How much does living cost in the United States in 2018? It varies wildly depending on factors like where you live, what your lifestyle is, how much debt you have, and who you must support. Yet each of us is eventually forced to confront the cost of living — and we are often poorly prepared.
It’s not uncommon for problems to take root in early adulthood, a time when many people make decisions “without understanding the consequences,” said René Nourse, founder of the financial planning firm Urban Wealth Management.
“A few years back, one of my clients, who had been interning at a law firm, was hired by the same firm after she finished law school,” Nourse said. “The first thing she did was to buy a very expensive car — the note was $800 per month, and of course, she had auto insurance which was another $250 to $300 a month. She didn’t realize she was spending over $1,000 a month, just on the car, and what impact that was having on her monthly cash flow. It began to sink in when she had to begin paying back her student loans.”
So, how much do you really need to make these days? The median household income in the US is a little over $57,000, but for many Americans, particularly those with families, that is hardly enough. It gets harder still if you borrowed heavily for college, if you carry a large balance on your credit card, or if you have a job without benefits or the prospect of upward mobility.
Meanwhile, health insurance premiums are rising — workers paid $440 per month on average for employer-sponsored family plans in 2016, and the unsubsidized cost of family plans on the so-called Obamacare exchanges has swelled to $1,168. Housing expenses (both buying and renting) are rising quicker than wages in many places, gas prices are climbing again, and the average student debt has surpassed $32,000. Perhaps that’s why the majority of Americans have less than $1,000 in their savings accounts, according to one survey. Saving for retirement only adds to the struggle.
But what if you’re earning more than the average American? Several years ago, a widely circulated report published in the Proceedings of the National Academy of Sciences pinpointed $75,000 as the magic number when it comes to income and happiness. Generally, anything more than that “buys life satisfaction but not happiness,” claimed researchers Daniel Kahneman and Angus Deaton, now both Nobel Prize winners.
Over the last few months, BuzzFeed News spoke with six people around the country, in a diverse set of circumstances, to see what life on roughly $75,000 looks like today. We talked to people who are near age 30, a time when many have outgrown the early euphoria of simply having a job and income, and are staring at real, long-term financial responsibilities, like car payments, mortgages, and children. It’s an age when many people begin to confront the consequences of big financial choices made earlier in their lives.
We heard that, while $75,000 is a comfortable salary for a single person in San Francisco with four roommates and no loans, it is “not nearly enough” for a young family in Orange County, California, trying to save enough for homeownership and their child’s college education. And for many, the specter of student loan payments dominate monthly budgets.
Today, $75,000 is a statistical gateway to the modern middle class: Though it’s more than what many Americans earn, it’s still not enough to relieve the many anxieties rooted in money.
Dustin, age 28
Location: Grand Blanc, Michigan
Annual salary: $80,000
Monthly housing cost: $1,200
Student loans: $68,000
Monthly car payment: $320
Monthly health insurance premium: $240 (including spouse)
Relationship status: Married
I’m an engineer and have primarily worked in automotive. Really, the only industry in the area that pays that much is automotive.
I graduated from high school in 2007, but I didn’t graduate from college until 2015. I transferred schools a couple of times and lost some credits, and I also spent six months in the Marines. It took eight years for me to graduate, and I’m not a doctor.
Eighty thousand is pretty high in the area. Here, it’s enough to not have to worry about daily bills, grocery, gas. We’re not rich, and it’s not enough to just do what you want, but it’s a lot more than average. My wife, Sam, describes it as enough to splurge at Sephora without feeling like you’ll break the bank. I don’t have to worry about utilities or the cars. If I need new clothes, I can get them.
When I only made $47,000, that wasn’t quite as easy, and you had to pay attention to groceries and there wasn’t so much buying of video games. It made a big difference to jump up to the mid-seventies.
We’re right near Flint, but Grand Blanc is a pretty decent city and we were able to get a nice house in a decent subdivision. It was built in 1971 but has been updated quite a bit. The living space is 1,500 square feet. It’s got three bedrooms, two and a half bathrooms, a full basement. The house was $150,000. It was undermarket — the family needed to move so we gave them the minimum they were willing to take.
We’ve got a really nice back porch, which is one of the main reasons that we bought the house. We just got a new hot tub to replace the broken one that came with the house. I didn’t know how much hot tubs cost, but the one we got was $15,000. It’s got really nice jets, where two of the corners have full-on massage jets that go up and down and spin, and spinny jets everywhere else, and a water fountain thing in it. We got that on a plan for about $200 a month for about four years.
Right now, our bills come out to a little less than $4,000 per month. We still keep a budget at this point. Whatever spare money we have goes to paying down debt.
