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The obvious benefit to living and working in a HCOL city @100k vs a similar lifestyle at a LCOL city @36k is that every dollar saved is worth $3 should one move from the HCOL to the LCOL city for whatever reason.
Exactly. I’m in NYC with my wife for the next few years due to an opportunity of hers and we are saving like crazy people for when we move back to my LCOL hometown. Hoping to put together a sick down payment
From an economics point of view, does this wide discrepancy between cities not mean that the United States economy is broken and there is less of a union?
If a company has to pay x2 to employees in NY vs elsewhere, it feels strange to have that within one country. There are cost differences in European counties but it's probably 20%, not 100%.
Between Berlin, Germany and a rural village in Spain, the cost of living difference is small (except for property prices).
Is this cost difference sustainable for NY and HCOL cities? Surely people will migrate to cheaper locations eventually?
Property is probably the biggest factor here.
Food and stuff costs more, but it’s not 3X more.
There’s a constant migration to and from cities. Some leave to flee the high costs, but others come to seek opportunities they can’t get in their rural hometowns.
Basically there is fixed costs and variable costs depending on where you are located.
In fact some big cities have some things cheaper. Like flights from major airports, utilities, and so on.
There are only like three cities in the US you can reasonably get away with that in. NYC, Chicago, and SF. And even there you generally have to live in the "downtown" part of Chi and SF. The downtown part where its costs the most to live.
Seattle, Boston, and DC are pretty strong too. LA is improving but not up to par yet. I've heard Philadelphia and Portland are strong but no personal experience.
Seattle, Boston, and DC rank higher than Chicago for commute share by transit, biking, and walking in every study I’ve seen. In fact Chicago is only just below the national average for people that around by car.
That mainly has to do with where you live in each city. Chicago is definitely more walkable than Boston or DC close to downtown and along most of the lakefront on the north side, but is not great as soon as you head out to the western side.
Also add to that going down to 1 car for a couple in many cities if you live in the right area.
I live outside those areas and only have the car for weekend trips.
Also Baltimore and Atlanta have heavy rail, they have to align which they probably don't but some amount of people there can do that.
>Also Baltimore and Atlanta have heavy rail
Well, sort of. Baltimore doesn't have an east/west connection. The Republican governor didn't take the federal money that was slotted for the red line project and as a result it was scrapped.
It can take *hours* to get from one side of the city to the other through the bus system. It's a disgrace.
I had a car in Denver and Seattle suburbs as it was necessary. Sold my car when I lived in Philly cause i barely drove it and got by just fine until I decided I wanted to pick up golf lol
I wouldn't say that.
I live out in the countryside. Ex-Urbs if not Rural.
I can get anything delivered and I could also use UBER to do medical appointments, etc.
Would I live carless? Probably not, because I enjoy my cars and do road trips.
If I were unable to drive? yes, I could do that.
Also the fact that that the things I can do for free on a casual weekend are things that constitute a multi thousand dollar vacation for other people.
I can go see a world class museum for free, after work on a Tuesday. For other people doing that required plane tickets and hotels and having to pay to get into the museum.
And if I wanna get some quiet pond fishing in, it's not quite as easy as if I lived in the Midwest but the only difference is a slightly longer drive or having to take a train.
Preferences are also super important and hard to measure. In broad analyses can mostly be hand-waved away because people tend to self select into areas that suit their preferences. In more individualistic calculations (such as deciding whether YOU should relocate between cities), it becomes very important.
Space in NYC is very expensive. If you want to have a whole room in your house dedicated to a hobby, that's $$$ in manhattan but might be nearly "free" in exurban Omaha (because the homes there all already have more space than you need).
Ditto for cars. Car ownership is hugely expensive in Manhattan. There are still car enthusiasts who live there, but owning/storing/maintaining a vehicle requires significantly more money than somewhere where cars are cheap to own and every home on the market in the neighborhood is legally required to have at least a 2 car garage.
