It's Impossible To "Get By" In The US

[Faust]

Right. And guess what? It's cheaper to register a corporation in almost any state in the union than it is to retain a BK attorney. Go figure.

That's cause already existing corporations trying to hide assets, need to be able to create shell corporations for cheap.

[tigergem]

That's cause already existing corporations trying to hide assets, need to be able to create shell corporations for cheap.

Do ya really think that's all the mechanism is good for?

Scuze moi. I have a pot to stir.

[Jackdog]

I think Average joe lives in too big of a house.!!! and drives too expensive of a car!!

I drive a 1996 Ford Explorer that has 200k miles on it. Vehicles have always been, in life for me, a way to get from point a to point b. As long as it gets me where I want to go I don't care. Boyfriend drives a 1994 Mustang that has 90k miles. Our house is modest under 1600 sq. ft. We don't take vacations, we don't own toys such as boats, atvs, or anything like that. I did make some stupid purchases with my credit cards but they amount for less than half of the debt more like a 1/4 of it. The rest was just trying to make ends meet when our business failed.

I've never tried to keep up with the Jones's and I've never asked for a handout. I have however asked for help from my creditors only to be told NO. I work and don't make a lot of money I bust my butt tho, so does my boyfriend.

Then there's my boyfriends brother in law. Sold a company for around 8 million in 2000. Since I met my boyfriend in 2003. He has owned vehicle wise, a lotus, bmw m5, hummer H2, viper, bentley gt, infiniti m45, ford f 250, amg mercedes. Those were the cars he has had over a 5 year time frame. He also built one 2 million dollar home, one 1 million dollar home, a few other houses and more condo's than I think of. 8 million dollars and he didn't even invest one penny of it.

They are broke now. I feel bad for him to a point, I feel much worse for their children, they have been exposed to a lifestyle that most will never know. He kinda made it hard for either one of us to feel any sympathy for him when we'd go over there for Christmas (when times were good for them) to hear him brag about his 20k chandelier or his 14k piano. We were happy that his sister and their children were well taken care of but we don't really wanna hear constantly how you bought items that were worth more than we make combined in a year. He is being sued by every bank out there for amounts of money that are shocking to me. I'm not one to call the kettle black but give me 8 million I'm investing a big chunk of it.

[banca rotta]

I think it's narrow-minded to assume that everyone in this situation is here because they simply did not budget. Many are guilty of overspending, no doubt about it, but do not be fooled into thinking that this is the sole cause. When I was working in the UK, I did not hear of one person that had to work two or three jobs to make ends meet. However, even prior to this recession and during the boom years, this was still quite common here.

The middle class once built America yet we are now led to believe that we are simply spending too much. Personally, I do not want my country to end up Mexico or Kenya, where people barely earn enough to pay basic bills and are stuck in poverty. I will never buy the con that the middle class are the bad guys, while the wealthy live it up doing nothing. This mentality is the equivalent of blaming and punishing the drug user rather than the pusher. Or blaming the rape victim for looking proactive rather than the actual perpetrator.

Who is assuming that everyone here didn't balance a budget???

I was responding to your statement:

"I don't know about any else but I am sick of being feed this BS that the average Joe, the middle class, and the poor must cut back. All while the wealthy get to throw money around like it's going out of fashion."

If you are middle class or poor then yes you have to cut back to keep inside a budget.

If you are rich you also have to keep inside your budget. Just ask Nicholas Cage and the others like him.

It turns out the rich have far more disposable income so they can "throw money around".

If you want to throw money around like it's going out of fashion then you need to increase your income as well as your financial IQ to a much higher level. How one does this is up to the individual.

My only thing that I am sick of the BS is how the rich bankers on Wall Street get bailed out for their mistakes with no regard for the federal budget, but for things like UE insurance all of a sudden these clowns debate this and are concerned for the budget.

[momofthree]

Well, Average Joe making $50,300 could make it fine if he would not have financed that $40K SUV. A family of four can live on $600/mo food easily - stop buying prepared meals and deli food. The income tax calculation is wrong too. Federal income tax on $50,300 for a family of 4 with kids is only $8. The FICA 7.65% payroll tax is $3,863, so his Fed tax bill including SS/Medicare and assuming no other deductions or credits, is $3,871, not $4,100.

I put in more reasonable expense numbers for Joe, only $500/mo for transportation, and he has $1,127/month left - which is plenty of wiggle room.

Of course a high state income tax and sales tax will reduce this to about 1/2 that amount. He's surviving - not living like a king, but getting by and saving $5K to $10K per year for emergencies or vacations. His health care costs will be going down in a few years too as the HCR provisions kick in.

