Budget for fictional couple each making $15/hr.

[bearishgurl]

[quote=FlyerInHi]I think there’s a stigma paying with foodtamps and getting free school lunches.
How would the kids feel?[/quote]

None of the other students can find out anymore. The problem has been fixed with electronic ID cards for the students with their picture on them. They are loaded with meals from the parents’ check or the Free Lunch program by the school’s front office. Every student stands in the same line and nobody in the cafeteria knows anything about who is eating a free (or 40-cent) lunch and who is paying full price (not even the cafeteria workers).

It’s as it should be. (see my latest post detailing the procedure from the “pre-computer” days, lol)

[an]

[quote=FlyerInHi]I think there’s a stigma paying with foodtamps and getting free school lunches.
How would the kids feel?[/quote]There’s nothing wrong with growing up poor. If they think there’s something wrong with that, then it’s best for them to learn that lesson early. Maybe it’ll make them work harder so their kids won’t grow up poor like they did.

[FlyerInHi]

[quote=spdrun]I can’t find the cite right now, but the website apparently told him that he was only eligible for insurance via Medicaid, due to his income being below x% of the Fed poverty level.[/quote]

So the exchange denied him Obama care?

I could understand a message saying “you may qualiify for Medicaid”

Btw I remember reading about a millionaire couple from Ohio getting arrested in Florida where they lied about their assets to get Medicaid

[spdrun]

FlyerInHI:

Bye-Bye Medicaid Asset Test*

No asset test, just an income test if applying through an exchange. Asset test exists for other means of applying. Eligibility is as follows via an exchange:

0-100% of poverty level – Medicaid only
100-x% of poverty level – Medicaid only (if state expanded the program). Or no insurance otherwise.
x-400% of poverty level – private insurance with subsidy
400+% of poverty level – private ins, no subsidy

I think x is something like 125%.

[FlyerInHi]

I read up a little more. I guess asset tests for Medicaid did go away under obamacare (except for some populations like seniors).

Come to think about it, it’s not such a bad thing because the threshold is pretty low.

Maybe eveyone should have basic government health care like in other developed countries. If you want better then you pay for private insurance.

[CA renter]

[quote=AN]BG, $31k before tax. How much would it be after tax? Then how much do you have to pay for child care for 2 kids? How much does diapers, baby food, etc. cost? How much does healthcare cost? Then there’s the intangible of having a parent raising the kid instead of a stranger. Have a parent there to tutor the kids after school when they’re older, making sure they’re well fed with home cooked meals, making sure they stay out of trouble. I think if you add all of that up, I would say it’s worth more than $31k.[/quote]

Too bad you missed our discussion on Kev’s “baggage” thread. We were discussing this very thing, especially as it pertains to the value of having a SAHP. The conversation mostly began on page 14, but feel free to read the entire thread for context if you have some extra days with nothing better to do! 😉 I posted this…

[quote=CA renter][quote=bearishgurl]Yes, it was the right decision, CAR. I now have a pension and a generous healthcare allowance until I die. I also have another small pension and investments. I divorced in CA (a community property state) and thus everything we owned got split down the middle. I am thankful we made good investments, had no debt but mortgage debt and lived well below our means. I am very thankful for all the decisions we/I made in the past.

I hope none of your “well-educated” friends who opted to throw their degrees away to stay at home have to try to dredge up their (now dated) degree they haven’t used in years and actually try to sell it to a prospective employer in attempt to survive. Especially if they wait until they are 50-ish to do so.

I don’t believe your “highly educated friends” would only keep 30 cents on the dollar of their wages if they worked FT. Especially those who were making $100K+ before they decided to quit and stay home. That seems very low to me. Without identifying anyone, can you furnish a breakdown of their former salaries and expenses which caused them to keep only .30 on the dollar?

It doesn’t cost that much to work. Even an attorney can buy dress suits at a consignment shop for pennies on the dollar. I have kid(s) in SF who buy (expensive-when-new) designer duds and shoes/boots in those places regularly. Believe it or not, attorneys actually ride the bus and trolley to work (at $72 mo), brown bag their lunches most days and have their own “coffee station” in their offices. That is just an example of a full-time San Diego area professional’s lifestyle. Yes, many have minor kids. Like everyone else, their children also have relatives, day camp, horse camp, overnight camp, home daycare, pre-K, spouse on a slightly different schedule and so on. They make it work to continue their chosen careers without interruption.[/quote]

You really need to read this book, BG.

And while it’s great that you would brown-bag it and ride the bus everyday to work, while keeping your kid in after-school care, most professionals don’t do that.

