# Financial Literacy

The Cost Of Living in Your Home

# The Cost Of Living in Your Home

With absolutely no science, here’s an item-pricing chronicle of a stroll through Safeway in a suburban California neighborhood in 2012:

Half gallon of milk - \$2.89
6-pack of Diet Coke - \$5.49
2 pound pack of hamburger meat - \$9.98
A generic kitchen mop - \$15.99
A box of Tide - \$13.99
A box of Cheerios, the big one - \$4.29
A loaf of bread - \$4.79
A big jar of peanut butter - \$4.79
A big jar of jelly - \$4.49
A bag of puffy marshmallows - \$3.29
A bag of chocolate chips for TollHouse Cookies - \$3.79
A sack of flour - \$7.59
A can of pork n beans - \$0.79
A pint tub of low fat cottage cheese - \$3.79
A packet of Oscar Mayer bologna - \$3.99
A big bag of dog food - \$21.49

Any of these numbers shock you? Mom and dad have been buying this stuff for you for years. If you are an average American family with 2.3 kids and a dog and a cookie-cutter house with a white picket fence (or barbed wire if you care less about appearance and more about keeping out raccoons), you spend about a grand a month in groceries. Using advanced calculus, we can derive that this spend equates to roughly \$12,000 a year.

If your parents’ combined incomes leave them pretty well off, they “gross” (meaning total earnings before taxes and all the other savings stuff) a hundred grand or so a year. They have “no-brainer forced savings” of 5 grand, and yeah, we’ll explain what that is later. So they have 95 grand on which they pay taxes. And they live in a blue state. so the taxes are high (i.e. the coasts who vote in relatively high government spending and taxing laws).

So on their 95 grand, they keep about 75 grand after taxes, assuming modest deductions, or earnings on which they don’t have to pay tax like… you. Yeah, you are a deduction. They get to deduct a few hundred bucks off of their taxes to cover your expenses. Still doesn’t make up for all the money they spend each year so you can keep up your Hostess cupcake habit.

As little as you likely know about their home economics, do you think it costs your parents a couple hundred bucks to feed, clothe, transport, insure, school, and generally manage you? Yeah, a couple of hundred bucks barely covers mom’s gas bill schlepping you around to friends’ houses over the course of a year. But that’s a different rant for a different day.

The bottom line is that, on the 75 grand or so your folks have to spend, they spend a 6th of it or more on groceries, so you oughta know what things cost. It’s likely that you are the biggest consumer of them anyway. Your dad isn’t the “growing boy” in your household.