Friday, August 22, 2014

Family of 4 Living On $30,000, $40,000, $50,000, and $60,000 a Year NET


I've showed you our family budget and now I would like to show some budget scenarios for a family of 4 to give you an idea of how all this works.  To make it easier, I'm using these annual incomes and considering that they are AFTER-tax incomes.  Generally for a family of 4, you would subtract $5,000 in taxes - factoring in state tax and the child tax credits.  That will give you a nice buffer.  So if you make $35,000, budget for $30,000 and so forth but as the income goes up, so do the taxes but I'm keeping these incomes low so that shouldn't be an issue.  Also, don't forget that your retirement contributions are pre-tax, which lowers your taxable income.  That is how I make these average monthly incomes work.  If you have an HSA account with your insurance plan, you will lower your taxable income even more!  But that is another topic in itself.

*I'm going to estimate that these families have a fully-funded emergency fund of $5-10K, so that they can purchase a higher-deductible medical plan.  They are also paying for disability, life and car insurance and have no car payments.  These would be ideal scenarios.  Imagine how much they would save if they had paid-for mortgages!  But in the meantime, let's assume they have a mortgage on a small, 2 or 3 bedroom home.  If you are wondering what each expense category covers, refer to my budgeting post here.

Family of 4 Living on $30,000 a Year - Average Monthly Income of $2,500

Income 
$30,000 after taxes

Expenses
Charity = $350
Savings = $320
Housing = $700
Utilities = $180
Food = $280
Personal = $130
Transportation = $230
Medical = $230
Clothing = $40
Recreation = $40
Debt - 0

This family has a high-deductible Medi-share plan to save on premium costs and they have their emergency fund fully funded to pay for any medical crisis that may happen this year.  Or, this family can get medicaid coverage because they are in poverty.  If they do that, they can then budget the medical money into other areas.  Their savings amount goes to fund their retirement and savings account.  They have to live in a very small home because they are living within their means.  They keep their costs down and consumption to the basics until they can pay off their mortgage.  Once they pay off their mortgage, they can either increase the other areas or add more bulk to their savings.  They find free things to do as a family and only reserve $40 for eating out or having friends over for dessert.  They shop consignment stores for clothing or the mom sews.  Many families live on this income and they make it work but it isn't ideal for sure but it can be done.  There is just NO room for debt! 


Family of 4 Living on $40,000 a Year - Average Monthly Income of $3,333
Income 
$40,000 after taxes

Expenses
Charity = $420
Savings = $600
Housing = $850
Utilities = $213
Food = $300
Personal = $150
Transportation = $250
Medical = $400
Clothing = $50
Recreation = $75
Debt - 0

This family does as the family above by saving 15% of their income for retirement but they will obviously give a larger portion and have a larger retirement.  They are also saving extra for misc. purchases that they choose to save for.  They can afford a higher housing cost than the $30K family but with that comes higher utility costs.  They spend more on food and personal items because they can and they also pay for a lower-deductible Christian sharing medical plan than the prior family but it costs more a month.  They are able to spend more on clothing and recreation but not so much as they can splurge yet until they pay off their mortgage.

Family of 4 Living on $50,000 a Year - Average Monthly Income of $4,167
Income 
$50,000 after taxes

Expenses
Charity = $510
Savings = $712
Housing = $1050
Utilities = $300
Food = $450
Personal = $200
Transportation = $320
Medical = $400
Clothing = $75
Recreation = $150
Debt - 0

This family is doing everything the prior families are doing with funding their retirement with 15% of their income and saving extra for whatever purchase they have on their list at the time.  They decided to get a larger home and with that comes an increased housing cost and utility cost.  They spend more on food and personal items but they decide to keep the same plan as the family before with a Christian sharing medical plan.  They still are frugal in their clothing expenses but decide to spend more in recreation because they like to go on field trips to the zoo or museum and this also increases their transportation costs as they use more gasoline for these outings.

Family of 4 Living on $60,000 a Year - Average Monthly Income of $5,000
Income 
$60,000 after taxes

Expenses
Charity = $600
Savings = $1425
Housing = $1050
Utilities = $300
Food = $500
Personal = $200
Transportation = $300
Medical = $400
Clothing = $75
Recreation = $150
Debt - 0

This family can live comfortably at this income as they are funding their retirements as all the previous families but they are also saving a lot more for other purchases.  They could also pay off their mortgage incredibly early by living on the lower income levels.  They can spend more in housing but they choose not to, so their housing and utility costs remain the same as the previous family.  They like to spend more on food and clothing but they keep their recreation and transportation costs about the same as the previous family so that they can fund their annual vacations and other big purchases.  They also keep the same Christian sharing medical plan to keep their costs low.


If you make more than $60,000 a year, it might be a good idea to live off a lower income and build wealth.  Set up your 6-month of expenses emergency fund, fully fund your retirement, pay off your mortgage, etc.  If you could live off the above scenarios and save and/or invest the rest - you could retire very early or even save to travel the world.  The possibilities are endless and it is in your favor.

