In The Interest of Full Disclosure

We're three days into our new year, and this post is a couple of days overdue. In the last post, we shared the inspiration and reasons for living at the poverty line. In this post, we want to make the methodology clear. 

The poverty line for two people is $15,130 a year. That divides out to $1,260.84 per month. That money must cover all of our living expenses: rent, food, utilities, auto expenses (including fuel), household goods, etc. We both have student loan debt that will not factor into the poverty level budget because that burden would be extremely difficult to take on, and because poverty tends to be cyclical, a lot impoverished people do not have access to higher education- thus they aren't saddled with those obligations either. [The monthly payments on our student loans totals $323.00- which is $3866.00/year] We have outstanding credit card debt (on a no interest card) that will be paid off by April that we will not count toward our budget. [The total amount owed is approximately $750] The other contractual obligation we have that we aren't factoring in is our gym membership, since we entered into that agreement long before this undertaking was conceived, and because its term runs through the entire year. [The monthly cost is $53.00- or $636.00/yearly]

Because the goal is to learn to live within a different set of means and not damage our credit ratings and be able to save money for a down payment on a home, we feel this is a fair compromise. Our basic method is to live on a "salary cap" of $15,130 for 2013.

My sister is getting married at the end of this month and we have already made all travel arrangements. Two more items of note: 1) I maintain an account with SmugMug.com [http://timpressions.smugmug.com/] which is set to auto renew in January. This is a business related expense that I can't eliminate, and we aren't counting this toward the "cap." 2) My cell phone died the day after Christmas and I attempted to get it replaced with a different model before the year ended. Unfortunately, Best Buy took over a week to process the replacement, and it wasn't until yesterday (1/2/13) that I was able to get a new phone. I had inquired about paying the difference between the model that died and a different phone (Samsung Galaxy Note II), and was told I could once the junk out order was processed. That cost was $120, which I was hoping to have taken care of prior to the New Year. 

At the end of each month, we will post our budget results so you can monitor our progress! Obviously we'll also post observations, insights, and maybe even some tips as we go through this year. We are definitely looking forward to learning a lot about poverty this year and hope you are too!!