Defining Poverty

Income levels are significant for families to secure a modest and adequate living standard. EPI provides an estimation of the income needed by families to get a modest standard of living. It estimates community-specific costs of childcare, housing, healthcare, transportation, food, taxes, and other necessities (Gould, 2021). My family consists of two parents and three children. From EPI’s estimation, my family budget is approximately 13, 058 dollars per month. This means that my family needs 156, 701 annually to get an adequate but modest standard of living. For a two-parent, three-children household our housing would cost approximately 3, 219 dollars per month. We live in an urban area and housing for our type of family is expensive. Another important need that accounts for the utmost variability in our family’s finances is costs of child care. The monthly child care cost for my family would be approximately 1, 676 dollars. This incorporates childcare expenses according to center-based child care costs.

Our monthly food cost amounts to approximately 1,094 dollars while transportation and healthcare amount to 1,321dollars and 1,278 dollars respectively. There is also the cost of other needs like entertainment, household provisions, reading materials, and personal care among many others. This amounts to approximately 1,740 dollars of our monthly expenses. We also pay taxes such as Medicare payroll taxes, federal Social Security taxes, state income taxes, and federal personal income taxes amounting 2, 730 dollars every month.

There are several things that my family will have to give up to live within the EPI’s budget. Every dollar and cent should be accounted for by going through the expenditures and allocating each necessity with the necessary funds (Gould, 2021).  Since gas eats into our transportation costs, it would be much better to give up personal transportation and hit public transportation more regularly to bring down the expenses. Also, groceries account for more of our food expenses and it would be best for us to give up and search for special deals and coupons. We can also save on our daily food expenses by packing leftovers for lunch instead of snacks and eating in restaurants. Limiting our entertainment costs would also be significant. It is hard to give up on things such as personal transportation and entertainment especially when we are used to them. However, we can understand why it is important when we take a hard look at our expenditure and find that we spend more on non-necessities. Small sacrifices will allow us to choose wisely where we want the money to be used.

The definition of what constitutes poverty is not realistic. The poverty line is not very accurate as a measure of poverty in the US — simply because the cost of living varies so widely from region to region. For example, in the larger coastal cities, the cost of living is so high that the “poverty line” is a meaningful measure. However, for many smaller cities inland, where the cost of living can be several times lower, the “poverty line” has a different meaning (ASPE, 2021). The poverty line only counts the number of people in the household and ignores the household production of a non-working adult or the cost of medical care for someone with a chronic health problem. The “poverty line” is an average annual income related to the cost of living in various cities. My life would significantly change in this situation since I have to rely on the charity of others to obtain food, clothing, shelter, and transportation. This means it is will not be plausible for me to maintain key aspects of my life. When a person or a family lives below the poverty line, it is very difficult to improve the situation, even when the person is qualified for a better income.

References

ASPE. (2021, March 16). Frequently Asked Questions Related to the Poverty Guidelines and Poverty. ASPE. https://aspe.hhs.gov/frequently-asked-questions-related-poverty-guidelines-and-poverty.

Gould, R. • B. E. (2021). What Families Need to Get By: EPI’s 2015 Family Budget Calculator. Economic Policy Institute. https://www.epi.org/publication/what-families-need-to-get-by-epis-2015-family-budget-calculator/#epi-toc-8.