Again, what you chose for yourself is NOT what’s best for everyone else…whether about housing, career decisions, child-rearing, etc.

Edited to add some quick, back-of-the-envelope numbers. Please double check my numbers, as I did this quickly.

If a woman has a gross income of $45,000…

TAXES (using 2014 tables):

-Federal: $5842.50
-State: $1770.19
-SS: $2790.00
-Medicare: $652.50

Total taxes: $11055.19/12 = $921.27/month

Childcare (3 kids)

, with one infant, one toddler, and preschool…and this is one of the less expensive options, as most professionals would want a “better”/more prestigious preschool option (using North County Coastal numbers…weekly expense X 50 weeks/12 to get a monthly number, allowing for 2-week vacation)

Childcare: $3,118.05/month

Transportation Expenses

-accelerated car purchase expenses, assuming commute is doubled as a result of wage-earning. Being very conservative here, if a SAH spouse can get 16 years out of a car, but doubles the commute if wage-earning, then that care will only last 8 years. If they buy a $20,000 car (not even taking into account interest, sales tax, registration expenses, and higher insurance costs, etc.), The monthly cost of the 16-year car is $104.17, and the 8-year car is $208.34…for a monthly difference of $104.17. The real number would likely be much higher than this, but some commutes might be shorter, and a car might not last 16 years, even with the lower miles, so think it would be a wash, more or less.

$104.12/month

-Accelerated repair/maintenance, assuming approximately $300/yr costs. This is probably low, but leaving room for additional repair costs on a car that is older, irrespective of the reduced mileage.

$25.00/month

-Gas, assuming average commute for a SAH being 500 miles/month, doubling to 1000 miles for the wage-earner (average mileage for most working people). If car gets 20 MPG, 25 gallons for the SAHP, and 50 gallons for the wage-earner (abbreviated WE from here on out). At a cost of $4.00/gallon, which is about the average around here over the past 7-8 years, the SAHP pays $100/month, and the WE pays $200/month, for a difference of…

$100.00/month

-Insurance, registration, sales tax, etc. would all be higher for the WE, but I’m going to let these costs slide for reasons stated above. Again, I’m trying to give your side the benefit of the doubt here.

$0.00

Food Expenses

While you might have managed to brown bag it every day for decades, most working people spend extra money on food when they work outside of the home. Perhaps these are choices, but we have to deal with reality, so will use what people do in the real world. Don’t forget, it’s not only lunches, but breakfasts and dinners. I have no doubt that the vast majority of working people eat out more often than SAHPs. Not only that, but they are less likely to shop when things are on sale because they will shop whenever and wherever they get the opportunity to do so. But I’ll give you the upper hand here and make it only $75/month more for a family of five, even though I know that is exceedingly low.

$75.00/month

Clothing

Yes, some people can dress casually, but many SAHPs dress even worse. For example, I wear an old pair of tennis shoes which I replace maybe once every 5 or 6 years, then I have very cheap flip-flops. I usually go barefoot or just wear socks around the house. My clothes are old, stained, and torn. My lovely DH doesn’t mind too much. Whereas I spend *maybe* $200/year on shoes/clothing for myself (and that would be very much on the high end and include “unmentionables”), I would have to spend quite a bit more to work in an office where I could earn $45,000/year. I am not including any additional costs for laundry/professional cleaning. Again, this number is definitely giving you the benefit of the doubt, and I will include any extra cosmetics, hair care, nails, etc. in this number. $200/yr/12=

$16.67/month

The total cost for wage-earning for this person is $4360.11/month. If her gross income is $45,000 (and this assumes that she has a job at that salary that will enable her to leave “early” to pick up her kids by 6:00 p.m.), her gross monthly income is $3750.00. In other words, she would be working for a NEGATIVE income of $610.11/month!

Now, you might say that this is only an issue while the children are very young, before they all qualify for “free” public schooling, but if a woman spaces a child every 18 months, she would have *at least* two years during which it would make absolutely no economical sense to work outside of the home. Even after the kids could attend “free” school (and I use the term “free” with tongue planted firmly in cheek, as the value of the work done doesn’t go away, it just gets cost-shifted), if a woman were to work full-time, after-school costs would be ~$800.00/month (assuming their prices are listed based on sibling discount, so am using what I believe are the discounted numbers). This does NOT include camps, etc. for when students are out of school, and it doesn’t include mornings.

http://www.ecke.ymca.org/programs/youth-programs/character-builders-prog.html

………..

