Tuesday, October 25, 2011

Budgeting nightmares.

Today in class we were discussing budgets for households. According to the SSA (http://www.ssa.gov/oact/cola/AWI.html) the average income in the US in 41,673.83. If there are two parents working 83,347.66. With this money a family has to pay for everything. Mortgage, cars, school, food, housing, unspecified costs, plus much much more! Hopefully with two working parents at least one of them will have health care to cover the family. However, not all plans have coverage on some of the things that I personally see as a necessity. For example, dental. The cost of braces alone average $5,000. This however does not include x-rays, special appliances, or extractions. Another expense could be a pair of glasses. Aside from the $5o for the actual eye exam glasses cost around $300 without insurance. These expenses are a very few of the total expenses that one would have to shell out for with or without kids. Knowing what your disposable income is great but there are also so many unknown expenses that can't always be accounted for. Emergencies can happen and usually without warning. This kind of opened my eyes to all the expenses that happens when owning a household. Also it seems much more plausible now that people may have a lot more trouble in knowing where they stand during uncertain times. Also uncertain costs come about that people can't plan for and it's possible that they're not able to pay it off.

2 comments:

  1. Good information!

    I think lots of people overlook such costs (I am not excluded), which contributes to the line of thinking that "I am responsible with MY money, so those who are facing foreclosure/bankruptcy/whatever are IRresponsible."

    Given how the middle-class is getting squeezed out of the picture (and not toward the 1% end of the spectrum), more and more families are walking the ice where one misstep - a bad investment, health issue, accident - means going underwater and belly-up.

    Sunshine and rainbows, really.

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  2. Sounds like a lot of uncertainty to me. It's impossible to know when an emergency will arise and just as difficult to anticipate downward swings in the economy. When times are tough and money is tight it may not be an option to save for those future trips to the doctor or plan for an orthodontic plan- both things that many people our age expected and took for granted growing up. I think the lesson to learn here is that when things are good they're never as good as they seem and when things are bad they're never as bad as they seem. Don't go crazy and spend unreasonable amounts of money just because you have it, save it. When you're down on your luck do whatever it takes to make it through, knowing things will turn around.

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