Let’s Discuss | How Much Money Do You Need To Live Comfortably?

I just read this article in the USA Today, which concludes that you need to earn at least $150,000 a year to pay for the basics, save and cover a few extras.

I was floored! My husband and I don’t earn anywhere near $150,000 per year, and we are more than able to do all three of those things.

Sure there are extras I’d like but can’t afford – but then, I think that would be true even if we did earn $150K. Unless you’re in the upper, upper echelon of earners, I suspect there will always be some things that are out of reach.

Which frankly is probably healthy.

Of course, location does play a role in the equation. Here in Overland Park, KS, the average four bedroom home runs about $200,000. And our property taxes are around $2500 per year. My friends in New Jersey tell me that they pay four times that.

I’d love to hear what you think: Is it true that you can’t live comfortably on less than $150,000? Or do you think that number is outlandishly high? Or perhaps impossibly low?


  1. I am in a 2bdrm condo in Chicago, and we don’t live particulary lavishly. We scrap by at about 100k a year combined before taxes. I save about 5 percent for retirement and on a good month I put away $250 for short term savings and $200 a month in long terms savings (other than the 5% that goes to retirement), although that often gets eaten up by unexpected expenses. My mortage, property taxes and assements combined are about $1800 a month, tution for my preschoolere is $650 a month, and baby sitting for toddler for the whole day and my preschooler for the afternoon so my wife can work full time comes out to about 1300 a month. If you do the math before you even talk about food and utilities, (forget about extras) we are looking at $3750 a month or $45,000. This artical is not that far off especially in the Jewish world.

    • Oh, there is no doubt that for dayschool/yeshiva-sending families, our basic costs are (significantly) higher.

      I was more thinking about national averages, but if you’ve got 4 kids and are paying $20K/year/kid – tuition alone would be more than half of the $150K.

      (BTW, tuition at the dayschool in Kansas City is only about $7200/year, K-12th! http://www.hbha.edu/admissions/tuition)

  2. I think it is high. We pay about $4,500 in property taxes and I don’t have any kids in yeshiva yet. We don’t buy cars with loans so that is an expense we don’t have. I think most people do have car loans which can probably add an additional $1,000 a month. Not quiet sure where all the other money is going and how much saving is happening. The article was not very good at explaining itself.

    • You are very right about the loans, Frayda! And I find this reassuring, since I think you’re in NJ, right?

  3. as crazy as it is, it sounds low! here taxes are around 10,000 for a smallish house. the cheapest house runs in the high 300s or low 400s. yeshiva tuition is around 10,000 foe a base without the extra fees. and thats not even including the day to day necessities.

  4. In Teaneck, NJ that’s poverty level. And I’m not kidding. With property taxes of $12K+ per year (and that’s for a small house) to a tuition bill for 4 kids in yeshiva of $60-80K per year, our family who makes $225K with a very austere budget is just scraping by. Camp is another $10K for 4 kids. Add to that higher mortgages (you can’t even get a 3 bedroom house here for less than $350K) – it’s ridiculous!!

  5. Hmmm, while 150k would be nice (we would be completely out of debt in 2 years!) we live comfortably on $30k a year (that’s with overtime). Now, I grew up seesawing between middle-class and poor (although, we were probably always ‘poor’ by government standards), so maybe my expectations are lower :). That said, we have a relatively new, safe car that is still under warranty, a 3-bedroom home, health insurance, good food, and can pay our bills each month. Those bills are: car payment, mortgage, electricity, water, internet, credit cards (we had to live off them for a while, so we have some debt there), Hebrew school, food, and some extras. I want to save more, and get a few things for our kids, but as we pay off our debts (including student loans) that becomes more and more possible. As far as making 150k a year, my father doesn’t even make that and we consider his salary generous and his lifestyle very comfortable.
    I also wanted to mention that I just got a job myself, so together we *might* bring in 50k a year. Which for us is huge! Once we have paid off our debts we plan to work less; the way we see it, if we are working in order to pay for things we don’t need, then we are taking the place of someone who may really need that job.

  6. 150k after taxes isn’t much. Before we had kids we made less than 100 and saving tuns of money. we bought a house in nj had 2 kids and expecting our third. Now we make a little over 150 and are breaking even each month. 2 kids in daycare (about $2,200 a month for both kids) and mortgage payments (including 7k in property tax $2,600) adds up to about $57600. taxes are about 40% ouch hurts thinking about it.

