fictional scenario -- how much to live comfortably in your area? (appointed, real estate)

[momof2dfw]

Oops, left this one out.

Saving or investing 10% of income (YES!!!! Second to come out of the check. Like I am counting on social security, ROTFLMAO). IRA's. stock, mutual funds, etc.

[jdhall1]

Oops, I realized my eating out # was way way too high. With that adjusted and car amount adjusted, you need $250,000 a year to live.

[pkoons]

So here's the tally so far:

West FL - $150K
Annapolis/DC suburbs - $275K
Connecticut/NY suburbs - $250K
SoCal - $300K
Immediate LA area - $500K - $2M

A few other impressions that I got were that SunnyAZ (Scottsdale AZ) seemed to agree with my numbers and that Dallas/Ft. Worth would be possible to live like this on maybe $100-125K.

Regarding multiple comments that "Nordstrom's isn't upscale," I know... I was just trying to give a well known store that everyone could use for a reference point - i.e. something that is pretty different from a WalMart. I mean, Nordstrom's does sell $200 dress shirts and $1,000 dresses... Georgetown/Tysons/Chevy Chase malls have Gucci, Fendi, Prada, Saks, Barney's etc. which do extremely well here in DC. Food-wise, I rarely shop at Whole Foods except for produce and cheeses - I much prefer the local butcher & Safeway is fine for prepackaged foods. But again it's a comparison that lots of people are familiar with.

This is very daunting to people who are just now coming out of college, getting married, having kids, etc. Buying a "first home" and living well in DC, CA, or NY is tough! (As if we didn't already know that.) But, to put it into perspective, it costs only slightly less to live this well in Laurel, MD, a DC suburb where I grew up. Crime is relatively high, there is no good shopping, and there are a lot of run-down apartments. The supermarket chain is "Bottom Dollar Food" and there are lots of bars/adult bookstores/pawn shops. Yet, the cheapest new construction single family homes are in the low $600K range and the average two-income family is $100K+. Families making $300K/year are still living there!!! Whereas, a similar scenario in a very nice suburb of, let's say Charlotte or Kansas City would be much less expensive and you'd be in a nicer area with all the perks of a big city.

I was really hoping to hear from people in less expensive areas (i.e. the Deep South, Midwest, Wisconsin/Minnesota, etc.) to get a true gauge of cost of living everywhere.

For the record the most recent appraisal of the average home in the city I live in (Crownsville, MD) is $660K. There are no apartments or townhomes and a building moratorium will likely keep it this way. We're right on the Severn River 10 minutes from Annapolis. Some of my neighbors' homes literally 3 blocks away are well over 10,000 sq. feet and yachts/Ferraris etc are commonplace. There are also a lot of small, old bungalow homes, people who shop at WalMart and drive old Ford trucks, enjoy racing cars and have BBQs in the street. It's a wonderful mix

[momof2dfw]

I think you are right about the location being the largest factor. I guess that is why I so love my home state and city (Dallas, Texas). While it does get hot and humid I can tolerate it knowing that at least I can afford to turn on the a/c. The opportunities that are here abound as just today there is an article in the Dallas Morning News (dallasnews com) that professional and business service jobs is on the increase. Just last week one friend told me that his employer can not hire enough people to keep up w/ demand that they have had to outsource. That is why I am glad my parents lived here and that I can live here to give my own kids the opportunity to get a good education, go to college, etc. That this can be achieved on one income. There was an article on that in Sundays paper about a young couple that is going to go to one income when their first baby arrives and how they are able to achieve that goal. It all boils down to being wise with how you spend that money too. There are foolish people here too. They throw money (er, credit cards) after material things believing it will buy happiness while they both continue to work full time and struggle to pay the bills and make ends meet and can not save for their kids college or their own retirement.

