Income a family of four need to live comfortably by state in the U.S.

[Zee09]

People making bad decisions, then they try to escape the state they ruined, and they put the same policies in place there….

Almost like a cycle of locusts.

Add Florida to the list.

 

[Dave Hess]

Yep. The fine print you can hardly read is 50% to necessities, 30% to discretionary and 20% to savings. National savings rate is between 1 and 3% depends on who's number you believe, and many people are resorting to putting even necessities on credit.

Some folks using Buy Now Pay Later apps to buy groceries.

The guy on TV says everything is sunshine and roses.

 

[4WD]

The definition is at the bottom of the chart.

Young/single? Happy with two bean bags plus a cinder block/lumber entertainment center. Then she came along ...

 

[Astro14]

Young/single? Happy with two bean bags plus a cinder block/lumber entertainment center. Then she came along ...

Oooh, cinder blocks and lumber? That’s a stylish upgrade from my milk crate stereo cabinet…

 

[goingplacesanddoingstuff]

People making bad decisions, then they try to escape the state they ruined, and they put the same policies in place there….

Almost like a cycle of locusts.

It’s overrun by Californians escaping a high cost of living but who don’t understand what actually causes high costs of living.

To be fair the Texans are pretty awful too. They are the most aggressive, inconsiderate drivers… until they encounter a hill. They blow stop signs, go 95 mph in town, and then freak out and go 20 mph in the mountains.

…then crash right next to the Californians the minute it snows.

 

[JHZR2]

Define comfortably

What’s the average home sales price these days? Like 450k?

So….

A car is what? $35k? So…

So for Joe Q Public, living “average”, they’re in for $4k/mo in home and car before anything else. Imagine if they live in CA or some other obscenely expensive place.

Then what? Just making “back of the envelope”:
$1500 car insurance
$1500 homeowners insurance
$1500 life insurance
$200/wk groceries =~$10k
$200/mo heat and electric =~$10k
$2500 annual vacation
$5000 misc

So I’m going to call that $40k, or to make things easy, let’s call it $50k/yr in living and cars, $50k in expenses.

So you need $100k of usable cash.

I’m going to guess 25% tax rate, so $133k, and then you want to save 15% of salary. So that’s $156k to do next to nothing. No clothes, no tools, no maintenance, no cable tv, or internet, or cellphones, or gas for your car, or eating out, or anything. How many folks do none of those things??!?

So to live a pretty plain, normal life, my simple calculations being done on my type-o-later with a 2yo sitting on my lap, indicates that one needs probably another $12k at least for some other expenses, and quite possibly double that. For nothing excessive or out of the realm of normal.

Oh and I forgot health insurance. That’s what for a family? Depending upon work benefits, somewhere between $500-1000/mo call it?

And if they have a second car payment, add another $600+.

And on and on.

It doesn’t take much to at least get to the near-$200k in this day and age, just thinking logically for a bit.

For a boomer that bought a home 30 years ago, and refinanced at near zero rates, the opinion expressed by someone in that position is nearly irrelevant. Because it doesn’t reflect the situation that everything is in these days.

I feel for people that are just starting out these days. In addition to crushing national and local debt on them, the real estate costs that have run up put the next generation in a horrible position of servitude to the older generations. It’s not for BITOG linking, but the TED talk on “How the US is destroying young people’s future” is worth a listen for another viewpoint.

 

[Thermo1223]

What’s the average home sales price these days? Like 450k?

So….
View attachment 218976

A car is what? $35k? So…
View attachment 218977

So for Joe Q Public, living “average”, they’re in for $4k/mo in home and car before anything else. Imagine if they live in CA or some other obscenely expensive place.

Then what? Just making “back of the envelope”:
$1500 car insurance
$1500 homeowners insurance
$1500 life insurance
$200/wk groceries =~$10k
$200/mo heat and electric =~$10k
$2500 annual vacation
$5000 misc

So I’m going to call that $40k, or to make things easy, let’s call it $50k/yr in living and cars, $50k in expenses.

So you need $100k of usable cash.

I’m going to guess 25% tax rate, so $133k, and then you want to save 15% of salary. So that’s $156k to do next to nothing. No clothes, no tools, no maintenance, no cable tv, or internet, or cellphones, or gas for your car, or eating out, or anything. How many folks do none of those things??!?

Some just live a pretty plain, normal life, my type-o-later being done with a 2yo sitting on my lap, indicates that one needs probably another $12k at least for some other expenses, and quite possibly double that. For nothing excessive or out of the realm of normal.

Oh and I forgot health insurance. That’s what for a family? Depending upon work benefits, somewhere between $500-1000/mo call it?

And if they have a second car payment, add another $600+.

