Amy Bryant
I read an inspiring blog this week; a United Way office in Massachusetts invited its employees to see what it was like to survive on food stamps. For a week, they had to live off a grocery budget of $21. It was actually impossible; the employee had to resort to credit card debt just to have enough to eat. This got me to wondering how I would budget for a family on minimum wage.
Let’s assume that a two-income family of four lived in Lubbock on minimum wage. The federal minimum wage increased in July 2008 to $6.55/hour. Each earner, if they worked 40 hours a week, would earn a gross income of $1,048 every month for a household income of $2,096. I am subtracting 10% for taxes; while this family would likely get all of their taxes refunded it wouldn’t be available to contribute to their monthly expenses.
Housing-We’ll start with the most basic expenses. According to City.Data.com, in 2007 the market fair price of renting a 2-bedroom apartment was $594 (http://www.city-data.com/county/Lubbock_County-TX.html). Anyone who has apartment hunted in Lubbock knows you are going to pay no less than $550 for a two-bedroom apartment, so I thought $594 was a reasonable number to work with.
Util
ities-Our family is working towards reducing our carbon footprint. We have switched to compact fluorescent light bulbs and try to keep the thermostat on just slightly less than comfortable. Our utility costs for a 2-bedroom duplex average out to $115/month. We will assume this family has similar energy needs.
If we can increase the educational level the family members attain, then we can reduce the number of families that live on the sharp brim of financial instability. The Lubbock Area United Way is working to help coordinate and fund the services of our community partners to ensure that they are effectively impacting the lives of families in Lubbock and helping them to set and achieve new educational goals.
By helping families form foundations for success through education, we can ultimately impact their quality of life forever. Children who are raised by financially independent parents are more likely to avoid poverty. We can help these parents set an example for success that will improve their children’s chances for success. We can reverse the cycles of poverty that create financial instability.
To find out how you can help promote stability for families in our community, check out our Education Matters Initiative at http://www.liveunitedlubbock.org/Edmatters.shtml
Let’s assume that a two-income family of four lived in Lubbock on minimum wage. The federal minimum wage increased in July 2008 to $6.55/hour. Each earner, if they worked 40 hours a week, would earn a gross income of $1,048 every month for a household income of $2,096. I am subtracting 10% for taxes; while this family would likely get all of their taxes refunded it wouldn’t be available to contribute to their monthly expenses.
Housing-We’ll start with the most basic expenses. According to City.Data.com, in 2007 the market fair price of renting a 2-bedroom apartment was $594 (http://www.city-data.com/county/Lubbock_County-TX.html). Anyone who has apartment hunted in Lubbock knows you are going to pay no less than $550 for a two-bedroom apartment, so I thought $594 was a reasonable number to work with.Util
ities-Our family is working towards reducing our carbon footprint. We have switched to compact fluorescent light bulbs and try to keep the thermostat on just slightly less than comfortable. Our utility costs for a 2-bedroom duplex average out to $115/month. We will assume this family has similar energy needs. Childcare-This family of four has two young children; with a gross income of $2,096 a month they would qualify for childcare fee assistance. I spoke to Jackie Rutherford at the Early 
Learning Centers of Lubbock about the cost of childcare in their centers. She said that, assuming there were no grants or other sources of funding to alleviate the cost of childcare, 1 potty trained youngster in daycare would cost the family $72/week. If both children were in daycare, the cost would be $128/week minimum. I will assume that both children are in daycare for my numbers, but you can subtract $224 from the monthly expenses to see the difference.
Those are the predictable necessities; clothing is a necessity, but there are so many variables involved in the cost of clothing that I just didn’t dare to go there. We could assume that they purchase their clothing from Goodwill for $5/bag to be very thrifty or they could be putting it on a credit card. From the figures below we know that it is unlikely they have cash on hand for new clothes. Now we can get into the more variable costs.
Groceries-The U.S. Department of Agriculture indicates in its 2006 report of food prices that a family of four on a low-cost food plan will spend $155.30/week or that family on a moderate-cost plan will spend $193.30/week (http://www.census.gov/compendia/statab/tables/08s0708.xls). Lubbock is below the national cost of living, so, I believe, a family in Lubbock can make nutritious and varied meals for $155.30 a week. That comes to about $621 a month for groceries.
Transportation-Gas, in an interesting way, is considered an optional expense. We may feel like we have to have it, but it is not a considered a necessity like food and shelter. No one is going to be surprised when I talk about high gas prices. Fortunately, we have seen a steep decline in
the cost of a gallon of regular lately. I drive a 2003 Saturn that gets excellent gas mileage. Today, I can fill up my tank and drive for a full week on $30. However, my husband drives a gas loving mid-sized SUV; he will spend atleast $50 this week on gas. If we use my family as an example, that is $320/month on gas for our cars alone. If we shared my car, I estimate that we could reduce our cost of gas to $240/month. We will assume that there are no car payments, but insurance adds $75/month to our expenses.