Many families live in the $30-40K range and they have more than 2 children!  So tell me how a couple living on $50K can't seem to make ends meet?  I know families with upwards to 9 children that make it on very small incomes WITHOUT GOVERNMENT ASSISTANCE and they live well and are happy.  God can make any budget work - God and the biblical principles of the bible!  Do what the Word says and be content with what you have and enjoy the showers of blessings that God pours on you year after year!  I call it basking in His bounty!

Notes
If you aren't debt-free and don't have a fully-funded emergency fund, then you would have to tweak other areas of these budgets to accommodate for higher medical and debt payments.  You can easily move money around the different categories as it suits your family.  If you want a larger housing cost, you will have to lower other categories.

I've seen budgets that did NOT work on paper but somehow every month God provided - don't lose hope, aim to do right and God will help you!

Christian Homekeeping © All Rights Reserved.

14 comments:

Anonymous said...

Hello. While i have enjoyed reading your blog on Budgeting; I was wondering something? How would you move these numbers around for a much larger family (over twice what you mentioned) on your largest income senerio? Just wondering. Thank you.

Christian Homekeeper said...

Anonymous - Ok, for the largest income scenario of $60,000 NET with 2 parents and 6 children, I put an idea below. I guess it depends upon the family and what they want. Some want a really big house, others are fine with a small home. I follow a blog of a family of 12 that lived in 1200sq ft 3 bedroom! Then, I know a family of 8 near me that lives in 2500sq ft 5 bedroom home. So the housing and utilities will depend upon what size house and that depends on personal preference. I'm not sure what my friend, who has a family of 8, pays for food costs each month but I know she makes pretty much everything homemade, doesn't eat processed food at all and they don't eat out. They drive one vehicle that is paid for and they have no debt. However, this family has medicaid, so I would think being you have that many people and would qualify, you could put the $400 for medical back in the budget or savings. However, that is up to each family to decide whether or not they feel ok accepting medicaid. It is getting to the place that some are literally being forced to go on it because the insurance costs are rising so high.

Expenses
Charity = $600
Savings = $975
Housing = $1050
Utilities = $350
Food = $600
Personal = $275
Transportation = $350
Medical = $400
Clothing = $200
Recreation = $200
Debt - 0

If you are looking for something more specific, I would need more details, hope that answers your question, it really is all about moving money around to fit each family.

Anonymous said...

Hello. Well, we have a family of 10! We have a 5bd/4ba house and its 2700 sq ft. We have all electric. I sew. We don't eat processed food either. We don't rent movies. We don't subscribe to any 'movie channels' and we have 3 pets. No, we don't qualify for Medicade in the state that we live in. Sorry. (we checked). Thank you for your time. Our housing is more than your "suggested amount"; but not by much. Blessings!

Christian Homekeeper said...

Sounds like you are doing some frugal things anonymous, you could probably share tips with us about how to do it LOL! :-) I have no experience being a family of more than 4, I just have a few friends with large families. The largest that I know is a family of 11 but I don't know their financial situation.

Pets are pretty expensive but if you really want them, then that will be a sacrifice in other areas. Not sure what you do for medical but the best plan that I know of is $184 a month with a $10K deductible. That would be like a catastrophic-type coverage, the bare minimum. There is a also a plan for $251 with a $7,500 deductible and then they go down from there but the monthly payment goes up. This is with Christian medi-share. Samaritan ministries has a plan that is $405 a month for the entire family, then you only pay up to $300 of your medical bills and the share pays the rest that month.

A very frugal cost for food per person would be $62.5 a month. So for 10 people that would be $625 a month. For a family of 4 that is $250. We lived on $80 a month in 2008 with the 3 of us at that time, but now on a good frugal month, we can do $200 a month, which is $50 a month per person. However, my 21 month old son isn't eating as much as the rest of us yet but he does eat a dinner portion as big as my 10 year old daughter! =0

I'm going to share a lot of what we do in my "Living Debt Free" posts I hope to do soon. Sharing things like how we save on personal items like toilet paper, soap, etc.

Anonymous said...

Well, i don't know if i hold the cornerstone on any of this stuff. I do allot of sewing, quilting, etc. My one hobby is scrapbooking. Which can be as expensive or as frugal as you want it to be. I shop sales. I shop thrift stores. I used to do yards sales, but we live in the middle of know where now; so not a feesable option at the moment. We are going to be starting a garden (prepping for the spring). We have a dog that needs to be on a special diet. She is on Blue Wilderness; but i try to ONLY purchase this on sale. But, our biggest expendature is the GROCERY bill! Our bill is around $1200/mo to feed our whole crew ( and yes, that includes household items; such as cat food, TP, Papertowels (which i am not a big fan of), laundry detergent/or stuff to make it; etc.....) But, my dh was laid off for 2 1/2 mo this year. He is working over an hour away and we are burning through $600/mo in gas money!!! NOPE, not funny at all!!!! very frustrating. Ideas? Thank you....

Christian Homekeeper said...

