Beating Broke

Is the Living Wage Realistic?

March 21, 2014 By Shane Ede 6 Comments

I recently found an interesting calculator (Via Lifehacker, via MIT), called the Living Wage Calculator. The smart folks over at MIT put it together to”provide a minimum estimate of the cost of living for low wage families.” Normally, when I see one of these calculators, I try it once, scoff lightly, then move on to something far more useful with my day. This calculator is a bit different from some other ones I’ve seen in that it actually gets pretty localized. Others tend to use a generalization like “urban” or “suburban” and leave it at that. The fault there is that the living wage in an urban setting like Los Angeles is going to be very different from a living wage in the urban setting of a city like Fargo.

The MIT living wage calculator gets localized down to the county you live in, and then goes a bit further and can go right down to the city that you live in in some cases. I gave it a run based on my county, and then based on my city. Not surprisingly, I got the same number in both cases. The city I live in is both the county seat, and the largest city in the county. I suppose it’s possible that the numbers could vary a bit at the two levels, but I don’t think it would be too much in any case.

A Living Wage: Example locations.

To compare how the results fare based on your actual location, I ran it for a few different locales. First, using the example above, for Los Angeles city. In all cases, I used the 2 adult, 3 children number. For Los Angeles, the calculator returned an hourly wage of $27.97 which translates to just a hair under $58,200. (using $/hr * 2080) For Fargo, the calculator returned an hourly wage of $20.56 which translates to about $42,800 a year. To be honest, I was a little surprised by the small difference between the two. Not that almost $16,000 is a small amount, but considering the difference in the size of the two cities, I really expected the living wage to much more significantly different.

For a second example, I compared Fargo against the city that I live in. The numbers for Fargo are above. For my city, the calculator returned an hourly wage of $19.20 which translates to about $40,000. This difference was a bit more expected. The two cities are only a couple of hours away, and their economic differences are pretty minimal. I also got curious and looked up what it would spit out for a living wage for New York City (Queens County). There, it estimates the living wage at $26.12 an hour, or about $54,300 a year.

I found it somewhat interesting to dig into how they were calculating the living wage. They’ve estimated some of the expenses for an average family of a certain number of adults and possible children. Based on our own expenses, I think it’s safe to say that some of them are a little low. They’ve also assumed that any 2 adult family with children is a one-income family with no childcare expenses. In fact, I’m not so sure that they aren’t saying that a 2 adult household with no children would be a one-income family.

Given all of that, it was a bit reassuring to know that our family makes more than what they’re assuming is a living wage for our area. However, that’s with two incomes. Which also means that we’re spending plenty of extra on child care. If I use their numbers for expenses for 2 children and childcare, then add it to their 2 adult, 2 children number the resulting number is not that far from what we’re really making. There’s still a bit left over above that amount, but it’s a bit of a reality check too. Time to find some ways to increase income!

A Living Wage: Is it Realistic?

All the playing around brings a question to mind. Is the living wage realistic? It’s important, I think, to realize that the living wage is meant as an indicator of the amount of income that is necessary to assure that a family can pay for the bare necessities of “living”. Keeping that in mine, it might be realistic. But, one of the key things I don’t see in the expenses categories is a line for any sort of debt servicing. Which means they’re assuming that you’re renting a house or apartment, and that you don’t have any other debts. And we all know how realistic that assumption is. Or not. I think, for this to be truly realistic, it’s got to assume that the family will be dual-income. It’s also got to assume that at least one of the two adults will have some student loan debt. More likely, both. And it’s got to assume that there’s going to be some other debts that will need servicing. Then it might border on a true living wage. Otherwise, it’s just another way of saying poverty line.

Go and give the calculator a spin. How close to the number are you? Are you so far from it that it’s scoff worthy? Or is it time for you to find a way to increase your income too? Do you think that the living wage is realistic?

Time to Plan Your Garden

March 17, 2014 By Shane Ede 5 Comments

Spring is finally here. The sun is shining a little brighter (and warmer too), and the ground is starting to warm up. And with all of that, those of us who garden are beginning to get a little antsy to start putting seeds and plants in the ground and begin growing them. In many parts of the states, it’s still much too early to start planting though. So, what is a anticipatory gardener to do? It’s a great time to begin planning the garden and preparing for the planting season.

