Create a list (7-10 items) that make up the basic needs of your household

The Federal Poverty Line is meant to identify what it would cost a family of a specific size to meet its basic needs. Think of your group as a family that lives together in a household. (The size of your group will be the size of your household.) Make a list of what your basic needs are.

Cost-of-Living Calculations Exercise.Using a blank or lined sheet of paper do the following:

1. Create a list (7-10 items) that make up the basic needs of your household(You may choose your family of origin or who live with now).Start with housing and food. What else is essential for your household?

2. Now estimate the monthly cost of living for your household. a) Take a guess and write down what you think are the costs; b) Check these against actual costs. For example, to find the cost of food, make a shopping list of what your family would need for a week, then go online and price the items. To find the cost of housing, for example, look at rental notices, keeping in mind that you need to decide how many rooms your household needs.

3. Do the same for each of the monthly expenses. Add up the monthly costs, and then multiply by 12 to find out the amount of money your household would need each year.

Check your annual estimates against the online”Living Wage Calculator.” (Links to an external site.)Links to an external site.http://livingwage.mit.edu/

How did you do? Did you miss anything? Did you over or under estimate the annual costs of one or more items.

4. Compare and contrast your list of expenses with those used by the LCW.

Now imagine that you are conducting this exercise with someone other than yourself. Perhaps a parent or guardian of three children. A senior citizen living alone. What would be the differences in your monthly expenses?