A family of four living in the United States, particularly in some of the country's most expensive cities, would have to earn more than $300,000 a year to live comfortably, a new analysis found.
Living "comfortably" was defined as having the income to cover a 50/30/20 budget for a family of two adults and two kids. Under this budgeting model, 50% of the income goes towards paying for necessities such as housing and utility costs, 30% covers discretionary spending, and the remaining 20% is set aside for savings, per a recent SmartAsset analysis.
The study extrapolated the income needed for a 50/3020 budget based on the cost of necessities in 99 U.S. cities.
The Study's Key Findings
On average, the study found that a family of four needs to have a combined income of $235,000 to support the household without living paycheck to paycheck. However, the income required increases to over $300,000 for a family of four living in six U.S. cities.
In San Francisco, two working adults would need a combined income of at least $339,123 to support their household and live comfortably. This goes down to $334,547 for a family of four living in San Jose; $319,738 for those in Boston; $318,573 in Arlington; $318,406 in New York City; and $316,243 in Oakland, the study found.
On the other hand, cities with the lowest salaries needed by a family of four to live comfortably include Houston, where two adults need a combined salary of $175,219. This is followed by El Paso, where households need to earn $180,461 to live comfortably; Lubbock, $181,043; Todelo, $208,416; and Laredo, $179,046.
Despite needing lower combined incomes in Houston, the numbers are still significantly higher than the median family income in the U.S., which is $92,750 as of September 2023, according to data from the Census Bureau.
Soaring housing costs can make it difficult for households to maintain a 50/30/20 budget. Households living in large cities often need to spend more than 30% of their income on housing costs, leaving little room for other necessities, per the Chamber of Commerce.
