Families making $300,000-a-year are living paycheck to paycheck in big coastal cities, expert says – Daily Mail

Families making $300,000-a-year are living paycheck to paycheck in big coastal cities, expert says – Daily Mail

A family of four would need a combined income of $300,000 a year to live a ‘comfortably’ middle class life in big coastal cities like New York, San Francisco and Miami – which would include saving for retirement and owning a home. 

The six-figure salary is a far cry from the median US income of $67,521 a year, but it’s what two parents would need to afford a decent lifestyle in cities where home prices are far above average, according to the blog Financial Samurai. 

Average home prices are $1.5 million in San Francisco and $733,000 in New York City, according to Zillow – far above the current US median home price of $404,700.

‘I use $300,000 in this post because I also believe it is close to the ideal income for up to a family of four to experience maximum happiness,’ wrote finance expert Sam Dogen, who surveyed the costs of dozens of his readers living in expensive cities.

Dogen notes that goods and services have become drastically more expensive, with the consumer price index, which measures the average price of a basket of goods in urban areas, increasing by 68 percent since 1995. 

A three-person family needs a combined income of $300,000 a year to live a ‘comfortably’ middle class life in cities like San Francisco, where average home prices are $1.5 million

The budget also applies to New York (above); Seattle; Washington, DC; Denver and Vancouver

Dogen created two mock budgets, one for a household with one child and another for a home with two children.

The highest expense, perhaps unsurprisingly, is the mortgage, coming in at $46,900 based on $3,900 a month for a $900,000 mortgage for a ‘standard 1,750 sq ft, three bedroom, two bathroom home on a 2,500 sq ft lot.’

‘A middle class lifestyle should include owning your own median-priced home,’ Dogen wrote.

The second-highest cost is babysitting and childcare at $29,400, taking into account pre-school – 18,000 to $20,000 a year – and the average babysitting rate of $20 an hour in San Francisco.

Food, property taxes, and 529 education savings plans round out the other most expensive costs.

The budget above was compiled with a family of three in mind by Financial Samurai blogger Sam Dogen, a former banker at Credit Suisse and Goldman Sachs 

The budget accounts for a $46,900-a-year payment for a $900,000 mortgage on a standard 1,750 sq ft three bedroom, two bathroom home

Food – grocery shopping and weekly date nights – cost about $20K a year in the budget

Annual car payments totaling $4,700 are based on a single vehicle to fit the family. 

The budget does not include the costs of student loans, but it does include $4,200 in charity payments.  

At $300,000, a family isn’t saving much beyond 401k retirement plans and their 529 education savings plan, Dogen told the San Francisco Chronicle.

‘We’re in this perpetual grind in San Francisco, and it’s a city for …….

Source: https://www.dailymail.co.uk/news/article-10289025/Families-making-300-000-year-living-paycheck-paycheck-big-coastal-cities-expert-says.html

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