Assume a household of 2 adults working at full time jobs pay

Assume a household of 2 adults working at full time jobs paying minimum wage, with 2 elementary school age children. Please create a monthly budget for this family and explain each budget line item. Remember to take 15% off their gross earning for taxes

Solution

Minimum wage in america is 7.25 USD per hour. Roughly it can be translated to 1,300 per month, After 15% tax it will be 1105. Taking income of both the family members it is approximately 2210 dollars per month.If we consider their interest on savings account to be 20 dollars, then the total monthly income along with the interest is 2230. Here are few things the family will spend money on:

Rent: Let it be around 350 per month. It is a fixed expense. Its around 16% of their total budget.

Food: Let it be around 500 per month on 4 people. It is a variable income. it is around 23% of their total budget.It is a variable expense.

Clothes: Let it be around 250 per month for a family of 4. It is around 11% of their total budget. It is variable.

TV cable and cell phones : Let it be around 200 per month. It is fixed expense and accounts for 9% of their budget.

Public school supply charges: Though public school for the two kids is generally free, the supplies for the two kids will cost around 200 dollars which is around 9% of their income.

Car payment : It is a fixed cost and is around 240 per month. That accounts for 11% of their income.

Car insurance: It is a fixed cost and accounts for Rs 100 per month which is 4% of their budget.

Child care centres: Since the adults work most of the times, the children stay at child care centres after school. This incurs a cost of 150 per month. It is around 7% of their income.

Savings: the rest 240 dollars is saved per month for retirement purposes, or for kids\' colleges, trips, car repairs or any form of emergency. Savings account for 10% of their income.

The expenditure side adds upto 2230 which is the total income of the family.