From Parts I & II, we calculated annual “take home” pay for an average household in Greene County was $31,288.52 or $2,607.38 per month.

In Part III, we'll look at "average" monthly expenses, which are certainly the most interesting -- and subjective -- part of the series. To take out as much subjectivity as possible, we’ll use general rules-of-thumb or “supposed to” amounts first. If none were found or exist, we’ll use national averages. If no national averages are found, we’ll use “guess-timates.”

First, let’s deduct $260.74 per month for tithing and charity. Now, some argue that this figure should be 10% of gross income, while others say 10% of take-home pay. Still others say that 10% should go to your church, and various charities are on top of that amount. Of course, some do not attend a church nor give to charity at all, so they have no expenditures in this category. All arguments aside, we’ll use 10% of take-home pay for church and charities.

Second, let’s deduct $8,000 per year or $666.7 per month for IRA contributions for this “average” couple. This fits under the “supposed to” category, as many do not do this, but we’re all supposed to be. After all, if you’re not looking out for your own retirement, who is?

Third, we’ll deduct $180 per month for a home phone, internet access, satellite or cable subscription, and a cell phone plan. This is based on $60 for phone and internet, $60 for cable or satellite, and $60 for a cellular plan. Sure, some plans and subscriptions are cheaper, some are more expensive. In any event, there are a number of access fees and charges, as well as various taxes, on each, so we shouldn’t forget those. (Remember buying that cellular plan that was supposed to be $39.99 a month, but your first bill was more like $60 with all the extra fees and charges? Funny how that works, isn’t it?) While this $180 is not completely necessary -- people do actually live without these conveniences -- we’ll include them.

Fourth, we have to eat. This one falls under “subjective” and a “guess-timate” because no rules-of-thumb were found. It all depends on your appetite, likes and dislikes, where you shop, etc., etc. For groceries, let’s plug in $300 per month. Dining out, while not necessary, we will still include an occasional trip to a casual dining restaurant or some fast food along the way by using $100 per month. For those not spending time in a restaurant, chalk this expense up as for entertainment too, say, a movie out or the like.

Fifth, we need a roof over our heads. In fact, that probably should have come closer to first in the list, but we didn’t forget nonetheless. Sure, you can rent, but in Greene County there’s a very high percentage of home ownership. Looking at the 2000 U.S. census data and a recent housing assessment completed in 2005, we note that the median home value in Linton is approximately $50,000. Typically, a bank will loan 80% loan-to-value against that home, so our mortgage will be about $40,000. Current rates on a 30-year loan are 6.5% or so. So, based on this data, our mortgage payment each month will be almost $260.

Utilities to heat and cool the home, as well as provide light, water, sewage, and trash pick up will be estimated at $175 per month on average. Of course, winter and summer bills tend to be the highest, but we’ll just use an average among all months.

Along with home ownership comes the pleasure of paying property taxes, casualty insurance, and maintenance. Since this is our primary residence and we have a mortgage, though, we can apply for a homestead exemption and a mortgage exemption at the Courthouse. Both will cut our property tax bill significantly, which by my calculations will be $434 per year or $36.14 per month. This is based on the new rate in the City of Linton of 3.6140%. Insurance against fire, tornado, and other disasters is estimated at $400 per year or $33.33 per month. Again, this depends on a lot of circumstances, including the age and condition of the home, the credit score of the homeowner, the amount of the deductible, etc. Along with routine maintenance, which we will estimate costing $500 per year, we’ll need to replace some more costly aspects too. For example, although it’s far from a daily expense, we will eventually need to replace the roof, exterior siding or paint, floor coverings, the furnace & air conditioning, and various other miscellaneous items. We’ll estimate the costs of replacing these, as well as their useful lives, as follows:

True, all of these items can have widely varying prices and useful lives, but these are the assumptions. Combined with our estimate of $500 for maintenance per year, these will all total $1,166.67 per year or $97.22 per month.

Sixth, we need to get to work. So, we need to look at vehicle loans. Although the “sky is the limit” on prices paid for a set of wheels, we’ll use a fairly conservative amount, such as $13,500 as a loan amount. This may buy a smaller car or a larger one with a decent down payment. Based on a 6% interest rate and a 60 month loan term, our payment will be about $260. (There’s just something about having a car payment higher than a mortgage payment; hence, they’re equal here.) Insurance is of course required by law, but again depending on the company, coverage, deductible, and credit score of the applicant, prices can vary widely. We’ll use $500 per year, which is $41.67 per month. License plates figure into the mix, too, and these are estimated at $250 per year (20.83 per month). Lastly, we need to put gasoline in the tank. According to national data, the average person puts about $1,000 into their tank each year.

Most of us in Greene County observe Christmas, although national studies indicate a wide range of what we spend during the holidays. National Public Radio reported a figure of only $466, while other studies said $700 to $1,000. At the risk of being called Scrooge, we will use the NPR figure because we’re running out of money quickly. Using the $466 per year, that equates to $38.83 being set aside each month.

Seventh, we consume a lot of things that will be simply thrown away, but necessary nonetheless. Such items include toilet paper, paper towels, floss, tooth paste, soap and shampoo, etc. Having not a clue what all this stuff costs the average couple, we’ll use $25 per month, so at least we acknowledged it.

Eighth, we’ll put a measly 1% of our income into savings each month, which is $34.60.

There. We did it! We have $1.97 left each month to our name! Not a whole lot of room for having kids, is it?

But wait! The average consumer has $10,000 of credit card debt. At a typical 2% of the balance minimum required payment ($200), we’re now $198.03 in the hole every month.

How can this be?

Stay tuned. In Part IV, we’ll discuss some likely scenarios of how this can be and what assumptions we may have gotten all wrong.