The Basic
Economic Security Tables Index (BEST) is supposed to be a
measure, in part, of a minimal cost of living broken down by
categories. The idea is that if you can get a number for the
minimum a household would need to live on, you can look at other
numbers, such as projected job growth by salary, with more context.
Overall, as someone trying to live frugally, their numbers seem
high. Living in boston, with one of the highest costs of living
[1], our spending in pretty much all of these categories has been
lower. I thought it would be interesting to look over categories
and see why. I used their "2 worker" numbers, which seems to be for
a couple living together, and I used our 2010 spending totals.
Housing and Utilities
- BEST: $688 + $149 -- $837
- Us: $1153
We were living in a studio apartment for all of 2010. This is one
case where the boston area is pretty expensive. If you want to live
in your own apartment, it's hard to get too much cheaper than this.
We're now living in a bigger place with another couple, and our rent
and utilities are about $900/month. Rents are definitely something
where boston is on the high side.
Food
They calculate using the USDA's
low
cost food plan, which is their second lowest cost plan, the
cheapest being their
thrifty
food plan. The main problem with these numbers is that they are
calculated in a remarkably useless way. They group food into about
60 categories ("whole fruits", "orange vegetables", "whole grain
cereals"), then assign costs and nutrition information assuming that
people are eating from the category in the proportion people do on
average. So if the "whole fruits" people tend to eat are 40%
apples, 35% oranges, and 25% bananas, then the cost will be a
weighted average of those three. Once they've assigned costs and
nutrition, they run some optimization to figure out how cheaply one
can get the needed nutrients. The problem with this is that they
can't say "eat bananas to get more potassium" because the only knob
their optimization thing can tweak is the "whole fruits" one. This
means that if a category is not homogeneous in terms of either
nutrition or cost, they'll not be able to optimize well.
Transportation
- BEST: $977
- Us: $72 (really $131)
Our transportation costs didn't include the $59/month bus and subway
pass I would get as a benefit from work. So say $131/month. This
is much cheaper than their estimate because we don't have a car (or
two cars). Our rent is higher because we live in an area with good
public transit, but not by enough to make up for the high cost of
cars.
Personal and Household Items
- BEST: $346
- Us:
$76 $330 or $109 (see below)
Their category includes some things that we count in the housing
category (soap, laundry) and doesn't include some things that we
include in the allowance category (eating out, musical
instruments). So that our allowance category is lower is even more
of a difference. We don't spend much on clothes or personal care
products, we buy furniture used when needed, we don't have life
insurance, we don't have bank fees. They calculated this by
assuming the "27% of a family's housing, utility, and food expenses"
that the BLS's
Consumer
Expenditure Survey found people spending on average.
Update 2011-04-04: Julia points out that this number is a
weekly number, not a monthly number. The monthly number for all of
allowance would be $330. This includes things that don't go in the
BEST's personal and household items category. Correspondence with
our categories is with the clothes, shoes, sundries, and tech
columns (and some things (dish soap, paint) in the housing
category). Counting just these allowance categories, we get
$106 (per month).
Overall, the biggest ways we save money compared to their index are
not having a car, preparing food at home not following the silliness
of the food plan, and spending less on miscellaneous items.
[1] Some
website gives boston as being 129% of the national average.