I thought it might be interesting to do a (highly unscientific) comparison of two different families’ budgets… one in France and one in the United States. For easiness’ sake, I’m using my budget for the French family; a friend of a friend agreed to do the math and be my American guinea pig.
This is how our American family describes themselves:
We are a middle class family of four, living in a medium size city on the East Coast. The parents are both college educated and white collar professionals (the wife works part time); the two children are in elementary school. We own our own home (with a mortgage), attend church regularly and take vacations regularly. We consider ourselves to be moderate spenders. We have no credit card debt and own our two cars free and clear. We have some money in savings for our retirement. Regarding spending, I wouldn’t call us frugal, but I wouldn’t call us excessive. We spend within our means and are willing to pay good money for good quality things.
This is how I describe my family:
We are a middle class family of five, living in a medium size city in the French Alps. The parents are both college educated and white collar professionals (the wife is on a year long maternity leave and works part time from home); the two oldest children are in preschool. We rent our home, do not attend religious services and take vacations regularly. We consider ourselves to be moderate spenders. We have no new credit card debt but are making payments on a fixed rate, low interest loan that paid off our one credit card. We have car payments for our two cars. We have no money in savings for our retirement. Regarding spending, I would call us frugal, mostly through necessity. If we had more disposable income we would probably spend more, although we would continue to try to be as frugal as possible.
Now for the budgets. All the numbers are percentages of total income spent in each category, in an ‘Us (France)’ versus ‘Them (United States)‘ format. For irregular expenses like home repair, medical care or (for us) savings, I’ve taken an average over the year. I’ve also used, for us, our minimum income, without counting any extras like snowflakes.*
- Housing 8.3% / 16.98%
- Utilities (gas, water, electricity) 2.9% / 4.64%
- Phone and Internet 1.0% / 2.36%
- Insurance 1.1% / 9.22%
- Medical Care 3.6% / .34%
- Transportation 8.5% / 12.13%
- Entertainment 4.8% / .69%
- Savings 13.6% / 5.20%
- Federal/State Income Tax 28.4% / .68%
- Home Repair 5.0% / 4.16%
- Groceries 4.2% / 13.86%
- Dining Out 3.6% / 3.47%
There are some interesting things here, or maybe it’s just the classes I took in statistics as a sociology major that are talking. First, what we pay in housing is almost double what they pay, and I suspect (from what they pay in taxes) they are in a higher income bracket than we are. Either they bought a long time ago, in a good market, or this serves to reinforce my suspicion that the market where we are is vastly overinflated.
Secondly, we pay much more than they do in insurance. I didn’t ask for details, but I assume that they are paying for health insurance.** We aren’t and we’re still paying nine times more than they are, for cars and life/disability insurance. On the other hand, when it comes to medical care, we are paying a much lower percentage. I didn’t include costs that are reimbursed for us, like doctors visits and medicine, because, after all, they aren’t costs. They manage to save much more than we do, nearly three times as much, which I think is great. They also pay way more than we do in taxes! We are lucky to be in one of the lower tax brackets in France; the generous taxation system favors low income earners and families with children. We haven’t paid income tax since the birth of our first child; we only pay local council taxes and the television tax.
One thing I did not mention is what percentage of our income is used for loan repayment. They didn’t include this category, as they don’t have any loans, but we pay 20.79% of our income in student loan and past credit card payments. Up until February it would have been even more: 25.41%. Ouch.
When I first received the email with their numbers I was struck by a funny thought: It’s normal to be debt free. After all, here’s a family in about the same situation as we are (white collar, professional, young children at home) and they have no car debts, no credit card debts and they are paying a mortgage for their own home. It shouldn’t seem exceptional to me, but it does. One day, I hope, it won’t, because we’ll be just like them.
*By the way, if you would like to do your own calculations, but are feeling too lazy or clueless to do the math, this site will do it for you.
**As it turns out, their health, life and disability insurance are all paid for by his employer.