Living on $15,000 a Year

Mike: After reading some of the conversations we’ve had with high-earners, you got in touch with us and said you wanted to talk about what it’s like to not earn a lot of money. Can you introduce yourself?

Broke Person: So, I’m 25, I live in the Midwest, I work and live at a camp/environmental learning center, and I earn just shy of $15,000 a year. It’s pretty seasonal work, so I earn most of that between late April and early November. The winter can be pretty lean in terms of what we do for work, so most of us supplement it with a second job. Last year, I was a nanny for some family members, and this year I spent a lot of time traveling back and forth from where I live to where my mom lives (about six hours driving) and scrounging for extra jobs here and there.

M: The federal poverty guideline for a single person is $11,490, and you are above that, but not by a lot.

BP: Well, that is the amount I filed for last year. I think I’ll earn a few thousand more this year because I have signed up to be a substitute teacher as well. I also have an extra six weeks of work at camp because I’ve been doing some maintenance work while somebody was out for surgery recovery. Because I live here, I’m paid a daily rate, which is $80 a day. That also means that I am currently living rent-free, which makes a big difference. I made about the same before I started this job, but also was paying rent from my salary, which was rough.

M: Can you talk a little about that? When you don’t earn a lot of money, I’m sure every dollar counts. Does it help to live in the Midwest instead of say, New York, D.C. or San Francisco?

BP: Absolutely. I did live in a city during this time, but definitely not a super-expensive coastal city. I was working retail, and my typical paycheck was about $450, I think. I paid $400 in rent, about $300 in student loans each month, which doesn’t leave much behind. For the most part, I was really enjoying myself at this point in my life: It was my first time living in a city, I had been living with my mom for about a year before that working for the same company and being pretty miserable. So in general, my lifestyle was on the up-and-up. I didn’t have a car, so I was biking around and taking public transportation, which when you’re first starting to use just feels so great, until about the 8th time a stranger tries to ask if he can be your man at the bus stop at 5:15 a.m.

M: What weren’t you able to do on what you were earning?

BP: The things that really sucked about having so little cash were not being able to go out with friends without asking them to buy you food or drinks, which is pretty humbling and embarrassing at times, and something you avoid by not being social sometimes. After rent and loans, my next biggest concern was food, and for the most part, I was fine. But when you’re broke at that level, you start to get pretty single-minded about food. When my roommate (who was at a similar income level as me, but had student loans deferred due to her job) would invite me to her parents’ house for dinner, it was always a relief in addition to all the normal reactions you have to a dinner invitation. When there was free food in the break room (this would happen about once a month), you sort of plot how much of it you can get away with eating so that you don’t have to spend money on food that day, or can save your packed lunch for the next day. For example, on pb&j day in the break room, you immediately eat a sandwich, with more than reasonable amounts of peanut butter on it at the beginning of your break, so that when you make one again ten minutes later, most of the people who saw you eat the first sandwich have filtered out of the room and you don’t feel judged for taking more than your share. I also would run out of money and have no cash and no money in my bank account occasionally for two to four days before a paycheck. If we were low on groceries, I would make toast from the butt ends of bread and fry an onion to eat with it, or buy Ramen for lunch at work with change from our change jar (17 cents!).

My co-workers and I noticed when the store we worked at raised the price of a single banana to 24 cents. A good friend of mine and I quit this retail spot for new jobs at the same time, and we would text each other things about our new jobs that seemed astounding to us. One of the things she noticed at her new job was that if you came in to work on a Saturday, the boss just ordered pizza for everyone. That was a revelation. At my current job, I eat for free a lot, because we have some programs where kids stay overnight and are fed, and I gained 20 pounds in the first six months, probably from overeating, which I’m pretty sure I do because I spent that time hoarding opportunities to eat for free. I mean, the price of bananas rising didn’t make a huge difference, but it was remarkable — a thing we talked about. I don’t think I would notice that now, with all of my access to free lunches.

M: Do you and your friends talk about money? You talked about having to ask your friends to help pay for you when you go out and how humbling that is, so I’m guessing that these friends can afford to do so and that they’re living at a higher income level than you. How do you navigate these relationships?

BP: I’ve been lucky to always have a few friends that I could depend on to talk candidly about money, and that I have mostly felt comfortable doing so. I think a lot of my comfort negotiating unbalanced financial relationships stems from a childhood friendship with someone whose family was much more financially stable than mine. She was always willing to finance entertainment for us when I couldn’t, and lent me money for tickets to concerts a couple of times so we could actually buy them ahead of time. Mostly, this was money her parents gave her, and I would pay her back from the jobs I worked in high school. But the important thing was that we talked about it, and that it generally was my decision to pay her back. We just wanted to do these things together, and figured out a way to make that happen.

