A little frugality goes a long way.

This was indeed true for my husband and I. At the end of March, I quit my full-time job in order to become a full-time student. My husband and I worked out a budget, relocated to a smaller apartment to save $300 a month, and kept an eye on where the money went. Since I quit my job, we haven't noticed much difference in the way we live and in fact, have managed to place even more money into savings than we ever did while we both worked full time. We don't eat like poor students and we usually have enough left over to pick up extras like a nice wine or an occasional dinner out.

The above comments made a good point about health care though. Without insurance through my husband, I would not have quit my job.

I am the one who earns the second income (no health insurance, also the smaller income) in our household. I definitely would rather do what I do, and spend a little more on eating out, have someone come in every other week to clean, etc., than to do those things myself. But I also think that I'm in that rare 5-10% of people who enjoys what they do, and I'm self-employed.

It's definitely the health insurance issue, though, that drives me to work and save. I cannot find work I like that would provide health insurance, and so if anything happens to my husband's job, we'll be paying for his health insurance out of unemployment and my smaller income until he finds a new job.

I happened to have been reworking our budget this morning. Even if we ditched cable, cell phones and the central air unit it would not compare to the huge dent in our income from healthcare, gas and food.

These three things take a far larger chunk out of our budget than the nice optional things do.
Gas in mandatory most places. We did look at where we could potentially move to allow us to use one car. We really could not find one. Even neighborhoods that were near shopping areas. The homes would be maybe walking distance to a grocery but not walking distance to much of anything else. The current urban planning here has bumped housing further and further from needed services. We also have horribly inept public transit. It would take hours to make a ten minute drive.
Food costs, there is only so much you can do to cut back, scrimp, make it yourself before you just can't cut food costs anymore.
Don't even get me started on healthcare. Our insurance alone is taking the second largest cut out of our monthly budget, just behind our mortgage. That's before you start paying copays, coinsurance and other out of pocket costs.
The reality is that wages don't meet up to even those basic expenses people would have had in the 50's.

Philip, I'm just discovering your blog, and the advice to be frugal is probably the best piece of advice one can give.

It doesn't have to mean living in tattered rags under a barn. Just watching how and what you spend it on often does the trick, and you have to get rid of the notion that just because others do something, you have to too. I liked what Rob said in post no. 5. Me and my wife live in Sweden, and everything's expensive here. Yet my wife manages to keep everything very nicely within budget. There is a HUGE lot you can save by simply not buying packaged food that you micro, if you are willing to do some actual preparing and cooking. And you eat better by putting in that extra effort. So i'm not sure lucille's argument holds up about food costs. Just think what you're doing, and then think if there is another way to do it.

It was actually 1964 when the "poverty line" was set at three times the cost of an "economy food budget". Of course, this definition has become less and less meaningful as food costs have declined in real terms while the cost of housing and health care have soared. (While energy costs are higher today in real terms, they have not quite "soared" as much as housing and health care.)

That poverty definition also fails to account for very real differences in standard of living. Only cash income is counted - for example, non-cash benefits like Medicaid, food stamps, and rental assistance improve the standard of living of a "poor" welfare recipient but they don't "lift them out of poverty". Similarly, a "poor" retired free-and-clear homeowner can live much better than a full-time "not poor" childless hamburger flipper earning minimum wage and paying half his income for rent. And of course, the cost of living varies widely across the country but the poverty line does not take that into account.

Bullshit.

In 1950, fully two-fifths didn't **need** an automobile.

And yeah, I'd be MIGHTY surprised that minimum wage can support a family of four today. BULLSHIT.

Prove it. It can't be done.

40 x 6.50 = $260 per week x 4.2 work weeks per month = $1092 (before taxes and any deductions).

Or 2080 hours per year x 6.50 / 12 = $1126.66 before taxes (not much better).

Rent will consume half or more of the realized, after tax income. Utilities, transportation, food, clothing, medical, etc.

I SAY BULLSHIT. Knowing many young people earning "minimum wage" and living in a fairly cheap area comparatively speaking to other parts of the country, they can't make it on their own.

Not unless the have been given a (large) helping hand and they sure as hell can't support 4 people on that income.

This article is crap.

Health care technology has improved, but quality and availability of care has decreased for those with lower incomes. I spent my early years in Chalmette, a small poor area outside of New Orleans. We had window units for air conditioning, one car, and a black & white tv. This was in the 70's and 80's. We were, however, able to go to the doctor when necessary. We were not required to pay the entirety of the bill up front before we even saw the doctor. Also medication costs were not as absurd as they are now.
Today a one month supply of a medication with no generic can cost between $100 and upwards of $500 for "everyday" medical concerns. A one month supply of diabetes testing equipment (not including meds) for a person without insurance runs on average $120 if testing twice daily. Self-pay costs for doctor's visits can run from $75 to $300 (higher end for specialists).
Emergency rooms are only required to stabilize people who come in without insurance. Stabilizing is NOT the same thing as treatment.