So, even if we subtract out the childcare costs for young children and substitute the lower costs of after-school childcare, the spouse who is lucky enough to earn $45,000 in San Diego County (not as easy as one might think outside of mobile phones and biotech), will be netting a monthly income of $1707.94. For this, she will have to sacrifice all of her time with her family, along with adding all the stress of working, commuting, and trying to peacefully divide the household chores with the other spouse who is likely also working full-time, with all that that entails.

Now do you understand why so many families have chosen to opt-out of this “feminist utopia”?[/quote]

http://piggington.com/ot_how_much_baggage_will_you_accept?page=15

…and realized afterward that I had forgotten to compute the other spouse’s income, which would have pushed this second income-earners income into a much higher tax bracket; making the true numbers even worse than what I had posted. BG (and others) insists that it doesn’t make sense to have a SAHP — that this person is a drain on the family’s finances, but nobody else dared to come up with the actual numbers like I did (though BG has been saying that she would do so, and would include the first wage-earner’s income in order to get the true picture of how much that second spouse is **really** earning when choosing to work outside the home. Of course, that would make the case for having a SAHP even more compelling, which is why I think we still haven’t seen the numbers.

It’s pretty eye-opening when you run the actual numbers.

[CA renter]

FWIW, I meant to put this in the other thread, but got pretty exhausted over there. When our kids were little and we were updating our life insurance, we had to calculate what it would cost to replace the SAHP (me) if I died. For us, the minimum was $65,000/year. These were our calculations, and they were based on real costs, not the calculations of the insurance agent who would have liked to pump up the numbers even more for a better commission. It would be a bit less now if we were to put our kids in a public school, though we would still have to arrange for someone to pick them up and care for them for the rest of the day and through the night, often for multiple days at a time. If my DH were to choose to continue homeschooling them, it would cost the same or more than $65,000.

This is the value to our family of having a SAHP, and that’s just taking into account the financial value, not including the “intangibles” of having a SAHP at home full-time. That’s why the value of these services would fall on a range, as some families have greater needs/desires, and some people are able to contribute more than others. But there is no denying that SAHPs provide services that have a very real value — emotionally, socially, and financially.

While this number might seem high to someone like UCGal who has a spouse who was willing/able to share all of the duties, and where both parents were able to work reduced hours (but still make a fairly decent income because of their particular career choices — well done!), our family is not in the same boat. My DH has a very chaotic, erratic, irregular schedule, so we had to calculate the cost of having someone available 24/7 — literally — to care for the kids and home (that’s where the 24/7 came from in my post, UCGal, I wasn’t engaging in “Mommy War’s” by trying to compare the value of a SAHP to an income-earning parent…I was literally referring to needing someone who would be available 24/7, often at a moment’s notice, so that the income-earning spouse could continue to work).

Many couples have to deal with this issue, BTW. Truck drivers, oil rig operators, doctors and other healthcare workers (especially those who are regularly on call), airline pilots, people in the entertainment industry, traveling salespeople, and others who have to travel out of town/country regularly for business, etc. There are actually quite a few jobs that do not have regular days/hours. For a family like this, having a SAHP or someone with the flexibility of a SAHP is probably “worth more” than they would be to a family where the primary income-earner has a local job with a standard M-F, 8-5 job (or better), where they can more easily arrange for “traditional” childcare.

[CA renter]

…

[bearishgurl]

[quote=CA renter]. . . BG (and others) insists that it doesn’t make sense to have a SAHP — that this person is a drain on the family’s finances, but nobody else dared to come up with the actual numbers like I did (though BG has been saying that she would do so, and would include the first wage-earner’s income in order to get the true picture of how much that second spouse is **really** earning when choosing to work outside the home. Of course, that would make the case for having a SAHP even more compelling, which is why I think we still haven’t seen the numbers.

It’s pretty eye-opening when you run the actual numbers.[/quote]

CAR, my people came in at the crack of dawn this morning and are still sleeping so thought I’d check in. I AM working on that post/thread I promised and WILL get it out very soon. There is a little more research I need to do on local child care resources and I need to place this family in a fictional home in SD County so they can claim the correct tax writeoffs and we can mull over their housing expenses. Congress made it worthwhile for both parents to work FT (or one PT) when it revised the tax code in 1986:

see: http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

… and made it even more lucrative by increasing the household income ceiling over the years on the usage of the Dependent Care credit:

http://en.wikipedia.org/wiki/Child_and_Dependent_Care_Credit

To your comments above regarding transportation and lunches, I’m going to state here again that many, many “professionals” take public transportation to/from work and bring their own lunches from home daily the vast majority of the time. Most “professionals” don’t have time in their workday to run around waiting in lines trying to scare up a lunch everyday. And most workers want a healthy lunch and snacks available (ie apples, carrots and celery, and reheated leftovers, etc) instead of fast food. I’m referring to the worker-culture in dtn SD as that is the only culture I’m really familiar with. There are actually many more dtn workers who take public transportation now than before I “retired” due to (now) the exorbitant cost of daily parking for governments, firms and their employees. The trolleys are standing-room only and the express buses during rush hours are full! This is also true of SF, dtn LA (Temple St vicinity) and dtn Sac workers.

