Rich Budget, Poor Budget

Now that $250,000 is the official definition of a "rich" family, let's compare budgets.

The Washington Post reports that "$250,000 is etched in the minds of policymakers and pundits as the number that separates the middle class from the wealthy."

To see how the other 2.9% of couples live, the Post got an accounting firm to calculate a budget for a two-earner, professional couple with two kids (one toddler, one in school), assuming $250,000 of earned income. (They did it for 8 cities, which I just averaged here.)

Here's how they might spend their money:

The total is actually about $260,000, but it's likely a family with that kind of earned income has some investment income coming in, so they're probably still in the black.

On the other hand, here's a basic budget, from the Economic Policy Institute, which has a calculator of basic-needs costs for cities across the country. Their estimated necessities for a family of four in Akron, Ohio is about $52,000, broken down like this:

Cross posted from the Family Inequality blog.