To the morons bitching about the price of medicines -- none of the name brand only medicines were available 20 years ago. You just suffered or died.

To the morons complaining about the cost of cars. Buy a fucking bicycle. It costs less then 1 car payment. That's reasonable transportation if you can't take a bus.

To the folks talking about minimum wage in CA -- the illegals do it, and still have money to send home. Fix your taxes or fix your illegals, or maybe, just maybe, realize that they're so rich that they're sending money home.

To the folks who complain about how crummy cheap housing is ... compare it to 1950 when there was no running water, and hot water came from a pot on the stove. You haven't seen poverty until you've been to central africa. The slums in Rio look like paradise compared.

Minimum wage works out to 1040 dollars a month or so. Here in Atlanta, which is not considered an expensive place to live, about the lowest place you can find to live would be a basement room in someone's house, which will be three or four hundred dollars. Less electricity and heat you're looking at around fifty dollars a week to spare for things like, y'know. Food.

That's without a car, even an old junker. Or ever having any kind of social life, because you can't afford it.

By the way, this is all calculated without taxes. I'm generous that way.

Now you're telling us that it's possible to support others on an income like this?

Let us assume, for the moment, that you're right. That through some magical means you've not bothered disclosing to us, everyone can find cheap, rickety housing for a song, which happens to be within walking distance of a place which will hire them (since according to you they don't "need" a car). And they can get by without phones, too, or hot water. I actually know of no such place that's even available, but you've assured us that the teeming millions can find such places. After all, it worked in the 50s.

So what's your point? That poor people today who can't make ends meet should stop whining? That you won't be satisifed that they're really poor until they have taken some sort of monk-like oath to do without any modern conveniences whatsoever? Things like phones and cars which would, you know, expand their employment and educational prospects? Exactly how much do you want them to give up before they have a legitimate gripe in your mind?

I really don't understand where you're going with this argument. You could just as well say that people don't need money at all because the our Cro-Magnon ancestors managed just fine living under trees and in caves and huddling around fires.

Yes, there are always going to be the people who don't understand that they can't live a first-class lifestyle on a nearly minimum wage budget, but the majority of people with low incomes would be happy to get through a month without having an eviction notice tacked on their door, and not have to worry about their electricity getting shut off in their 300 square foot studio apartment. Get a grip, man.

I want to say that I completely agree with Kitten's post. What is the point of this? I understand that it's beyond the comfort level of some affluent people to realize that they live in supposedly the most developed nation in the world and yet have fellow citizens who struggle for basic needs like food, housing, heat, and health care. But attempting to pretend that the impoverished are just a bunch of whiners or that they're exaggerating their ills is ridiculous. Why don't you try living the way you've described? Go and get a minimum wage job and then try to support a spouse and a kid on said income. Remember though, that you don't get to stay in the comfortable residence you probably live in now or drive the car you probably drive. You'll have to rent an apartment and then walk to whatever job will hire you. When you actually do it, come back and post and maybe then we'll take you seriously.

Don't get me wrong, I'm all for frugal living and living within one's means, but it's getting to the point in this country where things like nutritious food, safe housing, and health care are "beyond the means" of many poor families. And I'm not talking about the welfare cases. I mean the working poor, the ones who are just a smidge too rich to qualify for Medicaid and food stamps but not wealthy enough to make ends meet. They have real problems and real struggles and for someone who by his own admission grew up in a household where the breadwinner was a college professor to marginalize those struggles with a "If only it was still 1950, then they'd realize how great they've got it" schtick is just, well, heartless.

Excellent point about the number of workers in a household going up. With so many extra people in the workforce, keep in mind the company's cost to obtain a workforce (in other words, salary and benefits) - they are less likely to pay a premium for labor.

The argument typically is whether or not both spouses of a family should work, but my argument is with the teenage kids. From a study by the University of Washington, the majority of seniors have an after-school job, with many working more than 15 hrs per week.

Consumerism is making kids work (and buy) more than ever before. The workforce is diluted with the number of workers increasing, which means more people are feeling the pressures of becoming more skilled just to sustain their standard of living (which marketing companies are defining for us).

Another idiot. The article claimed that a family of 4 could be raised with a HIGHER LIVING STANDARD then the 1950's.

