According to a recent study from SmartAsset, on average, an individual would need to make $96,500 to live comfortably. The consumer-focused financial guru company used MIT’s Living Wage Calculator to gather data on the basic cost of living in a recently published study.
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This study surveyed individuals with no children as well as households comprised of two adults and two children. As opposed to single individuals, families of four would have to make an average combined salary of $235,000 to live in sustained comfort.
Ranked by the Lowest Annual Salary Needed to Live Comfortably
As part of their findings, SmartAsset ranked cities based on the lowest annual salary individuals and families need in order to live comfortably. Houston, Texas ranked #1 on the chart. Single adults would need to make $75,088 annually, or $36.10 hourly in order to live comfortably. Families of two adults and two children would have to make $175,219 combined between the two working adults.
(Source: SmartAsset)
Ranked next as the #2 city requiring the lowest salary is El Paso, Texas. Single adults in El Paso would need to make $75,254 annually, or $36.18 an hour. Families of four would have to make $180,461 annually.
Number 3 on the list is Lubbock, Texas. Single adults would need to make $75,379 annually, or $36.24 hourly in order to live comfortably. Families of four would have to make a combined salary of $181,043
Ranked by the Highest Annual Salary Needed to Live Comfortably
Smart Asset also ranked cities based on the highest annual salary individuals would have to earn in order to live in sustained comfort.
(Source: SmartAsset)
New York City, New York ranked #1 as the least affordable city to live comfortably in with the annual salary of a single adult having to be $138,570. The hourly wage would have to be $66.62, and a four-household family would need to bring in $308,416 jointly.
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Ranked as #2 of the highest needed salary is San Jose, California. Single adults would need to make an annual salary of $136,739, or $65.74 hourly. Families consisting of two adults and two children would have to bring home a combined salary of $334,547.
Tied for the #3 spot are Santa Ana and Irvine, California. Single adults in those two California cities would have to make $126,797 annually, or $60.96 hourly. Four-family households would have to annually bring in $291,450 jointly.
What Does It Mean To Live Sustainably Comfortable?
If you’re wondering what living “sustainably comfortable” means, look no further. Living in sustained comfort means being able to financially support your needs and wants, all while paying off debt, saving, and investing for your future.
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To live in sustained comfort means not having to live paycheck to paycheck.
Living off of $96,500
One way to live comfortably on a $96,500 salary would be to create a budget. There are many different budgeting strategies, but the one SmartAsset used to calculate the salary-to-comfortability ratio is the 50/20/30 rule.
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Based on this rule, your budget is broken down into three parts : 50% of your budget should be spent on your needs, 30% should be spent on your wants, and 30% should be set aside for debt, savings and investing.
Assessing Your Needs
Oxford Languages defines a need as something that is required because it is essential or very important. Cutting your paycheck in half and allocating those funds exclusively to your needs is one step to living comfortably off of a $96,500 salary as a single adult. Housing, utilities, transportation, and health care are all classified as essential.
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Assessing the impact something has on your life can help you determine if it is a need or want. If you can get by without that morning latte or that streaming subscription, chances are they might be classified as wants. Assessing your needs takes time and thought- only you can determine this for yourself so looking at a one-size-fits-all model wouldn’t be advised.
Dedicating 30% Of Your Budget To Your Non-Essentials
Oxford Languages define a want as “a desire for something.” Wants are the non-essentials that bring peace to your life. Fancy clothes, fine dining, gym memberships, and subscription services all count as being non-essential.
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To calculate and fit your needs into your budget, simply multiply your monthly take-home pay by 0.3.
Taking Debt, Savings and Investments into Account
According to the 50/30/20 budget rule, 20% of your salary should be put aside for savings, investments, and debt. To find this amount, multiply your take-home pay by 0.2.
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In this category, you’d include emergency funds, retirement accounts, student loans, and other debt.
The Average U.S Salary
What is the average salary in the U.S?
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While there are numerous factors to take into consideration such as occupation, industry, education level, location, and more, a study conducted by Statistica found that in 2021, the average annual wages in the U.S was $74,738.
Big Cities and the Housing Crisis
There is no doubt that there is a housing affordability crisis happening throughout the U.S. For many, it’s becoming increasingly difficult to find affordable housing. The good news is that average 30-year mortgage rates have seen a decline in recent weeks, although economists believe that the housing crisis will not be an easy fix and mortgage rates may continue to climb.
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In states like New York and California where the cost of living is much higher than other states, it is difficult to maintain a 50/30/30 budget. In these costly states, homebuyers and renters are allocating more than 50% of their salaries to housing.
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