Page 27 - Book3E

CHAPTER 4
Taking Your Finances beyond Your Home
IRS Standards for the Cost-of-Living
Learning by example is always helpful. If we know what other people are doing, it helps us gauge our own progress. While a mention of the IRS can sometimes strike fear in our hearts, the IRS does provide some very useful data. Each time there is an update to the national census, the IRS also updates information about the average cost-of-living around the country.
The following table shows the standard living expenses determined by the IRS according to monthly income level. It is used to help determine the amount an individual should have left for monthly debt payments. You might find this table helpful in determining how well you are doing at living within your means compared to other American households. These standards are used for all states with the exception of Alaska and Hawaii because of their unique geographic location. How are you doing? Are you thrifty or extravagant?
Average Living Expenses for One Person
Monthly Income Levels
Level 1: Less than $833 Level 2: $833 to $1,249 Level 3: $1,250 to $1,666 Level 4: $1,667 to $2,499
Level 5: $2,500 to $3,333 Level 6: $3,334 to $4,166 Level 7: $4,167 to $5,833 Level 8: $5,834 and over
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