We have some student loans: Mine are about $68,000 and Sam’s were about $30,000. Our total credit card debt is about $4,000; it was $11,000 and we did a consolidation loan to pay off credit card debt we racked up in college. My car payments are $320 — I’m leasing a Buick Regal — and Sam’s are $420 a month for a Chevy Equinox.
To be honest, when it comes to money, I mostly look at my parents and try to not do what they did. My parents didn’t really have any money and my dad had a lot of drug problems. Multiple times we had the power shut off, the lights shut off. If we ever did have money, he’d spend it really quickly, like go on a Best Buy spree and buy TVs and sound systems and spend $10,000 in a day just because he could. I try not to do that.
I love where I’m at, but the $100,000 mark is where I’ll plateau. It’s an extra digit, so there’s the mental thing, and I’ll be able to do the vacations I’ve always wanted, to just go to the airport and fly to a random place.
Andrew, age 28
Location: Orange County, California
Salary: Approximately $70,000
Monthly housing cost: $1,800
Student loans: $0
Monthly car payment: $0
Monthly health insurance premium: $600 (including spouse and child)
Relationship status: Married
It’s a relatively comfortable salary, but it’s difficult in the area I live in.
I’m a behavioral health registered nurse. I’ve got a wife and a nearly 2-year-old and live on a single income at the moment. It’s pretty tough. If I was single, or it was just me and my wife, it would be really easy on my salary. But for a growing family — even with one kid, but especially if you have two or more — and I’m the only income earner, it’s not nearly enough in the OC area.
We’re renting out a two-master-bedroom apartment in La Habra for $1,800. It’s a walk-up in a complex with a little over 100 apartment homes in a gated community. It’s like a townhome, only two stories tall, and someone lives beneath us. I’ve lived my whole life with my parents prior to this.*
Me and my wife are looking at moving to Henderson, Nevada, near the Las Vegas area. Las Vegas is a frequent haunt for us and as rich as Las Vegas is, they wouldn’t be taxing me like in California, where they gut my paycheck. My wife and I just got married there in July. We [had] a very simple $200 to $300 event with close family and friends.
We were doing a lot of home searching around the OC area, but at the prices we saw, it didn’t make a lot of sense. A three-bedroom, two-bath costs upwards of $650,000 and $750,000 here, and it would be old. If you go out of state to Nevada, the Henderson area, it’s probably $250,000 to $350,000. It’ll take us about four or five years to move.
Our big expenses now are rent, our daughter, food. Utilities aren’t too bad and we have no outstanding loans. My car was a gift from my parents, and my wife had a hand-me-down Dodge Stratus. Currently, my wife takes care of our child, but she has a degree in medical assisting and is anxious to go back to work. But if we ended up putting my daughter in a day care, it would take more out of her paycheck than she could contribute.
I’ve been saving money every month for both a home and my daughter’s college savings. I’ve been able to put aside $50 per month at least for her, but I feel like, is this going to make a dent in any tuition fees? But any little bit helps, I figured. Ally Bank has a 1.15% APY, so I keep putting money into that. Whenever I have extra, I put it away in a separate account I have for a house.
We were never that wealthy growing up. A lot of people have told me I’m thrifty or frugal. Like, I’ll fight tooth and nail for a missed credit card payment. That’s me. I hate paying for anything I don’t need to or that I don’t use. And we try not to eat out. We buy our groceries at a store called Aldi’s that’s really affordable. Milk here can cost $3 a gallon, and at Aldi’s, it’s probably under $2.50.
At the rate that I am able to go, saving what I have been, there’s no leeway for pleasure. Once a year, it would be nice to take a week, or two at the most, to go to Hawaii or Disney World with my daughter. To just go visit somewhere outside. I’ve never had the opportunity to visit outside the country and experience other cultures, which always seemed like an awesome thing to do, but just financially a burden.
*Editor’s note: By publication, Andrew and his family had moved in with his parents.
Bonnie, age 32
Location: Nashville, Tennessee
Monthly housing cost: $1,300
Student loans: $38,000
Monthly car payment: $150
Monthly health insurance premium: $0
Relationship status: Unmarried
I just moved to Nashville a few months ago. It’s a very interesting time to be living here because so many people are moving here and the cost of living is increasing dramatically. I just read that, to live comfortably in Nashville, you need to make at least $70,000. I lived here about five years ago and the rent has doubled since then.
I live alone and I rent a small house. It’s two bedrooms, one bath, 650 square feet, with a yard. I have two pets. Affordable housing is a big concern in Nashville now. Because I make a comfortable amount of money, I can afford to live alone, but my rent now isn’t much less than when I lived in Boston, which is kind of crazy.