Perhaps many/most posters on this board aren’t familiar with an urban work culture due to always having worked in a suburb or exurb where their employer provided free parking for them.

[spdrun]

Unless you live in very specific parts of SD County, you’ll still need a car for things other than commuting.

Though I do know someone who got away with it for a year or two in Carlsbad, since work, grocery stores, etc were within biking distance of her apartment, and she could take the commuter train+bus to the airport when she wanted to get out of town. (She has family in NY and abroad as well.)

[bearishgurl]

[quote=spdrun]Unless you live in very specific parts of SD County, you’ll still need a car for things other than commuting.

Though I do know someone who got away with it for a year or two in Carlsbad, since work, grocery stores, etc were within biking distance of her apartment, and she could take the commuter train+bus to the airport when she wanted to get out of town. (She has family in NY and abroad as well.)[/quote]

Understand, spdrun. I didn’t say that dtn workers didn’t own a car. I was only stating that they didn’t need to put 500+ mi per week on it commuting, as many workers likely do who live and work in distant suburbs and exurbs. When you’re not sitting in traffic two or more hrs per day, you don’t have anywhere near the maintenance costs on your vehicle as you would if you drove it long distances every day. I also believe a whole lot more worker-bees in SD County drive vehicles worth between $3K and $10K to work everyday than some of the assumptions made on this forum. Contrary to popular belief, older vehicles are actually cheaper to run and maintain, even taking into acct that they need more parts. This is due to the high cost of annual registration and insurance coverage in the urban counties of CA (where the vast majority of “worker bees” live and work). Lots of families consisting of one or more “professional” workers DO own an expensive road car or 4WD vehicle (which they keep garaged) and maybe even a boat and/or other trailered “toys.” But the vehicle they take to work everyday is 10-20 yrs old.

[CA renter]

BG, even you said that you didn’t use public transportation when your kids were young. If someone is earning $45K+, and assuming that’s the lower of the two incomes (which will be the case most often, since the spouse with the lowest income is usually the one who will work in the home instead of wage-earning), then that family would gross **at least** $90K/year. They aren’t going to contort their lives to live like paupers or run around town trying to drop-off/pick-up kids, grocery shop, etc. via bus in order to force the second income-earner’s choices to make financial sense. The whole point of having the second spouse work outside the home is to live a better life, not a worse one.

I have no doubt that many/most people take lunches to work, but I also have no doubt that households with two full-time wage earners would be more inclined to get take-out/fast food, or go out to eat for dinner more often than families with a SAHP. But I gave you the benefit of the doubt and only increased this cost by $75/month, which is **exceedingly low** for a family of five.

Deal with reality as it is, not how you want it to be. Either the numbers work (they have a positive enough income to make wage-earning worthwhile), or they don’t. All you need to do is work on the tax info, since I forgot to include the first wage-earner’s income. You don’t need to fiddle around with mortgages or other types of write-offs, because those deductions would ALREADY exist and be applied against the first wage-earner’s income.

Just FYI for your calculations, in order to qualify for the child/dependent care tax credit, you have to file a joint return if married.

http://www.irs.gov/taxtopics/tc602.html

In all my years as a full-time or part-time worker (including high school/college years), both in LA and in North County SD, I don’t remember a single person who took public transportation to/from work on a regular basis (with one exception to follow)…not even those who made minimum wage. I worked with one person who took the train between San Clemente and L.A., but had TWO cars, one at each end of the line, to drive the final miles to/from home and work. He was a higher income-earner, and did this so that he could work while on the train and to make his commute times more predictable.I can’t think of a single person who had kids and used public transportation to take them to/from daycare and then to/from work.

Here’s some info for you that shows how only 4.1% of San Diego’s workers take public transportation to/from work. Another ~20% carpool, walk, work at home, or used some other mode of transportation. Even if we count those in, ~75% drive alone to work. I can assure you that the vast majority of people who live in a household with a $90K gross income will drive alone to/from work and to/from childcare facilities.

How San Diego’s Transit System Stacks Up Nationally, in Four Charts

You have to work with reality and what the majority of people actually do in real life, not what you think they should, or could, do in some theoretical situation in order to prove your point.