  7. That sounds about right. We earn a little less than that and can afford to buy pizza when we’re swamped without being too worried about it. But I think that if you’re living comfortably, you probably don’t have to bend over backwards to look for the deals and coupons that we do. I also don’t feel like we can afford family vacations if we intend to pay school tuitions for our kids. I probably could spend more luxuriously if I didn’t save anything in the bank for retirement or rainy days, but I’m not comfortable living check to check. And granted, the rainy day cushion I feel comfortable with is probably higher than most, but dealing with my husband’s job loss right in the midst of a medical diagnosis for my daughter which was mostly not covered by medical insurance (and our COBRA still cost us $1K a month), keeps me still anxious about money.
    Let’s face it. Yes, we are better off today in terms of luxury items than generations ago; even the poor among us. Yes, people spend their money in ways we think are wasteful. But for the most part, I feel like the middle class has been really squeezed. There aren’t too many of us who can deal with more than one life crisis (loss of main breadwinner’s job; major medical illness/injury or death in family; loss of secondary income due to need to be a caregiver for family member; etc. etc.) And these crises aren’t rare–they happen.

  8. Average home of your specs outside Manhattan, but NY metro is about 500K and taxes can run from 4,500 to 14,000 depending on location. Taking that into account and adding Yeshiva tuition for an average family of 3 children I would say 150,000 does not leave much room for any extras, especially when the yeshiva’s are very tight on scholarships nowadays.

  9. For Jewish families it is very low, and if you take tuition into account for multiple kids you can be borderline poor.

  10. It depends where you live!! We live on Long Island. The Yeshiva we send our kids to runs about $10-12k per year (and many on the Island run closer to $15K), camp is another $2500-3000 per kid (forget about sleepaway camp – that can be $10K at many camps that the NY/NJ modern Orthodox community send to). A 4 bedroom house will run you $450K+ on the very low end (ours was almost $550K and it’s only 3 bedrooms!) and property taxes are between $9-12K. Once you add in add in electic, gas, water, car insurance, tv/phone/internet, and lease/finance payments, kosher food (including Shabbos & Holidays which blow up the food bill), $150K goes pretty quickly. That is about what my husband and I earn and while I do not feel like we are pinching pennies, I certainly do not feel “comfortable.” Wish I knew a thing or two about education and I would try to open up a charter school!

  11. Anon for this says

    I think it’s outlandishly high for a national average. I live in Manhattan so I have just about the nation’s HIGHEST cost of living. With about 30k a year I am barely scraping by and accepting family health plus but no food stamps. If I would be paying my own health insurance I’d probably need about another 10k a year. I think an average/standard apartment for our family size would also be another 10k, maybe a bit more – we are squeezing. We do put away some savings, not a huge amount but I prioritize that over things like frozen foods. If I wanted to stop pinching pennies at the supermarket and buy more clothes retail I’d want probably another 5k for the year. Being generous here. So even realizing that my budget is exceptionally low, I could still see living COMFORTABLY in one of the country’s MOST expensive cities on about $60k per year. I do talk after taxes though because I have no idea how much tax you have to pay if you make that much. This is for a family of 2 parents and one child, no tuition (let’s assume the average American kid is in public school for free). Now cut that figure down automatically just for moving across any river fromManhattan; chop it even further if you leave NY altogether. Tada! Nobody NEEDS 150k. Unless we assume the national average family has 8 kids. And plans to send all 8 to university.

    • Anonymous says

      We currently live in a borough of NYC and are not scraping by on about 105k pre-taxes. Post-tax that is about 80k. We are vigilant about maaser.
      Our rent is pretty low for our area and pay $1600 for a 2 bedroom.
      We both work full-time and therefore need a full-time babysitter, this year we’re sharing with someone else so now “cheap”- our portion is $250/week. Just those two expenses takes half our monthly income. Then comes the food, clothing, gas for 2 cars (costs about $70 a pop and when you drive 20miles each way, you are filling up weekly), car insurance (more expensive in NY, I pay 200/month for 2 cars), life/disability insurance….its always a struggle to try to keep within budget EVERY SINGLE MONTH. Currently, only paying one pre-school tuition @ $5500/year….
      Next year when DS goes to kindergarten his tuition alone will be 10,500 (!). Plus tuition for #2 and babysitter required for afternoons…. I have no clue how we will afford to pay for that.

