Cost of Living and Minimum Budget For A Family of Four
by Silicon Valley Blogger on 2007-10-3052
This is part of our series on “scary money tips and stories”. In some high cost of living areas, it now takes at least almost $80,000 to live. I’ve often expressed how life changes once you have a family to raise, beyond the time and effort it takes to care for kids and run the household. Financially, it can become somewhat more challenging as well: since the typical case is that your budget rises along with the number of people you have in your family. Without conscious efforts to throttle spending and to keep a close eye on your money, expenses can balloon to unexpected amounts. If this is what’s happened to you, you are not alone: this is a plight all too common for so many families today, when it’s often the case that it now requires two incomes to cover even basic expenses and make ends meet. What drove this point home for me is this new study that came out last month, the California Budget Project report, detailing how much money it now takes to fulfill the minimum living requirements of a family of four just to live day to day in the place I call home: the San Francisco Bay Area. These numbers did *not* include college tuition savings nor retirement funding. These scary numbers tell me that even if you have a good job, it may not be enough for your family to live on. With a growing disparity in income and expenses, people have been moving out of the area to be somewhere else. This also explains why trusted labor here is pretty expensive: outsource a job and prepare to pay. A home repair visit can set you back $50 an hour while day care runs around $1,000 a month.
Let’s take a look at some basic, minimal budgets that are required to sustain a family. The federal poverty line is at $20,444 for a family of four (in 2006) while here in one of the most expensive areas of the nation, it takes three and half times that amount or $77,069 to survive. The basic...
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