The Cost of Being “Average”

5 09 2008

Particularly during an election year, there is always a lot of talk about the middle class. Most of us probably fall into that category. We hear a lot about helping the poor, raising the minimum wage, tax cuts, tax breaks, and a lot of meaningless numbers thrown around, out of context, that do nothing to add to our knowledge of what these politicians are talking about. But it got me thinking–what does it really take to be your average American? What kind of dough do you need to pull in to be Joe Everybody?

So, I set about finding out. I’m making a lot of assumptions here, but most of them are safe ones. Where facts were needed, I did my best to make sure I got good ones. If I’ve made a goof along the way, I welcome corrections. So, here we go, let’s meet the average American family and take a look at their finances.

Who are they?

They’re a young couple with 2 kids. Both parents work outside of the home. They have an average house, two average cars, and try to be somewhat prudent with their finances. As is typical of average Americans, they carry more debt than they would like, and don’t save as much as they wish they could. They enjoy life, but don’t get too extravagent.

Their home and home expenses

The facts tell us that the average home (median) will set Mr. and Mrs. Average back about $215,000. Let’s make the far-fetched assumption that they were able to put down twenty percent when they bought this house, and so mortgaged $172,000. We will assume that they have good credit, and financed their home at 6 percent (a fair assumption according to That means their mortgage payment, exclusive of any common escrow items, is $1031.23. But as we all know, there’s a lot more checks to be written than the mortgage payment when you own a house.

Utilities. Let’s assume they have the basics–electric, water, sewer, phone and internet, cable or satellite TV. For the sake of simplicity, we will assume it is an all electric house so that there are no bills for gas.

The average house had, in 2006, an electric bill of $87.56 per month. Since our average family’s house is all electric, and since we all know that energy costs have risen since then, I think it’s fair (in fact, generous) to say that their average monthly electric bill is $100. The most recent information I could find on an average cable bill was from 2003 and it suggested that the average cable bill was then $48.93 a month. I feel its safe, and maybe generous, to assume that the average cable bill is $55 per month. Since home phone and internet plans can vary widely, I’m going to use my own bill as a basis for the Averages–$80 a month for medium-speed DSL and a no-frills phone line. Since I will assume, for purposes of this exercise, that our Average family uses their cell phones to make long distance call, I’m not adding anything to their home phone bill for  that. Based on info I found online, the average water and sewer bill is $46.17 per month.

Now we’ve paid the mortgage and the utilities, but we still need to insure, maintain, and pay the property taxes on their average house. In 2005, the average cost of a homeowner’s policy was $764 a year. My own homeowner’s insurance has remained relatively flat since then, so I’ll use that number to get to a monthly cost of $63.67. Now, those pesky property insurance taxes. According to the National Homebuilder’s Association, our average family will pay $9.64 per $1000 of value in taxes. For their $215,000 home, that comes out to be a tax bill of $2072.60 a year, or $172.72 per month. Lastly, let’s generously assume that our family either spends or saves for future repairs, $100 a month to maintain their house. For purposes of this exercise, we will assume that the Averages live in a neighborhood that doesn’t charge homeowner’s dues, and that trash collection is provided by their city as part of their property tax bill. We will also assume that Mr. and Mrs. Average take care of their own lawn and do their own cleaning, as I said, they aren’t extravagent folks.

  • mortgage-$1031.23
  • electric–$100
  • cable tv-$55
  • home phone/internet-$80
  • water and sewer-$46.17
  • homeowner’s insurance-$63.67
  • Property Taxes on house-$172.72
  • Maintenance and Repairs-$100

Their Cars and Related Expenses

I think it’s safe to say that Mr. and Mrs. Average have two cars. The average price of a new car is $22,651. If we give these folks the benefit of the doubt and say they put 20 percent down on their cars, and got one of those good interest rate deals (let’s say 4.9 percent for 60 months) that you always see advertised, I get that they end up with two “average” car payments of $341.13. To insure these cars will cost an average of $829 each or $138.17 a month for the two cars. Now, let’s say they put a combined 25,000 miles on the two cars each year, average being somewhere in the neighborhood of 12-15 thousand per car. And let’s be generous and assume they get an average of 25 MPG. With gas at around $3.50 a gallon, they are still shelling out $3500 a year for fuel, or $291.67 a month. Since they’re still paying on  both cars, I figure they aren’t shelling out much for repairs, but I will figure an average of $70 a month to cover maintenance and normal wear and tear items (tires, brakes, etc.) I’m also going to figure that Mr. and Mrs. Average do not live in a big city where parking and tolls are exhorbitant, but guess that they spend an average of $25 a month on those items.

