Living paycheck to paycheck is a hard reality for a lot of people trying to survive. As Congress works towards another round of stimulus, I wonder how many of them TRULY remembers (or have experienced) living pay check to pay check?
When I graduated from college in 1991, I got my first job in 1992 working for the state of Florida as a Safety and Health Specialist. It paid $20,000 a year. I was financing my first car (Chevrolet Cavalier). I relocated from Tampa to Tallahassee. I got a two bed room, one bath apartment at a one bedroom rate (it was the last apartment they had). I lived in North Tallahassee and my job was in South Tallahassee (7 miles one way to work). I was single (no girlfriend, no wife) with no kids and no health problems. Sounds good so far, right??
Now, here’s the Math.
First, I was paid monthly which meant before taxes my salary was roughly $1666 a month. Once you factor in Social Security, Medicare, and FICA withholding as well as health insurance through the state, I was bring home roughly $1250 a month.
So, let’s break down the monthly expenses:
$400 (Rent)
$200 (Car note)
$150 (Car Insurance)
$100 (Utilities)
$100 (Phone bill - land line. Not a cell phone and you had to pay for long distance)
$50 (Renter’s Insurance)
$50 (Citibank Visa - got it in college)
$35 (Sears - Got it in college)
$30 (Texaco)
$15 (Fingerhut)
So after getting my pay check, once all of the expenses were paid, I only had $120 to last me for the month.
Now, what you DON’T see listed are two other very important expenses: GAS and FOOD. Let’s take each one.
GAS
My Chevy Cavalier had a 13 gallon tank and it got 21 miles to the gallon in the city and 29 miles to the gallon on the highway. Gas back in 1992 was roughly $1.15 per gallon so with $14, I could fill up my gas tank. That meant, a full tank of gas could give me 273 miles of driving in the city. My job was 7 miles from my apartment so a round trip was 14 miles which meant I was driving 70 miles to and from work every week and approximately 280 miles every month. So with a full tank of gas, I should be straight for the month (aside from an extra quart of gas for those last few miles. Seems simple. Right?
Pause for a second. For me to get the benefit of only filling up my gas tank ONCE would mean that I would ONLY go TO and FROM work! I couldn’t stop at the mall. I couldn’t go and grab something to eat for lunch. I couldn’t go anywhere after work. I couldn’t drive anywhere on the weekend. I LITERALLY couldn’t go anywhere. No grocery shopping. No visiting. No fast foods. NOTHING! So, if you factor in that I would probably have to fill up my car twice a month. I was paying roughly $30 a month in gas.
So, now, my $120 is whittled down to $90!
FOOD
Here in lies the interesting rub. I had to be very strategic about food. Whatever I got, had to be able to be stretched! That usually means Hamburger Helper, ground beef, chicken, eggs, tuna fish, and spaghetti. If I was lucky, I would throw in some cheese, luncheon meat, bread and cereal. At best, if I budgeted right, I could probably get these things for about $30 to $40. That also didn’t take in consideration lunch. I had 20 lunches and that was a real trick. I paid strict attention to any deals or specials (Rally’s had a regular $2 lunch special with a cheeseburger, small fry and coke). If I did Fast Food or even bring in lunch, I was probably going to be out an additional $20 to $30.
So, now, my $90 is whittled down to about $30.
And just like that, I’m living paycheck to paycheck.
Now, I know there are some of you who are thinking to yourself that I could have done better to shave costs. I could have moved closer to my job to save money on gas (I had never been to Tallahassee so I was driving on my own and the apartments closer to my job were outside my wages. The further away you lived, the cheaper the rent). I could have paid off the credit cards I got from college (that I shouldn’t have gotten). I could have figured out a way to better budget on Food.
All of those things are true.
Once you take those things off, I would have had an additional $145 per month in discretionary funds. But if you are so focused on the nickel and dime that you over look a glaring fact.
Even if you take those things away, one major hiccup and that money is gone. I had a new car but I did all of my oil changes to save money. I did my best to take it in for regular tune ups (at the time was about $35 dollars so there goes money I wasn’t planning). Once my tires wore down, I would have to be two (again, money I hadn’t earmarked). I was lucky I didn’t have any health problems.
Listen, I know there are countless people who have managed to save and invest with far less and I applaud each and every one of them for doing so. However, it is important to remember that so many people are one unexpected financial emergency from having their finances destroyed.
It’s easy to tell people they can make a lot of things happen, even with limited finances, but when their finances are so tight that they are having problems breathing, it is unfair to not appreciate the air they consume.
#covid19 #stimulus #budget #caresact #credit #finances
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