"Have a seat! Let's talk budgets."
By now, you've probably read about the brouhaha surrounding McDonald's newly published Practical Money Skill Budget Journal. This seemingly well-intentioned educational attempt has been making many people very angry. Specifically because of the following sample budget:
I won't go into all of the details of what people are objecting to in this budget, but suffice it to say, there is concern over the fact that this sample budget assumes a worker must either be carrying two nearly full-time jobs, or this is a family budget (which explains the two jobs) that does not account for childcare or other child-related expenses. In addition, the $20 amount for health insurance, and the lack of a line-item in the budget for food, gasoline, or clothing, are both pretty troubling.
But, as Mother Jones (which was just about the last media outlet I expected to take this tack) puts it, Let's Give McDonald's a Break. (McD's, like the rest of us, deserves a break today).
Educating employees--particularly those employees who are working at minimum-wages--on how to successfully budget is a noble goal. Budgeting is one of those skills that is undertaught, both by parents and our educational system. But learning how to create, tweak, stick to, and improve a budget is something that can mean the difference between getting ahead and falling thorugh the cracks.
No, I don't think the problem is with McDonald's--although I do wish they could have used more realistic numbers. (The original version I saw listed $0 for heating but no corresponding higher cost for electricity, which is what you would see in areas where heat is not necessary but A/C most definitely is). I also wish there was more of a discussion about how it's nearly impossible for an individual earning minimum wage to get by on only one job.
But ultimately, those are not issues with McDonald's. This large corporation, which I truly believe is in an excellent position to do a great deal of good because of its immense size, is honestly trying to provide its employees with an important and under-taught life skill. Good for McDonald's, and good for any employees who are able to take something from this program.
Criticizing McDonald's in this case (although I do feel some of it is deserved) does smack a little bit of refusing to accept anyting less than perfection.
I saw a clear example of this when I was a young voter. At the time, I made the mistake of telling someone that I didn't like either candidate for president that year, but that I felt I absolutely had to vote against one candidate. My listener told me I was making a horrible mistake by doing that, because I should be voting for someone, not against someone, and I should therefore go to the polls and just pick no one for president. My listener was an incredible idealist, thinking I should reserve my vote for someone worthy of it. I am very practical and feel I need to work within the constraints and choices made available to me, because making no vote helps no one.
You'll also see this type of criticism anytime you start a slow, life-changing regimen. "Oh, you're drinking water with your double-bacon cheesburger? Like that's going to do anything!" Well, yes, actually, it will. Trying to switch to water and salad and runnning five miles daily and cutting out all sugar, etc, is unsustainable if you do it all at once. Making little mindful changes is much more likely to make a difference in the long run.
And I feel like that's what McDonald's is doing. An enormous corporation is attempting to fill in an educational gap in its employees' lives. It's definitely not perfect, but it's a start. And it could lead to incremental changes.
Also, by creating this budgeting journal, Mickey D's has gotten a lot of people talking about both personal finance/budgeting in general and how difficult it is to live on minimum wage in particular. That is most certainly a good thing. We need to have these discussions.
I've never had to live on minimum wage, but my first job out of college in 2001 was working 40 hours a week at Barnes & Noble for $8.25 per hour. My take home pay was $1000 per month. I paid $505 a month in rent, and about $150 per month in groceries and food. I was paying $200 per month in student loans. That left me $145 per month for my other bills, gasoline, savings, and fun money. Thankfully, my car was paid for, and my parents were still helping me out with auto insurance. Barnes & Noble took out my portion of the employee health insurance premium before I saw my paycheck, so I didn't have to think about it. Even though I tried to put away $60 per month in savings, I was generally able to make ends meet, although I took more loans from the Bank of Mom and Dad than I (or they) would have liked.
Even so, I consistently tried to find a second job that would fit within my irregular retail schedule, or a better-paying main job. But without the support of my parents, or the education I already had, I could have been stuck in a very bad financial situation for quite some time. And this was 12 years ago.
If Barnes & Noble had produced a similar budgeting journal for its employees back then, I might have been a little offended by some of the assumptions the sample budget made. (And I don't blame any McDonald's employee for bristling at those assumptions.) But I think think it's a mistake to get caught up in those offensive assumptions the detriment of the big picture. Instead, let's focus on the good that this can potentially do.
Here's hoping that it can lead to some important insights about finances on the individual through to the national level.
Ronald McDonald image courtesy of M.Minderhoud
Sample budget image source