who eat there aren't just buying lunch; they're buying an image of themselves that they can feel good about. (The company is obviously well aware of this, as its marketing focuses on the ways in which it's different from other big food distributors like its former parent company, McDonald's.)
Seeing these stocks on the best-picks list is encouraging in two ways. It's good to know that this financial expert thinks these two particular green companies are likely to grow and thrive, but better yet is the possibility that seeing the edge they gain from their "emotional connection with their customers" will encourage other big companies to adopt more sustainable practices too. Even if their efforts are no more than greenwashing, just a hint of green spread across a really big base like Wal-Mart's can make a big difference overall. Maybe in the future, companies will fight to earn a place in the "Green 500" Index, and my list of Stuff Green People Like will be a key to the hottest sectors of the market.
Monday, September 8, 2014
Friday, September 5, 2014
Futon Misadventures
So, remember that futon we found at a yard sale way back in July? Well, as it turns out, it took us six weeks to put it together.
This was not a case of simple procrastination on our part. We made our first attempt to assemble the futon just a few days after buying it, only to find that the hardware that came with it—which the buyer had assured us was complete—was actually missing one small but crucial piece. It was a specialized sort of nut, with a screw slot on one end and a hole in the middle. We didn't even know what it was called until I Googled "types of hardware nuts" and found that it was apparently what's known as a cross dowel nut. And, furthermore, it's something you can't just go and buy at Lowe's or Home Depot.
Since we knew the futon had come from White Lotus originally, our next thought was to go there, show them the piece we needed, and ask if we could buy a replacement. When I tried this, the guy at the store said the frames weren't made on site, so the only way to get the one piece we needed would be to order a complete set of replacement hardware from the manufacturer. At first I thought, "Oh, great, that's going to be way too expensive," but when I asked, the clerk said it should be covered under the warranty on the frame, so there wouldn't be any charge. Even though we'd bought the futon secondhand? Yes, apparently that didn't matter. So I happily left him my address and he said they'd order the hardware and send it to me.
When two weeks went by and the hardware hadn't arrived, I stopped by the store again to check on the order. This time I spoke to a different clerk, who said, after checking the computer, that she had this listed as an "in store pickup" and that I would get a call when the hardware arrived. After two more weeks and no call, we stopped in again, and this time the clerk said she couldn't find any information about the order and she'd have to get the first guy I'd spoken to to call me. Several days later, he called and said the company apparently hadn't sent out the order, so he'd ordered it again and he'd call me as soon as they had a tracking number. And finally, after I was starting to wonder whether it was even worth waiting any longer, he called and said there had apparently been some misunderstanding and they now had my hardware in the store. He offered to send it to me, but I didn't want to take a chance on anything else going wrong, so I ran hastily out to the store to get the package.
So on Wednesday night, at long last, we were ready to assemble this pile of pieces that had been sitting for weeks in our spare room into an actual piece of furniture. We opened up the package, examined the contents—and found that they didn't look anything like the hardware for the piece we'd bought. A glance at the instructions enclosed with them showed that the company had apparently sent us the hardware for a completely different style of frame.
Still, we thought, perhaps all was not lost. After all, the only piece we actually needed was that one missing cross dowel nut. A search through the package revealed that the hardware they'd sent us did indeed include several cross dowel nuts—but they were too long. If we tried to insert them into the pre-drilled slots in the frame we had, the hole in the nut wouldn't line up with the corresponding hole in the wood.
The hole in the nut itself was the right size, however, so Brian's first thought was that maybe we could still use the overlarge nut if we simply drilled the hole in the frame to make it bigger. We'd have to drill clean through the wood, which meant the end of the nut would be visible, but perhaps if we stuck that piece on the back part of the futon it wouldn't be too noticeable. However, after a little consideration, he decided to try a different approach. He stuck the nut into a vise, got out his hacksaw, and started sawing the end off the nut. And sawing. And sawing. And, about five minutes later, he showed me the result: a cross-dowel nut that was now short enough to fit in the existing hole.
With that out of the way, assembling the rest of the futon only took about twenty minutes. It took both of us to hold the various pieces in place and fasten them together at the same time, and we had a few minutes' confusion trying to figure out how to switch the three-position frame into its fully upright position (turns out you have to move it into its fully flat position first, then switch it from there), but we got it done.
I guess all's well that ends well, but the whole experience has definitely shed new light on a few old clichés:
This was not a case of simple procrastination on our part. We made our first attempt to assemble the futon just a few days after buying it, only to find that the hardware that came with it—which the buyer had assured us was complete—was actually missing one small but crucial piece. It was a specialized sort of nut, with a screw slot on one end and a hole in the middle. We didn't even know what it was called until I Googled "types of hardware nuts" and found that it was apparently what's known as a cross dowel nut. And, furthermore, it's something you can't just go and buy at Lowe's or Home Depot.
Since we knew the futon had come from White Lotus originally, our next thought was to go there, show them the piece we needed, and ask if we could buy a replacement. When I tried this, the guy at the store said the frames weren't made on site, so the only way to get the one piece we needed would be to order a complete set of replacement hardware from the manufacturer. At first I thought, "Oh, great, that's going to be way too expensive," but when I asked, the clerk said it should be covered under the warranty on the frame, so there wouldn't be any charge. Even though we'd bought the futon secondhand? Yes, apparently that didn't matter. So I happily left him my address and he said they'd order the hardware and send it to me.