And on and on.

It doesn’t take much to at least get to the near-$200k in this day and age, just thinking logically for a bit.

For a boomer that bought a home 30 years ago, and refinanced at near zero rates, the opinion expressed by someone in that position is nearly irrelevant. Because it doesn’t reflect the situation that everything is in these days.

I feel for people that are just starting out these days. In addition to crushing notional and local debt on them, the real estate costs that have run up put the next generation in a horrible position of servitude to the older generations.

You need to stop spying on me.

 

[GON]

If that were a reliable chart 90% of the people in my state would be bankrupt. There are lots of people that couldn't come up with $20,000 if they had to.

Last I checked many people of South Dakota are cash poor and asset rich...

 

[Zee09]

After seeing this I'm all for rescinding child labor laws...

Interestingly the poorest amongst us are having the most children...

 

[SC Maintenance]

What’s the average home sales price these days? Like 450k?

So….
View attachment 218976

A car is what? $35k? So…
View attachment 218977

So for Joe Q Public, living “average”, they’re in for $4k/mo in home and car before anything else. Imagine if they live in CA or some other obscenely expensive place.

Then what? Just making “back of the envelope”:
$1500 car insurance
$1500 homeowners insurance
$1500 life insurance
$200/wk groceries =~$10k
$200/mo heat and electric =~$10k
$2500 annual vacation
$5000 misc

So I’m going to call that $40k, or to make things easy, let’s call it $50k/yr in living and cars, $50k in expenses.

So you need $100k of usable cash.

I’m going to guess 25% tax rate, so $133k, and then you want to save 15% of salary. So that’s $156k to do next to nothing. No clothes, no tools, no maintenance, no cable tv, or internet, or cellphones, or gas for your car, or eating out, or anything. How many folks do none of those things??!?

So to live a pretty plain, normal life, my simple calculations being done on my type-o-later with a 2yo sitting on my lap, indicates that one needs probably another $12k at least for some other expenses, and quite possibly double that. For nothing excessive or out of the realm of normal.

Oh and I forgot health insurance. That’s what for a family? Depending upon work benefits, somewhere between $500-1000/mo call it?

And if they have a second car payment, add another $600+.

And on and on.

It doesn’t take much to at least get to the near-$200k in this day and age, just thinking logically for a bit.

For a boomer that bought a home 30 years ago, and refinanced at near zero rates, the opinion expressed by someone in that position is nearly irrelevant. Because it doesn’t reflect the situation that everything is in these days.

I feel for people that are just starting out these days. In addition to crushing notional and local debt on them, the real estate costs that have run up put the next generation in a horrible position of servitude to the older generations. It’s not for BITOG linking, but the TED talk on “How the US is destroying young people’s future” is worth a listen for another viewpoint.

Exceptionally well summarized.

 

[GON]

Family of 6 here, living in the PR of NY. I don't gross anywhere near that, yet we're doing OK and able to save.

The chart is on MACRO basis. I suspect the greater NYC, with its massive population eliminates the weight of what is reality in Buffalo and upstate NY.

 

[JHZR2]

The chart is on MACRO basis. I suspect the greater NYC, with its massive population eliminates the weight of what is reality in Buffalo and upstate NY.

At the same time, a lot of other stuff costs the same. A vehicle, for example, selling in Buffalo, isn’t 50% the price of it in NYC just because of location and real estate.

Nor is a pair of pants, or a cellphone, or a pound of flour, or whatever other metric you choose.

Taxes may be different, energy consumption, some other stuff. But a lot of things that drive folks’ monthly budgets are effectively national prices.

 

[97prizm]

Colorado used to be so great. Now it’s just cold California.

You aren't joking. Been here since 1991 and the Californians have done a number on the state.

 

[supton]

Hmm. I took a quick look at my budget. I do save about 20%, but that means I live on the other 80%. Yes there’s some frivolity in there, but not a lot. If I take the out my 20%, so as to find what I “need” today, then since that is supposed to be only 50% of my income, double that up, I get out past 200k. Now that would also bump me a tax bracket, so add on another 10%. Of course my 20% savings rate is unchanged—but now I need even more money.

Finally, most consider having a car payment, if not two, a “necessity” and so I too can hit a number that says I “need” close to $300k in order to be “comfortable” in the Northeast.

First glance, that chart seems bogus, but using its definition of “comfortable”, I guess it’s correct. I’m not sure it’s useful past that, maybe someone could look at that, redefine what they think is comfortable, and go from there.

 

[Glenda W.]

IMO the chart is pretty accurate.

 

[Astro14]

What’s the average home sales price these days? Like 450k?

