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My Low-Income Lifestyle

By Frugaling 57 Comments

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My Low-Income Lifestyle. My monthly budget is tight. There's little room for error with my low-income lifestyle. Here are the pros and cons of my financial situation.

Let’s start with my monthly salary

“I’d like to live as a poor man with lots of money.” —Pablo Picasso

I get paid $1545 after taxes on the 1st of every month. That’s my salary for working at the university, and being a graduate teaching assistant. Over 12 months that comes out to about $18,540.

For a single person, that places me about $7,000 above the federal poverty line of $11,490. You’d think I live a pretty comfortable, financially solvent life. And for the most part, I do.

I’m not in poverty. I never go hungry for long. I’m afforded incredible learning and writing opportunities. I can pay for shelter without any concerns. I’m lucky not to have any dependents or pets. I’m not on the brink of losing this consistency of life.

A tight monthly budget, but positive

Here’s what my monthly budget looks like:

Paycheck: $1,545 per month

Rent: -$550 (Housing in Iowa City is surprisingly expensive. This price bundles Internet/Cable, as well).
Utilities: -$50 (Varies month-to-month, but on average…).
Student fees/tuition: -$346 ($1251 per semester (x2), and then summer tuition (not covered) at $1650 for 3 credits — all divided by 12).
Food: -$400 (working to lower this, but in the past…)
Gas: -$5 (I don’t drive, but occasionally I give friends money to carpool with them)
Total costs: $1,351 per month

Partial budget: $194 per month

Notice that within this budget, entertainment, travel, and car expenses are not present. It’s difficult to approximate how much I spend on entertainment (going out to movies, playing pool, or bowling), but I’d say it averages about $10-20 per month.

Because I sold my car, I no longer have registration, titling, gas, insurance, maintenance, or car loan payments. Although, flights still happen and those cost about $300-400 round-trip. I fly about once or twice a year nowadays. Conservatively, that’s about $600 per year, or $50 per month. Subtracting these costs, and the following is my total budget:

Total budget: $124 per month.

If I stay within this budget and repeat it monthly, I can save about $1,488 per year. But that’s only if there are no other fees, expenses, or emergencies. For instance, my computer is hugely important to my business, job, and schooling; if that were to fail, I’d be in deep trouble. A single incident could wipe away my savings for a year.

Macro Money Photo
Photo: Kevin Dooley/flickr

Settling into the low-income lifestyle

While I might not be in poverty, I lead a low-income lifestyle with little room for error. Now that I’m no longer in massive student loan debt, my monthly budgets are real and accurate — not manipulated artificially by financial aid. When I run out of money, it’s gone — there’s no reserve ready. If something happens, emergency funding may be found using title loans or other secured lending options.

As I paid off my student loans and stopped withdrawing additional credit, I developed and settled into a low-income lifestyle. It’s one without exotic vacations, weekend getaways, cars, fancy dinners out, and the latest gadgets.

Now, I hold onto things longer, avoid purchases, and cook at home whenever possible. But it took me a while to adjust down — to slow down, really. I’ve said this before, but debt fostered an illusion of success that I felt compelled to uphold and continue. I wanted to show people that I could “afford” to treat, spend, and enjoy. Unfortunately, it was all a mirage. I was swimming in debt and stress.

Reflecting on the pros and cons

Pros

1. No more debt (or very little)

I no longer take out student loans to cushion my budget. Every month I do have revolving credit from regular purchases, but my balance is paid in full each statement period.

2. Support from family and friends, community

People check in with me more than ever about how I’m doing with my financial goals. Additionally, friends have increasingly begun to ask questions about how they, too, can save.

3. Greater exercise

Now that I sold my car, I take buses, walk, and/or ride my bike. Altogether, I’m getting way more exercise over owning and driving a car.

4. Empathy for lower-income and impoverished populations

Living closer to poverty and working with the homeless population has been an interesting combination. While I have great educational privilege, I do not have any income to show for these “achievements.” For now, this lack of money has helped me try to empathize with those less fortunate than I.

5. Reduced environmental impact

Despite America’s capitalistic ideals, we are doing the planet great harm with our consumption. Without any money or vehicle, I’ve drastically reduced my environmental contribution to greenhouse gases.

