My family of five lives under $21,000 a year. We own our own home, drive a decent minivan, send our kid to dance lessons, and splurge on some technological indulgences. Our story does not deliver a road map for every other American citizen to live within our income. These stories about families living at the poverty level successfully, as tempting as they are as financial-fitness guides, leave some readers feeling slightly disappointed.
A Family of Four Lives Well on $14,000 a Year. A story by Mandi Woodruff, with Business Insider, about a family of four who lives well on just $14,000 a year exemplifies my disappointment with these financial-freedom teasers. The family’s story would have impressed me more had they always lived on a low income or had they lost their savings from some devastating circumstance requiring them to start from scratch with little income. Their story did not begin at that low income. Their story began with the father’s career in the military which allowed his family to save enough money for a fixer-upper of a home and a payment-free vehicle.
Family Saves by Doing Things Themselves. Woodruff explains that this family stockpiles milk, bakes its own bread, makes its own detergents, and monitors its mileage so that the family saves money on gasoline. While I laud those money-saving tactics, I still do not understand how my family could live under $14,000 a year. Another family’s income level is insignificant if it has a different start to their story than most of us perpetually living on a low income. Saving money on groceries and gasoline doesn’t bring a family’s expenses down to zero. Many of us could erase our grocery and gasoline expenses from our budget completely and still find ourselves with basic bills and expenses that cost more than the $1167 a month that this family reportedly makes.
Living “Well” is Subjective. One could live “well” with little income by baking bread every day; making homemade detergents; turning the lawn into a small farm; milking goats; chopping the heads off chickens; and collecting neighborhood dryer lint to spin into threads for household linens and family clothing. My family lives “well,” by using second-hand furniture-sometimes donated to us by what we call “the garbage fairies”–, occasionally racking up a few credit card bills, wearing second-hand clothes, and paying a low home mortgage we secured by entering into our local Habitat for Humanity program. Would our living room décor of two large green chairs (different colors and styles), and one retro-orange plush rocker fit into your personal description of “living well?” We do not have a couch or a coffee table.
Poor People Sometimes Have Financial Kickers. A controversial topic of “living well” under a certain income is that some people find programs that bolster their economic standard of living. Some of these “programs” are lauded by society, and others are not so well-regarded. I would have thought that most people considered the G.I. Bill to be an honorable hand-up for veterans until the Veteran’s Affairs worker at my college erroneously quoted a change to the bill and explained that “too many people were just trying to live off the free money from the program without working.” When I suggested that I had paid into it, she disdainfully said, “You paid $100 a month for a year.”
G.I. Bill aside, some people get government subsidies for child-care, rent, food, and utility bills. Some people enter nonprofit programs such as Habitat for Humanity to get a discount on their mortgages. Slate writer, Brian Palmer discusses the quality of life for people living at the poverty threshold and he notes that increased government assistance has significantly improved the quality of life for the poor since the 1950’s. Palmer points out that the quality of life of the impoverished blurs our ability to recognize the wealth of our nation, because the deprivation they experience is relatively low.
Financial Assistance is Not Always Obvious. While those government assistance programs are obvious kickers to the financial freedoms some low-income families experience, other financial kickers are not so portable to every citizen in the same income-bracket. Some regions of the United States have poor labor markets and higher costs of living than others. The Michigan Institute of Technology offers an online living wage calculator for people interested in seeing how their location affects the cost living.
Some families have large social networks ripe with baby-watchers and car-fixers at their disposal. Regarding “luck,” some of the spoils of luck are easy to bury in the “how we do it on a low income” schema. Buying a Habitat for Humanity home during the same year the President of the United States sends all new home buyers a tax-funded check for $8,000 is certainly lucky.