Mind sharing your magic math that leaves $1127 left over each month after necessary living expenses for a family of 4?

Here's what I come up with for a fairly bare-bones budget--substantially below IRS standards:

$1000 mortgage
$350 medical insurance (going off the article)
$400 utilities (electric, gas, water, basic telephone)
$600 food (using your number)
$80 clothing
$100 out-of-pocket medical expenses (co-pays, prescriptions)
$300 gas
$150 car insurance
$80 life insurance
$100 car maintenance & fees
$100 home maintenance
=$3260

Leaving approx $200 left over each month and that's if there is no debt besides a mortgage--not even a car payment. And heaven forbid they want a cell phone or cable tv or maybe buy their kids a birthday gift. And what exactly would they do if their car broke down or they need after-school care for their kids? Sorry, I don't see this "average family" saving $10k a year.

[nc73]

Our healthcare is expensive, homes are too big, cars too big, of course our bills will be high. I was also in the UK and the homes were tiny therefore small util bill. I didn't pay a dime for healthcare. Got tax credits, etc. Rent was dirt cheap in our area. I knew plenty of people that had more than 1 job. Americans do live way beyond their means. I do mean EVERY single American including myself. We are to blame and nobody else.

[ForumReader]

Our healthcare is expensive, homes are too big, cars too big, of course our bills will be high. I was also in the UK and the homes were tiny therefore small util bill. I didn't pay a dime for healthcare. Got tax credits, etc. Rent was dirt cheap in our area. I knew plenty of people that had more than 1 job. Americans do live way beyond their means. I do mean EVERY single American including myself. We are to blame and nobody else.

Not EVERY American..cannot blame infants, young children and teens But parents are responsible for teaching their children how to live within their means for when they reach adulthood. I have a good friend who lives in the UK and he has described how life is like there, so much different from here. What happened? Politics got in the way? Or the knuckleheads who started the idea of credit (gotta check out the history of how credit came to be), inflation? Realtors and mortgage lenders pushing housing prices to go up unnecessarily? So many factors. But one thing I know for sure, it is time we Americans be fully educated of how we manage our finances, protect ourselves, understand what is happening out there in the world and help each other as a whole instead of "me me me me, I don't care about you"

And Congress needs to get their act together--new members. Seriously.

[bktmom28]

You know, I have never been one who tried to keep up with the Jones'. My husband and I got married in 2000. I was 21, he was 20. We lived in a little apartment that we paid $475/month for. We got a credit card with a $200 limit and we thought we were loaded! We purchased our first home in 2003 with excellent credit. We financed our vehicles, and I believe the highest amount we paid per month was 155. They were always used cars and never fancy. Fast forward 7 years later and here we are. 3 kids later, one vehicle, and were discharged from our bankruptcy. We never had toys. We have NEVER taken an expensive vacation. Believe me, I would love to, but it has never been a reality. Anytime we have gotten a tax refund, it goes to our debt and necessities. We get so excited when we get a refund because we get to go to Costco and stock up! We have ALWAYS tried to live within our means, but we did what we had to, to make sure our mortgage ws paid on time and our bills were paid, even if it meant robbing Peter to pay Paul, meaning, borrowing from the creditors to pay the creditors. STUPID I know, but we didn't know better. Anyway, all this to say that I think the majority of us know that we aren't going to live in fancy homes and drive fancy cars, we just want a good life. We want our kids to know the value of hard work and honesty. To know that one day we will have to explain our mistakes, will hopefully make them smarter and more savvy than we were.

On another point, last month I found out that my 2 year old daughter needed some dental work. I received the pre-procedure statement telling me that my portion of it would be $2200!!!! The entire amount for her teeth was $6000!!! For a 2 year old! When I asked the dentist why, he said that is just how much it is for all the work she needs done. Blew my mind! Anyway, I saw that a dentist in my area makes 444,000 a year! Granted, I am sure that he went to alot of school and has student loans, but I also see the 2010 Ford F-250 lifted diesel that he drives. I see the pictures of he and his family in such places as Hawaii, China, Disneyworld, trips that appear he has taken in the last 3 years. It just infuriates me that these doctors and dentists charge so much so that they can live their extravagant lifestyles but charge us up the butt for procedures that you know do not cost so much!!! Needless to say I explained that I cannot afford to pay $2200 2 weeks in advance which is what they require before the procedure, and you know what he told me? CHARGE IT!!!!!!!

