For those that keep asking what the definition of comfortable is, it's a 50/30/20 budget where 50% is spent on necessities, 30% is discretionary and 20% is saved.
this post was submitted on 12 May 2024
53 points (86.3% liked)
Housing Bubble 2: Return of the Ugly
326 readers
226 users here now
A community for discussing and documenting the second great housing bubble.
founded 6 months ago
MODERATORS
What are they defining as necessities?
a 8000sq ft home and two luxury cars, and sending your kids to private school.
vast majority of people seem to think unless you're in the top 5-10% of wealth, you're 'struggling'. I make 50% of the income for a family of four, as a single person. I am not struggling, but popular consensus among my peers is that I am 'poor'. Since I only have a 900sqft condo, a a 30K car, two rescue pets, and vacation budget is only four figures. For me to be 'comfortable' I should be living in a space twice the size of my current one, that is luxury/new, driving a 50-60K car, and have pedigree designer animals that cost me five figures.
This especially apparent on the dating market where the consensus is that a single male should be making 250K at a minimum to be considered husband materia, that's 95th percentile.
I have to take your comment with a grain of salt since you're not defining what 50% equates to or where you live currently.
My wife and I (+2 children) are currently in Europe and we're looking to relocate back to the US (were American).
We calculated our combined income would total around 160k before taxes and after doing a bare minimum budget (basic 1000sq ft apt for rent in second ring suburb in Minnesota; one shared used car) we decided it just wasn't feasible. Between daycare and health premiums (which would total around 2,200/mo) there was no way. Could we afford it? Sure, but we would be two paychecks away from homelessness.
Meanwhile, median household income by state doesn’t break $100k anywhere in the US:
https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_income
IDK man. As the father of a family of 4, 190k a year would be pretty nuts. I'm quite shy of that and we're all comfy as hell. Multiple vacations per year, birthday parties for the kiddos, a house with a yard and 2 cars.
Does this map assume you need a boat and a summer home to be comfortable.
Tf, how are you getting multiple vacations a year and to where? You may not be at 190k but you've gotta be well into the 100k range and have zero bills/debt/etc. Not trying to be an ass about it, that just seems highly unlikely.
I said quite far, but yes, over 100k. As a household maybe around 130? Bought a house after the housing got crazy, still paying student loans off. Those are the biggest bills. Both our cars are paid off and 10+ years old. We're lucky in that we found a free preschool so our childcare costs are low.
We haven't been to an all-inclusive or anything, but we flew as a family to the west coast last fall and to DC 6 months prior to that. Just rented a cabin with the family and in-laws for a week about 2 months ago.
IDK man, I feel like we're pretty well off.
We're lucky in that we found a free preschool
Are you saying you got free daycare, like from 3-months - 4 years? Cause that shit cost me like $300K for 2 kids.
Oh God no. Preschool only. Ages 3 to 4. And we only found it for our second kid. For our first one and until the second child was 3, we worked alternating shifts and only saw each other on the weekends. When my wife couldn't find a job that allowed her to work around my schedule, she stayed home and drove herself crazy.
Childcare until the kids are in school is tough and expensive.
No, a house boat that you use in the summer. Just the list price is $500,000 on average. That is before fees, taxes, fuel, maintenance, etc.
See now why you need to make so much money.
Oh sorry... What you don't have a houseboat? I am sorry I didn't realize you were part of the unwashed masses. I am going to have to go now before I catch something.
I'm curious if it takes into account retirement investment guidance?
I know a LOT of people who have essentially decided that they'll just work until they die. And, while sad, it enables them to live "more comfortablely" than people who are planning to retire, even with less total income.
I'm not from the US, so I have no opinion on the numbers here... Just tossing out a theory around the discrepancy.
Parental wealth is the big factor. a lot of folks are expecting to inherent parental wealth to cover retirement. among the wealth, education, healthcare, and housing are covered by wealthier parents well into adulthood.
I don’t know how they defined “comfortably”, but you could live pretty well below that. Massachusetts seems awfully high, but we also have a lot of well paying jobs. As a software engineer, I’ve been able to providing well for my family with much less than that and despite living near Boston. Maybe I’m biased as the demographic that already owns a house, and that’s much harder to do now, I don’t know.
However, yeah, if you marry someone in your field, the household income of two software engineers is above that and you’ll be quite comfortable. This puts into perspective how so many co-workers can afford daycare, while for us it was cheaper for my ex to stay home
Yeah, housing is a huge factor. I managed to buy a house in a lower-cost area about a decade ago. It's the only reason my family can survive on one income.
They are saying like $19k per month in my state, that is over 5x the median income. That is absolute financial security level of comfort, the only financial strain you would have is because of income creep and/or trying to keep up with the Joneses.
Their definition of "comfortable" is in the lower right corner. It is a 50/30/20 budget. 50% on necessities, 30% on discretionary spending on 20% on savings.
Wow, 20% savings! Yeah, that’s pretty comfortable, I don’t think I’ve ever known anyone to do that on a regular basis. Of course, as you earn more that quickly becomes lifestyle creep
those numbers are radically different if they are 50K vs 500K. and generally that rule is only for those of us on the lower end of the spectrum.
if you're pulling in 500K a year you and spend 70% on necessities you still have 150K in disposable income.
What are they defining as comfortable? Those numbers seem crazy high.
Title of post is wrong.
This is for a family of FOUR.
Thank you, fixed.
Thanks for fixing it.
ETA: Not fixed...?
Those are crazy numbers.
yeah if you halve them, it's more realistic. plenty of people i know in MA make 150K and are quite comfortable, objectively speaking.
They may not 'feel' comfortable, because they are living in a 70 year old house and driving toyotas, but objectively they are.
It would also be interesting to see a heat map based on housing prices around the major cities.
A large part of how I managed to get a lot more financially stable is that I got a federal government job that payed the same country wide then found a posting in a rural town not far out of a major city. Average income but super low cost of living for a few years.
As a "poor" European, our incomes are nowhere near those figures. Like, think 1/2-1/3 of those. But then again, I could come down with cancer tomorrow and not lose my home or job...
Yeah, here in America it's recommended to have at least a 6 month emergency fund. To be comfortable you'd need a year of living expense that could only be used for emergencies. That's why the comfortable budget has 20% of take home income set aside for savings.
Cries in ASEAN (without Singapore)...
Lol wow is this map wrong AF for my state haha
"comfortable" 🤣
The infographic is clear about a family of 4 (2 adults + two kids).
Decent approximation, for my state, in my experience.
Ah yes the average family of 4, spending 100k a year on necessities and having nothing left over after that.
Have you never heard of income taxes?
No, never, what are those?
Also this budge is for a family to live comfortably so 20% of income is saved.
Mmmmhmmmm, I actually read the little description 50% of 200k is 100k. What family of four is spending 100k a year on necessities?
Renting a single family home in almost any city can top 40k a year easy. And no, it's not anything near luxurious.
In my metro, renting a 3-bed is going to cost minimum 48K/year.
No kidding. I picked a random city in Michigan, found a nice house, new build for $390k. Mortgage is 2,652/month, which leaves $75,176 for necessities. Barely $6000/month for food, electricity and the lease on two lexii? That's not living
Ok, even if I take out income tax with no tricks to bring it down, take home is 160k. 80k/year on necessities, 48k after housing is taken out. 4000/month for utilities, food, car and gas? There's no sense breaking down a "comfortable" budget of necessities after that, this whole thing is out to lunch, as far as Petoskey Michigan is concerned