6. Eat healthier

To stay within my food budgets — and reduce them even further — I’ve been making more food at home and avoiding fast food alternatives.

7. Provides motivation for stories, articles

Living this low-income lifestyle provides great fodder for stories and reflection. Simply put, I learn every day from it. Comfort can sometimes make us complacent and inure us from others’ struggles. Stripping away income has provided deep insight into income problems in America.

8. Increased appreciation for what I do have

For everything I must sacrifice with my tight budget, there’s far more that I have, which I’m deeply grateful for. From health of friends, family, and myself to comfortable shelter, I am privileged.

Cons

1. Restricted travel

I used to travel all over the country. I loved seeing new places, eating different foods, and meeting new people. Instead, I’m mostly here in Iowa City. Traveling is too expensive — other than to see family a couple times per year.

2. Less time with family

I’ve added hours at work to receive more income. Between that additional time and aforementioned restricted travel, I don’t get to see my family as much as I’d like.

3. Awkward date conversations

While I’ve grown to embrace my low-income lifestyle, I can’t afford to go out with people too frequently. When I go out on dates, I’ve noticed that gender norms about who treats still seem to hold strong — the man is expected to step up.

4. Susceptible to emergencies/unexpected costs

If my computer stopped functioning or I had an injury, I may lose the budget surplus. This precarious balance threatens all my financial goals.

5. Psychological toll and nervousness

Being at this level of income takes a psychological toll. I’m working a large number of hours each week for relatively little pay. That’s stressful.

6. Society doesn’t seem to understand

Graduate students made great progress over the last few decades to have their educations paid for through assistantships and fellowships. But skyrocketing tuition has held back graduate funding. State and federal funding has consistently been in jeopardy.

7. Guilt when overspending

When I do spend money outside of the budgeted amounts, I feel tremendous worry and guilt. This emotional reaction sometimes stems the tide of purchases, but also makes me wish for days of financial security.

8. Tiring, test of willpower

Last, but certainly not least, it can be tiring. Following this strict of a budget takes an immense amount of willpower. Unfortunately, willpower is deeply tied to energy levels. With less energy, willpower tends to decline, as well.

Filed Under: Save Money Tagged With: Budget, debt, Downgrade, emergency fund, family, Fees, guilt, Lifestyle, low-income, lower income, spending, Student Loans, Tuition, Willpower

I Am LaTisha Styles, Founder Of Young Finances, And This Is How I Work

By Frugaling 7 Comments

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Latina Styles Headshot
Latina Styles

Over the last couple months I have interviewed a growing number of top bloggers and writers to get their input on personal finance (e.g., the founders of Budgets Are Sexy, The Broke And Beautiful Life, Frugal Rules,Debt Roundup, and Modest Money). Today, I’m excited to share with you another terrific interview with one of the top personal finance writers on the Internet.

LaTisha Styles founded a popular website called Young Finances. Since 2010, she has become an Investment Analyst, entrepreneur, and was featured in a variety of publications. Here’s my interview with her. Thanks again, LaTisha!

What inspired you to begin Young Finances?

I started Young Finances because I graduated college in 2010 and I was having a hard time finding a job. I had a degree in Finance and learned a lot about the correct way to manage personal finances after recovering from several bad decisions I made with my money. I decided to start writing about what I learned to help other young adults.

How did people (friends, family, etc.) react when you first started? How long have you been blogging?

Almost all of my friends were supportive. I used to share each post on Facebook and I got a lot of good feedback and encouragement. I started the site in December of 2010, but I have been blogging much longer. I started an e-zine when I was 14 and I just found an old issue! It was such a blast from the past.

What was your experience with design, code, web work prior to starting your site?

I graduated with a business degree, and had to learn the basics of HTML and CSS in our business information systems class. We had a group project that involved creating a single page website from scratch using Dreamweaver. I later taught myself more using W3 Schools to understand the basics of PHP and Javascript for WordPress. I personally did a few customizations to my site but on the next redesign I would probably hire a professional coder.

