Although poverty is an increasingly significant problem in the U.S., many citizens remain unaware of how prominent it is nationwide. reports that the national poverty rate stands at 15.3%, with this number rocketing to 27.1% among African Americans. Not only this, but one in four children also live beneath the poverty line, which confirms that economic hardship is impacting heavily on individuals of all ages.

While these statistics highlight the growing prominence of poverty as a social issue, they do little to educate citizens on how hard life is for those who are affected. Live Below the Line is an established international challenge that seeks to change this by raising awareness and giving individuals an insight into the realities of poverty, and it has now been launched for the second consecutive year in the U.S.

Facing the Challenges Posed by Poverty
The World Bank estimates that individuals who live in extreme poverty have a daily budget of just $1.50, which includes all daily expenditures relating to food, drink and transportation. The Live Below the Line Challenge encourages participants to adopt this budget for an entire working week, although the campaign's growing popularity has seen many Americans continue to sign up and embrace its principles beyond the official launch. Although a total of 3,200 citizens participated for the five days between May 7 and May 11, the Facebook campaign has registered an overall engagement of 50,000 individuals to date.

For those who undertake the challenge, the question that remains is how to cut their everyday expenditure without compromising their quality of life, and this is something that those who exist beneath the poverty threshold have to consider every single day. Food is the most obvious expenditure where money can be saved, especially when you consider the amount of disposable income that is spent on fast food and eating out in the U.S. every year. As recently as 2009, 24/7 Wall St. reported that the average household spent $2,619 on food purchased outside of the home, which reflects the differences in spending attitudes between those with wealth and those who struggle to make ends meet.

How to Eat and Drink Affordably
The key to saving money on food is to understand the manufacturing, packaging and logistical processes involved. It is these things that determine the cost and retail price to the consumer. Cheese is a relevant example, as individuals who purchase pre-grated brands are paying a far greater premium for the preparation of these goods. It is possible to save an estimated $3 per pound by instead purchasing whole blocks of cheese, and these savings are reflective of the difference between buying whole goods and prepared foods. Buying food that is in season also allows you to make considerable savings, as it reduces the production costs and those associated with the logistics of delivery.

Beverages pose a similar challenge to those with an estimated daily budget of just $1.50, but there are available solutions for anyone who is willing to make difficult choices and invest in only the core basics of a healthy and nutritional diet. Alcohol is one of the first luxuries that can be slashed when attempting to live frugally, as 2009 saw U.S. households spend more on wine, beer and spirits than on soft drinks and non-alcoholic beverages combined. Bottled water is also an unnecessary expense for those on a restricted budget, as over 90% of the nation's water systems meet all of the regulations that are stipulated by the Environmental Protection Agency.

Travel by Foot and Slash Your Annual Fuel Budget
Another considerable everyday expenditure is transportation; the way in which you travel to work or places of recreation affects your budget significantly. Fuel costs are a huge and often unmanageable burden that weigh heavily on poverty stricken families, especially when you consider the additional costs of purchasing, maintaining and insuring a car. Even though the price of fuel in the U.S. has fallen recently by a total of 15.9 cents to $3.624 per gallon, walking and utilizing public transportation remain eminently more affordable options. This is reflected in the annual budgets of each area's Metropolitan Transportation Authority, with New York's alone being set at a staggering $13.4 billion in 2010. The average driver in Los Angeles experiences an estimated 63 hours delay every year due to traffic and high levels of congestion, so embracing public transportation or walking can allow you to travel more conveniently while also drastically reducing your daily expenditure.

The Bottom Line
The Live Below the Line challenge may not be a new concept, but it has increasing relevance in the modern social and economic climate. As of May 2012, the estimated population growth in the U.S. stood at 0.899%, and this continues to place a strain on the nation's natural resources while driving a growing number of families towards the poverty line. By addressing the challenges of frugal living and embracing ways where money can be saved on food, drink and everyday transportation, it is possible to understand the difficulties faced by those afflicted by poverty and develop more responsible spending habits in the process.

Related Articles
  1. Investing Basics

    Why Interest Rates Affect Everyone

    Learn why interest rates are one of the most important economic variables and how every individual and business is affected by rate changes.
  2. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  3. Personal Finance

    How Tech Can Help with 3 Behavioral Finance Biases

    Even if you’re a finance or statistics expert, you’re not immune to common decision-making mistakes that can negatively impact your finances.
  4. Savings

    Should You Look at 529 Plans Outside Your State?

    529 savings plans are not restricted by geography. So if your in-state offering has high fees or poor investment choices, look elsewhere.
  5. Economics

    Understanding Donald Trump's Stance on China

    Find out why China bothers Donald Trump so much, and why the 2016 Republican presidential candidate argues for a return to protectionist trade policies.
  6. FA

    Paying for College: Utilize These Top Hacks

    Saving money for college is difficult for many families, but it doesn't have to be. Here are some overlooked hacks to save money on college costs.
  7. Savings

    How To Set Up A Trust Fund If You're Not Rich

    You don't need to be worth millions to create your own trust fund. Learn how your money can be handled in the event of your death.
  8. Stock Analysis

    Home Depot: Can its Shares Continue Climbing?

    Home Depot has outperformed the market by a wide margin in the last 12 months. Is this sustainable?
  9. Savings

    These 10 Habits Will Help You Reach Financial Freedom

    Learn 10 key habits for achieving financial freedom, including smart budgeting, staying abreast of new tax deductions and the importance of proper maintenance.
  10. Budgeting

    How Much Will it Cost to Become President In 2016?

    The 2016 race to the White House will largely be determined by who can spend the most money. Here is a look at how much it will cost to win the presidency.
  1. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  2. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
  3. Can minors invest in mutual funds?

    A mutual fund can be opened under the name of a minor through a custodial account overseen by a guardian. The custodian holds ... Read Full Answer >>
  4. When has the United States run its largest trade deficits?

    In macroeconomics, balance of trade is one of the leading economic metrics that determines the trading relationship of a ... Read Full Answer >>
  5. Which is more important to a nation's economy, the balance of trade or the balance ...

    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
  6. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>

You May Also Like

Trading Center