I am on the marketing team at Buffer [a social media company], where all salaries are transparent. It’s nice because you know going in what the salary formula is. I used to work for a nonprofit, doing grant writing for an organization in Boston. I enjoyed the work and it was a cause that’s close to my heart, but my salary was less than $50,000. It was a struggle. I was not in a great place financially, and just now I am getting in a good place with all of my loans. It’s a sizable chunk of my take-home pay every month.
I went to Oklahoma City University, a small liberal arts university, and studied sociology. It’s a lovely school, I got a great education, but that’s a little bit of a cautionary tale, maybe. I thought, “Oh, it’ll be fine; I’m going to get a good education. I’ll just take out student loans to cover what scholarships don’t, and I’ll get a good job because I’ll get a good education.” And it doesn’t necessarily work like that, especially when you have a degree in sociology. I don’t regret the education I got, but I do regret not going to the more affordable school. If you want the freedom to travel and [do] other things, your student loans will be a consideration in that.
I had about $20,000 in student debt, but then I did an occupational therapy assistant program and I took on more debt to cover that — and I ended up not wanting to do that, either. Again, probably not the best decision. I’ve taken quite a long journey to get to where I am now.
I have close to $38,000 in student loans total. I honestly haven’t paid off that much because when I was working in nonprofits I was behind on some, or just paying minimum payments. I’ve probably only paid off $10,000 to $15,000. Now I try to pay an extra $500 to $700 on my student loans on top of the minimum, but it depends on life. I don't usually have an extra $500 to apply to student loans each month. For example, my dog got sick and I had to pay for X-rays and ultrasounds.
If I could pay off my student loans, I’d be totally comfortable making this amount of money. I’d feel perfectly happy. Student loans are the only thing that gives me some anxiety. I have tried to refinance, but I got rejected. Back when I couldn’t afford to pay all my loans, I had some late payments.
It’s funny because, as a kid, $75,000 would have sounded like so much money! Like, oh my god! I remember thinking as a kid, if I get a job that paid $50,000, my life would be so good! Even now, I’m in my thirties, I’m way past $50,000 now — but also, wow, you have so many other things you have to pay for. I don’t know how people can afford to buy a house or have a baby. I guess they just have different jobs.
Ross, age 30
Location: Fort Worth, Texas
Monthly housing cost: $850
Student loans: $110,000
Monthly car payment: $230
Relationship status: Married
I was fortunate enough to find a job while I was still in college, but I only made $35,000. That was rough, and I definitely was broke. All of my money went to rent and gas because I had to commute to Dallas. After a few years, I was able to get a job at a defense contractor, which is when I started making $74,000.
I was so shocked when I got this job. I had been out of college for about a year, and I was immediately making more than 90% of my friends. It blew my mind. I was excited, but I immediately knew that almost all of that money would go to student loans — I owe about $110,000. It’s almost like a mortgage.
I could have taken out less. I was irresponsible. There was one semester where I took out extra to buy an Xbox. I would go back and grab myself and say, “What are you doing?!”
Getting this job was a load off my back because [before] I had only been able to pay the minimum on my loan. Now I pay around $600 a month, but the interest rate is so high that the balance seems to stay about the same. I probably should be paying $1,500 a month to get it down.
My wife just got her master’s a few months ago, and we just moved into a nicer place in a nice neighborhood called Arlington Heights. It’s $850 a month, two bedrooms, one bathroom, hardwood floors. It’s in a big building. We love it. The upstairs neighbor has a kid that runs around a lot, but I’ll put up with it.
Our main expenses are fuel, about $150 to $250 per month. Student loan payments for sure. Food is a big one. We also both compete in powerlifting, so we have to eat a lot — about $300 to $400 a month on groceries. Rent of course, which is about 22% of income. We drink a lot of beer, so we spend maybe $100 to $150 going out. We both got injured due to our sport last year and had to get MRIs and stuff, so we probably spent $3,000 out of pocket on health care, plus probably at least another $1,000 this year.
At $75,000, we have everything we want. Anything I want to do, I can afford to do it. I bought a new camera a few months ago. I could just go buy it — that’s something I’ve never been able to do before, and it’s a nice feeling. The only thing that would change is I want to put more into savings.
We have about $5,000 saved up. It’s barely over one month’s income, but it’s better than nothing, and if we were to really cut back, we could make that $5,000 last. It seems like now, we’d get a sizable savings account, but then something would happen. Like both of our cars broke down at the same time and we ended up spending about $5,000 to repair the cars. That was around the same time as the injuries, and during those few months last year we were living paycheck to paycheck.
Now I’m going back to school for my master’s in epidemiology. My earning potential will probably be around the same [when I graduate], but it’s something I’ve always wanted to do. Luckily, [my] school is funding everything, so that helps a lot.
