$120,000 in Baltimore, family of 3 (2015, insurance, mortgage)

[Lexatus]

Hi all and thank you for the many interesting threads I've seen.

I received an offer for Baltimore. I will be moving with family (2 adults, 1 child).
The salary proposed is $120,000.
Is it a good offer in order to have a decent-high quality of life?


Looking on the web, it seems these would be the monthly expenses:
- Food, $553
- Medical, $406
- Housing, $1,200
- Transportation, $712
- Other, $192

Required monthly income after taxes: around $3,000.
With that gross salary, the monthly net salary is around $8,300.
Is it correct to assume a monthly saving of $5,300 or I'm missing something here?

Many thanks.

[cjmeck]

Your housing budget is pretty low for the area. Depending on the type of housing and where you choose to live, it could be up to twice that. That said, the overall salary is good for the area to have a decent quality of life.

[Tallybalt]

The salary is fine if not remarkable.

Trying to estimate the cost of living for you is like asking how long is a piece of string. What is your lifestyle? What kind of housing do you prefer? Where do you want your children to go to school? What are your objectives? How many cars do you want/need? What kind of cars? How much will you be driving (and the associated projected need for gas)?

[MrRational]

Originally Posted by Lexatus

I received an offer for Baltimore. I will be moving with family (2 adults, 1 child).
The salary proposed is $120,000.
Is it a good offer in order to have a decent-high quality of life?

It should be more than adequate.

Is it correct to assume...

It is never correct to assume anything.

But if inclined to extrapolate and infer... start with objective data.
Here are two reliable sources:
Lutherville CDP QuickFacts from the US Census Bureau
Cost of Living Calculator | Comparison Tool

[pwduvall]

That will qualify you for a $400k or more house in the city and $500k or more house in the counties. Basically, you can live just about anywhere you want and have plenty of spending money. I know plenty of people that dream of making 1/3 of that salary - and for them it is just a dream.

[MrRational]

Originally Posted by pwduvall

That will qualify you (in the eye of some lenders) for a $400k or $500k or more house...

Just don't listen to them if you want to have the OTHER things in your life too.
Well, unless you have a substantial down payment to bring the mortgage balance into line.

Housing costs (rent or mortgage) and to include all the other common expenses like taxes
and insurance and utility bills too... need to be kept to a minimum of your NET income.

Not Gross... NET income.
After taxes and after payroll deductions like 401K, IRA or any other garnishment.
How minimum of a percentage? Shoot for a max of 25% of that net cash.

[Lexatus]

Originally Posted by MrRational

Just don't listen to them if you want to have the OTHER things in your life too.
Well, unless you have a substantial down payment to bring the mortgage balance into line.

Housing costs (rent or mortgage) and to include all the other common expenses like taxes
and insurance and utility bills too... need to be kept to a minimum of your NET income.

Not Gross... NET income.
After taxes and after payroll deductions like 401K, IRA or any other garnishment.
How minimum of a percentage? Shoot for a max of 25% of that net cash.

MrRational,
Thank you for the two contributions.
I'm coming from overseas, so I can't compare with other cities in USA. Same thing for the net income: I'm not familiar with the american taxation system.

I used this website: payrollforamerica.com that gave me these figures:

Annual Gross Pay: $120,000.00
Federal Withholding: $26,027.25
Social Security: $7,347.00
Medicare: $1,740.00
Maryland: $5,605.0
Net Pay: $79,280.75

Calculation Based On:
Tax Year: 2015
Gross Pay: $120,000.00
Pay Frequency: Annual
Federal Filing Status: Head of Household
# of Federal Exemptions: 0
Additional Federal W/H: $0.00
State: Maryland
Filing status: Married
Exemptions: 0
Income Tax: 0
Additional State W/H: $0.0

But I'm not sure about the options above (i.e. Additional State W/H??).

This is how I came out with 80k net from 120k gross.

[Lexatus]

@cjmeck,
I think I will go for something not so far from the city center in order to avoid a second car (first one will be for my wife).

@Tallybalt, pwduvall
Thank you for the questions, that let me add more details.
No extravagant life, but trying to have some weekends out in cinema/pizzeria/restaurants as well. 1 child, primary school. One small car.

Kind regards.

[MrRational]

Originally Posted by Lexatus

I'm coming from overseas, so I can't compare with other cities in USA.

Within those comparison websites many common household expenses are listed.
These should still give you good accurate data to use.

I used this website: payrollforamerica.com that gave me these figures:
But I'm not sure about the options above (i.e. Additional State W/H??).
This is how I came out with 80k net from 120k gross.

You were close enough before to not critique how you got there.

With more detail offered I'll point out some particulars to investigate:
1) Federal Filing Status and 2) # of Federal Exemptions
3) In addition to the State ...each county has a income tax as well

A married couple with one child would be 3 exemptions and a filing status of "married"
Recalculate with these changes and your NET should bump up a good bit (I got $89k)

Depending on your legal status (visa?) other factors might apply as well
I'd suggest asking the employer to provide a document
If you're exempt from US Social Security your NET will bump up a lot (I got $98k)

Other factors to investigate:
4) Deductions for PRE-TAX retirement account contributions (if any).
5) Medical care insurance (not a part of those taxes)

I think I will go for something not so far from the city center
in order to avoid a second car (first one will be for my wife).

You don't mention WHERE you'll be working.

Depending on where you choose to live and commute to that work from it is often very hard to
make public transportation work well (especially by EU standards) and to strike the balance
between neighborhood amenities, public school quality issues vs private tuition costs.

[B.K.]

The estimate of the MD state tax seems pretty low to me.
As mentioned, each county and municipality has taxes of its own to consider.
Likewise, remember that if you buy a home in the City of Baltimore, property taxes are very high.
Insurance costs for property and vehicles are also much higher in the City than in surrounding counties, as are utility costs-gas, electricity, water, telephone, internet, etc.
Do not plan on relying on public transportation. Not much of it in the counties; in the City it is widespread, but out-moded, inadequate and unreliable.
Public schools in the County are generally very good.
Public schools in the City are generally very, very poor. Private schools are excellent, but very expensive. Consider the Catholic schools system as an alternative to high-priced City private schools. You don't have to be R.C.
Thanks to the downturn in the economy over the past several years, our combined total income is substantially (considerably substantially!) less than yours. We are also two adults; no schools issues, but one special needs adult child who takes a lot of provender and attention. Fortunately, we bought our home many years ago when housing prices were much lower than today, even if interest rates weren't. We watch our money very closely, and manage to live reasonably comfortably, but far from extravagantly. I think you should have no problem living on $120K/annum, particularly if you don't take a bath on a home purchase.
Welcome to Charm City, hon!