Has anyone else gone from dirt poor to middle income?

[Greaseball]

I'm wondering how to manage the transition. We have been living on food stamps and student loans for the past two years, and dh just graduated from his teaching program so we are faced with the possibility of being regular middle class people someday!

But my fear is that it won't really be that much more money for us. Right now, we live on about $1500 a month in loans and social services. We get subsidized private health insurance, $30 a month for a family of 4. We also get $500 a month in food stamps, I get financial aid grants for school, and we don't have to pay any of dh's substantial student loan debt (about $80K).

When he is working as a teacher, he will make about $2500 a month. But of course, we will lose our food stamps, our health insurance (his job will come with benefits, but it will cost a lot to add the rest of the family), he will have to start making student loan payments because he has deferred them all he can, and we will probably lose our financial aid money and have to pay for my classes. Then someday there will be my student loans. Since we want to get out of our high-crime neighborhood, we will also have to pay a lot more in rent. So although we will be living in a nicer area, that looks like the only thing we will actually see. We won't really have more money.

Right now he is working as a sub, making about $2000 a month, but it still feels like we aren't seeing any of it! We have a few months left on our lease here, so we have to pay rent here and at the same time save up to move somewhere else.

What has it been like for everyone else? Is this just another example of how more money keeps raising one's standard of living to the point that no amount is ever enough? It just looks like we aren't really going to see any of this money; it'll all go to other people!

[Black Orchid]

We didn't have kids when we made the transition, but we were dirt poor students, living in subsidized housing, on barely $25K a year. I know it sounds like a lot, but it wasn't with all the bills and loans we had. IT felt like we'd never get our heads above water!

After graduating our income more than doubled, but we still found ourselves struggling at times. Not like before, but still running out of cash before the next paycheck. Esp after DD came!

I think it is that we raised our standard of living everytime we'd get a raise or to the next level. We really had to work to establish a budget and stick with it. We are both big spenders when we have $$ (probably because we felt so deprived when we didn't have any) and it is a constant battle to keep our spending in check. Hanging the budget and the check register on the fridge helps!

The best advice I got, was to pay off all of our debts first, then put away as much as we could... but NOT to deprive ourselves... i.e. to make sure that we have enough set aside to pay for entertainment and other things one might desire. It has worked for us... allowing ourselves to treat inexpensively now and then holds off the desire to splurge.

Good luck to you!

[kerc]

Originally Posted by Black Orchid

After graduating our income more than doubled, but we still found ourselves struggling at times. Not like before, but still running out of cash before the next paycheck. Esp after DD came!...
I think it is that we raised our standard of living everytime we'd get a raise or to the next level.

i agree. I'm not dirt poor, just "working poor" -- no foodstamps, etc. But someday (soon, God willing) we'll be one person making 40k a year with one fulltime job vs. two with three fulltime jobs making that much.

depending upon how many kids you have you might still qualify for WIC. Which I'd take and then take that $$ when you get your receipts and pay it towards debt retirement.

[Greaseball]

I have this idea of everything I need to feel safe and comfortable. To me, it's all basic stuff - average sized house in safe neighborhood with friendly neighbors (rental is OK for now), keeping up on car maintenance so our cars are always reliable, making regular payments into our credit card and student loan debt, always paying the utilities on time, you know...I guess I'll just have to see if my "must haves" list grows every time dh gets a raise! :LOL

[Black Orchid]

Originally Posted by Greaseball

I have this idea of everything I need to feel safe and comfortable. To me, it's all basic stuff - average sized house in safe neighborhood with friendly neighbors (rental is OK for now), keeping up on car maintenance so our cars are always reliable, making regular payments into our credit card and student loan debt, always paying the utilities on time, you know...I guess I'll just have to see if my "must haves" list grows every time dh gets a raise! :LOL

:LOL You soooooo sound like me! Seriously, congrats on everything!

[Throkmorton]

I guess it just depends on your must haves.
Last year we made 4x more money than we did in 2001 and the biggest difference in our lives was that the rent was paid every month on time. This year we might get these cool things called "savings"
I think there is a certain point where you really don't make any more money. It's frustrating because you get all excited about this new, huge paychque and it is gone as soon as the basic bills are paid. Eventually it gets better, i hope.

[megangaia]

Hey there,

We went from $26k a year to $45k this year, more or less. I agree with the above posts. Everytime our money went up, so did our standard of living. I remember when my monthly expenses were rent, gas, electric and phone. Period. That was it. With every increase in paycheck, there was an increasing expense (tuition for private school, cell phone, life insurance, etc) So, we never saved and never felt rich.