Joe,* age 27
Location: San Francisco
Monthly housing cost: $820
Student loans: $0
Monthly health insurance premium: $410
Monthly transportation costs: $250
Relationship status: Unmarried
I am a contractor at a major tech company. I make an hourly wage that, when factoring in overtime and bonus pay, is about $75,000 a year. My tax bracket is 25%, so they take that out of my paycheck. I have no benefits: no 401(k), no health benefits, no retirement benefits.
When you’re a contractor, it’s difficult. You get to say you work in tech, but you’re really not in tech because you’re not making the same money — you’re making hourly wages, you don’t have benefits, and you don’t get to participate in the tech scene, although you get a lot of exposure to it. There’s an unspoken hierarchy between employees and nonemployees. Now, we all get perks like free food — free breakfast, free lunches, free dinner, and we get a lot of snacks, drinks, beverages. But they are talking about moving us to a designated facility for contractors where there won’t be any of that. The free food is one of the big benefits for contractors.
I am lucky that I graduated from state college without any debt, and actually some savings. My rent, compared to everyone else, is not that expensive. I pay $820 a month plus utilities in Outer Mission. I have four roommates, so there are five guys in the house. We have two bathrooms, and I have my own bedroom. We have a full kitchen, but we don’t have a living room. I don’t have a car, so I go everywhere by public transit and Lyft.
I’m able to save a good amount every month. I’m actively pursuing buying a house in Portland, where I am from. I can see myself moving back there when I am a little older and maybe starting a family there. It is the only goal I have now with my money.
When I first came to San Francisco, I made $45,000 a year. I was working for a startup, so I was living that startup lifestyle, and being young and all that, but realistically, I was not making a good income. I got full benefits, but it was very minimal, and the room I rented was tiny. I didn’t have a full kitchen, just had an electric plate. It was really uncomfortable, so it was messing with my mental state a little because when I got home, I didn’t have a good, open environment to be in.
Once you hit $75,000, life starts to get a little easier. You pass the point where you’re trying to survive or make ends meet. It’s a good salary for a young, single person like me to get to enjoy life a little more, even in San Francisco. But then again, I live a frugal life. I bring food home from work. A lot of my colleagues eat out a lot. I eat out only when I’m with friends; I don’t eat out simply because I need to eat.
In tech, $75,000 is very low, but there are contractors who make less than me. It’s not something you want to talk about. There’s so much money to be made. We all want a piece of the pie, and when you’re not making that money, you start questioning yourself, whether you’re good enough to do it. But I’m not suffering.
Fairy tales do happen here, if you work for it. I just accepted a full-time position at a major tech company, and I’ll be making $95,000 to $105,000 after factoring [in] bonuses — and I’ll have full benefits. I’m very excited.
*Name changed at interviewee’s request.
Jason, age 28
I live in Astoria, Queens, and work in the administration of Broadway shows. There’s a union for what I do, so there are different ranges for my position set by the union. I had been making less than that, around $59,000, and only recently got a raise.
I have a great time with $75,000, to be perfectly honest. It helps that I am single. Not having debt is a huge thing as well. And my union is taking care of health insurance. I know people who make about the same as me and might struggle a bit.
My parents taught me from a young age to save, and it’s helped me along the way. Since I have to work from project to project, more often than not, I’m looking for my next job. One thing that helped me save: I was on tour for 10 months a few years ago, so I was paid to travel around the country. During that time, I had no expenses, so I was able to save up all my money. My housing was paid for, my food was paid for, and I didn’t have an apartment I needed to worry about in New York.
I just moved a couple of months ago into a three-bedroom apartment with two roommates. We each pay $1,000 a month. It’s a large duplex apartment in a two-story home with laundry in the unit, which is kind of unbelievable, and we’re pretty close to the train. My roommates have both lived there for a few years, so the rate was lower.
My credit card bill is almost all dining. I’m pretty cheap with transportation, so I mainly rely on my MetroCard. After that it’s probably travel, especially in the summer. I’ve probably left the city four or five weekends this summer, so it’s paying for trains, or reimbursing my roommates for gas and tolls if we drive.
I had some student loans, but I paid them off about four or five years after I graduated. I decided at one point that it wasn’t worth it to keep it open, I had saved enough money and I didn’t want to accrue interest anymore, so I just paid it off in one lump sum. I’ve never kept a balance on a credit card.
My mom always told me I should have a full year’s salary in a savings account. I don’t have that, but I have several months of income in savings.
But I would not feel comfortable starting a family at this income. I would not have a kid at this income. Maybe in a different part of the country, but not in New York. ●
*These interviews were edited for clarity and length. Each profile includes the income and expenses for just the subject, and not other members of the household.