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Open Collection of Student Writing (OCSW)

Poverty Assignment

Housing

The family of four resides in Bountiful, Utah. Their housing is a three-bedroom, two-bathroom, 1,500 square foot condominium. I chose the family to live in a condo because the average cost of an apartment is the same as a condo. A single-family home costs more per month in terms of a mortgage payment, and the exterior upkeep of the home is taken care of by a Homeowners Association for a small fee. This means that the family does not need to worry about a lot of maintenance fees and bills that come with home ownership.  The information to determine housing costs was obtained by observing realtor listings for apartments, condos and single-family homes. The cost for the housing selected was determined by calculating the average price of a three-bedroom, two bathroom condo. I found the water and utility costs by going to the Bountiful City Water Departments website and looking at my recent utility bills, which applies because I am a Bountiful city resident.

Food

The food budget was determined by going to Smiths in Bountiful after making a simple menu and researching food costs. The menu meals are nutritious and simple. The budget allowed for fruits, vegetables, and dairy items.  “Meatless Mondays” were incorporated to conserve meat, one of the costliest items on a grocery list, which allowed for more savings in the food budget.

Child Care

I decided the eight-year-old daughter would attend the after-school program at her elementary school. I chose the after-school program because it would give the child a safe social atmosphere after school where she could receive help with homework and be engaged in activities with other children in her community. Extended hour pick up time is five-thirty to six o’clock in the evening which would allow a parent to pick her up on their commute home from work. After researching daycares in the Bountiful and North Salt Lake area, I decided the most affordable and convenient childcare option for the three-year-old son is Buddy Bin Inc., located in North Salt Lake Utah. I chose Buddy Bin Inc. because it is a pay by the hour provider, meaning the parents only pay for the time the child is at the site. In addition, meals are included free after four hours of attendance and it is a safe environment. The pay by the hour option I found is a benefit because the family does not get charged for childcare if the child is not in attendance due to illness, emergency, early check out or vacation. The information was obtained from the website, talking with the owner and personal experience as my three-year-old son attends Buddy Bin Inc. while I am at work and school.

Transportation

I concluded the two adults would drive 2012 Honda Civics, and they would be paying a car loan for the vehicles. I chose Honda Civics because they are a standard commuter vehicle and, if needed, parts can be easily found. They are fuel efficient as well, with thirteen-gallon tanks reaching up to 29 miles per gallon, which helps lower transportation costs because of reduced fuel usage. I calculated the car price amount by looking at prices for used 2012 Honda Civics and finding the average cost. The monthly payment was determined by using a payment calculator through America First Credit Union. The fuel budget was estimated by finding the average cost of gas ($2.42 per gallon) in Bountiful and multiplying the fuel tank capacity (13.2 gallons) by five, allowing each vehicle two and a half full tanks each month. In the maintenance column, I budgeted sixty dollars to be used between the two vehicles as needed for oil changes, washer fluid, coolant, and brake fluid. The amount for the car maintenance and taxes was decided by talking with my husband, who takes care of our cars and is a CPA.

Charity

I decided not to budget for the family to give to a church because I was not sure of average church offerings of different denominations of faith. However, I did budget for the family to donate twenty dollars a month to charity.

Furniture

I chose for my family to purchase furniture secondhand. Used furniture can be purchased for a reasonable cost, or it can be found some of the time for free in local ads. I believe mattresses need to be purchased new, not secondhand. Because of this, I budgeted the monthly cost for one queen size and two twin size mattresses. The cost of the mattresses was found by going to a local furniture store and determining the monthly payment for the three mattresses. I chose not to budget for appliances because while looking at home listings I found most home sellers include appliances with the home.

Clothing

I budgeted thirty dollars for clothing for each of the adults and thirty-five dollars for the children combined. I decided to budget for thirty dollars per adult by going to Target and browsing essential clothing. I found most casual or dress casual men’s and women’s pants, jackets, and shirts, can be purchased for thirty dollars if one single item was purchased per budget month. I combined thirty-five dollars for the children because if needed this is an adequate amount to cover clothing and shoes for both children. Children grow out of clothing faster than an adult. I went to children’s thrift stores and found a generous amount of secondhand children’s clothing in presentable condition can be purchased for thirty-five dollars.

Personal

In the personal hygiene column, I budgeted thirty-one dollars for the month. I determined this number by considering hair, grooming tools, body, dental, and feminine hygiene care products. I chose not to budget for magazines or entertainment because these can all be easily accessed at a county library. Libraries have a wide range and variety of magazines, DVDs/TV series and literature, available for free. In the gifts section I decided to budget twenty dollars a month because that seems like a reasonable amount for a baby shower, a birthday gift to a friend, or, if there is not an event for the budgeted month, the gift budget can be put toward holiday gifts. I decided to budget two-hundred-three dollars in education. The decision to incorporate this number was made because millions of Americans pay student loans, with the median monthly student loan payment (for borrower aged 20 to 30 years) of two-hundred-three dollars per monthly payment.