We didn't lose all our benefits at once. We didn't stay on food stamps, but I still get WIC and the kids are still on medicaid. We qualify for tuition assistance for private school and other afterschool activities. But yeah, I think we'll make just too much for that by next year, and we'll have to figure out how to deal paying for everything!

I loved having my simple expenses, being in control of my simple finances, no cc debt, no home equity loan, etc. We still don't have 401ks or stock dividends, other things to complicate my life. It's funny how you spend what you make. If you had told me we'd be making $45k a year, last year, I would have dropped my jaw and said, "no way! What would we do with so much money!?"

I'd have to say the transition period kinda sucks. To suddenly have to pay $100 a week for groceries, $25 each visit to the doctor, that's the pits. I lost 3 months worth of WIC checks recently, and I couldn't get over the price of milk and cheese! So, it takes awhile. Pretty soon you're just plugging away, cutting coupons and praying your sore throat goes away before you have to visit the doctor!

Good luck, and congrats on heading up the ladder. Try to stay on top of your finances as best you can. Maybe you really can put a little away each month for savings. That's what we should be doing.

Megan

[Greaseball]

We used to get $250 in food stamps. We always had to spend a little cash at the end of the month. Now we get $500, and we still run out! So I think part of it is about feeling that because it's free, we don't have to watch how we spend. Dh is always telling me what's on sale, and I say, "Who cares how much it costs? It's free!" I think if we had to use cash all the way, we could all eat for around $300 a month. Part of the expense is I love to make all kinds of fancy things; we have "fancy stuff" a few times a week. I could save a lot by having it only once a week.

I also go to a lot of potlucks...do you know if you make a lasagna and need to buy all the ingredients, you will spend about $30-50?!

But recently I had to buy milk, and had no idea it was $3! Or that cheese was $7!

We are looking at going from $15K to $30K. We just started looking at houses to rent, and I'm a little disappointed in what's available. I guess it is all about expectations...

[its_our_family]

I just learned this in a first time home buyers class. If you end up with more money and feel you raise your living expenses to match then... budget in money to savings as if it were a bill.

Right now every paycheck 50.00 goes into savings. It is listed on my bill sheet in between phone and electric. We've built up a savings of over 1000 (I've been putting extra in) and we are using it towards closing costs on our new house!

I had never thought of budgeting in the savings account but it makes sense. Now I know every month it is going in there. If you have to dip in sometimes, I think that fine, but I think getting into the habit works. With each raise or additional income we get we'll up the amount going in.

HTH

[seren]

We went from abround $16 a year to just over $30. It's been an adjustment. The first few months went to catching up on everything we were behind on. We lost our food stamps, didn't expect to until Jan, but I had to get pregnancy medicaid, so it updated everything and we lost them in November. Kids went to the medicaid with a copay. Dh still qualifies for grants, I believe and we still get wic. Having to actually pay for our groceries was an adjustment in itself. And there are bills taht we didn't have before, dh's insurance for one. And as soon as the baby is born, I will be added to his insurance. Luckily our car will be paid off in 4 months. Sometimes our bills are still late. We aren't the best budgeters. My dad says taht no matter how much you make, you always feel like you don't make enough because your standard of living goes up, too. I have found this to be true. It is a hard adjustment, you would think it would be easy, but when you get all these things before and then you don't get them anymore, it's harder. Good luck, I hope your transition is easier than ours.

[CerridwenLorelei]

Greaseball

http://mothering.com/discussions/sho...d.php?t=262171

Yeah we were dirt poor too and made 2.50 too much for medicaid/fs etc at that time...
so it wasn't too hard after the first shock of 'is that really the new raise??" to keep budgeting/etc

[TiredX2]

Greaseball---

I have a couple suggestions for you.

First, it looks like you should still qualify for WIC (assuming you are not working).

Secondly, I would try to cut down your food expenses to the $300 you think you can do ASAP. Then with the "extra" go ahead and fully stock your pantry--- rice, pasta, beans, cereals, canned goods.

Third, would you consider staying in your current place for a bit longer.

