Standard budget for

Consumer Expenditures

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The Standard Budget shows ordinary consumer expenditures for different types of households. Based on households of varying sizes with differences in age and gender, this budget calculates the cost of maintaining a reasonable level of consumption. The budget contains both current expenses such as food, clothing, toiletries, etc. and expenses for less frequent purchases such as furniture and electrical appliances.
A reasonable level of consumption
The Standard Budget shows the costs of maintaining a reasonable level of consumption for the household of interest. A reasonable level of consumption means a level that is acceptable to most people. It fulfils the requirements of normal health and nutritional standards and enables the members of the household to participate in the most common leisure activities in a satisfactory manner.

The budget is one example

The Standard Budget is based on a detailed survey of goods and services and their costs. It exemplifies what researchers within the various consumption areas consider a reasonable level of consumption. The goods the budget builds on are of normal, sound quality, with an emphasis on durability, simple design and functionality. When relevant, safety aspects have also been taken into account.

The budget is a long term budget

The Standard Budget is a supplementary budget for households that have a decent standard of living. It is called a longterm budget because it assumes that money is set aside on a monthly basis for more infrequent purchases of expensive and durable consumer goods. When the refrigerator, cooking stove or washing machine breaks down, there should be money for repairs or to buy a new one without affecting consumption in other areas.

The budget is a family budget

The Standard Budget, which is a family budget, is difficult to use for calculating the specific costs of having children in the household. The various budget items can be used to calculate the cost of what a 10-year-old eats and drinks per month, for instance, but the sum of all the items does not necessarily show how much it costs to have a child in the household. Expenses for school, holidays and specialised leisure activities, celebration of birthdays and other occasions, gifts etc. are not included. Nor does the budget take into consideration the life phase of the adults, which also impacts the costs of having children.

Individual specific expenses

NOK per month
1. Food and beverages Gender Age Per month Gender Age
< 1 year 1 year 2-5 460 520 6-9 570 6-11 month 1 year 2-5 600 880 1130 6-9

Girls
10-13 1630 1820

Boys
10-13 2020

Girls
14-17 2050

Boys
14-17 2540

Women Men
18-60 2020 18-60 2520

Women
> 60 1810

Men
> 60 2120

Pregnant/ breastfeeding
2380

2. Clothing and footwear Girls

10-13 600

Boys
10-13 560

Girls
14-17 790

Boys
14-17 650

Women Men
> 17 790 > 17 670

Per month 300

3. Health and hygiene Gender Age

< 1 year 1-2 300 3 210 4-5 140 6-9 200

Girls
10-13 320

Boys
10-13 210

Girls
14-17 460

Boys
14-17 320

Women
18-50 630

Men
> 17 490

Women
> 50 580

Per month 270

4. Recreation and leisure activities Age

< 1 year 1-2 320 3-5 550 6-9 650 10-13 810 14-17 1040 > 17 930

Per month 130

5. Travel expenses (30 days pass for public transport in Oslo as per 1st of February 2011) Age
4-19 20-66 590 > 66 295

Per month 295 6. Baby equipment Basic equipment Age

Supplemental
<1 690

From 6 months before birth

Per month 3280

The Standard Budget for Consumer Expenditures 2011

The budget figures are largely the result of an index regulation (separate indices for the various consumption areas) as per 15 February 2011, using calculations based on price measurements carried out in the autumn of 2009. Compared to the budget of last year, there is little change. There is a significant reduction in Clothing and footwear, while there is only small adjustments in all of the other budget posts. Travel expenses and Kindergarten are based on current fares and rates per 1st of February 2011, while Car costs are based on data from Norwegian Road Federation per January 2011.

Household specific expenses

NOK per month
Number of persons Per month 8. Household articles Number of persons from 3 yrs Per month 9. Furniture Number of persons from 3 yrs Per month Number of persons Per month Number of persons Per month Income 1st child 2nd child additional children
1 310 1 1440 1-4 2120 2 350 2 1450 5-7 3120 >150 000 2071 1450 1036 <150 000 777 777 777 3 430 3 1500 4 550 4 1610 5 630 5 1650 6 760 6 1700 7 870 7 1710 1 320 2 350 3 420 4 540 5 590 6 650 7 680

Please note
Before using this budget, you should read Criteria and assumptions and Additional information on the various consumption areas (next page). Individual-specific consumption areas include goods and services that are related to individual consumption, where expenses vary with the age and gender of the household members. Household-specific consumption includes goods and services that can be used by more than one individual, such as furniture, kitchen appliances, telephones and newspapers. These costs are relatively high for single-person households, but they increase only marginally with an increasing number of persons.

7. Other everyday household items

1 230 2 300 3 390 4 540 5 630 6 720 7 780

10. Telephone and media use

Economies of scale

11. Car costs (operation expenses, maintenance)

The Standard Budget incorporates economies of scale, yielding in a 20% reduction in most of the individual-specific expenses in households with more than three persons. In households with just one adult, economies of scale are calculated only for households of 5 persons or more. It is assumed that households of a certain size take advantage of some of the opportunities that actually exist to reduce costs e.g. by handing down clothes and leisure equipment from older to younger siblings, buying food and hygiene products in bulk, taking advantage of special offers and increasing the level of contribution by household members in obtaining raw materials or preparing food.

12. Kindergarten (full day, city of Oslo per 1 January 2011)

>300 000 2330 1631 1165

How to compose a budget for a nuclear family

To show how the budget can be used, we have created an example for a typical nuclear family. From the tables we have extracted the figures (that have been circled) for the mother, father and their two children, Lars (age 5) and Kari (age 11). We have added the sums for each consumption area, for instance from Food and beverages NOK 2 020 + NOK 2 520 + NOK 1 820 + NOK 1 130 = NOK 7 490. The same has been done for the other consumption areas.

