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Raising a family can be one of the most fulfilling endeavors in the world, but it can also be a challenge — particularly when it comes to finances. Between schooling, extracurriculars, food, clothes and more, supporting children can quickly become expensive. If you are planning to raise a family and want some guidance about how much money you’ll need to comfortably support them, it is important to understand just how much money you’ll need to bring in so that you can support a family of four.
When it comes to financial comfort, every family has its own definition. However, at its core, financial comfort means that families are able to earn an income that exceeds the poverty line, covers housing and food, and affords them additional services and goods. According to a recent report in USA Today, essential costs for a family of four include things like housing expenses, groceries, car costs, medical expenditures, education payments, clothing and utility bills. Additionally, parents of a family of four have to pay federal, state and local taxes. Other various expenditures may have to be considered in the equation for financial comfort as well, such as restaurant meals, vacations, miscellaneous entertainment, cell phone and Internet costs.
While the financial requirements for a comfortable life vary by geographical location, a study conducted by Allegretto found that, on average, a family of four with two working parents in America requires about $48,778 to meet their basic required budget. While that appears to be the magic number to cover costs for the average American family of four, numbers can be a bit lower depending on whether the family lives in a rural town as opposed to a cosmopolitan city — and how big that city is. For example, families living in Oklahoma City need to make $42,106 for comfort, while they need to make $71,913 to live in Suffolk, N.Y. Alternatively, families living in rural Marshall County, Miss., can survive on $35,733 per year, while those in Nantucket, Mass., need to earn $73,345.
Keep in mind these numbers are purely ballpark figures. Your number may be higher or lower based on your lifestyle choices. So what is the best way to figure out your family’s number? Track and organize your spending with easy-to-follow budgeting programs.
Once you have a basic idea of what your financial comfort amount is, plan to create and stick to a budget. The advantage of a creating a budget is it allows you to track and plan where your money is going. Unsure where to start? Follow these six simple steps when creating your yearly budget.
Creating a budget is an easy feat compared to actually sticking to it. Here are a few helpful tips to help keep your family on budget. Finding and sticking to that magic number will ease financial anxiety and set your family up for a bright financial future.