      The qualifier “how much money do you require to live COMFORTABLY” has a huge range of responses- some people are fine if they are breaking even, putting away a few dollars but living very simply, no vacations, etc.
      My personal definition would be – I can go to the grocery store and buy what I need when I need it and not because its on sale and I have a coupon, practically free now so I am saving money down the road (which is nice, I love the thrill but its not what I consider having enough money to be comfortable.) I would also like to take my family on a yearly vacation where I dont have to count every ice cream cone, etc.

  12. Can we stop harping about yeshiva tuition for a minute? This article is about the national average. The average American kid goes to public school unless their parents have piles of spare cash lying around. Also the average American family can get meat, chicken, and certain other edibles for about half the price of kosher-keepers. And the national average has to include the millions who don’t live in NY or other small areas with super-extra-high costs of living. So yes I think the figure must be very inflated indeed. Or the “average” standard of living ,ust be very inflated indeed.

  13. We live in Nassau County, Long Island. Our property taxes are close to $9000 a yr. I believe that the biggest additional expense we have that other people may not have is Yeshiva tuition. Yeshiva tuition adds a lot to anyone’s expenses. Otherwise, you could live more than comfortably on $150,000.

  14. I think that in the New York/NJ area, it sounds about right. I’m really careful, keep a budget, and follow a lot of KOAB ideas. Still, it boggles me how you keep the food costs down! In many areas of New York, especially if you keep Cholov Yisroel like we do, it’s just not possible. Cheese can cost 5 bucks a pop, and if you have some cheese lovers….it adds up. Boruch Hashem. And I’m not even talking about meat!
    I think also that the price of certain expectations in the New York area are high, while some of my friends in out of town communities don’t have the same expectations. For example…robes for the children that can cost $50 might be a norm (as a pose to maxi dresses from Old Navy for $20). This makes the price of living go up.

  15. This is incredibly depressing. We will be THRILLED if we break 20k this year.

  16. In NYC, where we are now, that’s not a lot… which is sad. My friends making 1/3 of what we are in other places are far better off, quality of life-wise.

  17. We are AIMING for a goal of $150k per year! lol We are lucky to reach $50k/year, and in Miami Beach, that’s not bad for a family of four like us.
    We have a two bedroom apartment, mostly organic food, twin toddlers still in diapers, a car we JUST paid off this month, health insurance, dental, decent clothes, decent shoes, some gadgets to play with, we have to pay to wash laundry, we have a little savings each month, $1000 per year on car maintenance and cleaning, a few dollars each month to go to the zoo or a museum… and we’re not on any assistance programs. So…. I’m thinking there’s a lot of extra spending going on in this national average they talk about. We live extremely comfortable on $50k a year.

  18. There was a huge uproar in the Detroit area (where I live) in 2008 as to whether $14 an hour jobs were a living wage or not. On the assumption that two wage earners made $14, I ran the numbers on a calculator and came up with $58k a year. Given the fact median household income has been hovering around $52-$57k for Monroe County MI, I wrote up a sample budget on how a family of two adults, two children, and a rental two-bedroom apartment could get by. My conclusion: it could be done, and basic expenses would be paid. But choices would have to be made on how many extras they could expect. Now, if you have a mortgage, then living comfortably in southeast MI depends on when you bought your house. Prices fell dramatically during the recession and many homeowners now have underwater mortgages.

  19. I’m just curious. For you “in-towners,” why do you stay there? Don’t get me wrong–I love NYC! If I win the lottery, I’ll be there. We can’t afford NY/NJ.

  20. It depends on how many kids you have and what you see as comfortable, but in NY metro area it’s not so off the mark.

    With renting a 2-bedroom apt, having 2 kids in daycare (about $2000 a year… not close to school tuition) and buying in to company health insurance… comfortable would be $100,000. That includes some borrowing of clothes for kids or really looking for good deals (ie buying at teh end of the season for next year etc). No new furniture or replacing kitchen utensils as they start to wear out…

    With kids in school and camp and the increase in taxes and loss of benefits as you move up in salaries… yeah $150,000 is not so crazy.

    I do not think on $150,000 though, we could save up easily for a down payment on a house in the NY metro area. If you factor in student loan repayment rates, taxes etc… $150,000 is not struggling but not super comfortable either.

    That said, some people get “soft” support… parents help with home down payments, kids clothes, summer camp etc. I wonder how many people are factoring that into their equations when they determine living expenses. Especially since gift money is all pre-tax.