So….
View attachment 218976

A car is what? $35k? So…
View attachment 218977

So for Joe Q Public, living “average”, they’re in for $4k/mo in home and car before anything else. Imagine if they live in CA or some other obscenely expensive place.

Then what? Just making “back of the envelope”:
$1500 car insurance
$1500 homeowners insurance
$1500 life insurance
$200/wk groceries =~$10k
$200/mo heat and electric =~$10k
$2500 annual vacation
$5000 misc

So I’m going to call that $40k, or to make things easy, let’s call it $50k/yr in living and cars, $50k in expenses.

So you need $100k of usable cash.

I’m going to guess 25% tax rate, so $133k, and then you want to save 15% of salary. So that’s $156k to do next to nothing. No clothes, no tools, no maintenance, no cable tv, or internet, or cellphones, or gas for your car, or eating out, or anything. How many folks do none of those things??!?

So to live a pretty plain, normal life, my simple calculations being done on my type-o-later with a 2yo sitting on my lap, indicates that one needs probably another $12k at least for some other expenses, and quite possibly double that. For nothing excessive or out of the realm of normal.

Oh and I forgot health insurance. That’s what for a family? Depending upon work benefits, somewhere between $500-1000/mo call it?

And if they have a second car payment, add another $600+.

And on and on.

It doesn’t take much to at least get to the near-$200k in this day and age, just thinking logically for a bit.

For a boomer that bought a home 30 years ago, and refinanced at near zero rates, the opinion expressed by someone in that position is nearly irrelevant. Because it doesn’t reflect the situation that everything is in these days.

I feel for people that are just starting out these days. In addition to crushing national and local debt on them, the real estate costs that have run up put the next generation in a horrible position of servitude to the older generations. It’s not for BITOG linking, but the TED talk on “How the US is destroying young people’s future” is worth a listen for another viewpoint.

While I feel for people starting out (my six kids are in that category), and the real estate costs are daunting, you make some assumptions about previous generations that are utterly untrue.

I didn’t buy my first home for a song, and finance it for near zero percent. I’m not actually a Boomer, but it was 32 years ago, so I’m squarely in your sights with that misrepresentation.

My first house, bought in 1992, was financed at 9%. That’s right, 9% interest. The purchase price was nearly three times our annual income as a young Navy Officer married to a public school teacher, along with that interest rate.

So, it was worse than kids buying it today. A lot worse.

I didn’t have two car payments. I didn’t even have one, because to afford that house took about 35% of our income, and there was nothing left over in the budget for cars. We were strapped. House poor with that 9% mortgage.

I drove a 22 year old Ford wagon, with AM radio, crank windows, and no power steering. The wife got my 1985 Trans-Am, that had been paid off. It’s the only way I could make ends meet. There was no new car budget. No room for one car payment, much less two.

Your hypothetical person today enjoys a level of luxury and safety in today’s cars that was unimaginable for me 30 years ago, with ABS, air conditioning, entertainment and navigation, and everything that comes standard today.

Cable TV, Internet, computers, and cellphones didn’t exist.

So, again, your hypothetical person enjoys a level of luxury, and connectivity, that I didn’t have back then.

We were lucky to have a toaster oven on our budget. No microwave. No Keurig. No HDTV. None of the consumer goods that everyone expects today.

We live in an age of incredibly high expectations and standards of living.

Folks living below today’s poverty line have stuff that I couldn’t afford 30 years ago, or things that hadn’t been invented yet, that are now part of everyone’s expectation.

 

[Dave Hess]

I’ve said this before on here….

We gave each of our 3 grown children $70K for the down payment for their house (2014, 2016, 2017) in a nice area with low crime and good schools. Military and tuition reimbursement at work paid for their educations.

All 3 are happy to have a house by the age of 27 and driving a $10K Honda. No spending on unnecessary junk and their mortgage is similar to a 1 bedroom apartment in clean safe area. They also max their yearly retirement contributions.

Most of their colleagues their age are struggling to buy a house.

I agree the Boomers had it easier when a house was 4X their pay….. not 10-12X pay in todays real world.

 

[CKN]

You can still have kids and be very successful. Trust me......

 

[BMWTurboDzl]

Interesting chart. Of course it is in a MACRO basis. I wonder how state income and state/ local sales tax figure into the equationView attachment 218958.

For those who are wondering their definition of comfortable is written at the lower right corner.

 

[supton]

I can’t find a “good” chart or resource for median house price to median income, butI can find is that housing has been increasing far faster than income.

Now that is tempered by what used to be “normal” interest rates. I’m not sure how to compare, on a payment basis, yesterday’s and today’s data. A low principle amount at a high APR might represent a smaller portion of one’s budget than a high principle amount at a low APR.