We all require a certain amount of money each month to pay for normal living expenses, and in recent months, that number has gotten a lot higher. Whether at the pump or the grocery store, Americans are being hit with a severe case of sticker shock. The Consumer Price Index rose an annual 8.5% in March, the highest increase since December 1981. Gas prices accounted for more than half of the rise in costs, but the cost of groceries skyrocketed 10% from the previous year, too. (These are the states where drivers pay the most for gas.)
To determine the income required for a family of two adults and two children to meet basic living expenses in every state, 24/7 Wall St. reviewed March 2022 budget data from the Economic Policy Institute’s Family Budget Calculator.
The EPI model budget includes items a family would need to maintain what the institute describes as “a modest yet adequate standard of living.” Cost estimates include expenses related to housing, food, transportation, health care, taxes, and other necessities, and are aggregated from the county to the state level using population data from the EPI. Data was adjusted for inflation to 2020.
Data on median family income and the percentage of families earning less than $10,000 are five-year estimates from the U.S. Census Bureau’s 2020 American Community Survey. That number is well below the U.S.’s official poverty threshold – which the Office of the Assistant Secretary for Planning and Evaluation, a division of the Health and Human Services agency, estimates at $26,500 for a family of four. After declining for five consecutive years, the U.S. poverty rate rose to 11.4% in 2020, up from
10.5% in 2019, according to the Census Bureau. (These are states where income inequality has gotten worse since 2010.)
The income a family needs to cover normal living expenses varies widely from state to state. A family of four would need $112,751 annually if they live in New York state, the most of any state on the list. Much of that is taken up by food and housing costs. Second place is Hawaii, where a family of four needs $111,092 to cover basic needs.
Looking for a less pricey place to live? Move to Mississippi, where the cost of living is the lowest at $70,116 for a family of four. Or second-place Arkansas, where a family of four can live on $70,474.
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