What advice would you give to those thinking about starting their own site?

logoYTDon’t be afraid to just get started. You don’t have to know everything when you are first starting out and you won’t know everything. If you don’t like the name of your site you can always change it. More than once. I started out as Financial Success for Young Adults then moved to Young Adult Finances and now my happy home is Young Finances. I think this is where we’ll stay.

How do you make money from your site? Where does most of your revenue come from?

My site generates revenue primarily through affiliate marketing. When I first started, I sold text links and sponsored posts but I decided to focus on more stable revenue. If you’re like me and interested to see income reports, I share the income that comes from my web properties each month at TravelTish.com. Mostly I learn about the best financial tools and I test them out for myself before recommending them to my audience.

What do you think you’ve learned from your readers and fans?

I’ve learned not to be so scared. I used to be really scared about putting personal information out there and sharing my money mishaps. But once I starting sharing, more people (and even close friends!) started reaching out to share their stories about money. It makes me sad that personal finance is such a taboo subject because I think that we could all learn a lot from the mistakes and successes of others.

How I Work Youtube Latisha Styles Office
LaTisha’s workspace where she films YouTube videos

How can somebody in lower incomes best overcome financial hurdles and prosper?

I can only speak from my own experience here. I come from a low-income family and I was determined to set the bar high for myself. I was fortunate that my parents made school a priority and taught me smart study habits. I decided to learn about how money works and how banks and businesses make money. Learning the system is the best way to beat it.

Wherever you are starting, you can do it. I always imagined that someone held me back at the starting line of my financial life, but I just had to exert that much more effort to win and achieve my own financial success. And I’m still gunning for first place.

I had to be willing to be different. Turn off the TV, start reading about successful people, figure out the formula. It will take time but you can do it. And look for role models and mentors. Tell them about your goals.

“When you really want something to happen, the whole world conspires to help you achieve it.”

That’s from The Alchemist by Paulo Coelho one of my favorite books.

Who are your financial role models?

I admire the stories of ‘regular people’ as my financial role models. People who started with nothing and worked hard. Author J.K. Rowling who worked day and night on a book that helped pull her out of poverty and rapper B.o.B. who came from humble beginnings in Decatur, GA and played no name venues as he gained his fan base. I really admire that strong work ethic that unites successful people.

What personal finance sites do you read?

As a personal finance blogger, I like to read the sites that are very different. RomeoJeremiah.com has interesting posts about life and personal finance. I really enjoy reading AffordAnything.com. Paula really appeals to the rebel in me. I discover new blogs everyday but these are two that I come back to often.

To be honest, I would love to see more video personal finance bloggers. I enjoy watching FatGuyOnYoutube.com and of course, YoungFinances.com/tv.

What else would you care to share with the readers of Frugaling?

I would love to share my dancing skills! (And a bit of business advice). Please head over to this video and watch me do the hustle: youngfinances.com/sidehustle

Filed Under: Interviews Tagged With: Affiliate Marketing, Business, Entrepreneur, Income, LaTisha Styles, low-income, Side Hustle, TV, wordpress, Young Finances, Youtube

A Terrific, Terrifying Article About Poverty

By Frugaling 5 Comments

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Poverty House
Photo: Rennett Stowe

Today, I happened upon a wonderful article about what poverty is like. After reading it, I knew I needed to share it with you all. Poverty, debt, and working till you drop are all terribly interlinked. The following are a few highlights:

Rest is a luxury for the rich. I get up at 6AM, go to school (I have a full courseload, but I only have to go to two in-person classes) then work, then I get the kids, then I pick up my husband, then I have half an hour to change and go to Job 2. I get home from that at around 1230AM, then I have the rest of my classes and work to tend to. I’m in bed by 3.

Nobody gives enough thought to depression. You have to understand that we know that we will never not feel tired. We will never feel hopeful. We will never get a vacation. Ever. We know that the very act of being poor guarantees that we will never not be poor.

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing?

Poverty is bleak and cuts off your long-term brain.

Read the article in its entirety here (it’s worth a read): Why I make terrible decisions, or, poverty choices.

Filed Under: Social Justice Tagged With: Budget, debt, jobs, low-income, management, money, poor, poverty, school

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