I was curious and looked at some suburb data, and many of the suburbs have average house hold income of around $700. I assume this is take home money. This figure seems very low. How does a family live on $700 a week? Even if you were owned your home, mortgage fee, it would be hard to make ends meet. If $700 a week is doable, I want to know how, I would like to give it a try and save some money.
Living on Family Income of $700 a Week
zealmax on 21/03/2017 - 11:43
Comments
i think the $700 pw include mortgage / rent costs.
If a combined income is $700/w (assuming post tax), that family is probably renting. No way can anyone service a mortgage on a family income of $42.6k pa. If it's pre-tax income, definitely renting.
If $350-450 is sunk into rent, then $250-350/w on living expenses makes more sense. Assuming $100-150 on food and then $50 on insurance (what is there to insure though lol) and another $50-100 on spending money then it's doable. There won't be much entertainment unfortunately, and definitely no money for smokes and booze.
It would need to come down to an extremely disciplined mindset towards money and a robust budget. I reckon I could make it work, but it would be a pretty tough gig and I certainly wouldn't be half as happy as I am now.
Agree with most of the above but it would be more like $100 smokes and booze and $50 on food…
Quite possible to manage a $250k-300k mortgage assuming that they acquired it prior to moving to one income.
Repayments could come in at $300 pw or even less interest only. add a little bit on the side for council rates and taxes etc.
You have to be very disciplined to manage that.Cost of utilities is significant, my water, gas, electricity bill is about $1200 a quarter, that is $100 a week. If you have 2 kids, I don't know how you could pay for their schooling. However, people manage to do it. Just trying to figure out how. My family spending has sky rocketed over the last few years, and would like to bring it back down to earth.
No way can anyone service a mortgage on a family income of $42.6k pa.
That's silly. Mortgages can be of any size (almost). Also they could own their home outright. $50/w on insurance is ridiculous. My house insurance is less than that per month. In that situation as a single person I would be aiming to save at least $350/w for investing.
Sadly the assumption made by a lot of people these days is that everyone lives a lavish lifestyle. Having the same issue with banks at the moment. All assume an average monthly expenses of 4k which we simply don't do. We are at about 2.5k a month. But they all seem to use the 4k figure which makes it hard to get financing as we don't have overly high incomes.
@hazzad: Sadly the solution may be to tell porkies on the home loan application.
In my experience it's easier to maintain discipline if you are single.
No family equals no family assistance which makes the application impossible. But I get what you are saying.
For a family its fairly low. In my first job I saved $20k on a wage of around $35k.. Living in a share house though.
I'd assume its like $300 a week in rent, $200 food expenses and $200 on various other crap. Which is actually about $10k a year on various crap which is fairly achievable.We are a family of four, 2 adults 2 kids. We live fairly frugally on $900 per week; the rest goes into savings and extra mortgage repayments.
If we needed to live on $700 a week, some things have got to go. Private hospital insurance for one. The kids' paid activities would need to be whittled down as well, maybe just retain swimming lessons as they are quite important. If things were really tight, we might need to cut down on our discretionary spend (things like books, videos, meals out, etc) and just put that into savings. It is very doable but you need to shop smart, avoid meals out (soo much healthier to cook at home anyway), and think a million times before buying things.
What's your rough breakdown of your spending per week if you don't mind me asking? How much do kids cost in terms of extra-curricular activities? Swimming lessons are now up to $17.80/lesson at the pools I work at, and I have no idea how much music lessons would cost nowadays. How much do kids cost? My parents have said a few times their budget felt much less restrictive once my sister and I finished high school and they didn't have to pay for tutoring and sporting expenses.
Groceries and medicines are $150 a week. Clothing is $100/month — you need to balance to make sure there is enough left for January which is costly for schoolkids. Petrol is roughly $40/week — we don't drive big gas guzzlers and keep the car in tip-top shape. Utilities are roughly $100 a week and that is for gas, electricity, water. We are fairly frugal and have solar panels, but costs have the potential to blow up especially with teenagers. There are also periodic costs like insurances, rego, etc…
Kids cost heaps — public school system is just about $1k a year in fees, Catholic schools a bit higher, but independent schools can cost as much as $40k a year. That is just the fees, and most would agree it is not the expensive portion. Enrichment activities — swimming costs us roughly $100/month per child. Dance and music, not so much, perhaps $300 per quarter. Sports is generally more expensive unless you just join local teams/playgroups.
The house is obviously a big component. Many do not realise that when you own a home, the maintenance costs are steep. The council fees alone are ka-chingggg. We do get quite a bit ahead on the mortgage with all the belt tightening above. As I said it is very doable but you need to really want to do it.
