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Financial Utility

 
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Demo
Discordia's Alter Ego


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PostPosted: Mon Mar 08, 2010 5:30 pm    Post subject: Financial Utility Reply with quote

Shared Living arrangements intend to generate two different types of utility: Financial and personal. Personal goals can take many forms (good environment for child raising, company for activities, spreading a message, etc), but financial is just that. We'll analyze that here.


Durable Goods: Using them fully
Most households each have many of the same durable goods:
Kitchens, vehicles, entertainment centers, common space and so on. A household often has from 2 to 6 people. Are these goods being used to their full potential? Say 20 people in classic living arrangements could have six kitchens and such between them. But one of the larger kitchens could easily serve 20 people with minor upgrades. Thus, much of the utility possible from the six kitchens is wasted. Shared living can collect this utility and use it for other purposes.

Combined Expenses
Some things are easy savings. Buying in bulk for 20 is an obvious win. The labor in cooking for 20 is not 10 times as much as cooking for 2. Combining food prep labor improves nutrition and generates free time for members. Cell phone plans can be combined into family or corporate plans. Five plans at 100 per month can become a single plan at 300 per month. 20 such people sharing would generate an additional 800 per month. It will have to be discussed which expenses are combinable against the losses of freedom that comes from integration.

Savings happens in real estate as well. Fewer installations are needed like kitchens, common space(or better arranged common space), parking and such. Selling such non-standard property may pose a challenge, though.

Durable goods are used to their full potential. Keep in mind a difference between goods that wear out mainly with time, versus goods that wear out mostly with use. A washing machine would certainly wear out faster when used for 20, so the savings there isn't as pronounced (although startup expense is saved). An example of a good that wears highly with time is computing equipment.



Co-op Business
I am very partial to an eatery business for the following reasons:
-Food is a very mandatory and significant cost for everybody.
-Overall nutrition is improved.
-The time and money spent preparing or purchasing meals is saved.
-The group can feed itself with a professional facility and staff, at bulk food cost.
-Eatery times encourage socialization.
-Serving ourselves subsidizes the restaurant though economies of scale (and maybe directly, depending on the company agreement).
-The service industry is very easy to staff, allowing members who fall into hard financial times to maintain an income through work at the commune.

But with the issue of transportation, the utility would not be collected by the commune unless transportation is a pooled expense.

Outside Interaction
With a communal

Incorporation, Legal Concerns
There are a lot of things to juggle:
-Arranging labor from members at less than minimum wage.
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Last edited by Demo on Fri Apr 09, 2010 6:20 pm; edited 1 time in total
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Demo
Discordia's Alter Ego


Joined: 03 Jun 2006
Posts: 467
Location: To post anonmyously: User: Guest, Pass: guest

PostPosted: Tue Mar 09, 2010 6:42 am    Post subject: Reply with quote

Case Study: Personal Budget
Monthly:

Rent/Utilities:
Food: 150-600 Varies--from $5/day to $20/day or more.
Entertainment: 200 (probably best budgeted on a weekly cycle. 50/wk sounds decent for recreational habits)
Transportation, examples:
-Bus to/from work 21 days/month@4.50/day: $95 + personal = approx 130-150/mo.
-Auto: 35 Insurance, Parking varies, Fuel/Maint: 0.40/mile. 10 mile one-way commute = 200/mo + personal = approx 250-300/mo
=============
My personal budget: 1650/mo
Rent: 500
Utilities: 100
Student Loans: 200
Transportation: 50 (bicycling primary)
Food: 0 (all subsidized)
Entertainment and all other(travel, 'un-necessary purchased meals at work', actual entertainment): 600
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