Economic Outlook ‘96 Living In Spokane Takes $18,900 - And A Little Luck Credit Counselor Devises A Bare-Bones Family Budget

With $18,900, you can buy a midsized car or a very compact, one-year existence for a family of four in Spokane or Coeur d’Alene.

And that sum leaves little room for a breakdown that could leave a family destitute by the side of the road. It also assumes the family’s only debt is a small car payment.

“We see this sort of scenario quite a bit, except they all have credit card debt,” said Mark Harnishfeger, head of the Consumer Credit Counseling Service. “They have a slew of them.”

At an economic forum sponsored by The Spokesman-Review in December to gather information for our annual economic outlook, one of the more intriguing questions was: Just how much income do you need to live in Spokane?

Economists and analysts at the forum didn’t have a quick answer. So, we put the question to Harnishfeger.

His nonprofit agency developed an $18,900 budget that will support a family of four without any public assistance - if the family’s lucky.

Even this bare-bones budget requires substantially more income than the $15,150 the federal government defines as poverty level for a family of four.

The gap between the national definition of poverty and the counseling service’s suggested budget in part reflects a cost-of-living explosion in Spokane that has outdistanced wage growth.

Some 64,175 people in Spokane received income assistance in 1994, the most recent year for which numbers are available, said John Yoachim, a research analyst for the Washington Department of Social and Health Services.

To qualify, a household of four’s income must fall below the federal poverty level.

Just what does $18,900, equivalent to $1,575 a month, buy?

$450 for rent, assuming you can find a place to rent for that amount. “That’s going to be a steal,” Harnishfeger said. A mortgage payment would be less, but the service assumes a family with such a low income could not accumulate the funds for a down payment.

$400 for groceries. Harnishfeger said $100 a month per person is a conservative rule of thumb. The family might receive a minimal amount of food stamp aid.

$150 for car payments, which is probably only enough for one used car unless the family already owns one vehicle outright.

$65 for Washington Water Power Co. budget billing, which averages monthly utility bills to reduce the impact of high winter heating costs.

$25 for a telephone, with no long-distance calls.

$20 for clothing for the entire family.

$75 for auto insurance.

$20 for miscellaneous medical expenditures.

Harnishfeger said health insurance would run a family $400 to $500 per month, more than they could hope to afford unless it’s provided by an employer. “If they get hit with anything, they’re in deep trouble,” he said.

The other expenses break down to $25 for car maintenance and tabs; $60 for gas; $20 for two videos per week; $20 for Laundromat costs; $10 for school expenditures; and $15 for miscellaneous items like checking-account fees and postage.

All of which brings the total for a month to $1,355. The counseling service adds in taxes to arrive at a gross income of $1,575, which adds up to $18,900 a year.

But most people who seek help from Consumer Credit Counseling can’t make this budget work - because of debt. The average client owes $9,500 to nine different creditors, he said.

That makes an $18,900 budget unworkable, and brings a lot more clients through the agency’s doors.

Participation in its debt-management program grew 18 percent last year, and first-time visits increased 16 percent. Enrollment in educational programs almost tripled.

Almost one-fifth of the debt-management clients are in

Idaho, where Harnishfeger said costs may be slightly lower than Spokane’s, but so are wages.

Trish Potts, an administrative assistant at the counseling service, said her family’s budget is close to Harnishfeger’s model.

Because she, her husband and two children were able to qualify for a special federal mortgage program, they have a home on which payments are slightly less than $300, Potts said. But, she added, car payments of $360 per month use up the savings on housing.

Potts said winter heating bills, plus higher grocery and telephone bills, make this season the hardest. Other months, the family might be able to save some money.

“You just have to keep an eye on what you’re doing,” she said.

Potts, for example, charts expected income and expenses at the start of each month, then tracks them paycheck to paycheck.

She takes a calculator to the grocery store. And she has one credit card, the last of many she had when she arrived at the counseling service seven years ago with debt caused by their misuse, as well as the illness of her son.

The service’s guidance enabled her to wipe the slate clean. “I’ve lived by them for years,” Potts said.

, DataTimes