Cheers for that mate. I guess I better start saving more before kids come along, because by the sounds of things, they guzzle up money!
Good luck! The first one is a shocker on many counts. By the time you get another one you'll be an expert ;)
public schools have fees?
I thought these were 'voluntary contributions'Oh, yes you are right. Voluntary fees, although, have you heard of anyone not actually paying them? I haven't…
By the way, are you the same dasher from a (now closed) forum? I seem to remember your username from somewhere.
@empty456:
probably not me =)
as a kid i remember not paying some of the voluntary contribution fees as we couldn't afford it, not every semester but some.
we would get hounded by the teachers though.Bloody hell, PHI price increase letter came today. My parents need to fork out $416.35/m, and that already includes a 8.3% corporate employee benefits discount. Good thing I managed to claim ~$60k or thereabouts when I stayed in one of Ramsay's top psychiatric hospitals twice in the last 18 months…such a bloody rip off.
+1 for not eating out - especially weekday lunches - bring your own lunch to work and save about $50/week.
Just looked at my most recent budget spreadsheet and our biggest costs in order are:
- rent/mortgage
- food
- daycare
- home costs (utilities/rates/home insurance)
- health insurance
- vehicleIf I had to cut back I would look at daycare and private health insurance as the first two to go.
Oh, and brew your own beer!
Private hospital insurance for one.
Lose it. We have medicare.
The kids' paid activities would need to be whittled down as well
They can play in the park.
books, videos, meals out
Books are dead. You can't give them away. Videos? Bit-torrent. Meals out? what are you, a Kardashian?
Depending on your income, the tax bill for the medicare levy is actually more expensive than having a policy (it is in my case)
That's not likely relevant in the context of "How can ppl live on $700/w!?!?!"
(We get it, you have a BIG income)
I do not mean to offend. I am just stating how we live our lives. We love books in this house. Don't have NBN or low-cost, high speed internet, so we have to get our own entertainment sorted somehow.
We choose to have private insurance so as not to put excess burden on the system. We also like the flexibility it gives.
Each to their own, mate. No need to judge.
Wow $700 a week a lot of money!
Found the single guy!
Buy everything second hand
Use things until they break, then fix them until they can't be fixed anymore
Eat seasonally. Vegetables fluctuate in price wildly. For instance, you can get eggplant right now for $1 a kilo. Buy a few and store them
Food is usually the biggest cost for families after rent/mortgageNo heating/cooling other than fans and blankets
Never buy anything you don't absolutely need unless its a deal (often you sell for the same price you bought if need be)It's all very possible, but some people find living like that to be a prison. I grew up like that so I don't mind it so much, but I've come to see it has some pretty big downsides, namely the amount of time and brainpower it consumes. Time and brainpower are two of the most precious things in this world, and its a pretty big waste to spend them on low level optimisation like this. Especially when you start to understand the raw amount of money floating around. While your busy breaking your back to save a dollar, some unspectacular joe is making and burning through $1000 on something trivial in the same time
Buy everything second hand
Gumtree freebies.
Eat seasonally. Vegetables fluctuate in price wildly. For instance, you can get eggplant right now for $1 a kilo. Buy a few and store them
When food is cheap, have a big cook-up then freeze it in portions. Growing your own vegetables is almost always a loss. Beans are a much cheaper source of protein than meat, and the most nutrient rich meat is offal, which is luckily the cheapest.
I've come to see it has some pretty big downsides, namely the amount of time and brainpower it consumes
That's a good point. I have the kind of mind that enjoys seeing how little I can spend, but maybe I should be thinking about something else.
but maybe I should be thinking about something else.
Sky's the limit
Doable if you live frugally. These are roughly my fixed expenses off the top of my head at the moment.
$150 on groceries.
$80 petrol + car service(roughly $400/year).
$70 utilities + internet.
$50 house + medical insurance (house insurance is about $1000/yr and medical is about $100/month)
$300 mortgage.I guess if I had to live on $700/week, those would be my expenses. Realistically though, the above does not include optional stuff I do like:
- eating out(maybe once a week)
- holidays
- home reno supplies
- stuff I buy on OzBargain(maybe once a week). Lol.
Edit: forgot to say, the families on $700/week would have Centrelink payments to supplement their income, so realistically, $700/week income is much more than that.
I'm guessing you are single and not a family. When I ditched private health it was $300 a month and rising for a family.
You don't have car insurance or rego?