When two weeks went by and the hardware hadn't arrived, I stopped by the store again to check on the order. This time I spoke to a different clerk, who said, after checking the computer, that she had this listed as an "in store pickup" and that I would get a call when the hardware arrived. After two more weeks and no call, we stopped in again, and this time the clerk said she couldn't find any information about the order and she'd have to get the first guy I'd spoken to to call me. Several days later, he called and said the company apparently hadn't sent out the order, so he'd ordered it again and he'd call me as soon as they had a tracking number. And finally, after I was starting to wonder whether it was even worth waiting any longer, he called and said there had apparently been some misunderstanding and they now had my hardware in the store. He offered to send it to me, but I didn't want to take a chance on anything else going wrong, so I ran hastily out to the store to get the package.
So on Wednesday night, at long last, we were ready to assemble this pile of pieces that had been sitting for weeks in our spare room into an actual piece of furniture. We opened up the package, examined the contents—and found that they didn't look anything like the hardware for the piece we'd bought. A glance at the instructions enclosed with them showed that the company had apparently sent us the hardware for a completely different style of frame.
Still, we thought, perhaps all was not lost. After all, the only piece we actually needed was that one missing cross dowel nut. A search through the package revealed that the hardware they'd sent us did indeed include several cross dowel nuts—but they were too long. If we tried to insert them into the pre-drilled slots in the frame we had, the hole in the nut wouldn't line up with the corresponding hole in the wood.
The hole in the nut itself was the right size, however, so Brian's first thought was that maybe we could still use the overlarge nut if we simply drilled the hole in the frame to make it bigger. We'd have to drill clean through the wood, which meant the end of the nut would be visible, but perhaps if we stuck that piece on the back part of the futon it wouldn't be too noticeable. However, after a little consideration, he decided to try a different approach. He stuck the nut into a vise, got out his hacksaw, and started sawing the end off the nut. And sawing. And sawing. And, about five minutes later, he showed me the result: a cross-dowel nut that was now short enough to fit in the existing hole.
With that out of the way, assembling the rest of the futon only took about twenty minutes. It took both of us to hold the various pieces in place and fasten them together at the same time, and we had a few minutes' confusion trying to figure out how to switch the three-position frame into its fully upright position (turns out you have to move it into its fully flat position first, then switch it from there), but we got it done.
I guess all's well that ends well, but the whole experience has definitely shed new light on a few old clichés:
- There's more than one way to skin a cat. If we'd simply settled for the first solution we came up with—drilling the hole in the wood to make it bigger—it would probably have worked, but it would also have showed. Cutting the nut down to size with the hacksaw was more work, but a fix for the problem.
- If at first you don't succeed, try, try again. We could have given up on this futon when we first discovered that the nut was missing, or when we found that the hardware stores didn't have a replacement for it, or when our new set of hardware still hadn't arrived after one month, or when we got the new hardware and the piece turned out to be the wrong size. But instead, every time one path turned out to be blocked, we just kept looking for a new one, and in the end, we were able to fix the futon without having to spend a penny. (Although we did have to wait six weeks, so if we'd been under any sort of time pressure, we would have been better off just finding some way to order the nut online and eating the shipping costs.)
- Let the buyer beware. If I'd actually bothered to check the hardware packet at the time we bought the futon and make sure all the pieces were there, we might have been able to avoid this whole problem in the first place.
Thursday, September 4, 2014
Bean counting
This week, Brian and I harvested our first ever crop of lima beans. This is the third year that we've tried to grow them: in 2012 we got only one plant, and last year we tried planting them along the fence behind our cherries and got none at all. But this year, we bought a fresh packet and set aside a whole half trellis for them, and they have positively swarmed over it, even jumping the gap to spread their tendrils to the next trellis over as well. I'm not sure what we did right this time that we didn't do before; maybe the seeds in our old packet were just duds, or maybe it was the cooler weather we had this summer that made the difference. Whatever the reason, I'm not about to look a gift bean in the pod.
Since it's our first time growing them, we weren't sure exactly how to tell when they were ripe. We thought maybe we could just leave them all on the vine and harvest them all at once right before frost, but eventually the pods turned brown and started to split open, and we thought maybe it would be better to pick them rather than risk damage to the beans. At first glance, it looked like our plants had produced quite a bounty already, as the pods we picked completely filled our 2-quart kitchen colander. However, it turns out that, when shelled, two quarts of pods produce a much smaller volume of edible beans—and a much larger volume of empty shells. Once they've been split open, they take up twice as much room, so we filled the colander twice with the empties.
Moreover, some of the beans we removed from the pods didn't look quite normal. They were starting to split open and slip out of their skins. We're not sure whether these mutant-looking beans are okay to eat; I think they probably wouldn't hurt us, but I suspect they won't taste the same as normal beans or cook at the same rate. I'm wondering whether the best use for them might be to set them aside for planting next year, since it looks like they've got a head start on sprouting already. Alternatively, maybe we could sprout them and eat them that way, as a poster called "grainlady" suggests on the GardenWeb cooking forum.
So, out of our original two quarts of lima bean pods, we ended up with about 7 ounces of intact beans, plus about two ounces of the split ones. On top of that, there are still lots of green pods left out on the vines waiting to be picked. And once we've harvested the lot, they'll still need to be dried, a process that's apparently a bit more complicated than I thought. According to this article I found on WikiHow, you can't just put them in a jar and let them sit there until you're ready to use them; if you want them to dry evenly, you have to either spread them out in the sun, string thread through them and hang them up, or bake them on cookie sheets in the oven.