As an adult, my close friends know that I don’t have money, and many of them are in similar situations. I think the thing that varies the most are people’s levels of debt. I do have friends who make significantly more than me though, and sometimes they buy stuff for me. Mostly this is in the form of meals or drinks out, although it has also happened when I’ve traveled to see people. I’ve told friends “I can buy my plane ticket, but you’ll have to feed me while I’m there.” I don’t usually agree to go out if I don’t have the ability to pay for myself, definitely not without saying “Hey I’m broke, I can’t really go out this week.” Sometimes, friends offer to pay so that I can come anyway, and sometimes, when I’ve gone out anticipating paying for myself, they’ll offer to pick up my tab when the check comes around. I have a few friends in particular that have been pretty generous. A couple of them know they earn significantly more than me, but have also spent time making terrible money or using all their income to pay off debt.

The thing that has been tricky to navigate is keeping these relationships honest, and not expecting my friends to pay for stuff for me. There have been times when I’ve ended up putting things on my credit card that I didn’t intend to because I anticipated somebody else offering to pick up the check and they didn’t, all because I didn’t want to say that I was too broke to go at the outset. Those nights are not my most fiscally responsible decisions. Also, some people with money are way more generous than others with their broke friends, and it can be hard to let yourself be okay with that. There are times I have to remind myself that it isn’t the responsibility of everyone around me to make things come out more egalitarian. I definitely believe that people’s money is theirs to do what they want to with — I’m grateful when that includes helping me out, but I do occasionally have to coach myself to not feel like friends SHOULD be paying for me. It can also be hard to feel and show gratitude without overdoing it and letting yourself feel inferior. My friendships shouldn’t make me feel bad about myself, even if I can’t really get them back next time. Sometimes I’ll buy when we’re at a cheap place, or just getting one round of drinks, or getting ice cream instead of food. Being gracious can be challenging, and it’s unfair (and not good for my friendships) if I say “Oh, I’m broke” with the expectation that somebody will pay for me just because I said it.

M: Can you talk about your student loan debt, what kind of school you went to and if you feel like you got what you wanted out of your education?

BP: I went to a private liberal arts school (which I doubt people will be surprised by), and I did really, really enjoy my time there. I graduated with about $28,000 in debt at a time when it was abruptly much more difficult to find a job in my field specifically, and in general. I don’t think I would make the same school choice again from the perspective I have now, but I don’t exactly regret my degree or the school I went to either. There are some things I DIDN’T get from school that I probably needed but didn’t realize at the time, though. I think more honesty about the likelihood and rates of tuition increases from the admissions staff may have changed my choices.

I had the opportunity to go to a state school in my hometown with no debt for about $1,500 a semester, if I recall correctly, but the programs, faculty, distance from home and all of the brochure-ready things from the private school were so much more appealing! I ended up paying the same cost up-front due to a hefty academic scholarship, plus the maximum amount of federal aid, but I took on a debt load that got larger every year. My first year in school, the tuition price tag was something like $27,000 a year, but by my senior year, it was $36,000. I think that even at 18, I would have known the amount of debt I had to take on to do that was unreasonable. I was aware that because it was a private school, tuition wasn’t frozen, but I had no concept of how quickly it would rise. The other thing that I think I missed out on was intentional career counseling. That was something that was available, but I didn’t take advantage of. That school costs even more now, over $40,000.

M: What kinds of careers were you considering before you graduated?

BP: Teaching, in a really crowded subject area, which I didn’t even think about or hear mentioned until about my 7th semester. I applied for jobs after I graduated — probably not as aggressively as I should have — but nonetheless, I was seriously looking, and despite graduating with honors from a regionally-recognized school, didn’t get a single interview. I know people who applied for hundreds of teaching positions at this time and were interviewed at just two or three schools. I didn’t do that, but I did consistently apply for teaching and other relevant jobs, including lots of part-time stuff and things I was clearly over-qualified for over the course of about two years before I found something part-time with the organization I work for now.

M: And since you wanted to get into education, you knew you probably weren’t going to be earning a lot of money right after graduation? Did you think a lot about what you wanted or needed to earn?

BP: Honestly, no. I had a general concept of what teachers made, especially to start, which at the time (and probably still) was about $25,000 a year. I also knew that if I worked in rural or poor urban areas, I would most likely be able to have a good chunk of my student debt forgiven. I didn’t think about it a lot though.

M: When you found the job market to be particularly challenging, and found jobs that didn’t pay too much, did you consider moving back home with your parents to save money? Was that an option?

BP: During my student teaching, I was living with my mom, and I spent another 10 months after that there as well. I moved out to go to a city, be closer to friends and have more job opportunities. I wasn’t happy in my hometown, not really because of living with my mom, but because I felt stuck in general. I worked with kids who had been my students, which did not feel great. My mom also was not in a great financial state, so I was paying her some rent (less than I did after moving) and taking care of my own expenses.

