Housing and technology can make up a large chunk of a family’s budget, and that is especially true for those whose incomes may not be matching with their costs of living.
A recent study put out by the United Ways of Tennessee, “ALICE in Tennessee: A Financial Hardship Study,” confirmed this was the case for many statewide — and in Bradley County.
“ALICE” stands for “Asset Limited, Income Constrained, Employed.” This refers to those who are living above the federal poverty level, but still struggling to make ends meet.
In Bradley County, 24% of households are considered ALICE, and an additional 17% are living in poverty. The study based these figures on the federal poverty income level for 2017, $12,060 for a single adult and $24,600 for a family of four.
To figure out how people’s incomes compared with the cost of living, the study compared average wages in Bradley County and other counties throughout the state with “survival budgets” based on costs of living in each county.
The “household survival budget” for a family with two adults and two young children includes $745 for housing, $543 for food, $990 for childcare, $644 for transportation, $529 for healthcare, $75 for technology and $403 miscellaneous. With taxes, a family would need to make $4,436 a month — or $53,232 a year — to live at this level.
However, even if a family makes that much, there is no guarantee a family will always be able to find housing priced at or below $745 a month.
Many local real estate professionals have said it is hard to tell exactly how much rent is costing families on average, though it could actually be higher than the ALICE estimate.
“Even though we have estimates like this, it really is hard to judge what the average rent is right now,” said Robert Bradney, general manager of Bender Realty. “When you look at rent, you are looking at everyone from private individuals to property management renting out everything from trailers to bigger single-family homes.”
Bradney and other local real estate professionals say they believe Bradley County’s average rent is now approximately $800 a month, though many houses and apartments are renting for even higher.
Someone with good credit may be able to get a mortgage with a good interest rate, which could allow them to buy a home by making payments at or below the $800 mark.
However, the ALICE study indicates many in the ALICE population who take out loans of any type “typically pay higher rates, incur fees and are more likely to be delinquent or default on their loans.”
Some who are living on low incomes might consider applying to live in a public housing complex to save money, but those who try to do so today will run into a waiting list.
Paul Dellinger, executive director of the Cleveland Housing Authority, said there are currently waiting lists for all of Cleveland’s public housing units, as well as the Housing Choice Voucher Program, a.k.a. Section 8.
“We have a waiting list for both public housing and Section 8,” Dellinger said. “Our waiting list for Section 8 actually closed [to new applicants] in 2015, due to insufficient funding.”
The ALICE study also includes $75 for technology in its monthly “survival budgets” for households with two adults, regardless of the number of children. Authors of the study say this is meant to cover the cost of owning and obtaining a smartphone.
Eva VanHook, executive director of Family Promise of Bradley County, said it is common for people to judge those living on low incomes for trying to squeeze smartphones into their budgets.
VanHook, who regularly works with homeless families, points out having a phone can be necessary for everything from receiving calls from a child’s school to communicating with potential employers.
“For them, it really is a lifeline — just like it can be for everyone else,” VanHook said.
The Federal Communications Commission does offer a program called Lifeline, which allows low-income people to receive discounted phone or internet services.
However, this is limited to those who are "at or below 135% of the federal poverty guidelines" or those already receiving government benefits, which does not include much of the ALICE population.
The ALICE study also includes “household stability budgets” which look at what would make for more comfortable lifestyles for families.
“Stability budgets” for households with two adults include $129 a month for technology, which adds home internet service in addition to the phone service.
While the local public library and a number of other businesses and organizations offer Wi-Fi internet service to their patrons, those who rely on these places for internet service are at the mercy of other people’s schedules.
Some groups, like the Cleveland City Council’s recently-formed Wi-Fi Task Force, have also been looking at factors like the importance of school-aged children having internet access outside of school.
Though many consider the importance of technology a given, it can be one of the budgetary items families who are struggling may be tempted to cut.
Both housing and technology are pieces of the budgetary puzzle families who are living in poverty or are otherwise “asset-limited” have to figure out every month, and this is done to varying degrees of success.