Once all the beans are gathered in and dried, it's not clear whether our actual yield will be more than a pound—about the equivalent of a $1.20 bag from the grocery store, and just enough for one good batch of butter beans with bacon. So all in all, I'm having my doubts about whether growing lima beans is a good use of our limited garden space. We might be better off just buying our limas at the store and using the extra trellis place for more butternut squash, since the three we planted this year have only produced a total of six squash.
Between the limas, the butternuts, and the brussels sprouts that so far have no sign of sprouts on them, it's shaping up to be a pretty disappointing fall harvest for 2014. Our season of mists and mellow fruitfulness may end up being a lot more misty than fruitful.
Since it's our first time growing them, we weren't sure exactly how to tell when they were ripe. We thought maybe we could just leave them all on the vine and harvest them all at once right before frost, but eventually the pods turned brown and started to split open, and we thought maybe it would be better to pick them rather than risk damage to the beans. At first glance, it looked like our plants had produced quite a bounty already, as the pods we picked completely filled our 2-quart kitchen colander. However, it turns out that, when shelled, two quarts of pods produce a much smaller volume of edible beans—and a much larger volume of empty shells. Once they've been split open, they take up twice as much room, so we filled the colander twice with the empties.Moreover, some of the beans we removed from the pods didn't look quite normal. They were starting to split open and slip out of their skins. We're not sure whether these mutant-looking beans are okay to eat; I think they probably wouldn't hurt us, but I suspect they won't taste the same as normal beans or cook at the same rate. I'm wondering whether the best use for them might be to set them aside for planting next year, since it looks like they've got a head start on sprouting already. Alternatively, maybe we could sprout them and eat them that way, as a poster called "grainlady" suggests on the GardenWeb cooking forum.So, out of our original two quarts of lima bean pods, we ended up with about 7 ounces of intact beans, plus about two ounces of the split ones. On top of that, there are still lots of green pods left out on the vines waiting to be picked. And once we've harvested the lot, they'll still need to be dried, a process that's apparently a bit more complicated than I thought. According to this article I found on WikiHow, you can't just put them in a jar and let them sit there until you're ready to use them; if you want them to dry evenly, you have to either spread them out in the sun, string thread through them and hang them up, or bake them on cookie sheets in the oven.
Once all the beans are gathered in and dried, it's not clear whether our actual yield will be more than a pound—about the equivalent of a $1.20 bag from the grocery store, and just enough for one good batch of butter beans with bacon. So all in all, I'm having my doubts about whether growing lima beans is a good use of our limited garden space. We might be better off just buying our limas at the store and using the extra trellis place for more butternut squash, since the three we planted this year have only produced a total of six squash.
Between the limas, the butternuts, and the brussels sprouts that so far have no sign of sprouts on them, it's shaping up to be a pretty disappointing fall harvest for 2014. Our season of mists and mellow fruitfulness may end up being a lot more misty than fruitful.
Wednesday, September 3, 2014
Do I need a paycheck?
Regular readers of this blog have no doubt noticed that I've been posting a lot more frequently for the past few months. That's a positive side effect of a negative event: my biggest client, ConsumerSearch, laid off all its freelancers in June. I've tried contacting other clients, searching the freelance want ads at MediaBistro and FreelanceWriting.com, and offering my services to interesting sites like Wise Bread, The Billfold, and Money Talks News, but nothing has turned up. So I've tried to put my time to somewhat productive use by posting more often here, writing a couple of articles for HubPages, and setting up a little mini recording booth in the hopes of eventually getting some audiobook recording gigs. (More about that in a future post.)
Unfortunately, none of these activities actually brings in any money in the short term. Sure, learning to do voice-overs might get me some gigs eventually, but according to my friend Steve, who's involved in this business, it really isn't any easier than getting writing jobs; both fields are now overcrowded with amateurs willing to work for peanuts. Posting here and on Hubpages will bring in a tiny trickle of Google Ads revenue, but we're talking literally pennies a month; I might be able to increase it if I build up my readership, but that's an iffy proposition. And while it's theoretically possible that this blog will one day attract enough attention to land me a book deal, I'm not holding my breath.
So basically, I've been feeling kind of down lately about the fact that I'm not making any money. And it was only today that it occurred to me to ask myself why.
After all, it's not like we really need the money to live on. Brian and I have always been able to pay all our bills with his salary alone, so mine was just gravy. Having that extra padding in our budget was very useful, of course; it's the main reason we were able to pay off our mortgage as fast as we did. But now that it's all paid off, our expenses have dropped to the point that we actually have plenty of cash to spare even without my income. We can live quite comfortably on what Brian brings home and still have extra cash to put toward our new goal of reaching financial independence.
Yet even though we're doing just fine without my income, I still feel guilty somehow that I'm not contributing my fair share. This doesn't make a whole lot of sense, really, since my income was never anywhere near as high as Brian's, and so my "share," as measured in dollars, was never close to his even when I was working steadily. And Brian has made it clear that he doesn't mind at all being the sole breadwinner for as long as necessary. As he put it, he knows I'm not just sitting around the house watching soap operas and eating bonbons; I'm actually doing and learning useful things, whether they bring in money or not. So what exactly is it that's bothering me? In what way is my current lack of income a problem for us?