In 2000 we were living on $15K yearly (before taxes) in Eugene ($535 for rent). DP graduated, we moved to WA w/WAY more money that year. We spent about 1/2 of what we could "afford" on our appartment (it was nice, like 900 sq feet--- way bigger than our old place) and basically tried to keep our living the same (we were lucky, though, EXCELLENT health insurance) and saved the rest. Then, after saving for the next 18 months we had some down payment money for a house and *then* moved to where we wanted to live.

With your DH being a teacher is the $2500 a month every month or just 9-10 months a year. If it is only 9 months a year make sure to apply for services when your income is down (and you have the paychecks to show). If he is getting $2500 9-10 months a year, you can also have them spread it out. Have you looked into the FHIAP?
http://www.ipgb.state.or.us/fhiap/
It is so underutilized (they have immediate openings). They will help pay your insurance premium if you make too much to qualify for the OHP. I *think* that the qualifications were something like 170% of the poverty level, so you might want to look into it. Your kids are also young enough that they may still qualify for the OHP (if that is what you are on).

Logically, looking at what you have been living on ($1500 plus food stamps) you will probably bringing in, unfortunatley, little to no "extra" money (after loosing benifits, loosing EIC, etc...).

Good luck,
Kay

[Greaseball]

We already signed the lease on our new place and are taking it later this month. Rent will be $1000 (up from the $700 we pay now), and we will also have to pay for water and sewer for the first time. Our current place was so intolerable that we are willing to pay double rent for a few months if necessary. We are having trouble finding someone to take over our lease. But if it comes to that, we can borrow the money from dh's parents and pay it back slowly enough to where it won't make a huge dent.

The $2500 monthly salary I came up with is an estimate. Starting teacher salaries in Oregon are in the low 30K range, so I figured maybe after taxes it would be about $30K a year, which is $2500 a month over 12 months. Teachers have the option of getting paid every month, which is what I think we will do. Of course, if he doesn't find a full time job this year and keeps subbing, our income will be only $2000 with no benefits.

We already get FHIAP and pay 5% of the costs. We may still qualify, but at the higher 30% rate. I think they also offer some assistance to people who get benefits from their employers but still have to pay some.

We could still get WIC, I think, and I will consider that if it looks like we will be hurting without it. It's a real hassle, and my oldest hated the appointments, but it could save us $100 on food. Right now, since we have the food stamps, I do most of my shopping at the co-op and get a lot of organic stuff, but it would be a lot less to shop at the local grocery store (Richey's for anyone who knows Corvallis) and just do the co-op for special things that Richey's doesn't have.

[stayinghome]

We went from being dirt poor when we first married and began to having kids, to now, where we make (i suspect) maybe upper range of middle class. But we still live paycheck to paycheck!

The problem for us was debt. Stay away from it at all costs if you can. Stick to budgets, still buy/think/act as if you are "poor."

We are finally on the brink of getting it all figured out. We made soooooooooooooooo many mistakes, but like i said it was all debt. Living within your means- like we made more, so we bought the nicer car, the bigger house, etc... It's a mentality I guess. Read some good financial books too, to stay on track! Good luck!

[Greaseball]

That's what I could use, a good financial book that is made for people in my situation - SAHM, renter, dh making around $30K. It seems most of the financial books are for people who make a lot more and who own their homes. Or they give advice like "Don't take so many trips to Disneyland." :LOL I don't think we have to worry about that!

[farmer mama]

Greaseball- I have been in your exact situation, with dh in school for teachng, us living primarily off student loans, renting from student family housing for nothing, and then he finished school and got a good paying job. I think like others have said, work out your budget and stick to it. We found there wasn't much left over for extras, but that we could rent a house (we now own) and eat all organic, and everyone's needs were met. Make sure to consolidate your student loans when you start paying. Also, in most places teachers get pay increase every year, so that was helpful, and having good med and dental insurance is great. We get paid year round even though he has summers off.

[kerc]

one general boook I really like is called "your money or your life"

and other people I know recommend the books by dave ramsey. He's a christian financial guy. If you can get past the spiritual side of his books they offer great ideas. Both are kind of planning where you're at, moving forward for long term plans. You won't find lots of take fewer trips kind of information

[SmilingChick]

"Now we get $500, and we still run out! So I think part of it is about feeling that because it's free, we don't have to watch how we spend. Dh is always telling me what's on sale, and I say, "Who cares how much it costs? It's free!"

GB, it's not free! It might be free for you, but that doesn't make it free - someone is paying for it; if the majority of aid recipients have the same attitude, then it's a lot of wasted tax dollars that could be going elsewhere.