M: Do you not have health insurance now?

BP: I do until I turn 26, through my mom’s workplace, which I pay her for. Then there’s some mumble mumble Obamacare something happening at my job, which may or may not apply to me, based on some complicated stuff with hourly requirements vs. a daily salary that none of our supervisors are talking about yet, probably because they don’t have any more clue than I do whether we’ll qualify for insurance. I’m pretty sure I will have a gap before whatever that is kicks in (if it does).

So I will be figuring that out this summer. I have had a gap in insurance before, which didn’t really mean anything because I was lucky enough to not get sick, and I got insurance at my retail job before I was desperate for new eyeglasses, then some legal thing changed and I could get back on my mom’s insurance by the time I left that job.

M: Since you’re not earning a lot of money, are things like savings and retirement far from your mind at the moment?

BP: I do have some savings right now, about $1,000. I debate whether this is a good financial idea, because I also have $2,500 on a credit card. I used it to pay for incidentals on a trip to west Africa I went on a couple years ago (the trip was mostly paid for by other people, but not entirely), and to visit friends, once on each coast. I also occasionally use it irresponsibly to buy dinner or booze out when I’m out of money, but want to hang out with people anyway. I have been much better in the last year at paying it off aggressively and only using it when I know I’ll pay the amount I put on off before the end of the month. I like having savings though, because then when my car stops working, I can take it to the shop.

I feel like being poor often means all of your stuff is half broken, and I would prefer to be able to fix the big important stuff without using my credit card. I also will lose my lovely free housing if I leave this job, so I like knowing that I could actually afford a deposit and first month’s rent if I suddenly got a job that paid better, but didn’t pay better until four weeks after I started. I really don’t like carrying debt, and most of the time I have money left from a paycheck, or money that’s comes in outside of my budget (like tax returns!), I use it to pay down my credit card. It should be paid off by the end of the year, according to my Excel chart.

M: Good ol’ Excel.

BP: Yes, because I am a nerd. I don’t track all of my expenses because that is A Lot of Work, but I do auto-deposit into several savings accounts for specific things, and I made a chart to show me how much money I will have in those accounts for the next six paychecks or something. This is mostly a tool to keep me from constantly borrowing money from my savings account when I want to buy stuff. If I do, I will have to make some red numbers in my chart sometime, and watch my financial dreams of being able to replace my computer when it inevitably stops working, or taking a trip with my sister or whatever else tick back down and take another two months. I also use this handy thing I got off of the Consumerist forever ago to track my student loan payments and see the date many years in the future when I will be debt free, unless I had to buy a car or something before then. I will, probably — my car is twenty years old.

M: Can you lay out how much you typically spend on things like groceries, utilities or dining out in a month?

BP: Groceries are a total crap-shoot, because when I’m working a lot, I’m also eating for free a lot. Last month, I paid $200 for groceries, but really busy months when I’m working 12 days in a row regularly with 2–3 meals for free, it’s probably more like $50. Last month I spent $100 eating/drinking out, which is fairly typical. We don’t pay utilities because we have a fraught arrangement where we perform extra duties in lieu of rent and utilities, which are mostly reasonable but sometimes sort of crazy. I pay $35 a month for my phone, and don’t drive much because I live at my workplace, so I buy gas for about $50 a tank every two to three weeks. My health insurance costs $85 per month, and my roommates and I rotate our Internet bill around, so theoretically every four months I pay $45 for Internet, although we only decided to get it a couple months ago. I almost never shop for clothing, or anything else like electronics or whatever people at higher incomes spend their cash on, I guess I don’t really even know what people buy.

M: Do you think you’re finding a way to make it work, or have ideas of what you’d like to do next to start earning more money?

BP: I think so? The work I’m doing now is really great, even though the pay is terrible, and after spending my first season here just figuring out what is happening, I’ve started to get some experience managing programs and designing new stuff. I never got into teaching to make tons of money, because there is a lot of intrinsic awesomeness about hanging around kids, and providing them with cool experiences.

After not applying for jobs because I was so relieved to be here, I’ve started looking again, but in a much more direct way. I think what has been changing is not so much my odds of getting hired somewhere that does a better job of paying the bills, but that I’m doing a better job of figuring out how to develop the skills I have into more marketable things. And with some of the perks of my current position, I don’t feel like I’m drowning very often, the way I did when I worked in retail. And I do hope that I find something soon that is full-time, with health insurance, that is a job I feel good about doing. While poverty (or near-poverty) sucks a lot, I’m lucky to have some specific resources that make my aspirations to be not-poor feel attainable, if not now, then soon.

Interested in having a conversation about what you do, how much you earn, and how you make it work? Get in touch.

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