Once I actually put the question into words, I realized that what was worrying me wasn't that Brian is currently supporting me; it's that, so long as I remain out of work, I'll never be able to support him.
See, on the Excel sheet where I keep track of all our household finances, I've added a few lines at the bottom to keep track of our progress toward financial independence. I worked out (very roughly) how much additional savings we'd need to provide us with enough income to live on, and then I calculated how long it would take us to save up that sum of money. But below that, I added a few extra lines to track our progress toward partial financial independence: the point at which we'd be able to live on my income alone, so Brian could quit his job if he wanted to. And up until a few months ago, my estimate was that we'd get there in a little over three years. But now, with my income holding steady at zero, this goal is exactly as far away as full financial independence. Until we have enough money in the bank to pay our bills, I won't be able to make up the difference—which means Brian can't quit his job.
Being able to put my finger on the problem this way helps me, at least somewhat, to put it into perspective. After all, it's not like Brian had any intention, or even any wish, to retire next week. Even if I were still working steadily, it would still be a long-term goal. So maybe what I need to do is to focus on the long term for myself as well. Instead of worrying about how I can bring in money right now, I should be thinking about how to improve my prospects in the long term. My efforts to branch out into recording work, for instance, even if they don't yield any results right away, will certainly add to my skill set and make me more desirable as an employee. I can also consider ideas like using my recording setup to add a podcast to this blog, which may help boost its popularity and eventually turn it into a money-maker. I could even take a stab at something completely new, like interior redecorating.
Of course, none of this means that I should stop my current efforts to find new clients or seek work from old ones. It just means that I can stop beating myself up if it doesn't get me anywhere.
Unfortunately, none of these activities actually brings in any money in the short term. Sure, learning to do voice-overs might get me some gigs eventually, but according to my friend Steve, who's involved in this business, it really isn't any easier than getting writing jobs; both fields are now overcrowded with amateurs willing to work for peanuts. Posting here and on Hubpages will bring in a tiny trickle of Google Ads revenue, but we're talking literally pennies a month; I might be able to increase it if I build up my readership, but that's an iffy proposition. And while it's theoretically possible that this blog will one day attract enough attention to land me a book deal, I'm not holding my breath.
So basically, I've been feeling kind of down lately about the fact that I'm not making any money. And it was only today that it occurred to me to ask myself why.
After all, it's not like we really need the money to live on. Brian and I have always been able to pay all our bills with his salary alone, so mine was just gravy. Having that extra padding in our budget was very useful, of course; it's the main reason we were able to pay off our mortgage as fast as we did. But now that it's all paid off, our expenses have dropped to the point that we actually have plenty of cash to spare even without my income. We can live quite comfortably on what Brian brings home and still have extra cash to put toward our new goal of reaching financial independence.
Yet even though we're doing just fine without my income, I still feel guilty somehow that I'm not contributing my fair share. This doesn't make a whole lot of sense, really, since my income was never anywhere near as high as Brian's, and so my "share," as measured in dollars, was never close to his even when I was working steadily. And Brian has made it clear that he doesn't mind at all being the sole breadwinner for as long as necessary. As he put it, he knows I'm not just sitting around the house watching soap operas and eating bonbons; I'm actually doing and learning useful things, whether they bring in money or not. So what exactly is it that's bothering me? In what way is my current lack of income a problem for us?
Once I actually put the question into words, I realized that what was worrying me wasn't that Brian is currently supporting me; it's that, so long as I remain out of work, I'll never be able to support him.
See, on the Excel sheet where I keep track of all our household finances, I've added a few lines at the bottom to keep track of our progress toward financial independence. I worked out (very roughly) how much additional savings we'd need to provide us with enough income to live on, and then I calculated how long it would take us to save up that sum of money. But below that, I added a few extra lines to track our progress toward partial financial independence: the point at which we'd be able to live on my income alone, so Brian could quit his job if he wanted to. And up until a few months ago, my estimate was that we'd get there in a little over three years. But now, with my income holding steady at zero, this goal is exactly as far away as full financial independence. Until we have enough money in the bank to pay our bills, I won't be able to make up the difference—which means Brian can't quit his job.
Being able to put my finger on the problem this way helps me, at least somewhat, to put it into perspective. After all, it's not like Brian had any intention, or even any wish, to retire next week. Even if I were still working steadily, it would still be a long-term goal. So maybe what I need to do is to focus on the long term for myself as well. Instead of worrying about how I can bring in money right now, I should be thinking about how to improve my prospects in the long term. My efforts to branch out into recording work, for instance, even if they don't yield any results right away, will certainly add to my skill set and make me more desirable as an employee. I can also consider ideas like using my recording setup to add a podcast to this blog, which may help boost its popularity and eventually turn it into a money-maker. I could even take a stab at something completely new, like interior redecorating.
Of course, none of this means that I should stop my current efforts to find new clients or seek work from old ones. It just means that I can stop beating myself up if it doesn't get me anywhere.
Tuesday, September 2, 2014
Getting by on $100K a year
Last weekend, I came across a startling article in Money Talks News about the amount of money a family needs to maintain a "normal" lifestyle. (It's part of a series called "The Restless Project," which seeks to address the question of why so many middle-class Americans feel restless—that is, uneasy—about their financial situation.) The author, Bob Sullivan, crunched some numbers and concluded that to live "a normal, decent life" these days takes around $100,000 a year, minimum. That's the amount a family needs to spend, not the amount they need to earn; it doesn't include taxes (which can vary quite a bit depending on where and how you live) or retirement contributions.
