Budgeting can be challenging, particularly in a rough economy, and many families wonder where they stand compared to other families. There's no single average monthly budget that works for everyone. Your average budget will be affected by factors such as your income, geographic location and debt load, but national averages for common necessities can provide some guidance as to what you can expect to spend.
The Bureau of Labor Statistics estimated the average annual expenditures for a family of 2.5 at $49,705 for 2011. For a family of two, this amounts to around $3,313 per month. Conversely, the Internal Revenue Service publishes national standards for expenditures on necessities such as food, clothing and basic hygiene supplies, but not including housing or transportation. These standards are based on cost of living data and information from the Bureau of Labor Statistics. As of April 2, 2012, the estimated cost of necessities for two persons was at $1,029 per month.
Factors Affecting Budget
Income is a major factor determining average monthly budgets, and people with higher incomes tend to spend more each month; they may also contribute more to investments. Debt can eat up a significant portion of your budget as well, so your budget will be partially determined by your total debt. Geographic location can also play a role; cities such as New York and San Francisco have a higher cost of living regardless of how frugally you live.
Your budgeting decisions can significantly affect your budget, especially when it comes to how you determine what constitutes a necessity. For some people, high-speed Internet is a must-have, while for others, it's a luxury item that can easily be eliminated. How you allocate your money can also affect your budget. Some families of two put a significant portion of their income toward savings or paying off debt. Others only make minimum credit card payments, have no debt, or don't save. Your budget will generally be more costly if you save money, have investments or have a lot of debt. Luxury items, food preferences and your housing situation can also affect your budget. For example, people who live in areas with high property taxes tend to budget more for housing.
Necessities such as food and shelter can't be eliminated from your budget. Your housing costs should generally take up no more than 25 to 30 percent of your gross earnings. For example, the Population Reference Bureau estimates the monthly housing budget for Arkansas mortgage holders -- a relatively inexpensive place to live -- at $953 per month. Food is also a major budget cost. In December 2012, the U.S. Department of Agriculture recommended monthly food budgets ranging between $462.30 and $751.10 for a family of two. Costs vary depending upon the age of people in the family and whether they're living on a frugal, moderate or expensive budget. If you need to own a car, your necessity budget will also increase. AAA put the average monthly car ownership costs -- including maintenance, car payments and mileage -- at $745.50 per month.
While they might seem like necessities, you generally don't need cell phones or cable television to survive. These items can greatly increase the cost of your monthly budget. Consumer Reports reported that cell phones cost, on average, $50 per month, but add-ons such as wireless coverage can greatly increase the cost. Clothing, entertainment and similar items will also inflate your monthly budget, and decisions about how often to eat out and whether to use luxury products can also affect your budget.
- ConsumerReports.org: Trim Your Cell Phone Bill
- AAA Newsroom: Your Driving Costs
- Population Reference Bureau: Median Monthly Housing Costs for Owner-Occupied Housing Units With a Mortgage (5-Year ACS)
- Quicken: Home Budget -- Cost-of-Living Reality Check
- United States Department of Agriculture: Official USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average, December 2012
- My Family Finances: How Does the Average Family Budget Compare to Yours?
- Bureau of Labor Statistics: Consumer Expenditures -- 2011
- U.S. Census: Table 728 -- Cost of Living Index
- Internal Revenue Service: National Standards -- Food, Clothing and Other Items
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