I guess the first idea would be to move somewhere closer to everything and to his job. If you don't want to do that, you will have to sacrifice (as you are learning) in other areas. I like to keep my grocery money separate from the money for other things like toiletries, etc. In the budgets above that I gave, it is separate. The toiletry/necessity money is in the "Personal" category. I think that is one area you could try and cut down in but if you have teenagers that can hard as they eat a lot!

Seeing how I don't have experience (yet) of being a large family, I really couldn't help much other than share what we do. The family of 8 and the family of 11 that I know, they both shop in bulk from Azure Standard, and one shops at Costco too.

I hope to share a lot more of what we do in my upcoming posts, not sure if any will be new to you but maybe you can find something!

Anonymous said...

SO do the 2 kids not need child care?

Christian Homekeeper said...

Anonymous - considering this is a homekeeping blog, I thought it would be obvious that the mom would be at home. ;-) There is no need for child care when mom is there and the figures are for a one-income family.

Valerie said...

Do you live down south? A tank of oil cost $600 and we make it last for two months. What about electric, water and sewer as well? No Internet huh? Must be hard keeping a blog or homeschooling your kids without it since private school wasn't listed. Cell phones are not here either. That food budget? I won't even begin on the food budget. With food allergies running a muck special diets are a must for many families. And, I should check how old this article is but $350 for transportation? Please say that does not include car insurance. With the job market the way it is people are commuting far to work.

Bev said...

Wow Valerie, thanks for the critique but I can answer a lot of your questions. I don't live down south but I did for 19 years. I'm not sure what a tank of oil is - I'm assuming maybe that is for your heat? I did include electric, water and internet and even phone in the utilities cost. These are for frugal families that do what they can to lower their costs in these areas. I do homeschool because I love giving my children that one-on-one education. Cell phones are a luxury, so they were not included - although, we still live within the listed amounts for utilities WITH a cell phone by using Tracfone and only using it when out of the house for emergency-related calls or the "I forgot something" calls. It runs us about $6 a month.

The food budget is very doable with food allergies as many families only have that much to work with. If you make a lot of things homemade and don't buy processed foods, you will find you can easily live within that budget. Eating less meat, which most Americans need to do, is a great money saver, not to mention health!

If you live on the Biblical principles of no debt, that transportation cost is more than enough for a vehicle - it includes gas, car insurance and maintenance costs. If you find that you are driving too far for work and it is eating up your money, the logical thing to do would be 1. move closer or 2. find another job. Or lower other areas of your budget to allow for higher transportation.

Hope that helps!

Anonymous said...

In your examples, do you include property taxes in the housing bucket? Typical taxes on a 200k house runs about 6k per year in NY. Thanks to the TPP (Trans Pacafic Partnership), my company of 18 years has been replacing many good people with foreign H1B visa workers. If you haven't heard of TPP then do some research... TPP is coming to a company near you. I plan on voting for anyone who says they will repeal TPP.

Bottom line, I may just become a stay at home dad and live off the wife's income and pitch in where I can save a buck or two. We already are very frugal (debt free for several years now) by shopping at farmers market, grow my own garden veggies, brew beer, cook from scratch, shop at thrift stores, can/freeze veggies and fish/game, smoken fish, make jams, and look for free things to do. I also save on little everyday things such as I make most of our homemade consumables like dishwasher detergient, laundry deterient, dawg fud (the dog loves it and appears to clear up his food allergies), plus bake most of our breads; each of these little things add up to big savings per month.

Not working also gives me time to goto the gym 6 days a week, which I am in the best shape of my life at 52. Most people trade money (via a job) while forgetting about their health. Plus I make it a point to get out hiking and fishing a few times per week and the steelhead are running... Eating less meat is not an option for me, rather I harvest God's lean meat bounty of fish and venison. My wife and I also try to be good stewards in the community by donating time to a local domestic violence program.

After getting over the initial shock of job loss, I think I should have done this years ago. But it takes an understanding spouse to make it happen. Thanks for your blog. God Bless!

Bev said...

Hi anonymous - no, I didn't budget for such high property taxes, these examples are what you can "afford" on certain incomes. Obviously, if you wouldn't live in areas that expensive on certain incomes.

Never heard of TPP, I will look into it and that sounds horrible.

I do promote the woman staying at home and the man working on this blog, so I'm not sure you would feel entirely at home LOL!

Anonymous said...

TPP is getting some publicity with the election coming up but has mostly been hush-hush. And it goes far beyond cheap labor. It will impact our food supply too by having the large food companies drive the small time farmer out of business and replacing them with GMO-laddened foods. GMOs are illegal in Europe. TPP was heavily lobbied for in congress by big companies that stand to benefit. 9 out of 10 people never heard of TPP but more folks are waking up. It may be tooo late! Don't mean to go all political here...

Yes, property taxes are on the high side here but I am thankful that there are no catastrophic weather conditions (i.e. tornados/hurricanes) here in upstate NY, just the occassional snow storm.

Bev said...

That is sad and I don't like GMOs and wish they were illegal here also. We don't know what they really are doing to us. We try go buy a lot of non-GMO or organic foods but especially corn products like tortilla chips since most corn in the US is GMO unless label otherwise.

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