Ouch. I thought I was living the American Dream for much less than that!
The article is interesting, though anytime I read a story like this one, areas where the example budget could be tweaked for lifestyle changes and choices pop right out at me.
Take a look at the infographic from the USA Today story, and then let’s break down some of the more glaring budget-busters.
USA Today budgets the following amounts to these areas of life for a family of four:
- Groceries: $12,659 annually (that’s a crazy $1054.92 per month!)
- Restaurants: $3667 annually ($305.58 per month!)
- Car expenses: $11,039 annually for a sport utility vehicle ($919.92/month..!)
- Apparel: $2631 annually ($219.25/month)
- Family summer vacation: $4580
- Cable, satellite, internet and cell phone: $3100 annually ($258.33/month)
Right away, I think we can all agree that the grocery budget can come down significantly. Even if you didn’t coupon heavily, by shopping sales, $100-$150/week would be a much more realistic budget.
Restaurants aren’t a necessity. We all enjoy eating out, but spending more than $300/month at restaurants isn’t my idea of the “American Dream.”
With regard to car expenses, I’m half-guessing and half-assuming the $11,039/year spent on the SUV is estimating the cost of a $33,000 SUV that this fictitious family is replacing every three years. Well… I drove my last car for 14 years, and my current SUV is ten years old and (thankfully) still in fantastic shape and running well. I’m of the “Drive ’em ’til they drop” mentality.
I believe the apparel estimate is pretty high here too, unless you’re in a career that requires this kind of wardrobe budget. I would guess I spend less than that per year for my boys’ clothes! (If I estimate that I pay around $3 per clothing item for them, I could buy 73 $3 items for them for $219. Do I buy them 73 new items each year? I doubt it…)
Family summer vacation: This is another area that can be tweaked quite a bit depending on budget. If a larger-scale vacation isn’t affordable, closer-to-home “staycations” are certainly much less expensive.
Lastly, $258.33/month for cable and cellphone bills seems very high to me. Cable TV is one of the first things I suggest cutting if your budget is tight. And, pay-as-you-go cell plans are much less expensive if you’re keeping a cellphone primarily for occasional or emergency use.
Notably absent from the budget: A land-line phone, and any kind of charitable giving.
What do you think of USA Today’s budget?
bluedemon20 says
The grocery bill does seem a bit high especially because you’re paying 300+ for restaurants! We rarely go out ANYWHERE but our grocery bill is probably 200/week or more (I stopped adding it up; too depressing) which is also high considering we get our beef from a farmer.
The cell phone/internet/cable expense is spot on with what we pay. In fact, I think we pay a little more.
Everything else? We can’t afford it! LOL. But my version of the American Dream is paying off the mortgage and living debt-free.
hwendt12 says
was the 401k amount. Considering that (what I heard recently) less-than 30% of people have $100,000 or more in retirement savings, that is CERTAINLY not the AVERAGE spending. Maybe IDEAL spending (which I think is more in line with some of the other numbers, depending on your definition of ‘ideal’).
SO much about these numbers is subjective (location, size of family, habits, etc.) that I cannot take much of it seriously. For example, if you live in the city and don’t own a car and are single-those two ALONE would skew the numbers drastically. I look at it as one person’s INTERPRETATION of things and not much more, IMHO.
Deals4Us says
I guess I need a raise but I agree with everyone else that those numbers are high. The vacation number is very high in my opinion! We also don’t eat out much either and we hold on to our cars as we cant stand dealing with car salesmen.
ithica256 says
I agree that this is pretty lofty.
I grew up with cable; my husband did not and we do without. We had netflix for a while until the prices went up. We don’t have time to watch cable. Sometimes I’ll stop by my parents’ house and sit down and waste hours watching Wife Swap. I can’t imagine having time to make cable worth the expense.
Our housing expenses are higher though. Our house cost much less than their 275K number, but we have a 5% mortgage, rather than 4%. I guess that makes a difference. Landscaping too; it doesn’t look like it, but we’ve spent a decent amount of money on our yard/garden.
The article admits the median household income is 51K, but I would think that many people feel they are living the American dream for well under $130,000. I think I would probably retire by the time I’m making half of that amount.
NFriday says
Hi- I don’t make anywhere near that much, but I know people that do, and I know people that spend that much on groceries and going out to eat. There are some upscale restaurants in Chicago that charge anywhere from $150 to $250 per meal, and they are booked for at least a month.
LuxuryAddict says
This “American Dream” cost breakdown seems to be if a family were paying retail for all the perks that the media tells us we’re all supposed to want, and not attempting to live within a set budget.
So to be perfectly honest, the cable & cellphone seems pretty low to me.
I don’t think my family lives extravagantly, but our cable TV is about $100 alone, and I just recently got our cellphone bill down to $225/month and am very happy about that. And this is not including our internet service and landline telephone bill.
Yes, those are luxury expenses that can easily be cut, or eliminated altogether, but again…. I don’t think this USA Today article is speaking of families wanting/needing to live frugally.
Now, we usually spend nowhere near those figures on dining out, but there are some months when we do spend $200+ on takeout or delivery… and other months when we eat home-cooked meals every night.
But I know lots of families who DO eat out at least once a week, and probably get a pizza or other takeout/delivery item that often too. So that number probably is right for the average family that just wants what they want without thinking about the real value.
As to the other expenses’ dollar amounts: utilities are low to me, groceries a bit high ( even if NOT couponing or bothering to watch sales, but rather just buying whatever your family wants whenever the need/want arises), apparel seems too low for buying brand-new clothing for kids, especially teens, but the vacation figure seems about right.
I guess what I’m saying is that knowing a lot of families who spend their money like the budget described, this article’s figure is pretty much on-target.
NFriday says
Hi- I know at least three people that live in condo buildings where everybody in the building has cable, and it is part of your monthly assessment. People are not given the option of dropping it.
I used to have cable, and I really miss it, but right now I can’t afford it. The tv reception in my condo building is really lousy, and I can’t get in channel 2 99.9% of the time.
There are also a number of people that spend this much money, but have their credit cards maxed out
llamalluv says
I think that their budget person forgot to include the minimum payments for all the credit card debt this family is racking up to live their “dream”.
They also are putting nothing into savings for emergencies!