My newspaper column today discusses living wage estimates for Monroe County, Mich.

Rather than a specific hourly wage, as one would typically see or hear when this topic comes up, the chart I’m pulling from is based on family size and demographics.

There is a huge difference in basic family expenses listed in that study, with the examples including two adults who need only a one-bedroom apartment; to a single adult with one child, where the formula factors in child care and a two-bedroom apartment.

It’s also fair to point out that individual families with the same demographics might not have the same living expenses:

  • Some have no consumer or student debt.
  • Some are driving paid-off cars.
  • Some have paid-off houses or lower than average mortgage or rental payment.

How do you adjust for those situations?

Basic 3 budget busters

The process you want to go through when building a realistic family budget is to based on actual expenses. Three to six months of data will remind you of most expenses that come up only a couple of times a year. If you haven’t been tracking expenses, locate your bank account and credit card statements from that time frame and you’ll have a good start.

Now go to the budget-o-meter and put in the amounts you pay for housing, auto and debt. Housing category in Crown’s system includes basic utilities; and auto category in Crown’s system includes gas and insurance.

If those three combined are too high, Crown says on its more detailed spending plan chart, which is also worth your time filling out, “then it will be almost impossible to have a balanced budget.”


Another example of realistic expenses involves grocery budgets. Almost every budget plan I see relies on a percentage of income or tracking food expenses. But the amount I teach for food expenses is based on family size and demographics and it’s the USDA Cost of Food study. Look up that report and find “thrifty” for the line item(s) that describe your family. There’s your grocery budget.

While some people can push their grocery expenses significantly below thrifty, I don’t think it’s realistic to expect that. There are significant differences in the money-saving grocery tactics each family finds to be practical or of value. For example: While I do use coupons and shop the sales, I don’t have an interest in tending a garden.

Now what?

What if you can tell from those two review points, or a more detailed income-to-expense review, that the cost of basic needs compared to income is the underlying reason there rarely seems to be enough money?

You’ve got some decisions to make:

  • That’s why I drive a 6-year-old, paid-off car.
  • That’s why I jumped on a mortgage refinancing opportunity for our upside-down home loan when HARP 2.0 provided an option that my husband and I qualified for.
  • That’s why someone else might apply for food stamps and charity assistance.
  • That’s why some young adults end up moving in with their parents.
  • That’s why some parents seek out jobs where the work hours are specifically when their children are in school, or when the children can be cared for by the other parent.
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