    • $2,000 a year for daycare? That actually sounds like an amazingly good deal! Did you mean $20,000 a year for both kids? Or $2,000 a month?

  21. We make a little over $150K but live in an expensive area. Out take home pay is a little over $8000 a month and we dont really have much to save.

    Expenses are:
    $2262 mortgage+PTI ($460K house, which is mid-range for the area)
    $2090 – childcare (not jewish school tuition, that will be $2260)
    $1000 – food, we entertain a lot, eat dinner out maybe once a month, but occasionally grab sandwiches for lunch, also includes diapers, paper goods – i use coupons and only buy on sale
    $150 – car insurance
    $1000 – student loans (me and DH, both graduate degrees)
    $185 – life/disability insurance
    $135 – cable/internet/phone
    $75 – cell phones bill
    $150 – electric
    $150 – gas bill
    $200- gas for car
    $30 – gym membership
    $50 – prescriptions/dr appts
    $150 – shul membership
    $300 – home services (weekly cleaning help)

    And this doesnt include new clothing, home repairs, car repairs, gifts, travel, etc. t all adds up very quickly. We can definitely cut costs in a couple places, but not by much and not without sacrificing our quality of life. With 2 full-time working parents, a long commute and 2 young kids, some conveniences (cleaning help) are worth it.

  22. As a mom who keeps our budget and can never manage to make our monthly expenses fit into it, I feel very strongly about this one!!

    To be kosher, send my kids to Jewish dayschool (even if it is a wonderful and generous dayschool that cuts us a break) and live somewhat comfortably in the Northeast, yes, that is easily, I think, the minimum number.

    Sadly for us, it is not what we make.

    I think we work really hard to keep things simple. We don’t use cell phones (we have one, shared, pay-as-you-go emergency phone for the schools/daycare). The five of us are in a 3-bdrm, 1-bthrm “cozy” house. We have one car, and we try to walk/bike as much as possible. We don’t do take out. Our vacations are driving to family. We both work full time, but can’t afford to farm out our kids full time (although, to be honest, I’m not keen on it anyway): the oldest is at dayschool all day, but the two others are home a lot–we do preschool, not daycare, for our 4-year-old, and part-time daycare for our 2 year old. I stuff the rest of my work hours into nights and weekends.

    I think my life is quite wonderful–I love where I live, have an amazing family (three smart, beautiful boys, aged 2, 4, 6), have a fantastic stimulating job as does hubby–but I will be honest: I feel if we just could have one month go by where we didn’t get to the 29th of the month with me realizing that our gas and electric bill is about to come off our account and there’s only $5 in it and I’m searching through sofa cushions and emptying my wallet in a panic (this is a *good* month if we’re only behind a few hundred dollars), I would feel like this is a lifestyle we could sustain. Most days, however, I feel like we have to quit our jobs and get horrible soul-sucking jobs where we never see our kids, because most months, it’s not the sofa cushions that get emptied, which isn’t so bad, it’s the parents being called because we’re apparently not mature enough to support our own family and still have to look to mommy and daddy for help–and that just doesn’t feel right.

    So there you go: my two cents, which is about all I’ve got :-).


  23. Daycare is the really big expense that is hard to reduce, especially with both parents working or going to school. If the government or employers could offer quality childcare for a reasonable price….we parents would be breathing a lot easier on the 29th of the month and would probably be better employees…

  24. Care to hear from a penny-pinching Boston suburbanite with 2 kids and a dog? We couldn’t do it on $150K. Not even close.

    Monthly: Mortgage $4K incl taxes & ins, $1K kidcare (two working parents), $1K college 529, $1K cars, $3K retirement, $1K food, $1K home repair/maint, $1K energy, util, wireless, video. That’s $156K after tax, $236K gross. So if we want to retire above alpo level, and give our kids in public schools a fighting chance at not being saddled with enormous college debt, $150K/yr doesn’t even come close.

    I’m not saying you can’t live on $50K for now and be happy. I’m saying you shouldn’t set that as the goal. College and retirement shouldn’t be an “extra”.

    America is a cruel place to live for the 85% not making $100K+. I’m surprised so many think so stridently their life with low incomes is a good deal. The 1% are hoarding all the gold folks, and the other 99% don’t seem to want to admit it. Admitting we have a income distribution problem is step #1.

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