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Tim Lee comments on the reality of the McDonald’s budget

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Interesting take from Tim Lee in the Washington Post:

Various people are mocking McDonalds and Visa for putting together this sample budget for someone living on an after-tax income of $24,720 per year, calling it “ridiculous” and “hilariously obtuse.”

McDonalds budget

Budgets depend on individual circumstances, so it’s hard to know if a budget will work for any specific individual. But with a couple of exceptions, these are typical figures for the spending of millions of low-income Americans. Here are the major items in the budget:

Rent: Gawker’s Neil Casey calls $600 per month for rent a “laughably small” figure, but Casey should spend more time outside the Northeast Corridor. When I lived in St. Louis, my roommate and I each paid $425 per month for our comfortable two-bedroom, two-bathroom apartment in one of the city’s nicer neighborhoods. My then-girlfriend was paying less than $500 a month for a one-bedroom apartment. Then we moved to Philadelphia, where we paid $1,125 for a two-bedroom apartment in another nice neighborhood. That’s less than $600 per month per person. Paying $600 in rent sounds like a fantasy in New York but it’s completely plausible in typical U.S.cities.

Utilities: The budget allocates $0 for heat. This could be realistic in some Southern states, or in apartment buildings where heating costs are covered by the landlord. But most Americans have to pay heating costs. McDonalds and Visa have tacitly acknowledged their mistake by changing the heat figure to $50 in the latest version of the chart.

The other utility figures are more realistic. The budget has electricity costing $90, just slightly below the national average of $103. There’s $100 earmarked for phone and cable services. The FCC says the average cost of basic cable is $20.55, while “expanded basic” costs an average of $61.63. Cricket offers basic cellphone plans that start at $35 per month, while its smartphone plans start at $50 per month. So for $100 per month, you can either get basic cable and a smartphone, or expanded basic cable and a basic cellphone. Either way, $100 is a realistic amount for a low-income individual to pay for cable and cellphone service.

Health care: . . .

Continue reading.

Written by Leisureguy

16 July 2013 at 1:15 pm

Posted in Daily life

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