Recently, I was considering just how much our financial fortunes had changed.
When I first started this blog, I was making $900 a month from some contract work, plus a little under $800 (after Medicare was taken out) from Social Security Disability. Tim was on unemployment, so we were living on the equivalent of about $32,000 a year. Out of that, $700 went to our rent and $500 went to Tim’s insurance, with at least $100 a month in co-pays.
Now, I have a full-time job working from home that pays $15 an hour, less self-employment taxes. I also have some contract work that I am finishing out, for which I bill around $1500 a month total. And, as of two weeks ago, some added responsibilities at my main job increased my income by $500 a month. This means that I am currently earning the equivalent of $55,000 a year. Startling to see in print, actually.
And, if Tim’s hearing goes well today, he’ll begin to receive disability benefits (along with the almighty Medicare, which will be a relief!), which will probably be in the $700-800 realm — taking care of our rent each month.
Of course, I have no desire to do this much work forever. I am hoping to be down to just one job no later than summer.
Still, if I could have known last winter that things would turn out this way, I would have been a lot calmer. Instead, we were panicking, trying to figure out how to live on just my contract work and Social Security income, while still paying down debt.
In that scenario, we would have been living on $1800 a month. And here’s the thing: Even in the city of Seattle, that would have been too high to get us any sort of financial help from the state.
When Tim first became unemployed, he couldn’t get Medicaid coverage. The limit for two people was $1400. About a year later, I heard the amounts had increased. And they had: $1,700 for two people.
At this time, there were one-bedroom apartments in our building (decent, but hardly stellar) for $800+. And it was getting increasingly difficult to find any apartments in the city for under $700. So, based on the state of Washington’s logic, even with a “reasonable” $700 rent, a two-person household isn’t poor so long as the total income is $1001 or more. Uh huh.
Don’t get me wrong: Two people should be able to live on $1,000 or less after rent, barring any car payments or student loan payments. But I am not sure that I’d call $1701 a month anything other than “poor.”
I really couldn’t figure out where my comfort level lay, personally. I think that anything under $2,000 a month for two people — especially in Seattle — should qualify as poor. That’s $24,000 a year before taxes.
In this day and age, I think $30,000 or less is pretty dicey. Tim and I lived on just a little more than this and were able to pay down debt and deal with a lot of medical bills. Still, we had a few things in our favor, like free use of a car and my mom, who was constantly bringing over things she got for free/almost free at the grocery store.
Do you think the average couple could live comfortably on less than $30,000 a year? This would be assuming they rented instead of owned, of course. Would you consider someone making that much poor or just not part of the middle-class? (And is there a difference anymore?)
FYI, the 2009/2010 federal poverty level is $14,570 — or a little over $1214 a month, before taxes. Just food for thought…