HOW MUCH DO YOU NEED TO EARN TO LIVE IN A MAJOR U.S. CITY?

Living in a major metropolitan area doesn’t come cheap. To survive comfortably you’ll need to earn at least six figures, according to a new study.

If you’re single, you’ll need to earn at least $96,500 a year before taxes, and two parents supporting two children will need at least $235,000, Knewz.com has learned.

The above salaries are required to cover housing, transportation, entertainment, groceries, and entertainment, according to the personal finance website SmartAsset. That also includes putting money into savings or investments and paying down any debt.

SmartAsset came up with the figures after using the MIT Living Wage Calculator. They then applied that data to the budget method known as the 50/30/20 rule — 50% to cover basic needs, 30% to “wants,” and 20% to debt, savings or investing. They used their research in calculating the money required for the top 99 major cities in the United States.

However, SmartAsset revealed that the income required to live comfortably in cities like New York or Boston are even higher.

So, it might just be time to ask your boss for a raise if you live in a major metro area, because according to the Bureau of Labor Statistics, most Americans don’t earn anywhere near these figures, CBS MoneyWatch reported.

According to the Bureau, the typical American earns between $62,000 and $73,000 per year before tax, while one estimate found that the median U.S. household income is $77,397. Only 18% of individuals make more than $100,000 a year, according to 2023 data and 34% of households earn more than $100,000.

Here are the most expensive cities to live in according to SmartAsset’s research:

・New York City ($138,570 for an individual; $318,406 for a family of four)

・San Jose, California ($136,739 for an individual; $334,547 for a family of four)

・Irvine and Santa Ana, California ($126,797 for an individual; $291,450 for a family of four)

・Boston ($124,966 for an individual; $319,738 for a family of four)

Cyrus Purnell, a personal finance expert at Financial Finesse, told CBS the numbers for these cities are so high because most of the money goes towards housing costs.

“I've seen cases where couples earning $250,000 a year with a family of four are struggling to find a home that's affordable for them to do all the other things they want to,” Purnell said. “If you toss in daycare or private school, that can quickly get into a situation where $300,000 is more comfortable."

Purnell added that while there are millions of people living in large cities who aren’t making these kinds of salaries, he said they’re probably working more than one job to cover necessities. He pointed out the SmartAsset study is putting out numbers that are required to live comfortably – not to simply make ends meet.

He also noted that this study is likely to have people rethink what it means to be wealthy.

"In our society, for many years, we've tied wealth to the concept of six figures," Purnell said. "For a long time, you thought, if you hit $100,000, that's probably good. But a lot of it now comes down to where you live and the circumstances of your lifestyle.”

2024-03-08T01:16:36Z dg43tfdfdgfd