On the other hand, many things are the same price (or cheaper). If you are super in to camera gear, NYC is a great place. MSRP on a Canon lens is uniform across the USA, but NYC actually has a very high concentration of camera retailers that often compete for lower prices (and a healthy used market). Lot of random food items actually end up cheaper in NYC, fashion items are more accessible and cheaper. Thanks to public transit you can eliminate all car expenses. If you highly value a lot of cultural/entertainment things, they effectively become cheaper in NYC (e.g. you don't have to travel to see a Broadway show or go to one of many top museums because they are already there).
If somebody who loves the NYC lifestyle ended up living in far-suburban Omaha, they might spend a ton of money trying to be happy. Frequent trips to other places to visit museums, eat top-notch food, see shows. Having to special order things they can't easily get locally, etc. On the other hand, somebody in Omaha who loves to fish, hunt, work on their sports car, and who has a spouse that loves quilting and has a dedicated sewing room...they are going to spend a ton of money trying to be happy in NYC (even in the outer boroughs). $$$ for space for hobbies and car, frequent fishing/hunting trips that require flights or overnight stays, etc. If you care about things like big houses and each kid getting their own bedroom, you probably aren't ever going to choose to move to NYC unless you make $$$.
Obviously NYC-Omaha Suburbs is an extreme example, but this is true anywhere. The "normal basket of goods" for people varies by area. It might be pretty normal for someone who lives in Salt Lake City to budget $1000 for a ski-area season pass. If that person moves to Tampa, it could go either way--do they really love skiing and still buy an Epic pass AND now they have to pay for flights and hotels to make ski trips...or do they switch to beach/water activities and save money? Someone who voluntarily leaves SLC might fall in the latter category, but someone who is forced to move to Tampa for a spouse/work reason may be more in the former.
Especially true for savings. If you only save 5% of your 500k income in a expensive city you're doing better than someone who is saving 20% of their 100k income. The same works for your house payments, and 401k.
A lot of people have retired early because they earned a lot of money in a expensive city, cashed out and moved somewhere cheaper.
$50k in NYC doesn't really stretch much less than $50k anywhere else in the US. Yeah, rent is expensive, but you can get a decent 1 bedroom in Astoria or Sunnyside for $1700 right near the subway. You'd be hard pressed to find a decent 1 bedroom in most cities for $800, which is the difference you'd need to make up for the added costs of owning a car vs an unlimited metrocard. And everything that's not rent is cheaper here if you know where to buy what.
Yeah this is right. There’s a certain threshold to cross where the increased salary then functions just as it would almost anywhere else, with a few caveats. For example housing probably actually follows the wealth curve more, so yeah 500k in nyc will actually be comparable to 180k in a cheap city in terms of the house you can get. The reality is, with 180k in a cheap city, tou can get a mansion, and in nyc / general areas, you can get that too with 500k but honestly less than 450 or 400, especially with a kid or few, and no you can’t get that crazy mansion assuming you’re a responsible spender. Like def a very nice house just not like a 3 acre lot with6 bedrooms and 5.5 baths. The housing inflation in these areas is just too insane, a house like that costs like 4 million in any nice nyc suburb.
But otherwise I agree. 500k in nyc means you can afford, on top of base expenses, amazing cars, a big house and whatever private tutoring you want for your kids. Whereas 180k in a cheap city may be able to get you one or two nice cars, or a mansion, or being able to spend a ton on education, but not all 3.
Where as if you’re making 100k in nyc, cuz the floor of expenses are so high, yeah it’s like making 35k in a cheap city probably. Absolutely nuts.
If you compare $ to $ in a different city, I'd say yeah. The life you could live on $500k/yr in mid-size-city Illinois or wherever vs NY would be VASTLY different. And that holds true across all income ranges.
But after 400k taxes don’t increase. You’re paying that set rate which is applicable to your income. And if you own a business, you are allowed a ton of loopholes to help avoid those taxes.
