According to a recent CNBC article, "Americans think that a family of four would need to bring in a minimum of $58,000 a year, on average, just to get by in their community, a new Gallup survey finds."
Personally, our family of four finds this number a little high. However, knowing some of the people we do, I can certainly see how some people might feel this way. There are things that people do or don't do or certain factors that can affect how much people need to get buy. While the quoted $58,000 number is more than our family needs, there are reasons why we can get by on a lesser amount each year.
According to the USDA, the moderate-cost food plan for a family of four like ours (with two small children) would range right around $861 a month. This equates to about $10,330 annually.
This number far outpaces what we spend on our regular food costs. By doing things like using coupons, shopping at discount grocery stores like Aldi and Wal-mart, buying non-name brands, and reducing food waste through weekly menus and meal plans as well as by eating leftovers, we keep our expenditures to about $250 a month. In turn, this saves us about $7,300 a year.
Self-confidence and ignoring the Joneses
Many people I know will walk right past a penny on the sidewalk these days without taking notice. It's the, "Oh, a penny isn't worth my time," or "I'm too embarrassed to pick up a penny in front of other people" syndrome at work here. However, if it takes me three seconds to pause and pick up a penny, my hourly rate equates to $12. If that penny becomes a nickel, that rate shoots to $60! So I don't let what other people think deter me from picking that penny up, I go for it.
This is just a small example of not letting what other people think affect my spending…or saving. Driving an older, paid off car rather than buying new, shopping at a resale shop, or going to garage sales are all things that save our family tons of money. But many people don't do these things because they have preconceived notions that it makes them look poor or needy rather than looking like savvy, smart shoppers who care about their money.
Entertainment and activities
We've found a great way to combine entertainment and activities for our family, and especially for our kids. We've started making many of the holiday and birthday gifts experience-related. In this way, we take things like swim lessons, trips to the go-karting track, baseball and soccer team fees, our annual zoo pass, and similar items that we would likely pay for anyway and make them into gifts, avoiding costly consumer clutter on silly toys and treats in the process.
Sure, we still buy regular gifts too, but we don't have to spend in the amount we might otherwise and we avoid a lot of waste on things that the kids really don't care about. Instead we make great family memories through our experiences.
Having lived in the south, the west coast, as well as the Midwest, I've seen the range and variation of costs when it comes to numerous expense categories. From gas prices and vehicle insurance, to real estate and taxes, there can be a huge range when it comes to such costs. $58,000 could be just scraping by in places like LA or New York City, or it could be doing just fine in many areas of the south and Midwest.
In our current location in the Chicago suburbs, $58,000 may be on the lower end of the income spectrum for many, but given the range of suburban and urban options, it's enough to get by upon just fine.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
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