Superintendent’s Chat
Richard McClements,
According to recent
statistics, the average American owes $7,000 on his credit card. He pays $83 a month in interest or $996 a
year before he ever begins to pay the principle due on that $7,000 debt. When you use the credit card at the store,
you are not charged with interest if you pay off that credit card when the bill
arrives in the mail. Obviously as the data above shows, most Americans do not. For example, they charge $200 on the card in
October and then only pay $50 on the bill when it comes due in November,
thinking they will pay it the other $150 in December. Now the interest charge kicks in, and that
often ranges from 16-21%. Many people
cannot use that credit card responsibly.
Some even take out another credit card to pay off the first. Now they get in even deeper. A good rule of thumb is if you can’t afford
to buy something, you wait until you have the money. Putting it on the card makes the decision too
easy.
Almost all adults will tell
you that it is tough to make ends meet.
I keep trying to send a message to our students that they need to be
well educated. Let’s examine how hard it
is to get by even on a decent salary.
Let us assume that you have
a job that pays $15 an hour. Most would
say that is a good hourly rate compared to minimum wage or $6.20 an hour –
which is the amount that workers in McDonald’s or Burger King earn. That means that you earn $15 X 40 (work week)
X 52 (weeks in a year) = $31,200. This
salary (unfortunately) is more than most first year teachers earn. If you worked a year at McDonalds, you would
earn $12,896.
Let’s now see what you can
do with a salary of $31,200 and take care of a family with two children.
First, that salary of $31,200
will have federal taxes and state taxes withheld, and you will also pay social
security. This will reduce the salary
from $31,200 to about $27,310.
Next you will have health
insurance payments. Assuming that your
employer pays half of the cost (as we do here at Shonto), that yearly expense
will be another $1,283. That subtracted
from $27,310 leaves $26,027.
Let us assume that you are
making monthly car or truck payments of $500.
The cost for the year is $6,000.
That subtracted from $26,027 leaves $20,027.
You will have to insure your
car. Let us assume you are a safe driver
with no accidents. You will pay
approximately $900 per year. That subtracted
from $20,027 leaves $19,127.
You will spend at least $20
per week for gasoline. This totals
$1,040 for the year. This subtracted
from $19,127 leaves $18,087.
You will have to feed your
family. Let us assume you spend $100 a
week for all grocery and cleaning products.
This totals $5,200 a year. This
subtracted from $18,087 leaves $12,887.
Most likely, you will have a
telephone. You will spend about $35 a
month or $425 a year. This subtracted
from $12,887 leaves $12,462.
You will have a monthly
house or trailer payment. Let us assume
that it is low, and you pay $500 a month.
That amounts to $6,000 a year.
That subtracted from $12,462
leaves $6,462.
You will probably have cable
TV. If you pay $50 per month to get HBO
and the basic package, you will spend $600 per year. This subtracted from $6,462 leaves $5,862.
You will have house electricity
payments. Let us assume you spend $35
per month. You will spend $420 for the
year. This subtracted from $5,862 leaves
$5,442.
You will have to heat your
home in the winter. Let us assume that
you spend $800. That subtracted from
$5,442 leaves $4,642.
Let us assume that you are
that average American and spend that $996 a year in credit card interest. That subtracted from $4,642 leaves $3,646.
You will try to pay off that
credit card by paying at least $50 a month towards the principle. That amounts
to $600 a year. This subtracted from $3,646
leaves $3,046.
You will need to buy new
items to replace those that break down, such as microwaves, vacuum cleaners,
TV’s, VCR’s, washing machines, hair dyers, pots and pans etc. Let us assume that you spend $500 a
year. This subtracted from $3,046 leaves
$2,546.
You will spend at least $500
a year taking your family to the dentist, replacing glasses, or paying off the
doctor for items not covered by your health insurance. This subtracted from $2,546 eaves $2,046.
You will spend at least $600
a year to pay for your two children’s school lunch. This subtracted from $2,046 leaves $1,446.
You will spend at least $500
a year on clothing for four people. This
subtracted from $1,446 leaves $946.
You will spend at least $500
a year on your car by changing the oil and filter, replacing mufflers,
replacing tires, batteries, or resolving engine problems. That subtracted from $866 leaves $446.
You will now have to use the
remaining amount to get haircuts, buy birthday and Christmas presents, go to
the movies, buy postage, occasionally go out to dinner, purchase life
insurance, pay your car registration, replace your perfume or cologne, take
your pet to the veterinarian, buy a plant for the house, have candy for kids
who come on Halloween, or buy life insurance for the family. You will probably find that you don’t have
enough money. So you charge on that
credit card.
Do you still want to drop
out of school? Do you still think you
can have a poor education and have a decent life?