Apparently we live below the poverty line

The federal poverty level for a family of 5 in 2014 is: $27,910. This works out to $2,325 a month.

Here’s what our core expenses are per month:

  • Housing: $1,065 (varies slightly year to year based on property taxes)
  • Food/Household/Personal Care: $450 (does not include alcohol or luxury non-essentials like CO2 for our seltzer machine)
  • Fuel/Repair & Maintenance: $200
  • Gas/Electric: $200
  • Medical Out-of-Pocket: $100
  • Car Insurance: $83 (we could easily live with a single car, which would half this, and may do this soon)
  • Water: $80
  • Internet: $60
  • Phone: $25
  • Total: $2,263 (97% of the poverty line)

Maybe we’re poor, but we stop and smell the flowers!

Quite frankly, this amazes me. This doesn’t include the various benefits (Medicaid, EBT, EITC) that we’d qualify for if our income was actually at this level. And it includes paying a mortgage on a house! Renting a decent 2 bedroom apartment or buying a cheaper house at a lower interest rate (how I wish we could!) would easily get the home expense into the $600-$700 territory. When our house is paid off, taxes and insurance alone would ~$250/month.

Optimizing to a single-car family, something we essentially are already (I use my car only 1-2 times a week and could save those trips for when the Alchemist was home) would knock about $100/month ($50 each from maintenance and insurance). Our gas/electric bill may actually end up lower than $200 a month with our Mustachian usage. It would certainly be less in an apartment setting.

We live a pretty fantastic life. Our kids are happy and healthy. We have shelter. We eat lots of fresh food and are starting to grow some of our own. We live within walking distance of three parks, biking distance of many others. We live within walking distance of two supermarkets, biking distance of countless shopping opportunities. Entertainment is a bit thin, but that’s where the magic of the public library comes in – and the second-best library in the area is a mile or so down the road.

We’re thankful for what we have and we certainly don’t feel poor.

*Regular readers will note I’ve left out all of our debt payments on student loans. I did this because: 1.) they are not a core expense; 2.) based on these numbers, we certainly didn’t need to go to college to support our lifestyle!


8 Comments on “Apparently we live below the poverty line”

  1. torsverr says:

    I call up my internet every 6-7 months and say “the rate is too high… I’m thinking about switching/canceling” and they’ll always give me a lower promo-rate for the next 6 months.

  2. Did you include heath insurance? That could add $600-$1000 per month if you had to purchase it.

    • David says:

      I glossed over health insurance because I really don’t want to get into analyzing Medicaid and/or ACA subsidies, both of which we’d be eligible for if our income was that low.

  3. I wonder what it would take to teach people who are living on poverty wages how to do so and thrive.

    Heck, my expenses including health coverage are below the poverty line for one–and I own a 3-plex that more than pays for itself! (And before anyone talks about the capital necessary to buy it, I brought a check for $30 to the closing table and walked away with one over $400 higher that included prorated rent for the existing tenant.)

    • David says:

      Not spending like a poor person. Lots of symptoms of this, but generally it’s a hyper short-term financial planning outlook.

  4. Axecleaver says:

    Hi Chief,

    I like the blog! The census bureau determines poverty levels, which are used as an input by many government agencies to determine eligibility for government benefits, like Medicaid and SNAP (food stamps). The poverty guidelines are PRE-TAX, meaning that at 65k pre tax income, you are pulling down about twice the poverty level. Details here:

    That said, each program uses the poverty guidelines differently. ACA insurance subsidies (and most, but not all, Medicaid programs) use Modified Adjusted Gross Income (MAGI), which for you would be close to that 28k figure. With your current earnings, you probably qualify for free healthcare through Medicaid for your entire family, and you certainly qualify for free healthcare for your goblins through CHIP.

    One complication of the ACA is that if you qualify for Medicaid, you don’t qualify for an insurance subsidy; your choices are to take the handout, or pay full freight.

    • David says:

      Axecleaver- oh, I’m well aware we make far more than the poverty line. The purpose of that (old) post was to illustrate just how well you could live even at the poverty line, because our spending still gave us a very rich life. Our spending has creeped up a bit since then as we’ve changed some priorities about food and other things but we do still live quite simply.

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