Monday, October 17, 2011

A sobering thought experiment

As I was walking today, I started thinking seriously about what Shane and I would do if he was out of work for a long time again. What would we do if we had to live off of just my salary for an entire year? And I realized that in all of my planning and budgeting, I had never really thought out how much of my salary goes to what. So here's a brutally honest look at my finances.

Income: After taxes, healthcare, and retirement (to which I contribute the maximum) are taken out of my salary I earn just under $26,000 per year. In either December or January I'll get a small, 1.5% increase so that should bump me up to the "just above" category.
As Alaskans, we receive the Permanent Fund Dividend or PFD every year. It's a variable amount, based on the stock market and how many residents there are, etc. Last year it was $1281/person, but this year it was $1174. Since we each get one, I'll add about $2400 to the income.
I've also been doing the FLOT productions and have indicated every time that I would like to continue doing them. Since I seem to be the only violinist interested, I'd say I have a little bit of job security here, but I can't count on it. It's also not a lot of money. I think once I've finished "Annie" I'll have earned about $400 for the year. Since Shane has also done some odd jobs and other things to earn some money, I'll add this to the total even though it's not guaranteed money.
So all of that brings income up to $28,800.

Rent: Our rent is currently $1000/month, but will be going up to $1100 starting in January. Since there are only two months left in this year, I'll start with the fresh year's rent. That means that for the year we'll pay $13,200 in rent. Nearly half my salary. Deduct from income and I've got $15,600 left.

Bills: Heat comes with rent so we don't have to worry about freezing to death. But electricity in our small apartment averages out to about $150/month and internet is about $100/month. $3000 a year just for those two bills. Now I've only got $12,600 for the year.

Student loans: I (thankfully) don't have student loans, but Shane does. The payments are $450/month. So now I'm down to $7200.

Pets: Our dog and cat, while they seem vital to our happiness, are definitely a luxury. Pepper requires grooming at least 3-4 times each year and while we could do it ourselves, it's not generally worth it! $60 each time to get groomed. A bag of food lasts her about 3 months ($40/bag) and she gets some canned food, about $200/year in cans. (!!! That one's an estimate--it's probably much lower, but I've never really kept track of how many cans we go through because we supplement with so much other food, like meat fat and salmon skins.) Zap also needs dry cat food ($40/bag, which lasts about 2 months) and canned food (about $50 for the year) and litter (about $30/bag, 5 bags per year). All of this is assuming that they don't need vet care on top of everything else and adds up to about $1040 per year. (Holy crap! And I scoffed at the average expenditure of $800 per year per pet! I had no idea we spent so much....)

So now I'm down to only $6160, and that would be all we'd have for food, gas, clothes, medical bills, school fees (if either of us takes classes) and entertainment. If we entirely stick to my planned budget of $125 per week for food, that's $6500! Granted we'll have some time with family for the holidays, so we could probably elimate about 2 1/2 weeks from the food budget. But that's still way over what I had planned for, and leaves no room for anything else. Ouch! I never realized before how close we are to being in debt, or to not having enough to eat. Even having a lot of our food budget supplemented by what I have grown, bartered for, or been given, it's been hard to stick to only $125 per week. I keep thinking, this week we'll catch up and give ourselves some wiggle room! But there always seems to be something expensive which we run out of (flour is cheap in the long run, but expensive for the week when I buy it), or some other little expense that crops up.

Before you start worrying about us, you should know two things. First, if Shane is still unemployed in the new year he will start taking classes again and probably get a student job. So it will never come to this. Second, we have savings. We even have a good amount of savings for two people our age. Well, considering the pathetic state of savings in this country, we apparently have a good amount of savings for any age since we could actually get our hands on six months of living expenses if I lost my job. Third, even if it did get this bad, we could turn to either of our parents for help. We don't lack for resources and a safety net. But it is very sobering to realize that, in our current situation, we couldn't sustain our modest style of living on my salary alone. Probably the worst part for me is that we're well above the federal poverty level. Mine is considered a "living wage". But I ask, how is anyone supposed to live well or get ahead if a "good salary" barely covers essentials? For the government to consider someone as being in poverty, that person haS to have nothing. Once again, I'm realizing how good I've got it.

The state of our country has become absolutely pathetic when a couple who couldn't cover all the bills under one salary is considered fortunate.

No comments:

Post a Comment