Now, admittedly, $100K per year to maintain a middle-class lifestyle isn't nearly as large a sum as the $250K budget that I analyzed in this post last year. At that time, I seriously questioned the claims made on MSN Money that in many parts of the country, a family of four would actually find it hard to make ends meet on this income. Sullivan's figures, at first blush, look a bit more reasonable than the ones used in the MSN money article. His hypothetical family, he says, has two children under 10 (one school-age, one younger) and lives "near one of America’s largest cities — Washington, D.C., or Seattle, or Chicago." They're both employed, they rent a three-bedroom apartment (which makes it easier to calculate their living expenses without all the tax details surrounding a mortgage), and their only debt is a student loan (or two) with a $500 monthly payment. Here's what he estimates this family needs to spend each month just to "feel like it’s at least paying all the bills":
So in short, yes, it really is hard for families today to make ends meet. But there's no need to make it out to be harder than it actually is.
Now, admittedly, $100K per year to maintain a middle-class lifestyle isn't nearly as large a sum as the $250K budget that I analyzed in this post last year. At that time, I seriously questioned the claims made on MSN Money that in many parts of the country, a family of four would actually find it hard to make ends meet on this income. Sullivan's figures, at first blush, look a bit more reasonable than the ones used in the MSN money article. His hypothetical family, he says, has two children under 10 (one school-age, one younger) and lives "near one of America’s largest cities — Washington, D.C., or Seattle, or Chicago." They're both employed, they rent a three-bedroom apartment (which makes it easier to calculate their living expenses without all the tax details surrounding a mortgage), and their only debt is a student loan (or two) with a $500 monthly payment. Here's what he estimates this family needs to spend each month just to "feel like it’s at least paying all the bills":
Rent: $2,200I can't reasonably compare this family's monthly budget to ours, since our situation is so different from theirs. We own a house rather than renting an apartment, we don't live in a major city, and we have no kids to support. However, I can point out several points that struck me about this budget at first glance:
Healthcare contribution: $600
Cell phone: $200
Utilities (including TV): $300
School tuition, supplies (for older child): $1,500
Day care (for younger child): $1,500
Food: $500
Car loan and insurance, or mass transit: $500
Student loan: $500
Clothing and other goods: $500
TOTAL: $8,300 per month, or $99,600 per year
- First of all, Sullivan is assuming that this two-income family needs to pay, not only to keep their younger child in day care, but also to send their older one to a private school. He notes that the family could save $3,000 a month by arranging "for the older child to attend free public school and the younger child to stay home with a parent," but this would halve their income. However, the two expenses aren't really equivalent. A child under 6 needs to be supervised during the day, either by a parent or in day care, but a child over 6 doesn't need to be in a private school. One of the things that Sullivan says makes budgeting so hard for families is that they're "forced to pay too much money for decent housing near decent schools," yet his sample family seems to be paying a premium for housing and paying for private school tuition on top of that. Sending the older kid to public school, which should be a reasonable choice if the family lives in a good school district, would cut their annual expenses by $18,000.
- As many commenters on the post pointed out, the $500 a month budgeted for utilities plus a cell phone probably includes some fat that could be cut. For instance, they probably don't need to pay for both cell phones and a landline. They could save $50 a month or so by cutting the landline (or replacing it with a cheap VOIP service, such as Ooma), or, alternately, they could keep the landline and supplement it with cheap prepaid cell phones. Here's one area where our household budget does apply: we pay about $96 a month for basic cable, Internet, and a landline phone, plus $4 a month for a prepaid cell phone for emergency use only. If that's too basic, how about a pair of smartphones from Republic Wireless for $10 a month? That brings the total for phone, cable, and Internet service to just $106 per month, a little more than half what this family's currently paying for its cell phones alone. Add in another $121 a month for gas and electricity (the national average according to the White Fence Index), and you've cut this expense from $500 a month to $227, for an annual savings of $3,276.
- The health care cost is perhaps a little high as well. According to this NBC News article, an average family's share of its health care costs comes to $4,565 per year, or about $380 a month. That doesn't include copays or deductibles, which are typically at least $1,000, so add in $120 a month for that and you're up to $500 a month total, shaving another $1,200 a year off the budget. (Of course, this number depends a lot on where in the country you live. Many people who commented on the post said that for their area, Sullivan's $600 estimate was actually way too low. But since we're talking about a hypothetical average family, I'm just going with the national average.)
- His estimated cost for food, by contrast, appears to be on the low side. According to the USDA's latest figures, even on the "Thrifty" food plan, a family with two children aged 3 and 8 can expect to pay $603.40 per month for food. So fixing that estimate adds another $1,241 a year to the budget.
So in short, yes, it really is hard for families today to make ends meet. But there's no need to make it out to be harder than it actually is.
Friday, August 29, 2014
Live the Wage Challenge: wrap-up
DAY 7 (Thursday):
Rite Aid: $2.94
Total spent: $2.94
Total remaining: $21.49
So, as you can see, I made it through the Live the Wage challenge with money to spare. My only expense was the bottle of vitamins I decided to go ahead and buy at the Rite Aid after initially hesitating over the purchase on Tuesday. And as it turned out, they cost me only $3 rather than $5, because I had a two-dollar reward that I'd forgotten about ready-loaded onto my Wellness Plus card (the Rite Aid store loyalty card). So in the end, I had nearly one-seventh of my $154 budget for the week left over, and I didn't refrain from buying a single thing that I would have bought under normal circumstances.
