This is easy, assuming an average American family size:
- $8,333 gross ($100k)
- call taxes 25% (this is aggressive) leaves $6,667
- housing expense of $2k leaves $4,667
- minus 2 auto expenses (used car average payment is $465) brings us to ~$3,400
- childcare (which: is not free even when your kids are in school) of $1,500 yields $1,900
- frugally feeds the family on $1,000 per month
- $900 remaining for everything else. This includes all the one-off incidentals (car tires, physician co-pays, etc.).
The astute reader will have noticed that I was generous in my tax, housing and childcare estimates. The more astute reader will note that I have omitted student loans, any healthcare or dental expense, vacations, etc.
This is obviously not an estimate for a HCOL area, this is what the math looks like in much of the country.
Edit: _The Two-Income Trap_ is a good read on this. IIRC it points out that most of the big costs are fixed, where financial gurus often tell people to cut the variable expenses (cut down on avocado toast, or make coffee at home). When obviously tweaking inside the $900 left over won't fix this budget no matter what.
Also worth noting that even if they could halve their housing expense, they still would only be in a position to put away $12k annually. Which, given what we know about unexpected expenses, would probably put them right at actual break-even and prevent them from taking on consumer debt.
- That entire $900 for "everything else" ends up all going to your monthly employee contribution to have a family health insurance plan through your employer. Luckily they're only making you pay about a third of the premium.
[EDIT] For anyone from outside the US who's getting a bit lost in all this US-centric budgeting, the TL;DR (and trend which you may have noticed in all this) is that it's insanely expensive to have kids in the US. The main reasons are healthcare costs (including insurance), housing, and childcare. Costs can easily approach $100,000 to take one kid from conception to age 5, with no extravagant spending, and no major health problems.
I was intentionally being very generous. The thing about the cost sharing you mention; it's the kind of change that companies make all the time. An extra $200 out of a family's monthly check can be ruinous.
Yeah, and those numbers only ever seem to go one way, with no end in sight considering that (last I checked) insurance premiums are still increasing faster than base inflation.
Between the savings crisis in every generation past the Boomers (worse with each subsequent generation), and healthcare costs going ever-upward, I have a hard time seeing how we're going to have a strong economy in 20 or so years as more and more of our consumer base gets ground into paste by the wheels of The System and can no longer drive the economy with spending, yet we still don't seem to be anywhere near fixing any of that.
A large part of what's left over probably goes to service consumer debt, as the average American carries about $6k in credit card debt. Paying for yesterday's stuff makes it hard to save for tomorrow.
The hypothetical family I described above would easily end up with $6k of credit card debt after a few years on that budget, simply because $900/mo is not enough to cover all the remaining expenses and therefore they will need to tap a loan at some point. A single auto wreck, temporary job loss, physician visit, etc. can create long-term financial problems for this family because they don't have an extra $3k or whatever to cover a short-term expense.
(I take an agnostic point of view on the debt itself. The alternatives to not having some kind of financial cushion -- even burdensome consumer debt -- are often worse. Think: "can't get to work because the car is dead and I don't have an extra $750 so now I lose my job and then my housing" as the realistic alternative. The real problem is compensation has not paced inflation for 2 generations, and that the $100k family should be earning much more for the same jobs.)
- $8,333 gross ($100k)
- call taxes 25% (this is aggressive) leaves $6,667
- housing expense of $2k leaves $4,667
- minus 2 auto expenses (used car average payment is $465) brings us to ~$3,400
- childcare (which: is not free even when your kids are in school) of $1,500 yields $1,900
- frugally feeds the family on $1,000 per month
- $900 remaining for everything else. This includes all the one-off incidentals (car tires, physician co-pays, etc.).
The astute reader will have noticed that I was generous in my tax, housing and childcare estimates. The more astute reader will note that I have omitted student loans, any healthcare or dental expense, vacations, etc.
This is obviously not an estimate for a HCOL area, this is what the math looks like in much of the country.
Edit: _The Two-Income Trap_ is a good read on this. IIRC it points out that most of the big costs are fixed, where financial gurus often tell people to cut the variable expenses (cut down on avocado toast, or make coffee at home). When obviously tweaking inside the $900 left over won't fix this budget no matter what.
Also worth noting that even if they could halve their housing expense, they still would only be in a position to put away $12k annually. Which, given what we know about unexpected expenses, would probably put them right at actual break-even and prevent them from taking on consumer debt.