This is a great post by Maria Morton, a Realtor in Kansas City. I think she could run for any political office with this message. Bet she's got ideas for employment and healthcare!
When you get ready to buy a home, you need to factor in these expenses to make sure that you'll be able to pay for all of your monthly expenses without getting further and further into debt each month.
Has anyone been paying attention to United States' Health Care, cost of living, minimum wage, and how many pundits are saying that the key to getting over the recession is the recovery of the real estate market?
Who here believes that?
Let's say a regular person earns $10/hour; that's $21,200/year gross income. Suppose this regular person pays 20% in taxes, that leaves $16,960/year or $1,413/month. Please keep in mind that, according to the United States Department of Labor, the minimum wage for Kansas and Missouri is $7.25/hour, not $10.
According to the US Census Department, monthly housing costs are $758/month including mortgage and maintenance; $705/month excluding maintenance & second mortgages. See Table 1A-7 on page 9 of the American Housing Survey for US 2003.
Here is a breakdown of costs of living for a budget of $1,413/month income:
Shelter [13%] = $480.42/month ?but the average cost is >$700
Car [15%] = $211.95/month ?that wouldn't keep me in gas!
Food [13%] = $183.69/month ?Really? Where do they shop?
Pensions & Social Security [10%] = $141.30/month
Utilities [8%] = $113.04/month ?wonder which utility they choose to pay?
Health Care [7%] = $98.91/month ?you won't get much coverage for that!
Entertainment [5%] = $70.65/month (just the movie; no popcorn)
Clothing [4%] = $56.52/month -shop the dollar stores!
Household Furnishings [3%] = $42.39 -shop second hand stores!
Education [2%] = $28.26 -that does not cover the cost of Continuing Ed!
What about retirement? How much does this regular person need to save for retirement? According to the nifty CalcXML, this person needs to save $258/month starting at age 35 in order to retire at age 65.
Maybe I'm not doing this right, but the numbers aren't adding up! The best I can do on my Health Insurance is $474/month! Food is easily $400/month! Exactly how is this enforced Health Care Law going to work?
Sure, I can get Health Insurance for $70.69/month - Do you know what it covers? =$100/Emergency Room Visit; Nothing for Inpatient; Nothing for Surgery; nothing for medications.
What about a mortgage? $150,000 mortgage @ 5% interest over 30 years = $805.32/month Principal & Interest only --that doesn't include Homeowner's Insurance or Property Taxes --and it's 57% of our minimum wage worker's monthly income! Are you sure that real estate is the first thing that needs to recover? Do you not think employment and health care have a role in this recession?
I don't see how anyone can afford to live fairly comfortably on less than $4,000/month after taxes ($6,000 would be better). Am I missing something?
Maria Morton, ABR, SRES Leading Edge Society 2010
Prudential Kansas City Realty / 435 Nichols Rd. 3rd Floor / Kansas City MO 64112
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♫ KANSAS CITY REAL ESTATE SALES PRICES 2001-2011 by county
. ...*Information obtained from Heartland MLS is deemed reliable but not guaranteed. **This is an eclectic blog combining a little business with pleasure; please consult a licensed professional before making life altering decisions. ♪♫
Maria Morton, Realtor©, SRES is a Kansas City Real Estate Agent licensed in MO & KS and affiliated with Prudential Kansas City Realty 816.410.5499.o Maria Morton Copyright © 2011 *Check Your Budget - What Is The Cost Of Living?*