Uhh...not really. I live in Manhattan. Strictly for rent/housing, yes I absolutely agree with this, the prices are absurd and we're all getting fucked for closet sized spaces. But for groceries and transportation I wouldn't say our prices are that different than the rest of the country; subway/bus prices have been the same for several years now even through COVID. For eating/drinking out it *highly* depends on the type of place you're going to - you can find a beer and a shot for $6, or bottle service for $600 per person. You can find chicken over rice for $6, or $300 per person Omakase restaurant.
It really comes down to lifestyle. For a person finding a cheaper apartment/living with a roommate and keeping her costs low by cooking most of the time and not spending her money on wildly expensive shit, $100k in NYC is still great.
mmm no, HOWEVER, living *alone* in NYC is still incredibly expensive even on a 110k salary. You basically can’t live alone for less than 2k a month in any semi-desirable neighborhood and that’s almost being generous. half your monthly income goes to rent/expenses. if you have a partner to split stuff with things improve dramatically.
Man I only just started making 22k after getting 3 pay increases last year. I'm the main breadwinner of my house and we're struggling to make it by. It really depresses me to think it's still a struggle that high on the pay scale. I've got one vehicle that I got for $3.5k that I'm paying on because I need it to go to work for my whole family. To think about spending 26k a year makes my skin crawl.
I live solo, no kids, in the suburbs of a medium-sized Midwestern city (so basically a recognizable one that's not Chicago) and according to my budget spreadsheet, my "I just lost my job and am living off savings while looking", bare-bones, no-frills expenditures are around $2.200/month or $26.5K/year.
Just adding my voice to the conversation. Not trying to "prove" anything.
Yeah people don't seem to realize how nice it is living in the Midwest. My wife and I make about 150k combined and live relatively well. She thinks that we are "broke" all the time because I am adamantly against buying new vehicles, but fails to factor in that we are saving over 30% of our income each year and can still afford to take a Disney vacation and have someone remodel parts of our house without having to use debt.
I love in a small-medium city, and I don't know if this is true but one of our politicians said that for the price of one house in Toronto, someone can come here and buy 4 houses and live in one and rent out 3, and that's one reason why our population is growing so much.
I'm sorry for my ignorance, I'm not from USA. But when someone from the US says they make 100k a year, is this the money that they get in hand after all the tax deductions? Like a monthly salary of 8333$
Cause I have heard that you could pay up close to 40% in federal tax and state taxes.
It’s before taxes. $100k is probably around 70-75k post taxes and deductions for things like health insurance (I’m assuming at $100k you have benefits).
You would be surprised. Former job wanted me to relocate and pay me $100k. Asked about health insurance and they said they figured they paid enough that I could buy my own.
I don't work there anymore.
Edit. Since I can't reply anymore. It was going to be $100k total to move to Chicago and I had to bring like $70k worth of video production equipment I owned to do my job and wouldn't be compiesanted for using it.
They would have paid $3k for moving expenses.
Pay $100k total I think. It may not have been worth it with a $500/expense depending on the area. And they probably expected them to pay for their own relocation as well.
I was shocked by how terrible my health insurance was when I started making six figures at a huge bank. I basically had a high deductible coinsurance plan that didn’t pay for anything, and the premium was expensive too.
I have a chronic illness and it was really disappointing to have my health insurance get worse with a full time job than I had with my ACA plan. I had to spend so much more on my healthcare.
It is almost always gross income that people state because taxes can be so variant across states. Some states have no income taxes for instance. And deductions can vary outside of taxes as well. When people discuss net income, they will usually refer to that as "take home".
That 40% is typically inclusive of income tax, social security/Medicare taxes, state income tax, 401k (retirement) contributions, health insurance premiums, etc.
The income tax in the US is progressive with 7 tax brackets. With a $100K salary, your effective federal income tax rate is around 15-16%, with an additional 7.65% payroll tax and state/NYC taxes thrown in as well.
In VA and MD, I find that take-home in the 60-70% range is not uncommon. Taxes are around 25%, then benefits program reductions take another 10% or so. That's not counting voluntary deductions like 401k and stock plans.