Either you can't read, or you an idiot. Both, probably.

I've lived in poverty, I know what it's like. Critically injured in the mid-80's, I (of course) lost my job, my home, everything. I got out of the hospital in a body cast with my jaw also wired shut.

I was given $13 a month in food stamps. $13 lousy dollars.

Now, you tell me how the hell I was going to live on that?

Eventually, the body cast was removed, the wires in the jaw taken out and I returned to work. Disregarding my medical bills, which were on "hold" anyways due to a pending lawsuit, I struggled mightily with staying alive. I simply could not earn enough and I was making a bit more then minimum wage.

You are clueless and have absolutely no idea what you're talking about.

I live in Japan. My condo is only a 8 minute walk to the train station. There are 4 supermarkets next to the station. A quick ride on the train takes me to more shopping then I could ever do. A 5 min. train ride and a 15 min bus ride gets me to Costco. The infrastructure has been put in so people can get around. Of course, it's very urban and most apartments are smallish, but people manage very well. Taxes are not nearly as high as the states, for most.

People in the states are paying for the war in Iraq, the highway system, private health care (got to pay the middle man), and the military industrial complex. It's not free. People in other countries don't pay for it. The worst is education, up by at least 10% every year.

Do you need a car? Two? Really? I don't, nor does anyone around me. It's a luxury, people pay $200 a month for a parking space. There is no public parking. It's all private, pay as you go.

My daughter's daycare center is only a 3 minute walk from my condo, her elementary school is 8 minutes away. I could go on about how convenient the public services are, but I'm sure you get the point. People here enjoy the government working FOR the people. Sure, it costs a little more here and there, but in the end it is actually cheaper.

I find it very sad that individuals are unable to empathize with those who have it more difficult than they financially. There is so much of a "pull yourself up by your bootstraps you lazy bugger" mentality. This is extremely interesting when you consider how hight the per-capita debt is in this country. People live off of their credit cards and finance their homes with "interest only" loans. Most people pay the minimum payment on their credit cards each month, while lambasting others who do not live as they do. The American mindset needs to change. Everyone, regardless of their income, is a human being deserving of kindness and respect.

I believe strongly in living simply and frugally. If we haven't saved sufficiently for a purchase, we wait until we have. We don't use credit cards. We follow a monthly budget plan, which we adjust in the case of unexpected expenses. We share one car, and walk or bike. At the same time, I also believe in helping others. If I have extra vegetables or whatnot, I share with my friends and family rather than letting it go to waste. My family lives comfortably, but our income is well over the poverty line.

There has been a great deal of research on "how one can live on a limited means". The truth is, however, that often people who have more resources are more capable of living on less. One example- since we have a car, I can drive to the wholesale produce market to purchase vegetables and fruit at a fraction of the cost of a grocery. Many lower income areas in Tampa do not have a grocery within a 3 mile radius, so those who have to walk or bike have to rely on high priced items at convenience stores. When I dropped items off at the Salvation Army, I noticed that the prices for clothing and household goods were as or more expensive than Walmart, Target, etc..Once again, location plays a role. If you don't have a car, those options aren't available. Tampa has an almost non-existent public transport system.--enough said. How far you can go affects what jobs are available to you, and can limit your choices. Most of the urban US is not like the urban areas in Japan or elsewhere. There is a great deal of sprawl and little to no public transport. If you are in a city with public transport and where much is in walking distance, then you have more options.

For people trying to live week to week or month to month, up and moving to another part of the country is not a viable option. Also in many of those areas where cost of living is cheaper, few jobs are available.

I am all for voluntary simplicity. I do however firmly believe that we need to do more for each other. We need to spend less time criticizing, and more time getting out in the community and helping. I don't mean giving money. I mean giving something more important, time. Libraries are always looking for volunteer tutors for adult literacy and English for Speakers of other Languages. Habitat for Humanity is an amazing organization that always needs volunteers. There are so many ways to help. In the end it is working together to help one another which strengthens and enriches us all.

Yeah, you can live in a tiny, cheap apartment and walk or take the bus everywhere like people did in 1950 fairly cheaply, at least here in flyover country. The difference is that there's been an increase in crime rates (understatement of the decade) since then. You are risking life and limb if you do so in a way that you weren't back then. The whole point of suburbanization is to escape the pathologies that have exploded among the poor since the 1960s. It may be possible for a family of four to live in an urban slum on minimum wage, but the shittiness of that situation is far beyond that of your car-deprived 1950s family. If a neighborhood has a tolerably low crime rate, then the cost of a smallish two-bedroom apartment + the gas and power bill would account for the great majority of a minimum wage paycheck, if not all of it.

