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In most blogs and podcasts, including mine, it is assumed the reader or listener has adequate funds to provide basic “needs” and surplus funds to spend on “wants”.
Everyone has certain needs whether living in a developed or a developing country. Whether you term these things basic life necessities or core necessities, people need these basic things to provide for daily living. These core necessities are food, shelter, access to transportation, access to health care, and utilities.
The United States is considered one of the wealthiest nations in the world. Is a US worker’s income adequate to provide basic needs?
Is it fair for me to write about saving and investing if a significant portion of the US population is under-saving and struggling to maintain a decent standard of living?
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A December 2024 survey by Visual Capitalist indicated that Hawaii, at $259K, had the highest cost of living for a family of four. West Virginia, at $82k, had the lowest of the 50 US states. The average living costs for a family of four in the United States in 2024 were $121K. The disparity is that at the end of 2024, it will cost a family of four twice as much to provide the same necessities in Hawaii as in West Virginia.
In the United States in 2025 it will cost a family of four over $120K to provide necessities.
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We’ll go over how these numbers shake out in just a second, but first, let’s examine poverty in the United States.
While the exact number of people living in poverty in the US for 2025 is not yet available, the most recent estimate for 2023 is 36.8 million people. This corresponds to an official poverty rate of 11.1%. In 2025, the poverty line for an individual in the contiguous states is $15,650. For a family of four, it is $32,150.
This is well below the $120,000 figure I stated above which is the average necessary living expense for a family of four.
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Let’s Look at Each of These Five Items and Do Some Basic Math.
*Food
(Annual expense for a family of four = $11,916- $19,236)
According to Ramsey Solutions and Nerd Wallet, the average monthly grocery cost for a family of four in 2025 is estimated to be between $993 and $1,603 depending on the food plan, The USDA Thrifty Food Plan estimates a cost of $993, while a more liberal plan could reach $1,603.
Here’s a more detailed breakdown:
- USDA Thrifty Food Plan: This plan estimates a monthly cost of about $993 for a family of four with two children (ages 6-8 and 9-11).
- USDA Low-Cost Plan: This plan would cost around $1,076 per month for the same family.
- USDA Moderate-Cost Plan: This plan would cost about $1,326 per month for the same family.
- USDA Liberal Plan: This plan would cost about $1,603 per month for the same family.
These estimates are based on a family where both parents are between 20 and 50 years old, and the children are between the ages of 6 to 8 and 9 to 11. The cost can fluctuate based on individual eating habits, location, and specific food choices.
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Let’s start with the base poverty level income of $32,150 and see how each of these basic necessities impacts this income amount.
$32,150 (2025 poverty income level) -$15,912 (USDA Moderate Cost Plan) =
$16,238
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*Transportation
Important Considerations for a Family of Four:
- Number of Vehicles: Do you own one or two cars?
- Car Ownership Costs: If you own cars, consider payments, insurance, fuel, maintenance, registration, and taxes.
- Public Transportation: Does your family utilize public transportation options like buses, trains, or subways?
- Location: Costs can be higher in urban areas and certain states.
- Fuel Efficiency: The type of car you drive can impact gas expenses.
- Driving Habits: Consider your daily commutes and overall mileage.
- Budgeting: Remember to factor in potential increases in expenses due to inflation.
- Average Monthly Transportation Costs (General Household):
- One source indicates an average monthly household transportation cost of $1,098, including gas, insurance, and car payments.
- Another source, reporting on data from July 2025, indicates an average monthly transportation cost of $936.
- A different breakdown from December 2024 shows an average annual transportation expenditure of $9,761 ($819 per month).
- Family-Specific Estimates:
- The Economic Policy Institute suggests that a two-parent, two-child family spends an average of $1,455 monthly on transportation.
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For our example, we’ll use a $1000 per month transportation cost for a family of four.
$16,238 (Remaining poverty level income 2025) -$12,000 ($1K/ month average) =
$ 4,238
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*Utilities
Based on available information in 2025, the estimated average annual utility cost for a family of four in the United States ranges between $6,000 and $7,200.
This estimate includes the combined cost of various utility services, such as:
- Electricity: Average monthly bills for a 4-person household are around $191 depending on location.
- Natural gas: Average monthly bills generally range from $80 to $100.
- Water and sewer: The average monthly water bill for a family of four is estimated at $73. Sewer costs are usually an additional $60-$90 per month, often combined with water on one bill.
- Internet: Unbundled internet service typically costs around $78 per month, while bundled services (internet and TV) are significantly higher.
- Other utilities: This can include phone service, streaming subscriptions, and trash/recycling pickup.
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Factors Affecting Utility Costs:
- Location: Utility rates and consumption patterns vary significantly by state and region.
- Home size and age: Larger and older homes normally consume more energy.
- Household size: While adding more people doesn’t always drastically increase certain costs (like electricity for heating/cooling), it will affect overall usage.
- Energy efficiency: Well-insulated homes with energy-efficient appliances will have lower bills.
- Individual usage habits: Behaviors like taking long showers or leaving lights on can impact costs.