[marysally]

Assume a dual income family with 2 school-aged children
* 4 bedroom, 2.5 bath, relatively new 3200 sq. foot house on 1/2 acre in desirable area with 10% down payment
* 2 very nice but not extravagant cars - assume a BMW 3 series for hubby and a Lexus SUV for the wife
* Private school for both children and/or college funding plan
* 2 vacations a year - 1 to visit family and 1 to a tropical island/nice resort
* Decent home theater/stereo/game room
* Football season tickets, theater season passes, or equivalent luxury item
* Country club and gym memberships for husband & wife
* Cell phone for all 4 family members
* Dinner out 3 nights a week - 2 family restaurants and 1 upscale
* Saving or investing 10% of income
* Upscale shopping tendencies (Whole Foods, Nordstrom's, as opposed to big box retailers)
* Charitable or religious giving based on personal preference


Actually the house you describe is for sale right now down the street from me except that it also has a large swimming pool in back yard. Just went on the market last week for $299,900.
In general I think that the major difference in the cost of living in different places is mainly because of the cost of housing. A BMW and Lexus will cost essentially the same wherever you live. Season tickets to Univ of Tn are probably similar in cost to Notre Dame season tickets. You might have more upscale shopping opportunities in some areas, but in general the big difference making items are housing, taxes, and utilities. I'm not sure what payments for a 90% loan on ~$300K would be -- maybe $3000. Somebody else can figure that one out for me. Property taxes here would be less than $2000/year and utilities would probably average less than $200/month (thank you TVA).
Oh, by the way I live in Madison AL (suburb of Huntsville AL)!!

[marysally]

I just went to a mortgage calculator and found out that I was way off on the mortgage payment for a 90% 30 year loan on $300K. It comes to ~$1700 per month. If taxes and insurance are put in escrow the total monthly payment might be a little over $2000.

[sunrico90]

Originally Posted by pkoons

So here's the tally so far:

West FL - $150K
Annapolis/DC suburbs - $275K
Connecticut/NY suburbs - $250K
SoCal - $300K
Immediate LA area - $500K - $2M

This is a very interesting thread, based on the replies the small towns do offer an advantage in cost of living and in some situations you can get more for your money. What I mean by “more for your money”:

Less crowded areas
Slower pace of life
Less traffic
Cheaper insurance (we know about hurricanes)
Less crime

It also shows that greater wages means greater expenses if you want to live to the community standards and dollar for dollar with the “Jones”.

[pkoons]

Washingtonian magazine just ran these calculations, almost EXACTLY...even the same two cars. I got a kick out of some of the other things they added in though (anniversary gifts and a $20K annual clothing budget) but overall it was pretty similar to my scenario.

The total annual 2-income salary that would be required to live like this (plus a few extras)???

$678,000.

[cousinsal]

Well, since the median income in the U.S. (households) is only $48,000 I guess you'd better worry about where to live!

Here in Massachusetts, you'd need a HUGE amount of money for all that you mentioned. And, I don't know anyone like that. Most people I know are struggling every day, deciding whether to save for retirement or send the kids to college, or whether to buy a new car or pay their medical bills.

That scenario is unrealistic for most folks, except the ones who own all the wealth at the top of the heap. It's pretty unrealistic to even talk about it when the economy is bad except for the well-off. I'd like to see something a little less of a "luxury" lifestyle, which is what you're talking about, believe me.

For this in Mass., I'd say you'd need at least $500,000/year, at least in the Boston area and suburbs. Let's see - if the median is $48,000 - that's "only" $452,000 above it.

[tenken627]

Originally Posted by cousinsal

Well, since the median income in the U.S. (households) is only $48,000 I guess you'd better worry about where to live!

Here in Massachusetts, you'd need a HUGE amount of money for all that you mentioned. And, I don't know anyone like that. Most people I know are struggling every day, deciding whether to save for retirement or send the kids to college, or whether to buy a new car or pay their medical bills.

That scenario is unrealistic for most folks, except the ones who own all the wealth at the top of the heap. It's pretty unrealistic to even talk about it when the economy is bad except for the well-off. I'd like to see something a little less of a "luxury" lifestyle, which is what you're talking about, believe me.

For this in Mass., I'd say you'd need at least $500,000/year, at least in the Boston area and suburbs. Let's see - if the median is $48,000 - that's "only" $452,000 above it.

Actually it's not as unrealistic as it may seem. I am not sure about Anne Arundel County where the OP lives, but in the Virginia part of the Washington D.C. suburbs, Fairfax County ($100,318) and Loudon County ($99,371) more than double the U.S. National Household Median Income ($48,201). I am sure Anne Arundel, Montgomery, and other counties in the Maryland part of the suburbs are also high.

Loudoun Ranks No. 2 in Household Income | LoudounExtra.com | The Washington Post

There are also many affluent areas in Greater Boston as well.

This shows that the difference between the "haves" and "have nots" in this country is growing more and more apart.