  • Car payments: two at $341.13- $682.16
  • Car insurance-$138.17
  • Gas-$291.67
  • Repair and maintenance-$70
  • Tolls/Parking-$25
  • Total Car Expenses-$1207

Childcare Expenses

I’m going to assume that the Average children are both in school, and so don’t need full time day care.  Looking at different after-school only programs results in wildly differing prices. I think it’s reasonable to guess that the Averages pay $400 for afterschool care for both children each month. It’s fair to think that mom and dad get out of the house a time or two a month and pay a sitter to watch the kids while they do, so let’s throw in another $40 for that–bringing us a total of $440 a month for childcare.

Healthcare Expenses

This is another area where it’s hard to get good information on what is “average,” but I’m going to presume that Mom and Dad Average are both lucky enough to work for employers who pay the full premium on employees health insurance, so only the part for the kids needs to be paid for out of pocket. Based on what I’ve seen online, personal experience, and by asking a few folks who are in just this situation, I am going to conservatively plug in that the Averages pay $180 a month out of pocket to keep their kids covered on insurance. Then we have copays, prescriptions, over the counter meds, deductibles, eye care, and dental care. Our Mr. and Mrs. Average are fairly healthy, but it’s no stretch to think all these other things combined average out to another $120 a month in out of pocket expenses. That leaves us with a very fair average of $300 a month that the Averages use on health care.

Wooo! So where are we so far?

  • The Averages are spending $1648.79 on housing
  • $1207 on cars
  • $440 a month on child care
  • $300 a month on health care

Wow…we’re just shy of $3600 a month in bring-home pay and these people are still running around naked and haven’t had a bite to eat! So let’s look at their other expenses:


The USDA reports that our average family of four (using their moderate level) will spend about $961.10 a month on food. That number assumes that every meal is eaten at home, which isn’t realistic and I’m going to be generous here and assume that Mrs. Average is a bargain shopper who clips those coupons, uses the shopper value cards, and looks for the sales, and round that down to $840 a month. Since no average family eats every meal at home, let’s say the family of four has dinner out together three times a month, at a cost of $50 each time, or $150 a month. We’ll say that mom and dad are both good to take lunch from home, but will grab the midday meal with friends a time or two a week, spending an average between them of $25 a week, or $100 a month on lunches  out. Maybe they stop by Starbucks every now and then, or get the kids a quick snack from McDonalds, so lets throw in another $50 a month for that sort of thing. And, hopefully, Mr. and Mrs. Average have a night out alone once a month, and treat themselves to a nice dinner for $60. If my math is correct, then, our Average family is spending $1200 a month on food.

Clothes and Personal Hygiene

It’s hard to pin down what our Average family might spend on clothes…it varies so widely depending on a  number of factors, but with two growing kids, I think it’s fair to say that they probably spend $1500 a year buying clothes, shoes, and the like. That’s $125 a month. Then there’s dry cleaning, which I’ll conservatively allow $30 a month for. So, add another $155 a month to their budget for clothes. My Averages are fairly low maintenance folks..Mom won’t be at the nail salon every week, or having a set of $200 high and low lights done, but to keep four heads of hair cut, shampooed, and four bodies bathed and smelling nice will surely set them back another $75 a month, which brings us to $230 a month for clothes and personal care.


Whether it’s Christmas, birthdays, or weddings, there is always some reason to be gift giving. In 2007, the average family planned to spend $859 on Christmas gifts alone. Throw in birthdays, weddings, anniversaries, etc. and it’s fair to say that our average family will spend, on average, $100 a month on gifts.


AAA says that the average cost for a vacation for a family of four is $261 a day for food and lodging. So, a seven day vacation will run the Averages $1827. So there’s another $152.25 a month, and mom and dad don’t even get a weekend away together.


I’m going to be very generous here and assume that our couple has already paid off any student loans they might have had. Other than their mortgage and cars, I will say they have no other debt other than a few thousand dollars on credit cards that they make payments of $100 a month on. (see, I told you our average family was fairly prudent with their money)


Between retirement, college funds, and rainy day funds, our Average couple needs to be saving a lot, but they don’t. Still, they contribute something to their 401ks and put aside what they can for the little ones college, so let’s say they are putting away $400 a month all told.

