Standards for Living Expenses

If you’re trying to scale back your spending and live within your means or just save a little more each month, how do you determine reasonable spending amounts for each category of spending in your life like food, clothes, and transportation? Well, there are several government standards that you can use as a guideline.

The Internal Revenue Service has a set of standards for living expenses that it uses with people who are repaying delinquent taxes. Those filing Chapter 13 bankruptcy, the kind of bankruptcy where you gradually repay your debts, are allowed the same amounts by the U.S. Department of Justice. So it would seem safe to say that these amounts represent at least a bare minimum, if not a little more, of how much these expenses should cost each month.

National Standards: Food, Clothing and Other Items











Housekeeping supplies





Apparel & services





Personal care products & services















More than four persons

Additional Persons Amount

For each additional person, add to four-person
total allowance:



National Standards for Health Care
The IRS allows this amount in addition to a monthly amount for health insurance premiums. This money is expected to cover expenses such as doctor visits, eyeglasses, contact lenses, and prescriptions.

Out-of-Pocket Costs

Under 65


65 and Older



The IRS also allows expenditures for transportation, of course. How could you repay your debts if you couldn’t afford to get to work?

National Standards for Public Transportation



National Standards for Ownership Costs

One Car

Two Cars





Personally, I think the food allowance is very generous. For $528 a month, my two-person household could go out to eat quite a bit or buy all of our groceries at Whole Foods. We normally spend about $300 a month on groceries and a little more for restaurants. However, we spend a lot more than $165 on “miscellaneous.” It’s hard to say what we spend on housekeeping supplies or personal care items since we generally only buy these items a couple times a year — I try to stock up during sales. The health care allowance seems reasonable to me only if you are completely healthy.

I couldn’t believe it could cost $173 a month to use public transit, but some research revealed that a certain commuter bus pass in the Los Angeles area costs $180, and I imagine lengthy commutes on public transit in other geographically large cities might be equally as pricey. The national vehicle ownership costs are based on the monthly expected payment for a loan or lease. According to’s monthly auto loan payment calculator, $489 would be the monthly payment on a $19,300 loan at 10% with a four-year term. Considering that it’s possible to purchase a brand-new, entry-level car for around $10,000, this amount seems pretty generous to me. And if you had this much money to buy a used car, you would have a wide range of options, many of them quite nice — a 2007 Toyota Camry hybrid, a 2005 Acura sedan, or a 2006 Mazda 6, to name just a few I found in a quick perusal of vehicles listed for sale by owner on Craigslist.

Note that there is no allowance for things many of us consider “necessities,” like cable TV or internet or even pet ownership.

For expenses like housing, utilities, and the operating costs of owning a vehicle, local standards, determined by the U.S. Census Bureau, apply. Look up the local standards for your area here. To give you a couple of examples, a 2-person family in St. Louis, Missouri is allowed $1,008 per month for housing and utilities; in San Francisco, it’s $2432; and in Dallas, Texas, it’s $1451. All of these amounts seem reasonable to me; you might not be renting a luxury apartment, but you definitely wouldn’t have to live in a bad neighborhood to meet these allowances. It might be hard in some areas to get by on these amounts if you’re a homeowner rather than a renter, however.

Another standard is the amount allowed for food by the food stamp program. This benefit is not a set amount, but is determined by factors like size of household, childcare expenses, income, and housing costs. For a 2-person household with no income, no childcare expenses, $1000 in housing costs and $100 in utility costs, $323 in food stamps would be allowed. Some people might look at this number as a poverty standard, but my household spends less than this amount on groceries and we’re not exactly living off ramen. Our diet includes fresh fruits and vegetables and frozen food items, none of which are particularly cheap. You can use this calculator to plug in variables and calculate a monthly food stamp benefit.

Since the government standards for living expenses mostly seem pretty reasonable, if your expenses fall far above these amounts and you’re trying to cut back, these guidelines should give you a reasonable, if not generous, starting point. How do these national standards compare to your spending habits?

Digg! * Stumble Upon Toolbar
Subscribe in a reader *Share on Facebook

Related posts:

My Budgeting Strategy
How to Become a Millionaire
How Lifestyle Inflation Can Sneak Up On You
How to Nicely Furnish and Decorate Your Apartment for Under $1,000
Simple Steps to Wealth

Photo by Marshall Astor

Post by Amy Fontinelle

Another Chase Freedom Credit Card "Promotion" Fails to Entice or Impress

I received the following email from Chase about a promotion involving my Chase Freedom card. This credit card offers 3% back on your top three spending categories each month and 1% back on all other purchases. I've earned a lot of cash back from this card over the two or three years that I've had it, but I stopped using it because some bloggers reported receiving letters that the 3% back offer was being discontinued. Since you can't cash out your rewards until you reach $50 in cash back, I didn't want to get stuck earning only 1% back on my purchases when I have other credit cards that allow me to earn more.

But this promotional email caught my eye. The subject line was "Triple Rewards until the end of the year." "Wow," I thought. Not only are they not discontinuing my 3% back, they're going to give it to me on everything!


This is yet another one of Chase's meaningless "bonus" offers. Here are the details:

"Enroll now and earn 3% Cash Back for every eligible dollar you spend above $1,500 on discount store, computer/electronics store and bookstore purchases between October 1 and December 31, 2009 ."

How is this a good deal? I have the Citi Forward card that gives me 5% back on all bookstore purchases, including all purchases at, without having to meet any threshold whatsoever, let alone a sky-high $1500 one. I'm not planning to make any computer or electronics purchases or any discount store purchases (unless Target is a discount store?).

Really, this "promotional" offer just underscores why I've quit using my Chase Freedom card. There are better deals to be had elsewhere. It's too bad that credit card offers and terms change so often that it's hard to keep the same card for years if you want to get the best deals. The only card I've kept in my wallet for years is my Discover card. From October through December, I'll be getting 5% back on all my grocery purchases. From June through August, I earned 5% back on gas. Those are meaningful rewards.

Digg! * Stumble Upon Toolbar

Anatomy of a Bargain Hunter's Grocery Shopping Cart

I've written several posts now about how I save money on groceries, primarily by using the Coupon Mom method. In this post, I'll take you with me through a typical shopping trip to show how I planned my trip, what I bought, and how many great deals I got.

First, I created an account with Then, I clicked on the link "Grocery Deals by State" and clicked on the name of the store I wanted to visit. Because I had already perused the store's weekly circular, I knew they were having some great sales that I wanted to take advantage of. The Coupon Mom site would allow me to see both the store's advertised and unadvertised sales in an easy-to-read list format and alert me to which items had coupons available. I read these lists and noted all the items I wanted to buy, their prices, and whether they had a corresponding coupon. I try to buy everything when it is both on sale AND I have a coupon for it.

I went to the store with a list of sale items I wanted to buy as well as a list of other things we were out of that I hoped to pick up for a reasonable price. It isn't always possible to buy everything on sale and/or with a coupon, but I try to at least get everything at a fair price (for example, I never pay $4 for a gallon of milk or $7 for a 12-pack of soda--both are terrible deals where I live).

So here's what I bought:

Barilla whole wheat pasta: On sale for $1.50 for 16 ounces. A good price for a pound of pasta is $1. Anything less than that is great, especially for whole wheat pasta, which typically costs $1.29 a pound at best. I had a coupon for 50 cents off. The store doubles coupons, so I got this pound of pasta for 50 cents.

Barilla piccolini pasta: Same thing, except this is a type of miniature pasta instead of whole wheat. I really don't care that much what size my pasta is--I'm just happy to get another pound for 50 cents.

Tyson frozen breaded chicken breasts (4): On sale for $3.59. I have a coupon for $1 off, getting me the 10 ounce box of chicken for $2.59. No, this isn't the best price for chicken, but considering that it's already breaded and already cooked, the time I'll save on dinner one night is worth the extra cost.

Lean Pockets: On sale for $1.99 a box (a box has two lean pockets), but if I buy ten participating Kraft and Nestle items, I get $5.00 back, or an extra 50 cents off each item. I also have two register coupons for Lean Pockets from previous purchases. One is for 75 cents off three and one is for 75 cents off four. Perfect. I'll buy seven boxes. These are store coupons, which are not doubled, but I still get 7 boxes of lean pockets for $9. That's 14 Lean Pockets for $9, or 64 cents for a meal that involves nothing more than 2 minutes in the microwave to prepare.

Jello: I don't normally buy jello, but it's part of the $5 off on 10 items sale and I also have a coupon, and I can get the sugar-free kind so I'll have a healthy way to fulfill a sweet craving. The jello is $1 per box, and my coupon is for $1 off 2 boxes. With the additional 50 cents off each item from the $5 off 10 items sale, I essentially get two boxes of jello for free.

Buitoni fresh grated parmesan: Here's an example of something that isn't a great deal, but it's not a rip off, either. The container is $3.50. It's worth the convenience of getting the week's shopping done at one store to settle for a reasonable price on this item.

Bounty paper towels: On sale for $1, and I have a 25 cent off coupon which doubles to 50 cents. That gets me one roll of quality paper towels for 50 cents. Good deal.

Nestle chocolate chips: This is one item where I will only eat the name brand. I blame my mother for raising me on the back-of-the-bag Toll House recipe. Regular price, $4 a bag. On sale for $2.50, plus part of the $5 off 10 items promotion. I also have a coupon for $1 off a bag. Final price: $1. I know I'll use these come December to make holiday cookies as inexpensive Christmas gifts.

Tic Tac Chill: This is a new "high-end" mint. It's on sale for $1.00, and I have a coupon for 75 cents. The 75 cent coupon "doubles" to $1.00, so I get the Tic Tacs for free.

Deli turkey and ham: While I'm looking for the Foster Farms deli meats, which I have printed coupons for from, I notice some Oscar Meyer lunch meat with "manager's special" stickers on it. Eh, a package for $3.29? That's no deal. But wait! This isn't an ordinary 9 ounce package, which normally sells for $3 on sale. It's a full pound. There's also a package that's marked down to $1.99. Ca-ching! I buy all the remaining manager's special boxes on the shelf. It's probably marked down because it's approaching a sell-by date, but I've yet to see a piece of lunch meat go bad in my fridge.

Foster Farms marinated turkey tenderloins: I've never had these before, but they're also on manager's special. $4 for 24 ounces. Plus, there's a peel-off instant coupon on the package that will give me another $1 off. I peel off the coupon right away and put it with my other coupons so I won't forget to use it at the checkout. $3 for a pound and a half of healthy, name-brand meat that's already marinated? Good deal. Also, I can freeze it until I'm ready to use it.

Challenge spreadable butter: This is a product I actually use. It's on sale for $1.50 for 8 ounces, and I have a coupon from for 75 cents off and another for 55 cents off. Both will double to $1, getting me 8 ounces of butter for 50 cents, times two. Butter normally costs $2.50 a pound on sale, so $1 for a pound is great. Not as good as the free butter I got a few months ago, but still worth picking up.

I bought a few other things that I won't bore you with. It's important to note that I've purchased things I actually want to eat--I didn't just buy Lean Pockets because they were on sale--I actually like them. It's not much fun to get stuff on sale if you're not going to enjoy eating it. My total bill came to $74.11. The food I bought, plus a few things I have at home, will feed two people for at least a week. My total savings, printed at the bottom of the receipt, is $43.71, so overall I got my groceries for 37% off. Some weeks I do even better percentage-wise, but that's usually if I have a shorter list that includes nothing but sale+coupon items. Still, I got some great deals and I'm happy with my purchases and my savings.

Digg! * Stumble Upon Toolbar