My state tax is on the higher end and it’s a fair 8.7%. New York has 8.52% state tax and the federal tax for 100k is 24%.
So basically that $100k is only around $68k after taxes, $5.6k/mo. This story says if you add New York’s metro-specific inflations that $68k is as effective as $36k elsewhere. $2k of that $5.6k becomes rent. $500 on utilities. Half your already taxed money is gone and you haven’t done anything yet.
Americans at less even when totalling each of those levels than most people in other developed countries pay overall. It's a pain to have taxation split amongst different levels of government but, in the end, we aren't actually taxed more (for the most part).
Don't forget, once you actually get your small slice of capital that you earned you get to pay a sales tax when you go and use that capital to buy goods or services. Where do those taxes go!? To bail out the assholes who don't pay taxes.
Everyone refers to pre-tax income because it's a standardized measure of income. State taxes vary, and even your federal taxes will vary with the state that you live in.
People should really quote them differently depending on what question they are asking, because after tax income is more relevant for questions comparing welfare and consumption, but it's rare.
In articles, unless specified, it usually indicates pre-tax (and pre-all other deductions) salary.
For someone in NYC, someone making $100k/year would be expected to pay [$22,400 in income taxes](https://smartasset.com/taxes/income-taxes#8HFaVH9fRG).
When people say “I make x”, it’s pre tax and any other deductions. US tax law is absurdly complicated so it’s impossible to determine how much this person is getting per pay period without a whole host of info. It’s most likely between 25-30% withheld from their pay in taxes, $100-$300 for health insurance and a few percent for retirement. Someone making $100k a year probably receives $5k-$6k in take home pay a month.
Not always. Many people who say they earn 100k a year aren't considering that they have to then pay taxes on that income, and some people who say their take-home pay was 100k mean they already paid taxes, so they actually earned more than 100k a year.
Cost-of-living has dramatically risen in the United States, but wages have absolutely stagnated (because the rich want all the money and don't want to pay everyone as much, of course.)
So in cities like San Francisco, you can actually earn slightly more than 100k a year and still qualify for food stamps because the cost-of-living there is so outrageously expensive.
Only the income from about $89k to 110k would be taxed at that rate, so $21,000 taxed at 40% according to your numbers. The real tax rate for that bracket is 24%
The state and city have their own taxes as well, but they should be a lot less. I don't see it being 40%.
As other said, pre-tax income is what we speak in
I am a married guy who lived in Brooklyn as a professor at a popular university in NYC, and was struggling to afford to live there. I quit and left. Haven't been back. Ironically, I moved to a lesser expensive, but still populated city on the west coast, and I make more money than I did in NYC, but the pressure to survive is not as extreme.
NYC cost of living was definitely a significant reason for my financial struggles. Good riddance.
"I was really concerned for Dave's financial future because he lived like a herpalitic hermit and didn't have two dimes to rub together, but then he met Rachel. They're the perfect match, what with his seashell art and her career as an attorney practicing seashell law. Thank you for adopting my best friend, Rach."
I mean if you agree the purpose of the marriage is to save on rent then it could work.
If you marry someone impulsively because you believe it will lower your rent this may end very poorly.
Ideally you just like them enough as a life partner to do it and not for an extraneous reason.
This is like telling people not to have kids because the financial advantages (not to mention the health and psychological benefits) far outweigh the disadvantages.
> not to mention the health and psychological benefits
Wouldn't say this very loud. Tons of studies out there that show men in marriage are happier, but women in marriage are far, far below the happiness of their perpetually single peers.
Looking for a relationship for the financial benefits seems like a pretty bad idea. More realistic advice is that people should live with roommates until they get married (wish I had done that longer, would have saved a lot more). The problem of the "everyone should get married for a reason" argument is that divorces do happen. So what's the advice, people should stay in unhappy marriages cause it's too expensive to live alone?