It’s important to remember that these are just averages, and the actual utility costs can be influenced by several factors: For instance, while the average electricity bill for a family of four is $191 per month, this figure ranges from $157 in the Midwest to $215 in the South. Similarly, natural gas costs are higher in colder regions with required heating.
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My example will use an annual utility cost of $6,500 for a family of four.
$4,238 (remaining poverty level income 2025) -$6,500 =
-$2,262
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*Health care
According to the Milliman Medical Index (MMI) for 2025, the estimated average annual healthcare cost for a family of four in the United States with employer-sponsored health insurance is $35,119. This cost encompasses various healthcare services such as inpatient and outpatient care, professional services, and prescription drugs.
Historical Context: This figure represents a significant increase. According to the Advisory Board, costs have risen 6.1% annually over the past two decades, surpassing the average inflation rate during the same period.
Factors Influencing Costs: The rising cost of healthcare is attributed to several factors, including: Increased utilization of healthcare services, higher prices for medical goods and services, high-cost prescription drugs, and increased outpatient facility care.
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-$ 2,262 (2025 poverty level deficit) -$35,119 =
-$37,381
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*Housing
The average cost of housing for a family of four in 2025 varies significantly based on location. A reasonable estimate would be between $17,000 and $25,000 annually, according to Nasdaq and Apartment List. This translates to roughly $1,417 to $2,083 per month. However, this is just an average, and costs could be considerably higher in expensive metropolitan areas.
Factors influencing housing costs:
- Location: Housing costs are significantly higher in major metropolitan areas like New York City or Los Angeles, especially when compared to more rural areas. The median price for a single-family home in Seattle can exceed $1M.
- Type of housing: Renting an apartment will generally be more affordable than buying a house. For instance, the median price for a new single-family home sold in the first three months of 2025 was $416,900, according to the National Association of Home Builders.
- Size and amenities: Larger homes with more amenities will naturally cost more to purchase or rent.
- Market conditions: Fluctuations in interest rates and overall economic conditions can impact housing costs.
- Cost of living: The overall cost of living in a particular area will influence housing costs.
Examples:
- In Louisiana, the average rent for all property types is about $1,068 per month, according to Apartment List.
- Seattle: has a median overall housing price of $900,000, according to a 2025 guide from Radical Storage.
- In Chicago, the median listing price for a home was $359K in May 2025, according to Realtor.com.
Additional costs to consider:
- Mortgage payments: If buying, one must factor in mortgage interest and principal.
- Property taxes: These vary by location and property value.
- Insurance: Homeowners’ insurance is essential.
- Utilities: Electricity, gas, water, and internet.
- Maintenance and repairs: Older homes may require more maintenance.
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-$37,381 (2025 poverty level deficit) -$20,000 =
-$57,381
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If we add up, these five basic needs, the cost is approximately $90K, which roughly equates to the cost of living in West Virginia ($82K), but is significantly less than the average cost of living in the U.S.A.
These numbers verify the difference in cost of living in various geographic locations in the United States and reflect differences in cosmopolitan versus rural locations.
This also reflects a harsh truth for many Americans, not only those at the poverty level. It costs between $82,000 and $259,000 to live in the United States of America. These are average costs for the two states listed and don’t fully capture the outer ranges of total costs of living in the United States.
Research indicates there are challenges and struggles for many Americans.
Reports suggest a significant portion of the workforce struggles to afford basic living expenses. Some sources even indicate that many American households cannot afford a minimal standard of living. A recent survey stated that nearly three-quarters of workers struggle to afford more than the basics.
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Income vs. Cost of Living:
- Studies reveal that the income needed to live comfortably for a family of four in 2025 varies significantly by state.
- While median household income provides a general benchmark, it doesn’t directly reveal the percentage exceeding the average cost of living for a specific family structure.
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Final Thoughts
It’s sobering to realize that a significant portion of the American workforce struggles daily.
Research indicates there are steps that any family can take to increase their standard of living.
Financial Strategies:
- Creating and following a budget helps families track income and cut costs to prioritize spending. It is also important to live within one’s means and save for the future.
- Families can increase income through side jobs or by learning new skills. Utilizing discounts, negotiating bills, and applying for assistance programs can also help save money.
- Financial literacy concerning credit scores and debt management is beneficial. Saving on healthcare costs through community clinics or discount programs is also possible.
Personal Development:
- Investing in education and training can lead to improved economic opportunities and better-paying jobs.
- Building strong relationships provides emotional support and enhances overall well-being.
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Specific Examples:
- Some families have increased their standard of living by prioritizing saving and living simply. Others have found side jobs or adopted more frugal habits.
It’s important to note:
- Public policies reducing costs for healthcare, childcare, and food, can also help families afford necessities.
- Financial and emotional support for parents and caregivers can positively impact children’s well-being.
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You are fortunate if you have “ENOUGH” or more than “ENOUGH”. Most Americans work very hard. Many live conservatively and save aggressively for their future retirement needs and wants.
For many Americans, it’s a struggle to provide for everyday needs, much less save for future retirement needs and wants. If you are one of these Americans, all is not lost! There are things that you can do to help yourself and provide a better future for yourself and your family.
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