This week, Wider Opportunities for Women issued their “Basic Economic Security Tables” for the Washington DC region. Not unpredictably, the Washington Post coverage led with the finding that a family of four needs $108,000 to be “economically secure” in Fairfax county. I sometimes work with folks from WOW, and I generally think they do good work, but I have to admit that I winced reading this — I worry that it feeds into the world view where people who earn six digits feel entitled to whine about how they can’t make ends meet.
And, I make less than $108,000 a year, and I don’t feel like we’re “just getting by.” So, I thought I’d take a look at their budget for a family of four: two workers, one preschooler, one school-age child, which is the one that is closest to our family type.
- Housing — $1546. This is based on HUD’s fair market rent and seems reasonable to me. I can’t think of where in Fairfax you could rent a three bedroom apartment or house for much less than $1500,.
- Utilities — $188. Sure. We pay a bit more, especially in the winter, but a smaller house would be cheaper.
- Food — $868. They get this from the USDA low-cost food plan, which is one step up from the thrifty food plan. I think we spend somewhat less than this on food, but as I’ve discussed before, we eat less meat and less prepared foods than the budget assumes. The thrifty food plan definitely means you need to pay attention to what you’re buying — if economic security means being able to buy ice cream and meat without worrying about the cost, the low-cost plan seems reasonable.
- Transportation — $652. They assume two cars, and a lot of this cost is depreciation. I think you could probably get away for less, if you bought used cars and kept them until they fell apart. It certainly feels like we spend a lot less on transportation, but because we don’t have car payments, but pay insurance 2x a year and repairs at irregular intervals, I may be undercounting the real cost of car ownership.
- Child care — $2,210. With two school age kids, I took this out of the budget. With no other changes, it brings the annual total bill down to$81,540.
- Personal and Household Items — $702. This is based on a statistical report that says that renters on average (nationally) spend 27% of a family’s housing, utility and food expenses in these categories. I think it’s too high — this is a very high cost of housing area, but I don’t think that should drive up personal and household costs correspondingly. Even with cable and netflix and occasionally eating out or going to the movies, we spend way less than this.
- Health care — $508 (assuming employer provided health insurance). This is based on an average of plans in the area — you can definitely spend less if you’re willing to go with a HMO like Kaiser. (I have Kaiser, and my premium is fully employer paid, so I spend less than $1000 a year on all health care, including glasses, etc.)
- Emergency savings — $345 and retirement savings — $320. I’m willing to buy that to be “secure” you should be saving this much.
- Taxes — $2007, and credits of $334. I’m sure WOW did the math correctly for their hypothetical family.
So, what do you think? Do WOW’s numbers seem reasonable to you? Is my reaction just a version of the recurrent survey finding that the overwhelming majority of Americans think they’re “middle class?”