Anatomy of a Household Budget: The Chen Family

Budget like a whole person.

The Chen family - three people, one household - lives in Columbus, Ohio. Combined annual income: $120,000 ($7,450/month take-home). They’re doing everything right: contributing to retirement, building an emergency fund, paying down debt. Yet something feels off. The money goes out each month, but they can’t quite say where. There’s a persistent, low-grade tension they can’t name.

On paper, they have a net worth of $125,000. But when they look closer at the composition, the picture shifts: $433,700 in assets (home, retirement accounts, vehicles, savings) offset by $307,700 in debt (mortgage, student loans, car loan, credit card). Emergency savings: $8,500 - less than two months of expenses. By conventional standards, they’re doing fine. But the tension remains.

They decide to try something different. They map out their entire year’s finances, not by accounting categories, but by human needs. They select the “Balanced” preset: 40% Physiological, 25% Safety, 15% Love & Belonging, 10% Esteem, 10% Self-Actualization. It resonates with what they want - a balance between family needs and personal growth. Then they start entering their actual spending.

Mapping the Budget to Human Needs

The categorization process forces them to think deeply about what each expense is truly for. Not the accounting label. The underlying human need.

The Foundation: Physiological & Safety

• Mortgage ($1,800/mo), Utilities, and Groceries: The easiest ones. Non-negotiables for survival. Physiological. Shelter, heat, food.
• Healthcare ($200/mo): Co-pays, prescriptions, dental and vision out-of-pocket costs. Physiological. The body’s basic needs.
• Daycare ($1,200/mo): This one makes them pause. It feels physiological - without it, they can’t work, and without work, there’s no food or shelter. But daycare isn’t food or shelter itself. They realize it’s protecting their income, their ability to provide. It’s a modern precondition for stability. Safety.
• Insurance ($645/mo): Health insurance premiums ($450), dental ($40), vision ($15), life ($80), disability ($60). This wasn’t optional - it’s what protects them from catastrophic financial loss. Safety.
• Student Loan & Car Insurance: Clear Safety expenses. Obligations that protect them from financial instability and future risk.
• 401(k) Contributions ($425/mo), Emergency Fund Savings ($150/mo), Home Maintenance Fund ($75/mo): All Safety. Building a predictable, secure future. The 401(k) feels underfunded compared to what the calculators say they need, but $425/month is what fits after healthcare costs.
• Credit Card Payment ($145/mo): The minimum is $125. They pay $20 extra each month. Both portions serve Safety - the minimum maintains creditworthiness, the extra reduces a source of instability.

The Complex Middle: Splitting Expenses

This is where it gets uncomfortable. Some expenses serve multiple needs at once.

• Car Payment ($330/mo): They have one paid-off car and one with a payment. They ask themselves: what is this payment actually for? A basic, reliable car would cost about $150/month. That portion is Safety - dependable transportation. The remaining $180/month? That’s for the features, the newness, how it looks in the driveway. They realize they’ve been telling themselves it’s all practical, but $180/month of it is Esteem.
• Cellphone & Internet ($200/mo): This one serves two purposes. The portion that keeps them reachable for work and emergencies is Safety. The portion that lets them text family and scroll social media is Love & Belonging. They split it 50/50.
• Gym Membership ($70/mo): Is this for health or appearance? They admit it’s both. Physiological (staying healthy) and Esteem (feeling confident about how they look).

The Higher Needs: Connection, Respect, and Growth

• Social & Dining, Holiday Gifts, and Vacation: All about connection with friends and family. Clear Love & Belonging spending.
• Kids Activities ($75/mo), Pet Expenses ($60/mo), Streaming Services ($30/mo): More Love & Belonging. Soccer practice and music lessons keep their daughter connected to peers. The family dog creates bonds and shared responsibility. Netflix and Disney+ are how they spend time together in the evenings after the day fragments them.
• Professional Conference (Periodic): Career advancement, professional credibility. Esteem.
• Hobbies & Learning ($40/mo), Online Courses & Books ($20/mo): Self-Actualization. Small allocations for growth. They wish these numbers were bigger.
• Charitable Donation (Periodic): This one isn’t about survival or status. It’s about contributing to something they believe in. Self-Actualization - an expression of values.

What the Pyramid Shows

They finish entering their entire year. The pyramid renders.

• Physiological takes $3,260/month - 44% of their income versus the 40% target. The mortgage alone accounts for more than half of this, but healthcare costs ($200/mo) are also significant. The pyramid shows this level nearly full. Housing and health costs dominate.

• Safety takes $3,275/month - 44% of their income versus the 25% target. Healthcare and insurance alone consume $645/month - health insurance premiums ($450), dental ($40), vision ($15), life ($80), disability ($60). Add daycare ($1,200), retirement contributions ($425), debt payments ($400 student loan + $20 extra CC payment), emergency fund savings ($150), car-related safety costs ($300), and home maintenance ($75). The numbers reflect what Maslow called prepotency: their $8,500 emergency fund (less than 2 months of expenses) and $307,700 in total debt create a pull toward security. But now healthcare costs consume 11% of their income alone. Safety needs are calling loudly.

• Self-Actualization gets $60/month - 0.8% of income versus their 10% target. The visualization shows this level nearly empty. They allocated what they could afford after the other levels took their shares. The gap between 0.8% and 10% is where the tension in their budget lives.

• Love & Belonging receives steady monthly funding ($515/mo) through kids activities, pet care, streaming services, dining out, and connection-related portions of internet and phone bills. The large periodic events - summer vacation ($1,600) and holiday gifts ($750) - supplement this base. They’ve maintained connection even with everything else competing for resources, though they’ve had to cut back.

• Esteem gets $320/month, largely from the car payment portion they allocated to “nice features” and professional appearance spending. They could shift this to Self-Actualization, but they haven’t. The pyramid shows the trade-off.

• Total monthly spending: $7,430. Income: $7,450. They have $20 left over. There is no slack. Every additional dollar toward one level requires taking a dollar from somewhere else. The pyramid makes these zero-sum trade-offs visible.

What They See Now

With their entire year mapped to human needs, the Chens can see what was invisible before. The tension they felt wasn’t vague - it’s the observable gap between 0.8% Self-Actualization spending and their 10% target, combined with Safety consuming 44% of income when they targeted 25%.

They look at the numbers and see specific trade-offs:

• Healthcare and insurance costs: $845/month combined. This is 11% of their income - money that simply doesn’t exist for other priorities. It’s the cost of protection, but it crowds out growth.
• The car payment: $330/month. If they kept only the $150 Safety portion (reliable transportation) and eliminated the $180 Esteem portion (nice features), they could triple their Self-Actualization budget.
• The $4,200 credit card balance at 19.9% interest costs roughly $70/month in interest charges. They’re paying $145/month total, but $70 of that just covers the cost of carrying the debt.
• Their emergency fund needs another $12,000 to reach 3 months of expenses. At $150/month, that’s 6.5 years away. Until then, the Safety need keeps pulling for attention.

The pyramid doesn’t tell them what to do. It shows them what is. They now have a framework for these trade-offs - not according to what a financial guru says they should prioritize, but according to what needs are actually calling loudest in their lives.

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