Our experience on the Live the Wage challenge was clearly not typical. Representative Jan Schakowsky of Illinois says she "didn't quite make it" through the week when she tried the challenge, and she concluded that it was "impossible" to survive on $7.25 an hour. Representative Tim Ryan of Ohio ran out of money on day 5 with the purchase of a bag of trail mix. And former Ohio governor Ted Strickland ran out on Thursday evening, despite having made such sacrifices as walking to a meeting a mile from his home and eating from the McDonald's dollar menu.
So why was this challenge so easy for us when it's so hard for most people? I think one major reason is quite obvious: we're a married couple with no kids. That meant we had $77 for each person in the household, which gave us a lot more wiggle room in our budget than Strickland (who had only $77 for himself) or Ryan (who had to support a family of five on a $154 budget). As I've observed before, it may not be true that two can live as cheaply as one, but it's certainly the case that two people together, sharing the cost of housing, food, and all sorts of incidentals, can live a lot more cheaply than two people apart. Yet having kids can easily eat up all that extra income and then some; Ryan's biggest budget-busters during the challenge were $25 worth of "vitamin D drops and other incidentals" for his newborn child and "summer camp for his 10-year-old daughter."
Clearly, though, being a childless couple wasn't our only advantage. Schakowsky was in exactly the same situation, with $154 to support herself and her husband, and she still exceeded her budget for the week by $4.47. CBS also quotes her as saying that on a budget this strict, "There’s no way that you can stop into a Starbucks"—even though Brian and I did exactly that on Sunday. So what did we do that Schakowsky didn't?
Her account of her experience gives a couple of clues. First of all, she notes that one of her biggest expenses was "Driving 140 miles round trip to my granddaughter’s birthday party," even though she counted only the cost of gas and tolls and not car maintenance or insurance. Brian and I, by contrast, drove our car only once during the whole week, when we made our big grocery-shopping trip on Friday. The rest of the week, the car sat in the driveway as Brian took his bike to work. Admittedly, this is an unusually small amount of driving even for us. Our usual Thursday-night dance practice was canceled due to low attendance, so we didn't have to make a trip down to Princeton for that. We also didn't drive up to Morristown for the Minstrel concert on Friday night, which we typically do at least once or twice a month, and we were fortunate enough to have a whole week of sunny weather, so Brian didn't have to drive to work even once. But even if we'd done our usual amount of driving, it's unlikely we would have had to buy any gas, since we'd just filled up the tank on the 20th, and a full tank usually keeps us going for around two weeks. And even if by some chance we'd started the challenge with a nearly empty tank, we could still have gotten by with only a few gallons—about $13 worth—to get us through the week. That wouldn't have broken our budget.
Schakowsky also observes in her account that "pets are luxury," saying "Our family dog Lucky is disabled and his needs quite expensive." Well, we also have a pet, but we didn't need to purchase anything for her during the week. A big bag of her favorite dry food costs only $25 from the PetSmart and lasts her for months; a bag of her new cat litter (which I'll tell you about sometime) is around $20 and is also good for several months. If we had to take her to the vet for some reason, that would be a significant expense that would almost certainly put us over our $77-per-person budget, but typically, all she needs is a yearly checkup, which is an expense we can plan for. Adding up all the costs of caring for our cat over the course of a year, I find they come to around $1,086, which works out to $20.88 per week. So if the Live the Wage challenge were spread across a whole year rather than compressed into one week, the cost of pet care would definitely be manageable. Of course, our pet isn't disabled like Schakowsky's, so it's not surprising that her needs are less expensive, but I think an equally big factor is that she's a cat, and as these figures from the ASPCA show, cats are cheaper to own than dogs in general.
Finally, Schakowsky notes that on the Live the Wage challenge, "We didn’t have enough money to pick up our dry cleaning, nor could we do our laundry in the coin operated washer and dryer in our D.C. apartment building." We, by contrast, did two loads of laundry in our very own washer and hung them on the line (though one of them ended up getting caught in an unexpected shower and had to go in the dryer after all). The cost of both loads, factoring in detergent, water, electricity, and gas, was almost certainly under a dollar, and most of that is covered under utilities anyway, which aren't part of the $77 budget. As for dry cleaning, in general, we just don't do it. I think the only garment we actually own right now that requires dry cleaning is Brian's good suit, which hasn't been worn in over a year.
So, to sum up, here are my rules for making it through the Live the Wage Challenge, along with some ideas for how they could be applied to real people trying to survive long-term on the real minimum wage:
This just brings me back, full-circle, to my biggest gripe about the Live the Wage challenge: doing it for one week simply isn't realistic. In one way, it's too easy, because you know it'll only be a week, so you can just put off large, expected expenses like the cable bill (or pay for them ahead of time). Yet in another way, it's too hard, because you can also get hit by large, unexpected expenses, and you don't have any time to plan ahead for them. As a test of your ability to live on the minimum wage, I think the simulator at NYTimes.com is actually much more useful.
Rite Aid: $2.94
Total spent: $2.94
Total remaining: $21.49
So, as you can see, I made it through the Live the Wage challenge with money to spare. My only expense was the bottle of vitamins I decided to go ahead and buy at the Rite Aid after initially hesitating over the purchase on Tuesday. And as it turned out, they cost me only $3 rather than $5, because I had a two-dollar reward that I'd forgotten about ready-loaded onto my Wellness Plus card (the Rite Aid store loyalty card). So in the end, I had nearly one-seventh of my $154 budget for the week left over, and I didn't refrain from buying a single thing that I would have bought under normal circumstances.
