Norwegian version

Reference Budget for Consumer Expenditures

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If you have children in kindergarten or SFO, the household's total gross annual income must also be stated.

 

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About the Budget

  • Download 2020 budget in PDF

  • About the Budget

    Based on baskets of goods and services that are considered necessary for an acceptable standard of living, the reference budget presents ordinary consumer expenditure for different types of households. The budget can be adapted to households of different sizes as well as to different age and gender compositions. It covers both current expenses such as food, clothing, toiletries etc. and expenses related to less frequent purchases, such as furniture and electrical appliances

    A reasonable standard of living

    The reference budget presents the costs of maintaining a reasonable standard of living for the household of interest. A reasonable, or acceptable, standard of living assumes a consumption level that is generally accepted in Norwegian society. The level is intended to reflect the population’s perception of what a typical person or family should be able to consume if all adult household members participate in the workforce. It should neither reflect a luxury level nor be restricted to only cover basic needs. The consumption level allows for fulfilment of the public health and nutritional requirements and for satisfactory participation in the most common leisure activities.

    The budget is an example

    The reference budget is based on a detailed survey of goods and services and their costs. It exemplifies what researchers within the various consumption areas consider to be a reasonable level of consumption. This means that the budget does not reflect a statistical average. The goods that form the basis for the calculations are of normal, sound quality, with the emphasis on durability, accessible design and functionality. If relevant, safety aspects have also been taken into account. Furthermore, it is worth noting that the budget does not cover all expenses a person or a family might have, such as housing, holiday travel, gifts and health services other than an annual visit to the dentist.

    The budget is a long-term budget

    The reference budget is a supplementary budget for households that already have an acceptable standard of living. It is referred to as a long-term budget because it assumes that money is set aside monthly for more infrequent purchases of expensive and durable consumer goods. When the refrigerator, cooker or washing machine breaks down, money should be available to repair it or to buy a new one without affecting the consumption pattern.

    This is how the economies of scale are calculated

    The point of departure for the calculations in the budget is that the total amounts presented for the various family constellations are sufficient to meet the needs of individuals and families. Economies of scale, i.e. that several individuals make use of the same item, are naturally integrated into the household-specific expenses. With regard to individual-specific expenses, these are primarily costs related to goods and services meant to cover individual needs. However, this way of assessing costs may result in an overestimation of the expenses of families with many children. Economies of scale are therefore also calculated for individual-specific expenses for families comprising more than three individuals. For households with one adult, economies of scale are calculated for families comprising more than four individuals. The economies of scale for these types of households are calculated to be 20 per cent.

  • 2020 updates

    The reference budget is normally updated annually by adjusting the previous year’s prices based on changes in the consumer price index. The basis for the various baskets of goods and services is also updated at regular intervals. In the 2020 version of the budget, five consumption areas have been updated.

    When updated, the range of products and services covered by the relevant basket is reassessed, both by professionals within each consumption area and through several rounds of focus groups. In the focus group sessions, the participants discuss, among other things, the assumptions and the specific product lists related to the relevant consumption area, and assess whether changes are needed.

    Among other things, the purpose of these updates is to adjust the product range with regard to which goods and services are included, what lifespan the goods are expected to have and where they are purchased. The costs of the updated lists of products and services are obtained from selected stores and providers.  

    In 2020, we have updated the individual-specific consumption areas ‘Food and beverages’, ‘Clothes and shoes’ for children aged from 0 to 17 years, ‘Recreation and leisure activities’ for persons aged 10 years and older, as well as the household-specific consumption areas ‘Furniture’ and ‘Media use and leisure activities’. The 2020 version of the budget also includes costs for electric cars.

  • Criteria and assumptions

    Individual-specific consumption areas include goods and services that are related to individual consumption needs, where the needs and expenses vary according to the age and gender of the household member.

    Household-specific consumption areas include goods and services that can be used by more than one individual, such as furniture, kitchen appliances, telephones and newspapers. This is why the costs are relatively high for single-person households, but increase only marginally with an increasing number of household members.

    The reference budget should mainly cover

    • everyday current expenses as well as less frequent expenditures
    • an acceptable level of consumption that should provide opportunities to participate in ordinary social activities
    • expenses associated with normal household functions.

    The budget does not presume extensive use of special offers and seasonal sales.

    The reference budget does not include expenses for

    • housing, electricity and other housing-related expenses (such as maintenance)
    • tobacco and alcohol
    • health services
    • leisure pursuits that require costly equipment
    • holiday travel
    • celebrations of special occasions, gifts
    • ‘clubbing’, night life.

