What I would like to do in this post is show you how much money it takes to live a normal life in America. Once you understand that, adults and everything about them begin to make a lot more sense.
Lets say that you were to get totally fed up with your parents. In a fit of passion you decide at age 16 to run away from home. You hop a freight train and you end up in Atlanta, Georgia to begin your new life. Your goal is to live a normal lifenot an extravagant life, just a normal life. So, you are standing on a street corner in Atlanta. What is your first step?
First, you need an apartment. Every major city in America has apartment locator magazines, and you can find racks of them at grocery stores, convenience stores and so on. Pick one up some time. What you quickly find is that any "nice" apartment costs about $600 for a one-bedroom unit. A "nice" apartment has a pool, probably a club house, well-kept buildings, nice landscaping and so on. You realize that $600 a month is impossible. Where are you going to get $600 every month as a runaway? So you get a copy of the paper to look in the classified ads. What you find is that the cheapest apartment available is a "student" unit near the university. You go to take a look. It is really just half of the upstairs of an old house. It is a dump. No air conditioning, for example. Peeling paint. The carpeting is dirty and worn down. The toilet wont flush, but the man showing you the apartment says he will fix that. You can see all the pipes and they are all rusty. It is $350 a month. You also have to put down the last months rent and a security deposit of $300. Just to move in you need $1,000. Then you need $350 per month, every month. Now you need power for the apartment. You call the power company. They want $17 to turn on the power. Since you have no credit history, they also want a $200 security deposit. You ask the landlord for an estimate, and he says that the power bill will run about $250 per month in the winter because the apartment is heated with electric baseboard heaters, but it drops to $40 per month in the summer. The average is about $150 a month. You would also like to have a phone and cable TV. Cable is $50 a month and $70 to install it. The phone is $40 to install, $100 for a deposit and about $25 per month if you make no long distance calls.
Now you need some furniture for the apartment. You need a sofa, a chair, a living room table, a shelf, a TV, a table for the TV, a kitchen table and chairs, pots and pans, silverware, plates, utensils, a bed, a dresser, a night stand, several lamps, several phones and so on. Forget luxuries like a stereo, computer, VCR, XBox, etc. You have no money for those. You also need sheets, towels and blankets. If you were going to go out and buy nice stuff, and buy it all new, this would all cost thousands of dollars. You look in the classified ads and manage to find used stuff that is pretty beat up but serviceable and it all costs about $1,000. You end up renting a truck to pick it all up; that costs $100 for two days. The sheets, towels and blankets you get cheap at K-Mart for $70. You also spend $100 on paper towels, toilet paper, cleaning supplies, soap, toothpaste, shampoo, toothbrush, garbage bags, aluminum foil and so on. All of this is "stuff," but it is kind of hard to make it past the first day without toilet paper.
Now you need a car. The average price for a new car in America is over $20,000, and the cheapest new car you can buy is about $8,000, so thats out. You start looking for a used one. You know what you wanta hot, red, two-seat sports car. Unfortunately, you find that there are two kinds of used cars: nice ones and junkers. You cant afford the nice ones. The junkers look like crap and feel like they are going to fall apart any minute. You keep hunting until you find a 1986 Plymouth Horizon. It looks like hell because all the paint is peeling off and the seats are torn, but it seems to run well and the guy only wants $800. To buy it you need to transfer the title and get a license plate. The Department of Motor Vehicles wants $35 for the title, $25 for the plate, $24 in taxes and $2 to notarize everything. However, they wont give you the plate because you must have insurance and the car needs to be inspected. The inspection costs $25. The inspection station tells you that you must buy new tires, and they end up costing $250. The first insurance agent you call wont even talk to you because you are under 20. Neither will the second. Neither will the third. You eventually find an agent who will get you insurance, but it costs $1,800 per year. You have to pay the first $900 up front to activate the insurance.
Now you have a place to stay and a car. Certainly this is not a luxury situation. You are living in a dump with beat up furniture and a junky car. But you now have the essentials. So far it has cost you this much to get situated: When you ran away from home, you probably didnt happen to stick nearly $6,000 in your pocket. Where would you get that kind of money to begin with?
What this shows you is the "cost of entry" into an American lifestyle is high. Very high. Keep in mind that the example presented here is the absolute bottom of the barrel. It gets no cheaper than this and it gets significantly more expensive for anything nicer.
Now that you are on your own you have monthly expenses. Some we talked about above. Several we have not discussed yet, like food, gasoline, car repairs, clothes, property taxes, etc.
The car maintenance includes gasoline and regular maintenance like oil changes, new tires, repairs, etc. The random category handles all the random unexpected things that crop up without warning. Property taxes are a good example. Parking tickets. Drivers license renewal. Money you lose. Things like that.
Note that this monthly budget includes no luxuries or entertainment: no dinners out, movies, dates, videos, CDs, books, magazines, trips, vacations, air conditioning, cell phones, beer, cigarettes and so on. If you smoke, that simple fact alone can add up to $100 a month to your monthly expenses. Beer could add $50. Note again that this is a bottom of the barrel existence. You can double this number if you want to live in a nice place, drive a nice car, have some normal luxuries and so on.
