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Potential Savings A key idea for SEE is that by reducing living expenses, while maintaining an attractive life style, money will be available for savings to go into Millennial projects. This document examines the feasibility of this idea by an examination of expenditures by households as reported in the United States Statistical Abstract. Only trial will tell whether these potential savings can actually be realized. The report identifies potential savings on the order of 30 percent of expenses. Two reactions to this are first, that one might expect to find more, and second, that even this is enough to provide the opportunity for significant (10 to 15 percent of disposable income) investment in the community. These were the average expenses for all US consumer units for 1993 and for head of household under 25 from Table 718 of the Statistical Abstract. (The information is available broken down by race, age, region, size of consumer unit, and type of household. The "under 25" seems to be a likely representation for many who would move in.)
The two biggest entries, housing and transportation are discussed later with greater detail as to their components. There are great reductions in gifts, life insurance, pension savings, and healthcare for the under-25 households. For most of our residents there would be no cuts in these areas. For older residents, these cuts by the young allow identifying life insurance, pension savings, and healthcare as life-cycle dependent and unlikely to be sources of savings. The gifts entry might be redirected toward colony goals or towards investment, but it is a rather personal decision. Suppose half of this is redirected with no particular pressure applied or (480, 0). Food away from home could probably be cut some, shifting it to food at home. Suppose that half of Food Away can be saved or (800, 600). Apparel might be cut some, depending on the fraction of time spent in the community. I have a hard time believing how big even $1,198 for a young adult is. I may have spent a few hundred dollars a year on apparel (including cleaning) over the past decade. The give-and-rebuy-cheaply model which is widely in use for clothing has been suggested for some types of colony clothing. I think that would work better as the community grew, due to individuality of sizes. Being deliberately cautious here, I estimate 25% reduction or (400, 300). Entertainment overall has a breakdown in SA Table 404 into fees and admissions (414, 224), audio & visual equipment (590, 427), and other, which a note says includes pets, toys, and playground, sports, exercise, and photographic equipment (621, 258). Fees and admissions will include not just near-home expenditures but expenditures while traveling, so I doubt if this would be cut much. What was cut locally would be cut by providing more of the other entertainment expenses locally. I cautiously estimate no savings on this one. Audio and visual equipment is used in highly personal ways although there are significant opportunities for sharing. This will mostly be left to the household level but with at least a community satellite dish and electronics. Given money transferred into this category from fees and admissions, I think there could be some savings, perhaps (150, 100). Pets and toys will be at the household level. Playground, sports, and exercise equipment are robust and easily shared. Good photographic equipment is fragile and for some people quite personal in choice. Basic photographic equipment is more robust and of less concern so long as it gets the picture. Estimate (200, 100) savings here from sharing. Total for entertainment (350, 200). The average household is about two people, the under-25-headed household is about one. There is little decrease in the personal care expense per person, and so I'll estimate no savings on this. Education and reading might actually be increased. Book and magazines can be shared through a library but quantities are likely to increase. I am a biased judge because this is the area in which I go over the average. I will estimate that the reading expenses for young adults go up by 100 and that education expenses by others go up by 450, for (-450, -100) on the savings potential. Tobacco! I dare say most FMF members are not addicts. Estimate 90% savings, but round it to nearest 50 for (250, 200). Computers may be in miscellany. Let's leave this area alone. Telecommuters are going to need top-of-the-line equipment, but many others could do with filtered-down, used equipment that was not state-of-the-art. Alternatively this could be considered entertainment which needs first-line equipment, and entertainment savings turn negative. Breakdowns on housing are:
Shelter is the likeliest of these to be cut substantially. However, the other lodging is travel-based, so we will not expect savings there. The median sales price of existing one-family houses in the U.S. in 1994 was $110,000. The median would be lower than the mean, but is almost certainly more representative of what first-time buyers would pay. We are hoping to reduce that to $30,000 for two people, or a factor of .27. The quality of the shelter for young people would be upgraded from a rental unit, so apply this to the 5,415 - 370 = 5,045 for all U.S. households, getting 1,362, or savings of (3700, 1700). The biggest component of utilities is electricity which might be cut some, but the second biggest is telephone which is likely to rise. The expenses for furnishings and equipment could probably be cut also, but from the average level, not from the under-25 level. Estimate savings of (600, 0) on furnishings. The total for housing is thus (4300, 1700). Breakdowns on transportation are:
The bulk of these expenses look like they are proportional to usage. By cutting usage in half, savings of (2500, 2000) would be realized. The transportation costs should drop over time, and there is really no basis for estimating what immediate savings would be. Thus I come up with potential savings of
Savings potential thus seems to be about 28 percent of expenses. While some of this might well be redirected, it would allow a 10-to-15 percent reinvestment policy.
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