Additional information on the different consumption areas

  • Food and beverages

    This budget item was updated in 2020 based on recommendations from the health authorities, proposals from nutrition experts and input from consumers through focus groups. As before, the calculations are based on a four-week food basket comprising ordinary food bought in the groceries market and prepared at home (no ‘eating out’).

    The Norwegian dietary guidelines and government recommendations form an important basis for the updated version of the food basket; among other things, the reference value for energy intake has been increased so that it covers sedentary work and regular physical activity during leisure time, and it includes at least five portions of vegetables, fruit and berries every day.

    Dinner menus and dinner recipes have been updated (including some new dishes, leaner products and standardised portion sizes), the distribution of different types of dinner dishes has changed somewhat (more vegetarian dishes for dinner, and the distribution of types of meat and fish has been adjusted), and some new food products have been introduced (including nuts, muesli, several types of vegetables, fruit and berries). The budget allows for some buns, soft drinks and sweets on Saturdays, but food and beverages with a high sugar content is largely avoided. 

    The budget item ‘Food and beverages’ for children aged from six months to a year is based on a specific weekly menu that is intended to cover the estimated energy requirements of children aged 10-11 months. It is assumed 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.

  • Clothing and footwear

    The budget should cover the total annual need for clothing, including clothes for ordinary sporting and leisure activities and formal occasions, and it takes 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, and nor does it presuppose personal contributions such as sewing or knitting. The products on which the calculations are based are reasonably priced and of good, simple quality. This budget item was updated in 2020 for children aged between 0 and 17 years.

  • Personal care

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

  • Recreation and leisure activities (individual expenses)

    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. Expenses related to the purchase and use of smartphones with the possibility of streaming music are included for individuals from the age of 10 years. A personal laptop is included for individuals aged 10 years and older.

    This budget item was updated in 2020 for individuals aged 10 years and older, including collecting new prices. For individuals younger than 10 years, changes in the consumer price index from February 2019 to 2020 have been used.

  • Other everyday household items

    This budget item includes stationary, detergents/cleaning supplies and products such as light bulbs, batteries, pencils, adhesive bandages etc.

  • Household goods

    This budget item includes white goods, kitchen appliances, tableware, cleaning equipment etc., as well as household textiles such as bed linen, towels and curtains.

  • Furniture

    This budget item includes furniture and inventory in all rooms, such as the lobby, living room, kitchen and bedroom. The budget item is adapted to the number of people in the household. It was updated in 2020.

  • Media use and leisure activities (household expenses)

    This budget item covers expenses for the internet, a channel package for TV, opportunities for streaming music and playing digital games etc. It also covers expenses for leisure equipment that are related to the household, such as a tent, gas burner and printer. Purchases of newspapers and a simple household insurance policy are also included in this budget item. This consumption area was updated in 2020.

  • Car costs

    This budget item covers operating expenses, including fuel, insurance and annual taxes, for driving 10,000 km and 15,000 km per year, respectively. Depreciation is not included. Estimates are based on guidelines from the Norwegian Road Federation. Road toll expenses are included. The budget assumes that public transport is used to and from the workplace. From 2020, the budget item also includes costs related to the use of electric cars.

  • 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 linen, a baby cot, pram, baby carrier, feeding bottle etc. The item also covers clothes intended for use during the first few months. NB: These expenses are calculated per month for 6 months prior to the expected birth. In addition to the equipment necessary from birth, supplementary equipment is needed during the first year of a child’s life (car seat, high chair, cutlery etc.). These expenses are calculated per month for the entire first year of the child’s life.

  • Kindergarten and day care facilities for schoolchildren

    Payment is only required for the months the child is in kindergarten or day care facilities for schoolchildren. With one month’s annual leave, annual expenses for kindergarten and day care facilities for schoolchildren will be 11 times the monthly fee. In this publication, the maximum price for kindergarten, paid by households with a gross household income of more than NOK 574 750, is used. For households with a gross household income below this amount, the payment is maximum six per cent of their income. The calculator on SIFO’s website takes this into account.

    The municipalities can offer a lower maximum price and larger discounts. For day care facilities for schoolchildren, we use Oslo municipality’s rates for food costs. This is just an example and the rate may vary between different municipalities.

    NB: Note that food costs come in addition to the ordinary kindergarten cost. In Oslo municipality, this amount is NOK 180 per month in 2020. However, there are large variations in food costs between different kindergartens and across the country. Furthermore, note that the calculations for food and beverages assume that all food is prepared at home. This means that the food costs are wholly, or at least partly, covered by the amount for food and beverages included in individual-specific expenses.

    About food costs in kindergartens: https://www.udir.no/tall-og-forskning/statistikk/statistikk-barnehage/om-barnehagen/

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