Budgeting Guide for Family Income

by

Horizon Elder Law & Estate Planning, Inc.

Gross Income	$15,000	$20,000	$40,000	$50,000	$60,000
Tithe or charity	10%	10%	10%	10%	10%
Taxes	12%	14%	15%	17%	21%
NET SPENDABLE	$11,700	$15,200	$30,000	$36,500	$41,400
Housing	32%	30%	28%	25%	25%
Auto	15%	15%	12%	12%	12%
Food	15%	16%	14%	14%	10%
Insurance	5%	5%	5%	5%	5%
Entertainment	7%	7%	7%	7%	7%
Clothing	5%	5%	5%	6%	6%
Medical/Dental	5%	5%	4%	4%	4%
Miscellaneous	6%	7%	7%	8%	8%
Savings	5%	5%	5%	5%	5%
Debts	5%	5%	5%	5%	5%
Investments	-	-	8%	9%	13%

Always keep in mind that a budget is simply a tool used to help you track and manage your spending. You can deviate from your budget as long as you plan for variances.

Most people can afford to over-spend in one category list above. Families with higher income can often afford to over-spend in two categories. Virtually no one can afford to over-spend in three or more categories.

One of the issues we confront at the Elder Law Practice is that when individuals move down the elder care continuum, one family member may still be living in the community (still incurring expenses), while the other has high health care bills. Using the Guidelines list above, a family with $40,000 of annual income would be expected to spend $1,500 annually on medical and dental care. However, if one family member is admitted to an assisted living facility, then the monthly cost of care would be between $2,500 and $3,000. If nursing home care is required, then the monthly cost of care would be between $4,500 and $7,000. Assuming the low-end $2,500 per month figure, this still represents a 2000% increase in the medical and dental portion of the budget and consumes all spendable income. A primary consideration in Life Care Planning is protection of the healthy spouse so she can continue living in the community without impoverishment.