Budgeting On The Average Household Income

The median household income is $53,063 a year. I couldn't find the average household income for 2014. My area of the country has higher salaries due to a higher cost of living. It's hard for me to tell if that is realistically close to what the average household income is. But I wanted to do a realistic budget and this doesn't sound so far off from being realistic. I did a second budget towards the bottom for $80,000 a year. Either way, this is supposed to be a basic example of a real household budget. That's to help with money management.

In the bottom of this post are links to the resources where I got my information from. I am good at budgeting. At least as good as you can be. With budgeting, you work with two sources outside of your control, income and expenses. Sometimes the expenses are more then the income. I tried to find the average monthly bills for the necessities but had trouble in some areas. That means the Comcast, Energy and Car Insurance costs are estimated. Verizon Wireless was very quick to provide the information when I asked.

This is what I had to do to make it possible to afford to live on the average household take home income of $850.55 a week. I would have loved to budget more for some things like the food budget, gas budget, loans budget, and the energy budget but that is simply not possible on the average take home income. What this amounts to is something most of us already know................the average American doesn't make enough to cover their basic expenses. The budget on the bottom is closer to what I suspect these things ACTUALLY cost. 

The budget is for a three bedroom house with a mortgage for a family with two dependents (married filing jointly). I assume there are two cars. The Comcast budget is for two TVs, two internet sources, and a home phone. I couldn't confirm the REAL budget with them. Our current bill average from Comcast for one TV and one internet source without a home phone is about $101.20. However, I know they offer discounts for the more things you add. More proof that Comcast doesn't have a realistic view about what it's okay to charge based on what the average person can afford. The Energy information I found just said it was for the average monthly electric costs so I had to estimate the additional costs for gas. We don't have any loans but I know the average household either is leasing a car and/or paying off college loans. I tried to account for property taxes under the housing expenses category. The "Other Savings" category includes, gifts, hair cuts, office supplies, clothing, entertainment, ect......

Modify this budget to fit your expenses. It was made in excel and shouldn't be hard to recreate. It's a great way to track income and expenses and plan ahead. This has been our family's lifesaver for years. I have had a bunch of people ask for budgeting advice and decided it was time to do this post. Especially with a new batch of college graduates starting their adult lives and needing a basic template for managing these expenses. I hope this helps!!!

With budgeting, it's always better to underestimate income and overestimate expenses!!!

If you can't seem to make your income be more then your expenses when you do your own budget I certainly understand!!! This is helpful for getting out of debt. It's a realistic view for what you can and can't afford. Unfortunately, that might include food. It's sad that you might not be able to eat enough sometimes because of the cost of student loans. It's just undeniable proof about how salaries have fallen behind inflation. I HOPE the average take home income is closer to the $80,000 budget then the $53,063 budget. I simply couldn't find the current information. But I read a lot about how the middle class is making a lot less then they used to and wonder if the average salary is closer to $30,000 then $50,000.

Monthly Bills
Week 1		Bank		Weekly Expenses
Paychecks	$850.55	Starting	$100.00	Week 1
Engergy Bills	$200.00	Hostage	$100.00	Food	$175.00
Week 1 envelope	$275.00	Total	$0.00	Gas	$100.00
Total	$375.55				$275.00
				Week 2
Week 2				Food	$175.00
Paychecks plus Extra	$1,226.10			Gas	$100.00
Week 2 envelope	$300.00				$300.00
Verizon Wireless	$150.00			Week 3
Comcast	$200.00			Food	$175.00
Total	$576.10			Gas	$100.00
					$275.00
Week 3
Paychecks plus Extra	$1,426.65			Week 4
Week 3 envelope	$275.00			Food	$175.00
Car Insurance	$200.00			Gas	$100.00
Total	$951.65				$275.00
Week 4
Paychecks plus Extra	$1,802.20
Week 4 Envelope	$275.00
Loans	$180.00
Housing	$1,346.00
Total	$1.20
Week 5
Paychecks plus Extra	$851.75
Week 5 Envelope	$300.00
Other Savings	$350.00
Retirement/Emergency	$200.00
Total	$1.75
Fidelity
Starting	$0.00

So what do I WISH the budget could look like?

Median Salary: $80,000
Take Home: $1,288.80
Hourly Before Take Home: $38.46
Hourly Take Home: $32.22

Monthly Bills
Ideal
Week 1		Bank		Weekly Expenses
Paychecks	$1,288.80	Starting	$100.00	Week 1
Engergy Bills	$500.00	Hostage	$100.00	Food	$300.00
Week 1 envelope	$500.00	Total	$0.00	Gas	$200.00
Total	$288.80				$500.00
				Week 2
Week 2				Food	$300.00
Paychecks plus Extra	$1,577.60			Gas	$200.00
Week 2 envelope	$300.00				$300.00
Verizon Wireless	$150.00			Week 3
Comcast	$300.00			Food	$300.00
Total	$827.60			Gas	$200.00
					$500.00
Week 3
Paychecks plus Extra	$2,116.40			Week 4
Week 3 envelope	$500.00			Food	$300.00
Car Insurance	$300.00			Gas	$200.00
Total	$1,316.40				$500.00
Week 4
Paychecks plus Extra	$2,605.20
Week 4 Envelope	$500.00
Loans	$600.00
Housing	$1,500.00
Total	$5.20
Week 5
Paychecks plus Extra	$1,294.00
Week 5 Envelope	$300.00
Other Savings	$490.00
Retirement/Emergency	$500.00
Total	$4.00
Fidelity
Starting	$0.00

Average Income:

http://www.sentierresearch.com/pressreleases/Sentier_Household_Income_Trends_Press_Release_February2014_03_31_14.pdf

Average Take Home:

http://us.thetaxcalculator.net/

Average Mortgage:

http://money.cnn.com/calculator/real_estate/mortgage-payment/

Average Home Sales:

http://realestate.msn.com/2014-housing-outlook-home-prices-head-higher

Average Electric Bill:

http://www.builderonline.com/housing-data/average-monthly-residential-electricity-bills-and-consumption_o.aspx