To the people who brought up illegal immigrants, they usually cram 8 or so guys (not families, guys) into small apartments and work lots of hours. This is certainly possible, but is again a far crappier situation that the minimum-wage bread earner who at least had a single-family dwelling, as humble as it may have been.

All the comments made me feel better about being a single woman, fresh out of a bad relationship, starting only with debt and a car. I make $9 an hour and in only four months time I was able to move from my brother's broken futon to my own studio apartment. I have hot water, basic cable, a phone, AND just found a computer by the dumpster that works (!) so I can comunicate with the outside world (information CAN improve the quality of one's life). My food bill is about 12% of my income (90% prepared healthily at home - no microwave). My rent is about 32% and credit card debt 14%. I could probably pay out of pocket (like I have all of my adult life earning less than $12,000 a year)for dental needs. Maybe by the time I need medical, I won't mind dying (just the pain). I feel rich after reading about the way people lived when I was born (1966). And I know the reality of homelessness. I am truely glad I found this website. I had been feeling a little discontent about my job. At least I have one. (I still feel sorry for the poor people who want a lot of babies. Liberty for all? No. I don't really feel bad for them. Poor people should't make babies.)

People don't seem to see the point that the author was talking about a 50's style of life. Yes rent is alot more money, but there are no hot waterless shacks to live in anymore. Because everyone has a car now, the mainstream psychology now is that its ok to have to drive 15 minutes to get to a supermarket. A high standard of living is basically forced upon us now.
Yes there are some people who really do have a tough life, but these are mostly caused by serious disasters. While growing up, it was just me my mom and my older sister. We lived in projects, but found that they were really only economical for people on welfare. We started renting out floors of other peoples houses, having 2 families in one house. It got really stressful, but it worked. Me and my sister both started working at the age of 16, and havent stopped since. But my mom didn't take any of our money, it was for our own private use, since believes strongly that the primary income should be enough for a family.
Now things are slightly better. I've had cars, but decided insurance wasn't worth it, so now I walk to college and borrow my moms car when I can. My sisters gotten married and now has her own house. My mom has worked the same job for over 10 years now, slowly moving up in the medical field (started at a nursing home, became an assistant nurse at a hospital, and has gotten a few promotions there). Yes, things are not always easy, and unexpected expensives can be killer. But we have all the basics, avoid debt, and save money where we can.

Why can't people walk in the winter? I recall pictures of children walking in snow with no shoes in my history classes, going to there factory job for the next 12 hours(more like late 19th century, but it still happened). People complain about insurance costs, while 50+ years ago people just died slowly of mystery illnesses. The idea isn't that its EASY to live on a small income in America, just thats its a hell of a lot better then it once was.

I live in L.A. and it is very expensive to live here. There is no way you could find an a room to rent for $200, let alone a whole apartment. The housing boom has priced most of us out of the real estate market and the rental market. The answer is to just get up and move away from the city? Really, the answer is to leave family, friends and everything you've worked for to find a home out of the city? Are there the same work opportunities out of the city? I think it is flippant to say "just move," it reminds me of the response one hears at times to critical debate of U.S. politics, which is, if you don't like it, then just move. Anyway, I am sincerely happy that things are so affordable and crime free in KY, I am sure it is a wonderful place to live and have grown up. I will; however, take my over priced, crime ridden Los Angeles and struggle to make a life here near those I love.

I see your point and I agree. My husband and I were raised in the same standard and hoped to raise our children in similar comfort. With prices rising, doing so in our hometown was an impossibility for us at present. We chose instead to move out to a less expensive and more rural location. We also scaled down (items, clutter, extras) and shopped smart. And now we're able to live better than our parents had at the time, on less and in a beautiful environment. Options for middle class families are really boundless in creativity if you are willing to research and stick to.

You should compare the way the poor live today with the conspicious consumers, Not the poor in the 50's. Compare the capitalist class with the working class, working poor class and underclass. After comparing those classes tell me if you still think the working-underclass has high expectation.

If this was in fact 1960 you could use the same spiel for how good we had it, and how expensive we were living compared to 20's standards.

Managing a budget appropriately is something learned over time .. or for some people.. never.

At the risk of breathtaking oversimplification...

In the 1950's and 60's my father's income as an average tradesman could support himself, his wife, four children, pay for the house, the car, the summer vacation and the countless large and small necessities and little luxuries it took to be 'middle class.'

In the late 70's as a clerk in the service sector I could afford an apartment, pay the utilities with ease, have plenty of spending money for my pastimes, save for school and for holidays, and still have something left over.

