A family of five is naturally going to have a lot of expenses. After all, three children and two adults don't come cheap. Without a budget, a large family is at a disadvantage, because the amount of money needed per month is unknown. The average budget for a family of five varies depending on location and income.
Average Annual Expenses
According to the United States Department of Agriculture, a three-child household with two parents had an average annual childhood expense of $30,970 in 2009, assuming the youngest child was 12 and older two were 13 and 16 respectively. The annual expense translates to a monthly expense of $2,580. Although the average monthly expense is $2,580 for three children, that doesn't mean a family of five should create a budget using this exact number.
A family of five is going to have a drastically different budget in a state with a low cost of living versus a state that has a high cost of living. For example, the average monthly budget for a family of five in Hennepin County, Minnesota, was $5,594 in 2007. If that family moved to Brooklyn, New York, the family budget could nearly double in 2010. For example, housing costs alone would increase by nearly 181 percent, while the cost of groceries would go up by 16 percent.
A budget for a family of five is typically directly proportional to the income of both parents. If two parents are pulling in over $100,000, the family budget will in turn increase. An income of $50,000, however, doesn't allow for a lot of wiggle room in the budget. Although a higher income usually means a higher budget, that's not always the case. If the parents have incurred debt, the family budget for everyday living expenses goes down, because money must be paid to resolve the debt. Low-income families can usually qualify for assistance programs, such as energy assistance, to help decrease their budget.
Cost Per Child
Children cost a lot of money to raise, and that is the primary reason family budgets skyrocket when children are born. According to the USDA, children born in 2009 cost middle-income families an average of $286,050 to raise to age 17. That figure jumps to $858,150 when factoring in three children. Low-income families pay an average of $205,960 per child for the same time span, while high-income families pay an average of $475,680.
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