Even $300 a week for mortgage is pretty good.Not having a go but curious if your figures are correct
Yes, you are right, rego is about $700/year + third party car insurance is about $300 a year. That adds another $20 a week to my expenses. We only have hospital cover, the bare minimum so that we don't get the surcharge.
We are a family of 4. I guess living in Brisbane means that housing is cheaper compared to Melbourne or Sydney. We did save a huge chunk for deposit when we bought the house though. It took us 2 years to find a house that we both liked, within the 2 years, our deposit just kept on growing. Luckily for us, we started looking for a house in 2008, so house prices was pretty stagnant in Brisbane between 2008 and 2010.
It took us 2 years to find a house
NOOO, please say it isn't so….we started looking at houses in Bris around Nov/Dec and I'm so sick of it already!! Can I ask how you finally decided on a house? Some people say they just know the one as soon as they see it, but it just feels hopeless at the moment, certainly doesn't seem like we'll be getting that moment ever…
Did you really spend 2 years constantly house hunting without a break?!?! I can't imagine doing this for another 18 months…I feel like I've hit a wall around after 5 months
I didn't think of Centrelink income. I doubt it would be very much though.
Depends on your definition of very much I guess. There was a time when I was unemployed for a while and just did odd jobs, Our combined income was around $45k that year, which translate to about $700/week take home pay roughly. If I am not mistaken, our Centrelink payments were around $300 per fortnight, which translates to another $150/week.
You would be surprised. Could be upwards of $15k per annum for a family with 2 kids. And thats tax free. More if there are more than 2 kids.
That is generous indeed.
Probably all those self employed people minimising their tax and putting most expenses through their business
Might want to add a bit more information re what area/suburbs/city/state etc and your source.
I'm always curious about data, and read the ABS data pages and have never seen $700 household income… remember household includes dual/multiple income. Well maybe if you're looking at 2001 data…
two person in a household with centrelink would pass $700 a week
2016 Average Australian income was $81k
But as others have stated people with low incomes tend to live in… in low income areas where things tend to be cheaper, that's how they survive.
The median income is more around 45k though
median is a bad measurement as it includes part time work. Also very hard to find proper source for this, but generally they all agree with that 45k
But the median household though is 80k+,
edit
This was an interesting read
https://www.theguardian.com/business/grogonomics/2015/sep/10…
Only buy stuff listed on OzBargain. Food included…
I dispute the above premise. You arent supposed to do it all on $700 cash a week.
2ndly if you didnt have to pay mortgage or rent then $700 cash is probably enough for 2 people and a kid, it wouldnt be easy but its doable.
$700 for (no count rent) family of hubby n wife will certainly work if both are a true fan of OzBargain way.
if not even a double $1400 or triple will not enough
Some uni students would think $700/w is a lot of money. The people in those suburbs are probably on Centrelink benefits, so things are comparatively cheaper for them as well ie meds if they hold concession cards.
My parents are obviously on much more than $700/w post-tax income, but I reckon they don't spend more than $150-200 a week feeding a family of four. We buy everything in bulk and we eat extremely well, but everything is bought in bulk. As for other living expenses, there's about 8 tanks of petrol into three cars every month. That's another ~$140 a week. My parents don't spend a lot, they only spend when they see something on sale. I reckon they make about $10k worth of big purchases in a year, so that's another $192/w. That leaves $168 - I'm not sure how much insurance costs but I would say it is in the ballpark of $450/w for health, contents, cars and life insurance. My parents do save a fair amount of money each month though, so I think $700 is not that unrealistic if you budget carefully. I've looked at their credit card statements each month and I spend more than they do on average, except in December when all the insurance bills are due. Their spending on their cards would amount to around $40k a year max, and cash spendings at places that don't take card would be $20k max.
I know my parents only got wealthier in the last 10 years. I am certain in the first 10 years of my life my parents spent much less than $700/w on living expenses. They bought their house outright when they arrived in the late 80s though.
I haven't moved out yet but I have done the maths for moving out whilst working part time. If I move into a place that charges $450/w rent, that leaves me $1000/m spending money. That is significantly less than what I currently spend, so I would get rid of my car and catch public transport more. Without my car/petrol/servicing costs and money put into savings regularly, my spending would be around $600/m. With health insurance, it would go up to around $700/m.
I also think $700/w of post-tax income for a dual-income family is quite reasonable. For a sole-income family on say $70k, $700/w post-tax spending would only leave about $280/w in savings. I daresay loads of families live on less than $700/w out of necessity, despite being on salaries over $70k due to HECS debt and mortgages.