NEW YORK (MainStreet) — Rent, utilities, transportation and child care present the biggest threats to families’ financial stability, according to a new index developed by social awareness groups at Washington University in St. Louis.
The Basic Economic Security Tables or BEST index, which determines how much individuals and various families need to save for long-term financial security rather than simply getting by, is used by policymakers, researchers and policy advocates who are concerned with national and changing family needs over time.
Researchers at the university used data from both the Census Bureau and the U.S. Bureau of Labor Statistics to create budgets for families of varying sizes, which outlined how much various family units should save for retirement and emergencies each month.
According to the findings, sufficient emergency savings should make up only 3%-4% of each family unit’s projected budget, while retirement savings should account for $73 per month for individual workers, and $56 per month for couples.
In terms of costs, the index estimates that housing is the biggest expense for single individuals or married couples, costing an average $681 per month.
However, once more than one child enters the equation, child care becomes the biggest financial burden, costing single and married parents around $1,080 per month. According to the index, child care is so expensive that a single-parent family with two preschoolers shares the same financial needs of a single-parent family with five teenagers.
Transportation costs, meanwhile, ranged from $495 to $1,019 per month, and were higher for families with children.
"In order for families to develop, it is necessary to accumulate savings and assets for investments in homes, education, experience and enterprise,” said Michael Sherraden, professor of social development, in a press release. “This is true for all families, rich and poor alike. Asset holding creates material conditions, as well as outlooks and behaviors, that promote household stability and development."
You can find an estimate of your family’s expenses online.