This was on a part-time job, by the way.

Today, as a middle-aged man, over the past five years of full employment--admittedly at the lower end of the scale--over half my income has gone to rent alone for just ROOMS, and the rest is taken up by food and public transportation, such as it's called where I live.

And that's it. Period. The End. Note no budget for clothing, utilities, healthcare, spouses, children, rainy days, emergencies or insurrections. Wages minus rent and food equals absolute zero.

And this is fulltime work.

Even bearing in mind the difference in pay scale between such an occupation as my father practiced, and the jobs open to degree bearing, liberal educated good-for-littles as myself, one would think that if in one time a single man could pay for himself and a large family, a few years later another man could at least earn a proportional degree of comfort just for himself, but this is no longer the case.

So, despite the many fascinating accounts of how frugality can beat all (one is reminded of that scene in 'The Pink Panther' where Inspector Clouseau explains his wife's ability to buy mink comes from care with the housekeeping money) and dubious comparisons between living in Hickville, Arkansas and the Big Apple, or between life in the third world and in this one, I think the overwhelming conclusion to reach is that in North America we are on something of a downward trend, and no amount of cell phones, MP3 players and other digital toys are going to change the fact that for many people new shoes are now a luxury.

What is more disturbing--as demonstrated in some responses here--is how present society--which for much of the twentieth century had been fiercely egalitarian--now comes to think of working poverty as acceptable, as 'okay', as 'normal' and even 'serves them right'. And, needless to say, by most political figures, as highly desirable.

By the way, why has there been so little comment on the political factors behind the current cost and standard of living?

Thanks to Guest #49 for the great summary of the hidden costs of poverty. It describes many people's lives to a T.

Guest, Vancouver

I think many people don't consider the impact smoking and drinking has on their finances. That is probably the difference in more cases than not (not considering medical problems) between getting by and not getting by. I bet many people feel those things are off-limits to discussion due to the lack of addressing them here or anywhere else I've seen. I think there is a double standard. I get bad-mouthed because I have plenty because I don't do those two things, but someone who does do those things feel they have all the right to gripe about their situation.

As a college history professor, I make a decent income, however, my father's one income in the sixties FAR surpassed the buying power I have now. (I have a much higher comparable job than he did) Our 3200 square foot home we had as a child, in an upscale neighborhood, in suburban America cost them LESS than 25,000 dollars. We DID have two cars (in fact three). Where it took my father a year and a half to earn enough to equal the value of our house, it takes me four. Today, the house my wife and I both pay for is smaller than my parent's home and cost us a half million.
Economic historians will tell you that the decline of the American way of life came in the late sixties, and from everything I have read that is pretty much fact.
I applaud your spin, but unfortunately it is only that, a spin. Middle class standards have dropped due in part to supply side economics which saw corporate America expand. Companies like Wal-Mart displaced local business, displacing upper middle class owners. Wages HAVE NOT kept up with inflation, for example, when I started driving, gas was $.69 a gallon. It went to $1.00 by the late 70s. Gas was a 35 cents in 1969, I paid 3.15 yesterday.
But the argument can be settle relatively easy. Just compare wages vs relative costs. Average wage in 69 was 9.4k, houses averaged 23k, cars 3k, gas 35 cents, bread 25 cents, hamburger meat 75 cents/lb. In 2008, average wage was 40k, houses averaged 238k, cars 28k, gas 3.05 (widely fluctuating to as high as 4.10) bread 2.79, Hamburger meat 3.99/lb.
Simple math would tell you that 9.4k into 40k is about 1/4. So we are making four times what we made in 1969 (remember, it gets BETTER the further back we go) The problem with phil's assumptions is this, houses went up TEN x, cars went up 9x, gas 9x, bread 11x, hamburger meat 5x. Pretty easy argument to defeat Phil. Throw in that insurance for cars was NOT mandatory back then, that the price of a ticket for not wearing your seat belt cost you money today and wouldn't have been a ticket then (we didn't have seat belts.)
I applaud your faulty logic for being cheery, but alas, not very well researched.
One last factor that should be considered with makes your argument even more faulty, is how the average income has been calculated. Although the average income in 69 was 9k, there were fewer individuals below poverty income. Today's figure has a small number of individuals making such an enormous amount of wealth that the medium is skewed and there are a larger number of substandard incomes. In otherwords, the middle class has shrunk considerably.

Randall: you pay $3.99/lb for hamburger? You should shop around more, dude.

And living standards have not declined since the 60's. Total compensation (not just wages) has roughly increased along with productivity growth.