Maintenance and Clean-up of your Garden

I like to start with the maintenance and clean-up of the garden area as soon as I’m able. I get to go outside and, while I can’t plant anything, I can begin to prepare for doing so. There’s always some leaves that fall after I rake for the last time in the fall that can be collected. We do most of our growing in containers, so it’s a good time to make sure the dead plants from last year are removed (fall quickly became winter last year and I didn’t get a chance to remove them) from the containers. If you’ve got any gardening structures, like lattices, nets, etc, you can give them a quick once over to make sure that they’re all still in usable condition and don’t need any repairs.

What Will You Grow?

For several years, we’ve been playing with and experimenting in our garden. We’ve been planting some new varieties of plants that we haven’t before (last year we had Eggplant and Brussels Sprouts) and planting some things in different locations than we have before. This year, we might do the opposite and refine what we grow a little bit. There are a few staples that we’ve grown every year that we’ll grow again, like Tomatoes, Potatoes, Green Beans, and Cucumbers. We added some Snow Peas to the garden last year and they did really well, so we’ll be planting more of those this year as well. A couple of crops that we have grown in the past, but all depend on space are Carrots and Onions. We’ve never had a whole lot of success with them, so they might get scrapped to leave more room for more of the other plants. We’ve also got a few smaller containers that we’ve discovered are a little small for most of the stuff we’d like to grow, so we might throw some herbs in those and see what we end up with.

Start Your Seeds Indoors

This is one thing that I’ve really struggled with over the years. For whatever reason, I always end up with most of my seedlings dying before I can transplant them, or with them dying shortly after transplanting. It is much cheaper to buy seeds and then start them indoors for transplanting, than it is to go and buy plants at the nursery, though, so I keep trying. I’ll do so again this year, and we’ll likely supplement with a few plants from the nursery just to be sure we get some strong plants. The growing season (outdoors) here doesn’t really start until late May or early June, so I generally try and hold myself back from planting seeds indoors any sooner than mid to late April. Even that is probably pushing it, and probably should be pushed out to early May.

I find that giving some thought to the garden before you get to the planting stage acts a little like a budget. If you’ve got a plan for what you want to plant, and when, you have something to stick to and keep yourself from going overboard with plants you won’t have room for, or that won’t do well in your garden. It saves you money, and work.

What do you do to begin the gardening season?

No One is Going to Save You

March 13, 2014 By Shane Ede 6 Comments

I have some bad news for you. If you’re waiting on someone to show up at your door ala Publisher’s Clearinghouse and hand you a big cardboard check that will solve all of your financial problems it’s not going to happen. No one is going to save you from your financial woes. No one is going to suddenly decide that you, and you alone, are worth pulling from the depths of your financial hole, pay all your bills and set you up for life. No one but you.

In truth, I’m writing this post as much for me as I am for you. I need to hear that message occasionally, just as you do. It’s nice to daydream about winning the lottery, or some sweepstakes and having some of your problems solved. It really is. But, if you, like me, find yourself lingering in those daydreams a little too much, too often, you need to hear those words.

You and you alone can be the savior of your finances.

You (and I) are the best prepared, and the most willing (without fees), to take on the ratted nest of bills and accounts that we call our finances. You (and I) are the most able to figure out how to sort out where our money is coming from and where it has gone. You (and I) are the only ones that can drum up the willpower to make the changes necessary to begin telling our money where to go that it will be most helpful to our finances. No one else is going to do it for you.

No one but you.

If you (and I) don’t do it, do you know what happens? Nothing but the same. Your paycheck comes in (maybe on time, maybe not), your paycheck goes out. At the end of the month, maybe we ask “where did it all go?”. And if we do nothing about it, we’ll never really know. We’ll just continue the pattern; wondering why we aren’t paid more, and wondering why what we are paid never seems to be enough.

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You can make a difference in your finances though.

Uniquely. No one but you.

You can budget your money and tell it where it belongs. You can know where your money is going, and control how it works for you. If you actively manage your money, it can no longer control you. Create a budget, track your income and spending, then take back your financial life.

Put your finances in order; be free. Be debt free. Be free to spend as you choose. Be free to earn as you choose.

What are you doing today to break old financial habits and take control of your money?