How much does it cost to really live in Houston?

Good question.

So what does it cost to secure an “adequate but modest living” in the Houston area?

According to the Economic Policy Institute, it requires an annual income of $63,600 for a family of two adults and two children.

Health care takes up the biggest chunk – $1,380 each month to pay for insurance premiums and out-of-pocket costs – while child care is the second-biggest expense at $961 each month.

Other big monthly expenses for Houston-area residents include $945 for housing, $754 for food and $577 for transportation costs, according to the report based on a variety of government and private data.

“It’s not going out to restaurants,” said Natalie Sabadish, a research assistant at the Economic Policy Institute and co-author of the report released earlier this month. Or money for vacations, savings accounts, Internet, cable and cellphones.

“It’s being able to make ends meet month to month,” Sabadish said.

The nonprofit institute that focuses on the financial situations of low- and middle-income workers calculated what it costs for families to reach a decent living standard in 615 communities and in six types of family configurations. (See the accompanying list to see what the institute believes it takes for a variety of family sizes in the Houston area. For a family of two – one adult and one child – it’s an annual income of $46,540.)

The institute made the calculations to demonstrate what it believes is inadequacy of federal poverty measures. For a family of four, the national poverty threshold is $23,283; Sabadish said that isn’t enough to cover the basics.

The federal poverty line doesn’t take geography into account when it makes its calculations, said Sabadish. It’s the same for a family living in high-cost New York City as one living anywhere else in the nation.

You can read more about the EPI study and its methodology here, and you can play with its budget calculator yourself.

The EPI Family Budget Calculator overcomes many of the shortcomings of the federal poverty line and the Supplemental Poverty Measure by illustrating the income required to afford an adequate standard of living for six family types living in 615 specific U.S. communities. As will be explained in greater detail shortly, that the budgets differ by location is important, since certain costs, such as housing, vary significantly depending on where one resides. Geographical cost-of-living differences are built into the budget calculations by incorporating regional, state, or local variations in prices (depending on item). This geographic dimension of EPI’s family budget measurements offers a comparative advantage over using poverty thresholds, which only use a national baseline in their measurements (e.g., the federal poverty line), or which use a geographic component only for measuring home prices (e.g., the SPM).

Basic family budget measurements are also adjustable by family type because, as illustrated in the following section, expenses vary considerably depending on the number of children in a family and whether a family is headed by a single parent or two parents. The six family types include one or two parents with one, two, or three children.

Out of curiosity, I checked its numbers for some other parts of Texas. These were the results:

Austin = $66,812
Dallas = $64,704
El Paso = $59,890
Fort Worth = $64,456
San Antonio = $61,345

That puts Houston squarely in the middle for Texas’ major urban centers. Note that all of these calculations (and others for Texas – they really covered the state) are based on the entire metropolitan areas, defined either as an MSA or a HUD Metro Fair Market Rent Area, so they cover much more than just the named city. I haven’t done more than just scan all this stuff so I can’t offer a detailed critique of it, but I will say that within any of these metro areas you will find a great deal of variation in the cost of living. It might make more sense to offer a range for these areas rather than a single figure, but that would also likely take a lot more time and effort to determine, and might not be that much more accurate. The point of this study is to make people realize that the federal poverty line is a really low number, one that offers at best a scratched-out, hand-to-mouth existence that is far removed from what those of us in the middle class expect, and that the real cost of living can be much more or much less than any single nationally calculated number. For that, at least, I hope you find this to be thought provoking.

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