Family budget calculator

0:00- [Instructor] So what we're gonna do in this video is use a family budget calculator, as you can see right over here, to think about what the likely expenses are going to be for families of different makeups, and think about how that might translate into hourly wages.

0:18And you can access the same calculator, and there's others on the internet, but this one's at epi.org/resources/budget. So this one's pretty useful. You can say how many folks are in the household. So we could start with something simple with, we could say maybe just one adult, no children.

0:35We can put a metro area here. We could put a city, let's say we say Houston and I can search for it. We could say Houston, Texas. And let's say, maybe I'll do this first one, Houston, the Woodlands Sugar Land metro area right over there. And now for this combination in Houston, one adult, no children, it is saying that in terms of necessities, you're going to spend about 1,030 on housing.

1:04So that's going to include whether it's rent or mortgage, but let's say it's rent. You're talking about a rent, you're talking about other things that might be associated with housing, maybe renter's insurance, other things like that. Food for one person. So $315 over the course of, let's call it roughly 30 days.

1:21These are monthly costs. That's about little over $10 a day. So it's not spending a lot on food. This is really focused on the necessities here. Childcare is zero because we're assuming in this scenario, no children. And so you could add up everything, has a monthly total of $3,738, and an annual third total of $44,850.

1:42Now, if we wanted to think about what hourly wage would you need to make in order to provide for these expenses? And once again, these are primarily necessities. And you can click on any of these things and see what these include in terms of what types of say in taxes.

1:58These are called you know, these are, they're things, the income taxes, state income tax, federal income taxes, state income taxes, social security, and Medicare payroll taxes. So you could look at, for example, what the assumption is on food, where they're getting this data from.

2:13But if you wanted to figure out what an hourly wage would be, well, there we could get a calculator out, maybe some of these calculator, maybe some of these budget worksheets might have a calculator embedded in them. But what you could take is this monthly total there.

2:27So 3,738, and every month has a different number of work days. Some have 20 work days, some have 22 work days. And obviously it depends how many hours you are going to be working. But actually, let's do it the other way. Let's say that you're making, say, close to the minimum wage in this example Texas.

2:54So let's divide by that and figure out how many hours you have to work that month. So divided by $8. So you have to work 467 hours in that month. And so let's just take an average of 21 working days. So that would be divided by 21. That's 22 hours in the day, which is not what most people are capable of working, where most of us need to sleep at least six to eight hours a day and then have some leisure and some downtime.

3:24Most of us would say eight, nine, maybe 10 hours a day is reasonable for a workday. Now, I didn't put weekends in here. Ideally people have time to rest, but this could flow into weekends. But either way, we're talking about almost an unsustainable amount of work.

3:41If you're making close to the minimum wage in a place like Houston to be able to take care of all of these necessities, at least, at the levels that this budget calculator's saying. And if you want other things, if you wanted to save, if you wanted to have other maybe not necessities, more wants, then that would be above and beyond that.

4:01And this was, once again, this was for a single individual. If you were to say one adult and two children, now all of a sudden the numbers become larger. And I'm sure people could debate some of these numbers. This is based on, it's getting legitimate sources of data to come up with these, but everyone's circumstance is going to be different.

4:21For example, if the children are much older, maybe the childcare isn't as relevant versus if the children are very young, et cetera, et cetera. But now we've seen the numbers almost double in this scenario. And then you could imagine if you were to divide this by, you could either divide this by the number of hours you think someone can work in a month, or you can divide it by the wage that you think they're gonna make.

4:44So you can see how many hours they need to make. But you can see that it's a useful way at minimum of having a framework of the amount that someone would need to earn or work per hour or how many hours they would've to work, or how much they would've to earn per hour in order to meet their necessities, at least according to this budget calculator.