Our experience on the Live the Wage challenge was clearly not typical. Representative Jan Schakowsky of Illinois says she "didn't quite make it" through the week when she tried the challenge, and she concluded that it was "impossible" to survive on $7.25 an hour. Representative Tim Ryan of Ohio ran out of money on day 5 with the purchase of a bag of trail mix. And former Ohio governor Ted Strickland ran out on Thursday evening, despite having made such sacrifices as walking to a meeting a mile from his home and eating from the McDonald's dollar menu.
So why was this challenge so easy for us when it's so hard for most people? I think one major reason is quite obvious: we're a married couple with no kids. That meant we had $77 for each person in the household, which gave us a lot more wiggle room in our budget than Strickland (who had only $77 for himself) or Ryan (who had to support a family of five on a $154 budget). As I've observed before, it may not be true that two can live as cheaply as one, but it's certainly the case that two people together, sharing the cost of housing, food, and all sorts of incidentals, can live a lot more cheaply than two people apart. Yet having kids can easily eat up all that extra income and then some; Ryan's biggest budget-busters during the challenge were $25 worth of "vitamin D drops and other incidentals" for his newborn child and "summer camp for his 10-year-old daughter."
Clearly, though, being a childless couple wasn't our only advantage. Schakowsky was in exactly the same situation, with $154 to support herself and her husband, and she still exceeded her budget for the week by $4.47. CBS also quotes her as saying that on a budget this strict, "There’s no way that you can stop into a Starbucks"—even though Brian and I did exactly that on Sunday. So what did we do that Schakowsky didn't?
Her account of her experience gives a couple of clues. First of all, she notes that one of her biggest expenses was "Driving 140 miles round trip to my granddaughter’s birthday party," even though she counted only the cost of gas and tolls and not car maintenance or insurance. Brian and I, by contrast, drove our car only once during the whole week, when we made our big grocery-shopping trip on Friday. The rest of the week, the car sat in the driveway as Brian took his bike to work. Admittedly, this is an unusually small amount of driving even for us. Our usual Thursday-night dance practice was canceled due to low attendance, so we didn't have to make a trip down to Princeton for that. We also didn't drive up to Morristown for the Minstrel concert on Friday night, which we typically do at least once or twice a month, and we were fortunate enough to have a whole week of sunny weather, so Brian didn't have to drive to work even once. But even if we'd done our usual amount of driving, it's unlikely we would have had to buy any gas, since we'd just filled up the tank on the 20th, and a full tank usually keeps us going for around two weeks. And even if by some chance we'd started the challenge with a nearly empty tank, we could still have gotten by with only a few gallons—about $13 worth—to get us through the week. That wouldn't have broken our budget.
Schakowsky also observes in her account that "pets are luxury," saying "Our family dog Lucky is disabled and his needs quite expensive." Well, we also have a pet, but we didn't need to purchase anything for her during the week. A big bag of her favorite dry food costs only $25 from the PetSmart and lasts her for months; a bag of her new cat litter (which I'll tell you about sometime) is around $20 and is also good for several months. If we had to take her to the vet for some reason, that would be a significant expense that would almost certainly put us over our $77-per-person budget, but typically, all she needs is a yearly checkup, which is an expense we can plan for. Adding up all the costs of caring for our cat over the course of a year, I find they come to around $1,086, which works out to $20.88 per week. So if the Live the Wage challenge were spread across a whole year rather than compressed into one week, the cost of pet care would definitely be manageable. Of course, our pet isn't disabled like Schakowsky's, so it's not surprising that her needs are less expensive, but I think an equally big factor is that she's a cat, and as these figures from the ASPCA show, cats are cheaper to own than dogs in general.
Finally, Schakowsky notes that on the Live the Wage challenge, "We didn’t have enough money to pick up our dry cleaning, nor could we do our laundry in the coin operated washer and dryer in our D.C. apartment building." We, by contrast, did two loads of laundry in our very own washer and hung them on the line (though one of them ended up getting caught in an unexpected shower and had to go in the dryer after all). The cost of both loads, factoring in detergent, water, electricity, and gas, was almost certainly under a dollar, and most of that is covered under utilities anyway, which aren't part of the $77 budget. As for dry cleaning, in general, we just don't do it. I think the only garment we actually own right now that requires dry cleaning is Brian's good suit, which hasn't been worn in over a year.
So, to sum up, here are my rules for making it through the Live the Wage Challenge, along with some ideas for how they could be applied to real people trying to survive long-term on the real minimum wage:
- Challenge Rule #1: If at all possible, do the challenge as part of a couple. That way, you can split the costs not just of housing (which isn't counted in the budget) but also food, Internet service, medicines, household goods, and to some extent, transportation (since you only need to make one trip to the grocery store rather than two separate trips). What this means in real life is that, if you're a single person living on minimum wage, your ideal living situation is to either live with family or have a roommate and share your living expenses as much as possible. (This piece in the New York Times tells the stories of minimum-wage workers who live with their parents, share a home with a significant other, or rent a room in a friend's house to save money.)
