Minimum Household Budget:The minimum household budget is the lowest cost of household basics necessary to live and work in the modern economy. Based on a standardized methodology, the minimum household budget is calculated for every county in the country to account for the variation in cost of living both between and within states. These budgets are the result of a partnership with United for ALICE and are derived from their methodology. ALICE® stands for asset limited, income constrained, employed and includes households that struggle to afford basic expenses despite having earnings that exceed the federal poverty level. Learn more about ALICE households on the United for ALICE website.
Methodology: The minimum household budget uses the ALICE Household Survival Budget as its base. The basic budget items in the minimum household budget include housing, childcare, food, transportation, health care, and technology (a smartphone plan), plus taxes and a contingency (miscellaneous) fund equal to 10 percent of the budget. The budget is calculated separately for each county and for different household types. The ALICE Methodology is reviewed biennially by an external group of subject experts.
In specific instances, the CLIFF suite of tools may incorporate different values for food, health care, housing, and childcare costs than those provided by United for ALICE. For example, ALICE research calculates that a household participates in an employer-sponsored health insurance plan when available. In contrast, CLIFF tools determine and assign the most cost-effective bundle for a household’s health care needs. This could include a scenario in which an adult participates in an employer-sponsored insurance plan while children in the household receive Medicaid. There are also scenarios in which the CLIFF suite of tools may incorporate slightly different food costs than the calculations produced by United for ALICE. Specifically, the value of any benefit in the CLIFF suite of tools, including those associated with food expenditures, cannot exceed the cost of the associated expense.
