Planning a future budget is one of the most difficult activities anyone can do.
It’s easy for you to look at a single monthly or weekly paycheck and determine where that money is going to be allocated to. So much for rent or mortgage, this much for a car payment, these utilities and credit card bills need to be paid. Don’t forget groceries, gas, and… oh yeah, the kids need new shoes for school next week.
But looking at the bigger picture, it can be daunting to plan three, six, or even twelve months down the line as you can’t always predict what you’re going to need to pay for beyond those regular set payments such as rent or a car note.
The Budget Kit:
The Common Cents Money Management Workbook
So let’s attack the question a different way.
Instead of looking at each paycheck and allocating it into different payment buckets, let’s take a step back and see what experts have determined to be the AVERAGE COSTS FOR A FAMILY TO LIVE A MODEST LIFESTYLE in different areas of the country.
Web Watch has mentioned how CIGARETTES COST IN DIFFERENT STATES as an example of how geographic differences are an influence for a family budget.
Sometimes, if it’s too expensive to live where you are right now, one option that some don’t consider is to move someplace that has a lower cost of living. Of course, it helps if one can relocated and maintain the same level of income… but if you’re digging into your savings to pay for short-term bills, this could be something to think about. But we digress.
Let’s take a look at some of the information the ECONOMIC POLICY INSTITUTE has come up with:
- The 2012 poverty threshold for a 2 parent, 2 child family was $23,283. To maintain a “modest” living level, the EPI took into account geographic differences in rent and added in various other costs such as taxes, transportation, and child care.
- New York City had the highest annual budget at $93,502
- Marshall County, Mississippi had the lowest annual budget at $48,144
- The median annual budget was found in Newaygo County, Michigan at $63,238
- Housing costs were most expensive in Hilo, Hawaii. Least expensive in Macon County, TN and Smith County, TN
- Child care costs ranged wildly across the board, with almost a $1000 difference in monthly costs between the least and most expensive locations surveyed
Want to see how much you should be budgeting per year, based on average figures for your nearby economic area? Check out the EPI FAMILY BUDGET CALCULATOR and select your family type, state, and area. You’ll be shown a breakdown of budget values that cover the following monthly costs:
- Child Care
- Health Care