At the same time you were forgetting to grab $5,000 as you walked out your parents door, you probably also forgot to grab the $1,300 you need for this month. Or the $1,300 you need for next month. Or Therefore, you need a job.
So far we have ignored the income side of all of this. You should keep in mind that none of the above could have happened if you did not have a job first. You could not get an apartment without a job. Or a phone. Or power. Or car insurance. You must have the job first. Every single place you go to will ask for your job history and credit references. You have none. We have ignored that fact for the sake of the example. What you know is that you need $5,000 to get started and $1,300 per month to live your life.
Since you dropped out of high school to run away, you dont have a high school diploma. Therefore, the only place you can get a job is at a fast food place. It pays $5.00 an hour. You do some quick math. If you work 10 hours a day, 6 days a week, you can make $300 a week. Of course, no place will let you work more than 40 hours a week because of overtime restrictions. So you work at one restaurant 40 hours per week and another restaurant 20 hours per week. That earns you just about exactly $1,300 a month in a 31-day month. Just enough to squeeze by.
Who wants to work 10 hours a day, 6 days a week scrubbing toilets and flipping burgers? The problem is, what choice do you have? If you want to live in this trashy apartment, you have to make money. If you want to drive this trashy car, you have to make money. If you want to eat, you have to make money. You have no choice. With this job you can at least break even on monthly expenses.
Maybe once you get situated for a month or two you can figure something else out. Unfortunately, you have miscalculated. You have forgotten about taxes. When you get your first pay check you are stunned to find that the federal government has erased 15% of your check. The social security administration and Medicare has lifted 7.5%.
You are nowhere close to breaking even. So what are you going to cut? Medical insurance is probably the first thing to go, but that is extremely, incredibly risky. Even the simplest illness can cost several hundred dollars by the time you cover the office visit to the doctor and the cost of prescription drugs; if you get in a car wreck you will be in debt for life. Now you have to cut another $200. So you cut cable. What else, exactly, are you going to cut? Food? Phone? Clothes? You cant move to a cheaper apartment. You cant get a cheaper car. You are already at the bottom.
So, you are working 10 hours a day, 6 days a week. You live in a dump with junky furniture and a trashy car. You have no health insurance, no cable TV, no phone, no clothes, and you are eating what you can at work and going hungry on Sunday.
Now what? Are you starting to get the picture? This, by the way, is the definition of poverty. When you hear about "Americans living in poverty," this is what they are talking about: this sort of crappy, 60-hours a week, no way out, cant make ends meet sort of existence. You are scraping by at the absolute bottom on the barrel, and if anything goes wrong you are dead. If your car blows its engine, or you get a speeding ticket and your insurance goes up, or you get sick one week, oryou are out on the street. There is absolutely no slack in your budget. Once you are out on the street, it will cost you another $4,000 or $5,000 to get back on your feet again. So you are permanently stuck.
You must do something with your life so you can make more than minimum wage. It is impossible to survive on minimum wage. When you hear adults constantly talking about a "good job" so they sound like a broken record, thats why. It takes about $20,000 a year just to get by in this country.
You dont mind making minimum wage when you are a teenager living with your parents because it is gravy. Your parents are paying the rent, buying food, covering all the bills, giving you clothes and loaning you a car. You should now see that minimum wage wont cut it when you are out on your own.
You really need your family to help you get started in "real life." How else can you handle that $5,000 start-up fee? There is no way to start a household for any less than $5,000. Your parents can help you with expenses, loan you furniture, and so on.
If you were to actually find yourself in this position, it would be difficult to get out of it. When you are working 10 hours a day, 6 days a week, there isnt a lot of time for anything else. The only way to get a better job is to get more education. But when, exactly, are you going to get it?
A person in this position has no freedom. You are absolutely stuck in that rut and there is no way out. You get up every day and go to work, then you come home dead tired and feel like you are trapped in a prison cell. Money is freedom.
Right now you might be thinking, "There are lots of jobs out there that pay a lot more than minimum wage. Ill get one of those jobs. Its easy." Keep this in mind: Median income for the U.S. in 1997 is $23,000. That means half of the jobs in this country pay less than that. All of the jobs paying better than that are being fought for by all the people in America who give a damn. You arent just going to walk into an office one day and be handed an easy $30,000 a year job. There are 100 other people in line trying to get that job just like you.
Running Away from Home Sucks!
When teenagers decide to "run away from home" they aren't thinking about the financial Implications of what they are doing. They just want out. They aren't thinking, "Let's see, to live a minimal American life the cost of entry is $6,000, so I need to raise that money prior to departure and then" Instead they take off, end up in a city, and immediately are destitute. They have no money, no food, and no place to stay. There is no way to get a job and no other way to make money. Someone eventually suggests or forces drugs or prostitution. And there it is.
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