Costs of having children

SIFO advises that the Standard Budget should not be used to estimate the costs of having children. The budget is only suited to calculate the total costs of households with at least one adult. It reflects the consumption costs of the household, but not the expenses of individuals.

1. Food and beverages 2. Clothing and footwear 3. Health and hygiene 4. Recreation and leisure activities Total individual specific expenses - 20 % economy of scale 5. Travel expenses 6. Other everyday household items 7. Household articles 8. Furniture 9. Telephone and media use 10. Car costs Total household specific expenses Expenses per month Expenses per year Total

NOK 7 490 NOK 2 580 NOK 1 580 NOK 3 220 NOK 14 870 NOK 2 970 NOK 11 900 NOK 1 180 NOK 540 NOK 540 NOK 550 NOK 1 610 NOK 2 120 NOK 6 540 NOK 18 440 NOK 221 280 NOK 25 630 NOK 246 910

Supplementary budget

The Standard Budget is intended for households that already have a decent standard of living. It is not suited for those who are establishing a new household.

Kindergarten NOK 2 330 per month * 11

*Assumption: Lars is in Kindergarten and the expenses are calculated for a household income higher than NOK 300 000

Additional information on the various consumption areas

Food and beverages
This budget item covers the total daily requirement (which varies with age and gender) for food and beverages for different age groups. In calculating the quantity of food, we assume a moderate level of activity and that all food is cooked at home (no eating out). The budget is based on ordinary Norwegian food, a traditional meal pattern and food consumption, incorporating some of the more recent types of foodstuffs. We have drawn up a menu that takes into account both the need for varied and healthy food and the official nutritional recommendations for a proper diet. The budget includes soft drinks and sweet buns, but not chocolate, crisps etc. An extensive degree of home processing, such as baking, preserving etc, is not assumed. The budget item Food and beverages for children aged six months to a year is based on a specific weekly menu to cover the estimated energy requirements of children at the age of 10-11 months, assuming that the child is breastfed and for the most part eats some of the same types of dinners and sandwiches/fruits as the other members of the household. Industrially produced baby cereals are included on the menu, but only limited amounts of other typical baby food products. If the child is not breastfed but needs formula, or if industrially produced baby foods are used often, this budget item will increase considerably. (It should be seen in relation to budget item no. 1, which takes into account whether the mother is breastfeeding.)

Criteria and assumptions

The Standard Budget mainly covers everyday current expenses, as well as less frequent expenditures a reasonable level of consumption that should provide opportunities to participate in normal social activities a range of goods associated with normal household functions purchase of all goods over the counter. The budget does not presume extensive use of special offers and seasonal sales. The Standard Budget does not include expenses for housing, electricity and other housing expenses (such as maintenance) tobacco and alcohol upper secondary school health services leisure pursuits that require costly equipment holiday travels celebration of special occasions, gifts clubbing, night life

Clothing and footwear

The budget should cover the total annual need for clothing, including clothes for ordinary sports and leisure activities and formal occasions, and taking into consideration that children and young people who are growing should have clothes that fit. The budget does not assume that clothing and footwear are handed down, nor does it presuppose personal contributions such as sewing or knitting. The products that the calculations are based on are reasonably priced and of good, simple quality.

Health and hygiene

This budget item covers expenses for personal care, such as soap, dental products, a limited quantity of cosmetics, hairdresser services, shaving equipment, diapers etc. An annual dental examination is also included.

Recreation and leisure activities

This budget item includes toys for children, bicycles, sports equipment, books, CDs, comic books, cinema and theatre tickets etc. The budget allows for participation in basic leisure activities and does not assume that leisure equipment is handed down. Mobile phones are included for household members from the age of 10.

Other everyday household items Household goods

This budget item includes stationery, detergents/cleaning supplies and products such as light bulbs, batteries, pencils, adhesive bandages, etc. Included in this budget item are white goods, kitchen appliances, tableware, cleaning equipment etc, and household textiles such as bed linens, towels and curtains.

Telephone, media use, various leisure time products

This budget item covers telephone subscription, connection fees and call charges, as well as expenses for newspapers, radio/CD player, television, DVD player and some leisure equipment. Expenses for PCs and use of the Internet, along with home contents insurance, are also included in this budget item.

Car costs

This budget item covers operating expenses, including insurance and annual fees, for 10,000 km or 15,000 km per year, respectively. Depreciation is not included. Estimates are based on guidelines from Norwegian Road Federation Expenses for toll roads, ferries and parking are not included. The budget assumes that public transport is used to and from the workplace.

Baby equipment

This budget item distinguishes between basic equipment and supplementary equipment. Basic equipment includes products that a baby needs from birth, e.g. bed linens, a baby cot, pram, baby carrier, feeding bottle, etc. This item also covers clothes intended for the first few months. NB! These expenses are calculated per month for 6 months before expected birth. In addition to the equipment necessary from birth, there is a need for supplementary equipment during the first year of the childs life (pushchair, car seat, highchair, childrens flatware, etc). These expenses are calculated per month for the entire first year of the childs life.

National Institute for Consumer Research

P.O.Box 4682 Nydalen N-0405 Oslo Norway Visitors address: Sandakerveien 24C Building B Phone: +47 22043500 Fax: +47 22043504 E-mail: sifo@sifo.no Internet: www.sifo.no

Kindergarten

Payment is required only for the months the child is in kindergarten. With one months holiday, annual expenses for kindergarten will be 11 times the monthly fee (see example). The calculator on SIFOs web page computes expenses in a normal month (not the holiday month).