[NHC]

I don't know where you live but....this might help. See if there is a Dental School near you run by a local college....I live in Denver and CU has a dental school that takes patients...and most insurances. Their rates are consistently 50% below a 'commercial' dentist but the work is just as good.

[bktmom28]

I don't know where you live but....this might help. See if there is a Dental School near you run by a local college....I live in Denver and CU has a dental school that takes patients...and most insurances. Their rates are consistently 50% below a 'commercial' dentist but the work is just as good.

Thank you for that tip! I will do that!

[ForumReader]

You know, I have never been one who tried to keep up with the Jones'. My husband and I got married in 2000. I was 21, he was 20. We lived in a little apartment that we paid $475/month for. We got a credit card with a $200 limit and we thought we were loaded! We purchased our first home in 2003 with excellent credit. We financed our vehicles, and I believe the highest amount we paid per month was 155. They were always used cars and never fancy. Fast forward 7 years later and here we are. 3 kids later, one vehicle, and were discharged from our bankruptcy. We never had toys. We have NEVER taken an expensive vacation. Believe me, I would love to, but it has never been a reality. Anytime we have gotten a tax refund, it goes to our debt and necessities. We get so excited when we get a refund because we get to go to Costco and stock up! We have ALWAYS tried to live within our means, but we did what we had to, to make sure our mortgage ws paid on time and our bills were paid, even if it meant robbing Peter to pay Paul, meaning, borrowing from the creditors to pay the creditors. STUPID I know, but we didn't know better. Anyway, all this to say that I think the majority of us know that we aren't going to live in fancy homes and drive fancy cars, we just want a good life. We want our kids to know the value of hard work and honesty. To know that one day we will have to explain our mistakes, will hopefully make them smarter and more savvy than we were.

On another point, last month I found out that my 2 year old daughter needed some dental work. I received the pre-procedure statement telling me that my portion of it would be $2200!!!! The entire amount for her teeth was $6000!!! For a 2 year old! When I asked the dentist why, he said that is just how much it is for all the work she needs done. Blew my mind! Anyway, I saw that a dentist in my area makes 444,000 a year! Granted, I am sure that he went to alot of school and has student loans, but I also see the 2010 Ford F-250 lifted diesel that he drives. I see the pictures of he and his family in such places as Hawaii, China, Disneyworld, trips that appear he has taken in the last 3 years. It just infuriates me that these doctors and dentists charge so much so that they can live their extravagant lifestyles but charge us up the butt for procedures that you know do not cost so much!!! Needless to say I explained that I cannot afford to pay $2200 2 weeks in advance which is what they require before the procedure, and you know what he told me? CHARGE IT!!!!!!!

Interesting post! I had to when the dentist told you to charge it instead. I understand how you feel about these professionals leading extravagant lifestyles. As far as dentists go, maybe you should go for another opinion? Or like NHC suggested, go check about dental schools if there are any nearby where you live.

[shabam]

If you are middle class or poor then yes you have to cut back to keep inside a budget.

If you are rich you also have to keep inside your budget. Just ask Nicholas Cage and the others like him.

It turns out the rich have far more disposable income so they can "throw money around".

If you want to throw money around like it's going out of fashion then you need to increase your income as well as your financial IQ to a much higher level. How one does this is up to the individual.

The point both the article and I are making is not about what people do with their money. The point is that considering the cost of things and that most barely earn a workable salary to begin with, it is almost impossible to get by. When someone rants that we should simply cut back, well what is left to cut back?

Best not to assume that we all purchased large homes, five plasmas, and Cadillacs.

[shabam]

Our healthcare is expensive, homes are too big, cars too big, of course our bills will be high. I was also in the UK and the homes were tiny therefore small util bill. I didn't pay a dime for healthcare. Got tax credits, etc. Rent was dirt cheap in our area. I knew plenty of people that had more than 1 job. Americans do live way beyond their means. I do mean EVERY single American including myself. We are to blame and nobody else.

The minimum wage in the UK is $9.18 an hour, which is not that much more than our own. Yet as you point out, they receive a range of low income credits and do not have the massive burden of healthcare costs. Very few people earn that amount over there anyway, as doing even retail work results in $12 to $18 an hour.

You will not exactly hear of many people filling for BK because of healthcare in the UK.

[WhatMoney]

Mind sharing your magic math that leaves $1127 left over each month after necessary living expenses for a family of 4?