[CA renter]

[quote=bearishgurl][quote=spdrun]Public universities were cheaper then as compared to incomes. At least partially due to (zOMFG!) … taxpayer support.

Was your stepfather a single parent when he was going to school? Were your cow-orkers single parents, or did they have a spouse to share responsibilities with?

Also, during your stepfather’s time, it was easier to get a decent job without a college degree in the first place. He was probably a union factory worker at Rockwell, not a Mickey Dee’s fry cook.[/quote]

My stepfather’s ex-spouse always worked FT as well. At all times when he was a PT student, he was married and his kids were grown. My student-coworkers were all married and living with their spouses and kid(s) at the time of going to night school, IIRC. I was in the same situation (worked FT and lived with spouse and kids) while attending night classes at City and SW Colleges (local CC’s) for about ten years. I earned about 75-80 sem units but never graduated because I am still lacking 9 units GE credits (3 classes). My accounting classes were four units and I got home about 10:45 pm. My paralegal program was a one year program (500-level graduate course) two nights per week (got home at 10:30 pm) and every other Saturday (until about midnight). At the time of earning my paralegal certificate, I worked FT and had minor children at home. I had a sister (now deceased) who earned a BS in Accountancy and a Masters in Taxation, all while working FT (married, no kids at that time) and putting herself thru college. I have a brother who earned a double major (Voc Ag teaching credential and Meat Science) all while working FT (single, no kids at that time) and putting himself thru college.

My siblings and I NEVER borrowed one dime for school or even qualified for a grant then – grants were $2-$4K yr back then (mostly $2K “BEOG” grants) and in order to get one, the student literally had to be on “welfare.” I applied for one on my FAFSA as a senior in HS and my mom made $900 too much money that year for me to get it. I then went to work FT right out of HS and made too much money to qualify for the grant (but was able to pay rent on a nice apt and buy a nice car – all cash). So it wasn’t worth it anymore for me to try to qualify for a measly $2-$4K in college aid.

Yeah, college was cheaper and housing was cheaper back then but we didn’t get paid as much either. My brother and I didn’t make anywhere NEAR $15 hr (more like <$5 hr). People did what they had to do back then to get ahead in life. Accepting aid was frowned upon unless a parent couldn't feed their family. Even those parents temporarily down on their luck had their pride and so were embarrassed to apply for food stamps or stand in line for commodities. Public school students had different-colored daily lunch tickets (participants of the Free Lunch program at school) and had to stand in a different lunch line than the paying students. The “free lunch” kids were stigmatized. (I’m glad this problem was “fixed.”) There were way fewer programs available and the benefit amounts were much lower than they are today and as such, there was much less incentive to attempt to defraud the “system” which seemingly appears to be so attractive today. It seems that there’s been a sea change in people’s views of what it really means to be “poor” today in the US and a huge increase in an individual’s “sense of entitlement.”[/quote]

BG, I’m old enough to be one of the lucky folks who was able to work my way through college. There is no way you can compare today’s realities with what you and I were dealing with. Increases in the costs of everything — from rent, utilities, healthcare (better than it was in recent years without Obamacare), gas, tuition, etc. — are all much higher than the increases in wages over those years.

AND we actually had jobs available to us when we were young, which isn’t necessarily true for most young kids today.

[UCGal]

I went away a few days and this thread blew up. We have some long winded folks, heh heh heh.

FWIW – our household budget (including taxes, health insurance and OOP medical expenses, etc) is $84k/year for a family of four.

Unlike the fictional family in the OP – we have a paid for home and paid for cars… but we still have to insure, maintain, and pay taxes on them. We’ve lived on this budget for several years… so it’s doable and still have a very upper middle class lifestyle. We *choose* not to eat at restaurants a lot because we like the food we cook.

I could definitely cut costs by cutting out organic meats and produce. We’ve already cut out most processed food. We do a lot of things for “green” reasons – that coincidentally save money. Like the shop towels Brian mentioned above, rather than paper towels. I make my own chemical free cleaners (vinegar, baking soda, tea tree oil.) I dry about half of my laundry on the line.

I also repair rather than replace whenever possible. This includes mending clothes, fixing appliances and autos, etc. Again – the motivation is to consume less, to be more green – but it ends up saving money, too.

I’ve found the more I conserve (as in resources) the more I conserve (money). Not bad for a liberal like me. LOL.

[moneymaker]

Read in the paper that for the average house (or was it mean?) in San Diego, anyway the household income would have to be 101K, problem is the average income is more like 63K.

[Author]

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