Hypothetical Family Living "Above" Poverty (Assignment 10)

Monthly Costs:
Mortgage/Rent: $1,000
Insurance- Family Plan: $250
Child care: $600
Food: $750
Car Payment: $175
Gas: $150
Electricity: $85
Water: $20
Basic cable/Internet: $70
Clothes: $200
Appliances: $150
Eating out/ entertainment: $200

Total Monthly: 3650
Total Yearly: $43,800

Possible cuts:
Getting rid of the car: (reduces costs yearly by $3,900, but bus passes are $1560/year) saving $2340/year
Cut cable, Internet, and entertainment: saving $3240/year
Move to a smaller living space: savings up to $5400/year
Cut insurance for state insurance (the family could only be eligible for state insurance if neither of the parents' work offered insurance, so this is unlikely): $3000/year in savings
Cut clothing costs in half: saving $1200/year
Total yearly after cuts: $28,620

To estimate costs, I referenced what I pay for my son and me and multiplied by two when applicable (food, clothes, entertainment).

I didn't feel that I could cut anything else from this family's budget to get under the $21,834 poverty line. The cuts that I did make didn't even seem reasonable. Imagine how difficult it would be to get two children to school and daycare and two parents to work on time via the bus; or how miserable the family would be living in a one-bedroom apartment with no entertainment. It's possible that the children wouldn't fit in at school and daycare because of having old or misfitting clothes.  They wouldn't know what the other kids were talking about when they talked of popular TV shows and movies. 

As the children got older, they might not want to invite friends over to their small house.  Their health could suffer on a limited food budget and with little access to health care.  Teachers might not give them as much attention as they would a wealthy child, and their education could be of a worse quality as a result.  Maybe they wouldn't be able to be involved in extracurricular activities due to limited funds or the necessity to start working as early as possible.  This would hurt their applications to college, if they chose to attend. Also, because their parents income is not below the poverty line, they wouldn't get as much funding for college and might be forced to work part or full time while going to school, which could hurt their GPA's and affect their ability to complete homework and stay enrolled in school. Not completing college would make getting a high-paying job difficult, and their children could be in a similar or worse situation than they were.