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Starting Two Challenges

February 25th, 2006 at 08:55 pm

I'm joining the $20 challenge and the living on minimum wage challenge at the same time.

Here's my initial planning for the challenge of living on minimum wage. Iím going to make this a double challenge by buying JMJJ215/Jesseís YNAB budgeting spreadsheet for $20 (less a nickel)and seeing how much that $20 helps me save by living way below my means. (This isnít a plug-yet. I donít know Jesse, I just need a separate way to track this specialized budget outside of my current Quicken. I use Quicken to track, not budget, and with this I will need to budget-for example, I wonít be spending $20 a month on Auto service, Iíll be banking $20 a month towards auto service.)

As I live in California, I am going to use the California minimum wage of $6.75. Part of my justification is that I have some current expenses that I am not comfortable cutting, such as health insurance and prescriptions. The other justification is that I do live in CA, and couldnít make less than $6.75. If I truly had a minimum wage job, either $6.75 or $5.15, I would likely have no insurance, and would struggle to find special programs to cover the 1/3 of my prescriptions that are absolutely crucial.

In doing this challenge I am in no way stating that I believe that the minimum wage is fair, etc. This is not a political statement of any sort. Iím doing it because I can really boost my savings by doing this, and remind myself that things I have taken for granted recently are really luxuries.

All rent and utilities are exactly half of the household total; my boyfriend covers his half with his income-this has been our arrangement for over eight years and this challenge wonít affect it. He will likely actually enjoy the scaling back as he is off work living on savings now (for fun, not laid off).

CA min wage of 6.75 at 40 hours a week at 4.33 weeks a month is $1169. Less 7.65% FICA for $90, 1/2 percent SDI for $6. Iíll assume due to low income no federal or state tax liability.
$1169 Ė 96 = $1073 total to work with

My expenses are taken either from the exact monthly bill, or my total from 2005. I have used Quicken since 1998 to account for every penny spent, so my figures should be accurate.

Rent $400 (A larger place than I need; if I was min. wage Iíd scale down)
PG&E $100 (Our bill is crazy, see other posts)
Phone $ 9 (Just the basic line, long distance is on a prepaid MCI card Ėnegligible, Iím still going on a card bought early 2005)
Cable TV $5 (We have the very basic limited cable)
Cable Internet $30 (We compensate by having a sweet connection-again, something that is a luxury)
Groceries $145 (2005 $1227/12 mo = $102 a month, but I need to increase to lower my dining out amount Ė maybe three meals total a week lunch and dinner- a luxury I will cut for this)
Personal $ 27 (2005 $253/12 mo. My groceries amount really is only food, I separate shampoo, tampons, etc. Haircuts are included in this, and I went crazy on bubble bath last year. I can probably do much better here.)
Netflix $10 (Half membership of 3 at a time. Again, I could/would cut if necessary.)
Household $21 (anything from toilet paper to furniture, last year $243)
Car-Fuel $15 (2005 $167/12, plus a dash) (I have less than a mile commute)
Car insurance $51 303 2x a year.
Car Reg $9 ($105/12 mo.)
Car AAA $4 ($40/yr for Ĺ a two person family membership)
Service $20 hoping for no more than $240 for the year-itís a 2000 Saturn w/ 33K miles on it, well kept)
Health Ins. $44 (My share, work pays the rest. Yes, this is unfortunately a luxury these days, but thatís a different story)
Health-other $62 (2005 $739/12, for copays, deductible, prescriptions, eyeglasses, OTC meds. If I was minimum wage, Iíd learn to go without.)
Clothing $25 (2005 $552/12 mo. makes it $46, but I was very luxurious last year and spent a lot-a couple pair of Dansko shoes, etc. I could easily cut it down by shopping smarter)
Entertainment $20 (Yes, Cable and Netflix is already entertainment. I donít go out to movies. Iíll use this for garage saling, dining out, and poker.)
Workout $17 (Local Adult school, cheap water aerobics and weightlifting. Iím overweight and working on it, the price is reasonable. I could drop this but I am considering it health related.)
Charity $20 (Iíll give less than usual, but I canít give none.)
Savings $39
Total $1073

These are bills/expenses I donít have: Credit card debt, car payment, cell phone, anything kid or pet related. (I will have pets again someday.)

Now, if I really only had this much, I would: cut cable; cut food to $100-I have done it, the $145 will easily accommodate my club soda and fresh fruits and treats; cut Netflix, cut medical expenses-some prescriptions, doctors visits, and glasses; cut personal-fewer and cheap haircuts, much less bubble bath; cut the workout expense and walk to work instead; but, I actually would probably keep cable internet because my boyfriend is total geek, we run servers (donít ask) and I am super spoiled-it would be a last luxury.

Things I spend ďtoo muchĒ on now: dining out a few times a week-I increased my food budget to compensate. Travel-I went to Poland and Mexico last year. Gifts - a great satisfaction of having some extra money is buying friends and family treats, like my dad a lap top, or paying for his hotel when he visits, etc. I will get frugal gifts, which I do currently give-I think a $3 garage sale item can make a ďbigĒ gift if itís right.

3 Responses to “Starting Two Challenges”

  1. Ima saver Says:

    Wow, you have really keep up with your expenses. I am impressed.

  2. LittleGopher Says:

    A second wow! It'll be fun to read the updates on your challenges. Welcome!

  3. annab Says:

    This is an excellent challenge (just found your blog.) I am going to try it!

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