Insurance

For life insurance, the monthly rate is the average of monthly rates for two people with a coverage of $500,000.  I determined the average by comparing insurance websites.  For the car and homeowners insurance I got the monthly average amount by using an insurance estimator for a few major insurance companies.  For the medical insurance I asked my husband and he made an estimate based on our own insurance costs.

Medical Expenses

For the medical expenses I looked at my own family’s medical expense history. The doctor co-pay, dentist and eye doctor expenses are what I have paid during medical visits. The monthly cost for prescriptions was determined by asking close friends how much they pay monthly for medications.

Miscellaneous

I budgeted a small buffer amount into the miscellaneous column for each family member. I decided the number by looking into my own family’s miscellaneous spending. The amount seemed reasonable to purchase small wants or extra needs.

Other

In the “Other” column I budgeted diapers for the three-year-old son. The total was determined by my own three-year-old son’s disposable diaper use. The amount for the diaper budget was determined by going to Target and totaling the cost of two boxes of Up and Up brand diapers in size four.

Budgeting Sheet for Monthly Expenses 

Housing   Transportation  
Rent or Mortgage  $1,138 Car Payments  $325.18
Real estate taxes  $183.00 Gas  $159.72
Water and Sewer  $25.39 Maintenance  $60.00
Heat and Electricity  $136.95 Public Transportation  $0.00
Phone  $122.44 Taxes  $15.00
Maintenance  $80.00 Total Transportation $559.90
Total for Housing $1,656.78  
    Charity  
Food $325.00 Church $0.00
    Other $20.00
Clothing   Total Charity $20.00
Father  $30.00    
Mother  $30.00 Durables  
Children  $35.00 Furniture $100.00
Total for Clothing $95.00 Appliances  $0.00
    Total Durables $100.00
Insurance      
Life  $18.00 Personal  
Car  $170.00 Education  $203.00
Homeowners/Renters  $39.00 Magazines  $0
Medical  $200.00 Entertainment  $0
Total Insurance $427.00 Gifts  $20.00
    Personal Hygiene  $31.00
Medical Expenses   Total Personal $51.00
Doctor Co-pay  $30.00    
Dentist  $40.00 Miscellaneous  
Prescriptions $30.00 Husband  $30.00
Eye Doctor  $65.00 Wife  $30.00
Total for Medical $165.00 Children $20.00
    Total Misc. $80.00
Child Care      
3-yr old $624.00 Other $45.00
8 yr-old $55.00   Diapers- Size 4 $45.00
Total Child Care $679.00    
       
Total Column One $3,347.78 Total Column Two $1,058.90

 

Column One Total $3,347.78
Column Two Total $1,058.90
Total Monthly Living Expenses   $4,406.68

Poverty Line Level Discussion

Poverty is a pressing issue in America. Many Americans struggle to make ends meet and aim to live what is supposedly the ‘American dream.’ It can be very discouraging looking at the numbers to figure out how to afford to live. Financial struggles are often linked to mental and emotional stress. With so many Americans worried about finances, it is no wonder anxiety and depression are so highly diagnosed.           

The yearly income for the family of four following the monthly budget I created would be $52,880.16. This is below the median income of Bountiful, which is $64,123.00, but is nearly $20,000.00 over the Utah poverty guideline for a family of four, which indicates that the poverty line of a family of four is $36,900.00/annual. This certainly challenges my thinking of how poverty levels are being determined in America. It is possible to live on a limited income. However, the cost of living is rising, and with 44.2 million Americans paying student loan debt with an average payment of $351 a month, living on a limited income is becoming more and more difficult for millions of Americans.

Student Reaction

When budgeting, I am always surprised with how quickly everything adds up. In studying costs of living and monthly expenses, it is not a surprise to me why money is an issue among so many people. The monthly budget for the family of four provided would be $4,406.68. I feel I made my budget very reasonable and conservative. Yet, the monthly budget was still very costly. This assignment inspired me to prioritize our monthly budget meeting as a family.

Conclusion

I think the poverty line is set too low. People earning above the current poverty line can still be living in poor conditions and financially find it difficult to have a decent quality of life. It is a very common misconception that only people living in/below poverty are individuals who are homeless, jobless, and struggling to fulfill their basic needs like food, clothes, and shelter. Poverty is a reality for many individuals and families who are struggling to survive on minimum wage and those living paycheck to paycheck. Families within the low-middle class can be considered as living in poverty or on the verge poverty. Poverty is a threat to anyone that is unable to live within their needs and who is unable to provide for themselves with the basic necessities of life.   

Sources:

Bountiful City Water (2017). Retrieved from

https://www.bountifulutah.gov/Water-Department.

Gregory, K. (2017, January 31). 2017 Poverty Income Guidelines. Retrieved from

https://www.utcourts.gov/resources/poverty_guidelines.pdf.

The Buddy Bin (2012). Retrieved from

http://www.thebuddybin.com/.

U.S Student Loan Debt Statistics (2017, September 13). Retrieved from

https://studentloanhero.com/student-loan-debt-statistics/.

Wasatch Elementary After School Program (2015). Retrieved from

https://www.davis.k12.ut.us/Domain/10604.

 

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