Reaching the Poverty Line

I recently looked into a variety of estimates for goods and services costs that a family of four would need to function at a minimum subsistence level in my hometown of Windom, Minnesota.  Both parents are employed, the oldest child is 7 and in elementary school, and the youngest is 3 and require daycare during the day.

The federal government's cutoff for the official poverty line is around $22,113.  After compiling my list of what I though were essential for this family to function, I realized my numbers came in significantly higher than the poverty line.  My estimate was around $31,002.  My estimate calculations were broken down by category into yearly costs.

Childcare/School - $9885 (average cost of child care in MN)
Car insurance - $1000
Phone/Cable/Internet - $717 (Windomnet rates)
Health insurance - $2400
Food - $5840 ($4/person/day)
Clothes - $960 ($20/person/month)
Housing - $9600 ($800 rent&utilities/month for 2 bedroom apartment)
Miscellaneous - $600

Total - $31,002
Poverty Line - $22,113
Amount over Poverty Line - $8,889

I included these goods and services because I figured that a family of four would be able to get by with just these essentials.  I also decided to add in a "Miscellaneous" category as sort of a catch-all section where a wide variety of things could fall into (entertainment, gas, sickness, etc...).  The categories of car and health insurance were quite difficult to predict, since I pay for neither of these.  My guess is that these values are too low, but I made my best guess in this situation.  I gave the family the benefit of the doubt that they had a car and it had been paid for.

It would be extremely difficult for me to cut anything in order to reach the poverty line.  Childcare expenses must remain about the same because of the 3 year old requiring care during the day.  Food and clothing have a little room to move; however, there isn't much give there.  It would potentially be possible to find less expensive housing and utilities, but it would have to be drastic in order to reach the poverty line.  The biggest area of potential decreases is within the insurance categories.  I suppose insurance isn't completely necessary, but I believe it to be an essential.

This family would have a very difficult time being able to maintain a comfortable life.  They are too poor to be able to afford to do much splurging on items such as a vacation, a new car, or even something as simple as a night out on the town.  On the other hand, they make too much money to reap the benefits of being under the poverty line.

Being in this awkward position clearly affects the family as a whole, but may have the greatest impact on the kids.  Their parents won't be able to keep up college fund for them, give them an allowance to spend money on what they want, or provide them with some items that are a part of many childhoods, things such as a ball, a glove, and a bike.  Although many schools, including my hometown of Windom, have programs set up that will help defray some of the costs to enroll kids in summer recreation activities, these kids may not be able to receive all the coaching and help needed to be outstanding in any particular area.  The two children will receive a public school education, have to work part-time at a young age to pay for what they want and help out the family, and will either end up joining with work force full-time directly after graduation or going to a community college.  As in any case, it is possible that these kids will be able to overcome all these obstacles placed in front of them and have a successful academic or athletic life, but the cards are against them.