But! If the family’s work schedules permitted them to use Citibus-they would have to do all of their travelling between 5:25 am and 7:45 pm Monday thru Friday and between 6:45 am and 7:55 pm Saturday-then they could spend as little as $87.50 for two monthly adult passes.(http://www.citibus.com/services.html)
Learning Centers of Lubbock about the cost of childcare in their centers. She said that, assuming there were no grants or other sources of funding to alleviate the cost of childcare, 1 potty trained youngster in daycare would cost the family $72/week. If both children were in daycare, the cost would be $128/week minimum. I will assume that both children are in daycare for my numbers, but you can subtract $224 from the monthly expenses to see the difference.Those are the predictable necessities; clothing is a necessity, but there are so many variables involved in the cost of clothing that I just didn’t dare to go there. We could assume that they purchase their clothing from Goodwill for $5/bag to be very thrifty or they could be putting it on a credit card. From the figures below we know that it is unlikely they have cash on hand for new clothes. Now we can get into the more variable costs.
Groceries-The U.S. Department of Agriculture indicates in its 2006 report of food prices that a family of four on a low-cost food plan will spend $155.30/week or that family on a moderate-cost plan will spend $193.30/week (http://www.census.gov/compendia/statab/tables/08s0708.xls). Lubbock is below the national cost of living, so, I believe, a family in Lubbock can make nutritious and varied meals for $155.30 a week. That comes to about $621 a month for groceries.Transportation-Gas, in an interesting way, is considered an optional expense. We may feel like we have to have it, but it is not a considered a necessity like food and shelter. No one is going to be surprised when I talk about high gas prices. Fortunately, we have seen a steep decline in
the cost of a gallon of regular lately. I drive a 2003 Saturn that gets excellent gas mileage. Today, I can fill up my tank and drive for a full week on $30. However, my husband drives a gas loving mid-sized SUV; he will spend atleast $50 this week on gas. If we use my family as an example, that is $320/month on gas for our cars alone. If we shared my car, I estimate that we could reduce our cost of gas to $240/month. We will assume that there are no car payments, but insurance adds $75/month to our expenses.But! If the family’s work schedules permitted them to use Citibus-they would have to do all of their travelling between 5:25 am and 7:45 pm Monday thru Friday and between 6:45 am and 7:55 pm Saturday-then they could spend as little as $87.50 for two monthly adult passes.(http://www.citibus.com/services.html)
So what does all of this projecting add up to? After examining the highs and lows, this family could have a staggering $132 in disposable income to save or spend in our community every month or they could be accumulating as much as $658 in debt every month. My reasonable estimates indicate accumulating $265 in debt every month. With no income to spare, even a small, unexpected expense like an urgent prescription or a missed day of work can send this family into serious financial turmoil.
The services United Way funds are not meant to be used as supplemental income every month, in fact, many of the agencies have rules prohibiting the recurring monthly use of some services. However, a hard-working family could easily make too little to pay even modest monthly bills, which would leave them always teetering on the verge of homelessness.
How prevalent is this problem? In 2007, 18% of Lubbock’s families were living at or below poverty. If there are 25 children in your child’s classroom, statistically, 4.5of them live in poverty. What can we do to improve stability for the children in these homes? How can we impact the needs of this family for long term stability?
The most effective method of predicting someone’s income is to look at their highest level of education achieved.
How prevalent is this problem? In 2007, 18% of Lubbock’s families were living at or below poverty. If there are 25 children in your child’s classroom, statistically, 4.5of them live in poverty. What can we do to improve stability for the children in these homes? How can we impact the needs of this family for long term stability?
The most effective method of predicting someone’s income is to look at their highest level of education achieved.
If we can increase the educational level the family members attain, then we can reduce the number of families that live on the sharp brim of financial instability. The Lubbock Area United Way is working to help coordinate and fund the services of our community partners to ensure that they are effectively impacting the lives of families in Lubbock and helping them to set and achieve new educational goals.
By helping families form foundations for success through education, we can ultimately impact their quality of life forever. Children who are raised by financially independent parents are more likely to avoid poverty. We can help these parents set an example for success that will improve their children’s chances for success. We can reverse the cycles of poverty that create financial instability.
To find out how you can help promote stability for families in our community, check out our Education Matters Initiative at http://www.liveunitedlubbock.org/Edmatters.shtml