- Challenge Rule #2: If you drive, have an efficient car that's cheap to maintain—and then don't drive it that much. It's best to avoid making a 140-mile round trip if possible, but if you have to, you're definitely better off making it in a car that will take 3.5 gallons of gas to go that distance than one that will take 7. Biking to work, as Brian does, will help if you're in an area that allows it; so will carpooling, if you can find someone to ride with. And in real life, if you live in an area with a good mass transit system, you might be better off not owning a car at all (though as I noted in this post, if you already have a car, you won't save much, if anything, by using transit instead).
- Challenge Rule #3: If you have pets, stick to smaller ones. Obviously, if you already have a dog (or several), you're not going to get rid of it for the sake of a one-week challenge. You probably won't even want to get rid of it if you're suddenly forced to live on minimum wage in real life (though you may be forced to eventually). But if you're only thinking about getting a pet, it's worth giving some thought to how much it will cost, not just to buy but to care for on a year-round basis. Cats are cheaper than dogs, and smaller pets, like a mouse, bird, or fish, are cheaper still. If you're trying to get by on a low wage, this is definitely a big consideration.
- Challenge Rule #4: Wear low-maintenance clothes. Avoid anything that requires dry cleaning; you'll be doing the environment a favor, as well as your wallet. If you work at a job that requires you to wear a suit every day, then you're almost certainly doing this challenge for one week only, and not as a way of life; you can probably manage to get by for the space of one week wearing the same jacket every day, or going with a more business-casual look. And if you're a real-life low-wage worker, then wash-and-wear clothes are probably the most practical for you anyway. Of course, if you're an apartment dweller, then even washable clothes can be a bit costly to care for; according to my records, when we were living in an apartment, we used to spend between $6 and $23 at the laundry every month. But this is another area in which sharing with others will help keep your costs down. Two people do not produce twice as many loads of laundry as one; more likely, they'll just do two large loads per week rather than two small loads (whites and colors). At a laundromat, where smaller loads may cost just as much as larger ones, sharing your laundry could cut the cost in half.
This just brings me back, full-circle, to my biggest gripe about the Live the Wage challenge: doing it for one week simply isn't realistic. In one way, it's too easy, because you know it'll only be a week, so you can just put off large, expected expenses like the cable bill (or pay for them ahead of time). Yet in another way, it's too hard, because you can also get hit by large, unexpected expenses, and you don't have any time to plan ahead for them. As a test of your ability to live on the minimum wage, I think the simulator at NYTimes.com is actually much more useful.
Thursday, August 28, 2014
Live the Wage Challenge, day 6
DAY 6 (Wednesday):
Stop & Shop: $1.00
Stop & Shop: $6.05
Total spent: $7.05
Total remaining: $24.43
On Wednesday, our only purchases were a few additional grocery items to supplement the big shopping trip we made on Friday. In the morning, I stopped by to pick up a couple of liters of seltzer after discovering that the last two cans in the case I bought at Shop-Rite had dented and gone flat. Then, in the evening, we made a second trip out there for some ice cream and, while we were there, grabbed a bottle of orange juice and a box of raisin bran. (Both of these are items we normally get at Aldi, but right now the Stop & Shop has them on sale for less.) Altogether we spent $7.05, which makes our total grocery spending for the week $53.93—almost exactly the amount that I initially estimated it would come to based on our experience in the Reverse SNAP Challenge.
So, with one day left to go, we're down to $24.43, which is just slightly over the $11 per person, per day allotted by the budget. At this point, I think there's no doubt we'll succeed in meeting the challenge. Thanks to the good bicycling weather this week, our car hasn't been driven since Friday, so there's no need for us to buy any gas; we don't currently need to repair any part of our house, our car, or ourselves; and the activity we have planned for tonight is a live radio play at our local library, for which admission appears to be free of charge. (The listing for the event says it's "sponsored by the Friends of the Library," which technically means I've already paid for it with my annual dues.) I'm even inclined to go back to the drugstore and pick up those vitamins I didn't get on Tuesday, just so I can say I made it through the challenge without making any changes in my normal spending habits.
Stop & Shop: $1.00
Stop & Shop: $6.05
Total spent: $7.05
Total remaining: $24.43
On Wednesday, our only purchases were a few additional grocery items to supplement the big shopping trip we made on Friday. In the morning, I stopped by to pick up a couple of liters of seltzer after discovering that the last two cans in the case I bought at Shop-Rite had dented and gone flat. Then, in the evening, we made a second trip out there for some ice cream and, while we were there, grabbed a bottle of orange juice and a box of raisin bran. (Both of these are items we normally get at Aldi, but right now the Stop & Shop has them on sale for less.) Altogether we spent $7.05, which makes our total grocery spending for the week $53.93—almost exactly the amount that I initially estimated it would come to based on our experience in the Reverse SNAP Challenge.
So, with one day left to go, we're down to $24.43, which is just slightly over the $11 per person, per day allotted by the budget. At this point, I think there's no doubt we'll succeed in meeting the challenge. Thanks to the good bicycling weather this week, our car hasn't been driven since Friday, so there's no need for us to buy any gas; we don't currently need to repair any part of our house, our car, or ourselves; and the activity we have planned for tonight is a live radio play at our local library, for which admission appears to be free of charge. (The listing for the event says it's "sponsored by the Friends of the Library," which technically means I've already paid for it with my annual dues.) I'm even inclined to go back to the drugstore and pick up those vitamins I didn't get on Tuesday, just so I can say I made it through the challenge without making any changes in my normal spending habits.
Subscribe to:
Posts (Atom)
Posts