So where are we?

  • The Averages are spending $1648.79 on housing
  • $1207 on cars
  • $440 a month on child care
  • $300 a month on health care
  • $1200 a month on food
  • $230 for clothes and personal care
  • $100 a month on gifts
  • $152.25 for travel
  • $100 debt payments
  • $400 a month to savings

Throw in another $80 for mom and dad to have a cell phone, and Thats a grand total of $5758.04 every month. Before they pay a dime of income or social security taxes, before they pay for any entertainment, before buying any furniture, books, or television sets. That’s almost 70 grand a year in TAKE HOME pay just to be “average”. Makes you think, doesn’t it?




19 responses

5 09 2008
Mike Harmon


I like your site and wanted to know if you would be interested in exchanging blogroll links.

Thanks in advance

5 09 2008
The Vinyl Villager

Hi Mike! I don’t normally talk about finances, in fact, I try not to talk about anything “serious”, but I’ll definitely check out your blog.

5 09 2008

HOLY CRAP! Nicely done! This is one of the better blogs I’ve read recently! And almost dead on. Me being one of those middle-classers with 2 kids and a working wife, I would say you are pretty damn close. A few bucks here and there and you pegged it. Sorry state of our union when you can’t survive making $70 grand a year, huh?

5 09 2008
The Vinyl Villager

Alan…thanks! Yeah, it is. And once you throw in taxes and all, Im betting the “average” family really needs to draw a salary pretty close to 100 grand. And my imaginary folks are, in many ways, luckier than most–how many people still get 100 percent of their health insurance paid by their employer? Or only have a few grand worth of non-car and mortgage debt?
It’s sad…

5 09 2008
Promotion For A Blog I Wish I Had Thought Of… « A Round World Through Square Glasses

[…] wealthy” or “downright poor”) and have a few minutes, go check out THIS blog. The Vinyl Villager tackles what it takes to be in the middle class today…and does a […]

5 09 2008

Maybe YOU should run for president!!

5 09 2008
Kathleen McDade

And the median household income for a family of four in the U.S.? About $63,000 – and that was in 2004.

5 09 2008
Peter Parkour

I can’t afford to be average. I’m not even sure I can afford to be homeless. Damn. 😐

5 09 2008

i’m with Peter- i’m virtually impoverished in the eyes of America.
Only impoverished with internet access. 😦

The thing is, i don’t feel that way. We rent, have a car, eat well and have cable, which i consider getting rid of each and every day! because it is caca.

5 09 2008

We used to be average. Then college came along. Now we are poor.


5 09 2008

Another “used to be” here. I was average then assisted living for my momma came along. Now I’m poor. But VV, this was excellent. This took some work. You were very close to target from my point of view (and geographic area) too.

5 09 2008

This is a great perspective on a GREAT big problem… I think you were VERY generous on healthcare… those kids don’t get sick much! Wow!

5 09 2008
The Vinyl Villager

You all make some good points–the little bit our Average family is socking away wouldnt come close to covering unexpected expenses–a sick parent, a sudden illness. Even the temporary loss of one of their jobs.

And the number I came up with doesn’t even allow for a pet (I read that it costs over 100 bucks a month, on average, to have a dog), any charitable contributions, tithes, piano lessons, etc.

5 09 2008

I can’t afford to be an American. I got that line from the movie Swing Vote and it had me tearing up. I mean really. Just really. What can one do?

5 09 2008

*sigh* Now I’m depressed. I need the book from the other day.

5 09 2008

I can never figure out how we make almost a hundred grand between us and we’re still basically broke…but looking at your break down and making adjustments to apply it to us (we have a 450 & 650 car payments, not 341) now I see…*sigh* it doesn’t matter how hard you work, at least in our case, you can never get ahead. Hell, we can’t even SEE ahead, let alone get there…

6 09 2008

So I guess McCain, with 7 Houses, is a bit above the Average and maybe a little out of touch. Of course I don’t have many nice things to say about Rep or Dem’s..Nice Post

7 09 2008

Its hard to make it on a government employee salary … and your stats seem to be right on as far as us, as we are so the average American family. Add on the college loans for me and we are sinking ….

So sad, ain’t it?

7 09 2008
The Vinyl Villager

Guys…it really does make you think. I mean, what was a great salary not long ago doesn’t seem to go very far now.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: