Life on a budget

It's difficult to think of how a poor family struggles and what kinds of things middle class people take for granted that poor families have to do without until you stop and add up monthly expenses. In this situation, I'm going to imagine a family of four and what their monthly expenses might be.

Food: For myself, I spend maybe $500 a month on food between groceries and eating out. So that's $2000/month
Shelter/Bills: I live in a modest sized house in a working class neighborhood in St. Paul, there are two of us in the house; I believe the mortgage is around $700/month, and other bills are usually around $400-500/month. Property tax is added on to that, but I'm not sure how much. Let's say bills and shelter are a total of $1500/month for a family of four.
Daycare: I visited http://www.mnchildcare.org/families/pay.php to see how much day care costs... Uh, like $1000/month for a toddler!? Jesus.
Transportation: I usually have to fill up once a week for my usual job, and that's about $40/week, so $160/month. Let's assume we have two cars (since both father and mother drive) and that they have older, less fuel-efficient cars (I have an '05 Corolla that gets close to 35mpg), So let's go with $400/month.

Uh, that's like 58,800/year.

So maybe my estimations are a little (or a lot) off...I mean, I haven't even factored things like tuition or recreational activities or travel into this little off-the-cuff budget of mine. Things that might reduce this:
1. Spending less on food. Maybe I don't have to buy quite so much food for children, but more likely I would just have to buy less food and less expensive food. So, lots of ramen, lots of mcdonald's, lots of mac and cheese, carby staples rather than proteins. A lot of my food budget goes to buying proteins, which are expensive.
2. Live somewhere cheaper. I doubt a family with this low level of income could afford a mortgage and tax payments on a house, even a relatively modest one with a low monthly mortgage like this one. If we were able to find a really cheap apartment or duplex, or live with our parents or something, that would help a lot.
3. If I could either rope my parents or convince some friends in the neighborhood who are stay at home moms to care for my 3-year-old during the day instead of sending them to day care, that would eliminate that prohibitively expensive cost. I'm just baffled that day care is like $12,000 a year. Could that really be true?
4. Not much I can do about the transportation costs except maybe looking into taking public transit...and even that's not exactly free.

And again, we haven't even touched on recreational activities or clothes or pets or car and house repairs and upkeep. All of that stuff would have to be secondary to everything I listed above. Solutions to these challenges: shop at thrift stores for clothes, get hand-me-down clothes and toys from shelters or extended family, don't have pets, keep using old/damaged/broken appliances/cars/etc without repairing them.

Maybe considering what a four-person family needs to live at the standard I do as an individual doesn't just come down to simply multiplication, but still. I'm way overbudget if this family is only making $22000.

The effect these limitations would have on the children would be profound. They wouldn't grow as strong physically or mentally because of their diet, they might not be treated to the same level of health care, their busy working parents wouldn't have time to spend with them to help develop their mental and emotional capabilities so they probably wouldn't do as well in school or socially, they wouldn't have access to learning opportunities outside of their school and daily life because of their inability to travel or visit museums and so on, and they wouldn't learn how to access higher levels of society. More importantly though, I think growing up in poverty like that would instill a sense of learned helplessness and despondence that would permeate their entire outlook on life. Their expectations for themselves would be lower, their outlook on what the world has to offer them would be limited, and their view of how social institutions (like school) serve them would be one of pessimism.