If your household is struggling to pay the bills right now, you are far from alone. The cost of just about everything that Americans regularly spend money on has been soaring, and as a result our standard of living has been steadily declining. Over the past couple of decades, our politicians borrowed and spent trillions of dollars that we did not have, the Federal Reserve shoveled giant mountains of money that were created out of thin air into the financial system, and our leaders treated the reserve currency of the world like toilet paper. So now the value of the U.S. dollar has gone way down, our paychecks don’t stretch as far as they once did, and most of the country is barely scraping by from month to month.
This week, an excellent article that was authored by Michael Green is getting a ton of attention. In that article, he calculates that a “basic needs budget” for a typical family of four in the United States would come to a grand total of $136,500 a year…
I wanted to see what would happen if I ignored the official stats and simply calculated the cost of existing. I built a Basic Needs budget for a family of four (two earners, two kids). No vacations, no Netflix, no luxury. Just the “Participation Tickets” required to hold a job and raise kids in 2024.
Using conservative, national-average data:
Childcare: $32,773
Housing: $23,267
Food: $14,717
Transportation: $14,828
Healthcare: $10,567
Other essentials: $21,857
Required net income: $118,009
Add federal, state, and FICA taxes of roughly $18,500, and you arrive at a required gross income of $136,500.
Do you agree with these figures?
I very much appreciate the effort that he put into his analysis, but I certainly do not agree with some of these numbers.
The national average for child care for a single child is about $975 per month. So for two children for an entire year the total should be less than $24,000.
So we can eliminate more than $8,000 from his budget right there.
And if your kids are old enough, you may not need to spend anything on child care at all.
On the other hand, I think that his figure for housing is too low.
The average home price in the U.S. now exceeds $500,000.
Taking out a $500,000 mortgage at 6.2 percent would result in a mortgage payment of $3,047.41 a month.
So Green’s budget completely rules out owning a typical home in many areas of the country.
Instead, it would allow for renting a two bedroom apartment which averages about $1,800 a month right now.
And I think that Green’s figure for health care is also too low.
The average monthly health insurance premium for a family of four in the U.S. now exceeds $2,000.
Yes, a hypothetical family of four could save money by going without health insurance or by living in a van, but that is not the point.
It is time for everyone to admit that a middle class lifestyle has become out of reach for a majority of American households.
Green’s analysis may not be entirely accurate, but others have come up with similar results.
For example, the Economic Policy Institute has determined that it takes approximately $123,000 a year for a family of four to live a middle class lifestyle in Essex County, New Jersey…
The Economic Policy Institute offers a Family Budget Calculator. It says a family of four would need about $123,000 a year to attain “a modest yet adequate standard of living” in Essex County, New Jersey.
And Investopedia has determined that it now takes approximately 5 million dollars to live the American Dream over the course of a lifetime…
Investopedia, the financial journalism site, uses similar calculations to estimate how much emergency savings a family should hold (about $35,000, on average) and the lifetime costs of fulfilling the American dream (roughly $5 million).
Needless to say, most Americans don’t have a prayer of making 5 million dollars during their lifetimes.
And the cost of just about everything is only going to go even higher.
Right now, our rapidly rising power bills are making a lot of headlines…
The numbers are as stark as a slate-grey November sky. Household spending on electricity for heating is expected to rise 10% this winter to more than $1,200. Utilities requested a $29 billion rate increase in the first half of 2025, double last year’s rate rise. Residential electricity rates rose 6.6% year-on-year as of June 2025, according to Utility Dive, after already rising nearly 30% between 2021 and 2024.
Meanwhile, the job market just continues to get even tighter.
On Wednesday, ADP reported that the U.S. economy lost 32,000 jobs last month…
- The U.S. labor market slowdown intensified in November as private companies cut 32,000 workers, with small businesses hit the hardest, payrolls processing firm ADP reported Wednesday.
- Larger businesses, entailing companies with 50 or more employees, actually reported a net gain of 90,000 workers. However, establishments with fewer than 50 saw a decline of 120,000.
- The ADP report is the last monthly jobs picture the Federal Reserve gets before it meets Dec. 9-10.
Most experts were expecting that the ADP report would show that the U.S. economy actually added jobs last month.
So this is really bad news.
The three month average has now plunged into negative territory.
This is the very first time that has happened since August 2020.
Back then, we had a pandemic to blame for our problems.
What is our excuse this time around?
It is easy to say that unemployed people should just go out and “get a job”, but the truth is that even the mainstream media is admitting that “job hunting feels impossible right now”…
You’re not imagining it. Job hunting feels impossible right now because it actually is. You’ve polished your resume, customized cover letters and applied for hundreds of roles only to hear nothing back.
I know that many of you can identify with that.
Month after month, a lot of unemployed workers have been unable to find anything no matter how hard they have tried.
It can be absolutely soul crushing what you are in that position.
There is speculation that the latest ADP report may make it more likely that the Fed will give us another interest rate cut…
But Kenwell said the latest report should help push America’s central bank to cut interest rates for the third time in 2025.
The Fed, currently led by chair Jerome Powell, has a dual mandate to lower inflation and increase job growth through the government’s borrowing rates.
Rates are used as a blunt tool, swinging higher when prices climb, and plunging when unemployment accelerates.
Hopefully the Fed will do the right thing.
But a quarter point rate cut is not going to significantly alter our current economic trajectory.
We aren’t just heading into another recession.
We are heading into a full-blown meltdown.
When you total up all forms of debt in this country, we are more than 104 trillion dollars in the red.
It is the greatest mountain of debt in the history of the world, and now a time of reckoning is here.
So please try to enjoy these “bad times” while we still have them, because it won’t be too long before things get a whole lot worse.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
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