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Having lived in and knowing very well two of the most expensive cities on that list (Honolulu and NYC), I knew this was BS before even popping open the article.
Maybe I read past it, but it doesn't even seem that the article fully explained what went into the calculations (e.g. average vs. median rent, etc., when discussing expenses). The average rent of a one bedroom in NYC is significantly higher than most NYC residents pay for a 1 bedroom apartment; the average is inflated by those super expensive luxury places, that go for significantly more than the average price. And this takes on even greater meaning when you start talking about the outer boroughs.
"For this study, we used SmartAsset’s paycheck calculator to apply taxes to an annual salary of $100,000. This online tool calculates your take-home pay per paycheck for both salary and hourly jobs after taking into account federal, state and local taxes. We then adjusted the remaining amount for the local cost of living in 76 of the largest cities in the U.S. using data from the Council for Community and Economic Research. The cost of living takes into account the price of housing, groceries, utilities, transportation, and miscellaneous goods and services. Cost of living index data is for the third quarter of 2022."
"For this study, we used SmartAsset’s paycheck calculator to apply taxes to an annual salary of $100,000. This online tool calculates your take-home pay per paycheck for both salary and hourly jobs after taking into account federal, state and local taxes. We then adjusted the remaining amount for the local cost of living in 76 of the largest cities in the U.S. using data from the Council for Community and Economic Research. The cost of living takes into account the price of housing, groceries, utilities, transportation, and miscellaneous goods and services. Cost of living index data is for the third quarter of 2022."
Thanks. I'm still curious to know what this cost of living is based on. Specifically for housing, what are they measuring? Median vs. mean cost of an apartment? And where in NYC vs. elsewhere, understanding that prices can vary greatly even within cities.
Thanks. I'm still curious to know what this cost of living is based on. Specifically for housing, what are they measuring? Median vs. mean cost of an apartment? And where in NYC vs. elsewhere, understanding that prices can vary greatly even within cities.
Its in there somewhere, I don't have that kind of time right now.
However, complicated as it seems....The math is simple.
As bleak as the numbers are you can become wealthy
under the duress of everyday life.
A $50 restaurant steak every night or a 69 cent box of homemade pasta.
Where there is a will there is a way.
Frugal living is a thrifty living concept that makes you wealthy.
With great sacrifice ,decades in some cases, one can eventually join the ranks.
Approximately 1 in 11 adults are millionaires.
20% was from money inherited.
Over 55%, by used cars
41% spend less than $3,000 on vacations and some don't even bother.
84% never gamble.
The frugal do not assume mortgages twice their annual income.
They treat the stock market long term instead of on fear or impulse.
They think long term and say " no" more often than "yes ".
and finally....... they put the money they save into mutual funds,retirement accounts and real estate.
a mortgage of under 2x annual income buys near nothing today ….the average mortgage is 3x household income and high cost of living areas can be even more , especially if a family since they can’t really use a studio or one bedroom.
in manhattan a tiny studio is what 3x income gets you which does a family no good.
following the standard 28% of income rule for a mortgage that equates to about 3-1/2 x income.
nyc runs about 4 to 5x income …
this is why there is a big difference between a middle class income and middle class life style .
one of the benefits of high cost of living areas is that it does force more money and LEVERAGE in to savings with home prices higher .
don’t forget if someone owns their home for a while a home that appreciated to 700k at 3% appreciation is a lot more then a 200k home that saw 3% appreciation.
so when sold and one relocates they are usually far wealthier then locals are
Last edited by mathjak107; 03-20-2023 at 06:12 AM..
Doesn’t everyone’s job pay for health insurance?? That’s like a standard benefit of having a full time job!
Not at all. I work for a major hospital and they take payroll deductions and charge copayments at every MD visit. So if my own hospital won't give me fully covered health care, where else would many get it?
Not at all. I work for a major hospital and they take payroll deductions and charge copayments at every MD visit. So if my own hospital won't give me fully covered health care, where else would many get it?
Actually, my company doesn't either. They take $40 semi-monthly from my paycheck for health benefits, but it's a pre-tax deduction, so I get a tax benefit from it.
a mortgage of under 2x annual income buys near nothing today ….the average mortgage is 3x household income and high cost of living areas can be even more , especially if a family since they can’t really use a studio or one bedroom.
in manhattan a tiny studio is what 3x income gets you which does a family no good.
following the standard 28% of income rule for a mortgage that equates to about 3-1/2 x income.
nyc runs about 4 to 5x income …
this is why there is a big difference between a middle class income and middle class life style .
one of the benefits of high cost of living areas is that it does force more money and LEVERAGE in to savings with home prices higher .
don’t forget if someone owns their home for a while a home that appreciated to 700k at 3% appreciation is a lot more then a 200k home that saw 3% appreciation.
so when sold and one relocates they are usually far wealthier then locals are
a mortgage of under 2x annual income buys near nothing today ? What numbers do you want to use? manhattan a tiny studio is what 3x income gets you Agree.......only if one doesn't mind overspending. income rule for a mortgage....nyc runs about 4 to 5x income The numbers change depending on your down.
Using your numbers are norm and sadly I agree but..........some have worked outside the norm.
The longer you wait to start saving the longer it will take to become wealthy.
If a young mid twenties married working couple can pool away $1,500 a month
or 20 years they will bank the million dollar home in a nice middle class neighborhood
in Staten Island,Queens,Brooklyn or the Bronx.
If both were savers before marrying there is no reason why they cant reach that goal in 10-15 years.
Now if someone wants to pay a million for a broom closet in Manhattan I would call that irresponsible and foolish
but then again it's only my opinion.
Work hard, save harder, retire quicker.
Best wishes.
If you're single and can only survive off 100K AFTER taxes even in NYC, you have a ton of debt or a spending problem.
As for that SmartAsset map of those 25 cities, you're not finding well paying jobs in them, especially if you're not 100% white collar. Maybe Houston, Cincy and Indianapolis, where you need a car which is an added expense.
If you're single and can only survive off 100K AFTER taxes even in NYC, you have a ton of debt or a spending problem.
Seriously. There are families living in NYC that survive off of less than half of that.
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