Struggling to survive
How much money do you need to live on!
If your household is struggling to pay the bills right now, you are far from alone. The cost of just about everything that Americans regu... View MoreStruggling to survive
How much money do you need to live on!
If your household is struggling to pay the bills right now, you are far from alone. The cost of just about everything that Americans regularly spend money on has been soaring, and as a result our standard of living has been steadily declining.
Over the past couple of decades, our politicians borrowed and spent trillions of dollars that we did not have, the Federal Reserve shoveled giant mountains of money that were created out of thin air into the financial system, and our leaders treated the reserve currency of the world like toilet paper.
So now the value of the U.S. dollar has gone way down, our paychecks don't stretch as far as they once did, and most of the country is barely scraping by from month to month.
This week, an excellent article that was authored by Michael Green is getting a ton of attention. In that article, he calculates that a "basic needs budget" for a typical family of four in the United States would come to a grand total of $136,500 a year...
I wanted to see what would happen if I ignored the official stats and simply calculated the cost of existing. I built a Basic Needs budget for a family of four (two earners, two kids). No vacations, no Netflix, no luxury. Just the "Participation Tickets" required to hold a job and raise kids in 2024.
Using conservative, national-average data:
Childcare: $32,773
Housing: $23,267
Food: $14,717
Transportation: $14,828
Healthcare: $10,567
Other essentials: $21,857
Required net income: $118,009
Add federal, state, and FICA taxes of roughly $18,500, and you arrive at a required gross income of $136,500.
Do you agree with these figures?
On the other hand, I think that his figure for housing is too low.
The average home price in the U.S. now exceeds $500,000.
Taking out a $500,000 mortgage at 6.2 percent would result in a mortgage payment of $3,047.41 a month.
So Green's budget completely rules out owning a typical home in many areas of the country.
Instead, it would allow for renting a two bedroom apartment which averages about $1,800 a month right now.
And I think that Green's figure for health care is also too low.
The average monthly health insurance premium for a family of four in the U.S. now exceeds $2,000.
Yes, a hypothetical family of four could save money by going without health insurance or by living in a van, but that is not the point.
It is time for everyone to admit that a middle class lifestyle has become out of reach for a majority of American households.
Green's analysis may not be entirely accurate, but others have come up with similar results.
For example, the Economic Policy Institute has determined that it takes approximately $123,000 a year for a family of four to live a middle class lifestyle in Essex County, New Jersey...
The Economic Policy Institute offers a Family Budget Calculator. It says a family of four would need about $123,000 a year to attain "a modest yet adequate standard of living" in Essex County, New Jersey.