Here's what I come up with for a fairly bare-bones budget--substantially below IRS standards:

$1000 mortgage
$350 medical insurance (going off the article)
$400 utilities (electric, gas, water, basic telephone)
$600 food (using your number)
$80 clothing
$100 out-of-pocket medical expenses (co-pays, prescriptions)
$300 gas
$150 car insurance
$80 life insurance
$100 car maintenance & fees
$100 home maintenance
=$3260

Leaving approx $200 left over each month and that's if there is no debt besides a mortgage--not even a car payment. And heaven forbid they want a cell phone or cable TV or maybe buy their kids a birthday gift. And what exactly would they do if their car broke down or they need after-school care for their kids? Sorry, I don't see this "average family" saving $10k a year.

No magic, I just reduced the monthly expenses in the original article and used the correct after tax income for 2009.

Income after Federal taxes: $3,869/mo.

Mortgage: $1,022 - same as article.

Food for family of 4: $600/mo, the lower end of Dept of Agriculture's range.

Electric bill: $101 - from the article. This would be an all electric home, so no gas bill.
I added $50/mo for water, which the article forgot about. Do you have to water your lawn?

Transportation for SUV: $500/mo, reduced from the $712/mo article claim. Gas at 20 mpg, $3/gallon, 15,000/yr is $188/mo. The rest is maintenance, insurance, and financing costs. Like I said, Joe needs a cheaper car.

Health Insurance and prescriptions: $369/mo - same as article. Since Joe earns over $50K per year, his employer should provide health insurance, so the additional monthly expense seems reasonable.

Telephone and internet: $100/mo - Verizon provides Telephone, Internet, AND digital TV for $99/month. You don't need cable TV. Over the air TV is FREE, and you don't waste your time watching all the crap on cable.

Total expenses above = $2,742. $3869-$2742 = $1127/mo

You can think up other necessary expenses out of the $1127/mo, but within the constraints of the article, that is what I calculated. Say $150/mo for clothes and supplies, and State income taxes (if any) will reduce the number. You only need to save $417/mo to accumulate $5,000 in a year.

[momofthree]

No magic, I just reduced the monthly expenses in the original article and used the correct after tax income for 2009.

Income after Federal taxes: $3,869/mo.

Mortgage: $1,022 - same as article.

Food for family of 4: $600/mo, the lower end of Dept of Agriculture's range.

Electric bill: $101 - from the article. This would be an all electric home, so no gas bill.
I added $50/mo for water, which the article forgot about. Do you have to water your lawn?

Transportation for SUV: $500/mo, reduced from the $712/mo article claim. Gas at 20 mpg, $3/gallon, 15,000/yr is $188/mo. The rest is maintenance, insurance, and financing costs. Like I said, Joe needs a cheaper car.

Health Insurance and prescriptions: $369/mo - same as article. Since Joe earns over $50K per year, his employer should provide health insurance, so the additional monthly expense seems reasonable.

Telephone and internet: $100/mo - Verizon provides Telephone, Internet, AND digital TV for $99/month. You don't need cable TV. Over the air TV is FREE, and you don't waste your time watching all the crap on cable.

Total expenses above = $2,742. $3869-$2742 = $1127/mo

You can think up other necessary expenses out of the $1127/mo, but within the constraints of the article, that is what I calculated. Say $150/mo for clothes and supplies, and State income taxes (if any) will reduce the number. You only need to save $417/mo to accumulate $5,000 in a year.

The article uses the median household income. Since the majority of families are 2-income, it is unrealistic to limit them to 1 vehicle. If you look at the budget I created, I put $300 for gas, that's $150/mo per person, which is actually less than your figure, but more overall. I don't think $300/mo gas, $150 insurance, and $100 car maintenance/fee expense for 2 older vehicles (no car payment) is excessive at all (total of $550/mo).

The initial article also doesn't account for out-of-pocket medical costs. So, yes, you have medical insurance, but don't you dare go see a dr. or fill a prescription. Again, highly unrealistic for a family of 4. Heaven forbid you have to fill a cavity or buy a pair of glasses.

Hey, I'm all for living without cable. I don't have cable tv or even a cell phone (gasp!), we live a pretty bare-bones lifestyle, maybe it's just our part of the country, but I can't imagine only paying $150 a month in utilities (electric, gas, water, basic telephone). And your snarky remark about "do you have to water the lawn" is a bit much. I mean, come on, you have to have water to drink, cook with, do laundry & dishes, and shower. We don't water our yard at all during the winter and our bill is still over $70 a month and we don't even bathe every day! (we do water our lawn during the summer and our water bill alone is close to $200 a month! I'm sure I'll be stoned now!) By the tone of your posts, I'm sure next you'll be telling "Joe" he needs to read by candlelight...

I just don't think that either the initial budget prepared in the article or the one you've prepared are feasible. Maybe we should just agree to disagree on this point though....