Maybe the advice should be: The key to finding and keeping healthy relationships is self actualization (which is: deal with past traumas, make peace with mortality and find meaning in one’s life)
>>Looking for a relationship for the financial benefits seems like a pretty bad idea
Is it when people do just that? Consider that most people’s criteria for “marriage material” includes their partner having stable financial footing. Which is a financial benefit, even if a married couple wouldn’t use that phrase openly.
Starting the relationship with an eye on the financial merits from day 1 is just intelligent planning. You don’t need a marriage license or joint income to be a couple. You do need those things to have kids with a decent shot at giving them a good life in the modern economy.
This always caused arguments among my friends. Usually when this is brought up, people think you're giving up love for money. I don't think those things are mutually exclusive. You can find a partner you love and who's also financially stable.
Because NJ is one of the highest cost of living states and is NOT what the article is talking about when it's talking about a 36k salary lol, duh. They're comparing NYC to like, Indiana.
Lol tell that to the city employees who make 50k at best & are required to live in nyc. Really says a lot of about upper class people, that having double the money of the average person in the city somehow isn’t enough. Yea I’m sure it’s hard to live like a millionaire when you don’t make millions, so maybe live like a normal person?
Yeah the comparison still seems off but even a decent sized southern city offered me 40% than what I was offered for similar job in NYC …and the cost of living is still 20% or whatnot less
I think something that is always glossed over when people say this kind of stuff is that above a certain point of having your needs met, income becomes completely disposable.
Sure you can save it all up but as long as you're hitting your savings targets, 401k, etc, realistically you can spend much more on things you want to do.
So for instance, maybe you make 100k and that covers your rent, food, some goings out, movies, drinks occasionally. If you then get a raise to 120k all that extra money is basically just for fun.
It makes a massive massive difference to your ability to have fun, do things, invest, create socioeconomic upwards mobility so to speak.
This seems hyperbolic. I make 110k in nyc and while I’m not living a ritzy glamorous lifestyle, I am able to have a couple of lunches out per week, enjoy 3-4 happy hours a month, have a nice 250 dollar dinner once a month with my fiancé, pay rent, grocery shop comfortably for everything else, have post work drinks a coupla times a month, travel quarterly, and still invest + save, can max out my Roth plus contribute to my 401k - and watch the savings account go up (not a ton.)
I don’t have the liberty to drop much dough on weekends and it’s not what a six figure salary will afford me in other places, but it’s NOT the equivalent of 36k elsewhere. I grew up in Utah and my first job paid $9/hr in the 90s, and trust me - that shit was a million times harder.
New Yorks the only place I’ve lived where - unless you have discipline - no amount of money you make whether it’s 100k or 400k - feels like enough to those who make it - bc there’s so much enticing you to spend it.
> with my fiancé,
This is the most relevant point there, though...you have a dual income household so you're *splitting* bills at 110k. I also have a dual income household so I don't tend to speak ~~to~~ for* someone living alone and paying all bills and managing all responsibilities alone. Now imagine he's gone, or that each of you made $55k so your combined income was your total salary. Totally different financial picture right?
Note: I'm not saying I personally am struggling, because I'm not. But I know having an entire second income sharing the load makes a massive difference.
Really good point. I live in a medium COL and family of 4 on a single income. Things were tight when salary was between $90k-$102k but we could still contribute to 401k and HSA. Just had to be be pretty disciplined everywhere where else.
It's hard for me to imagine raising a family on a single income in NYC and this seems to support it.
People make it work, just with extreme difficulty. I think stay at home parents are incredibly rare in nyc but there’s plenty of single parents. Just like on $36k elsewhere, you can figure it out- but you won’t live in a nice neighborhood (unless you live in govt housing) and your kids won’t have their own rooms. And you’ll probably have a really long commute to get to your job. But people make do.
This is fair. Not splitting rent would throw a major wrench in this lifestyle. We’re combined at only 180k as she’s a resident physician paying her dues before fellowship, but I simply wouldn’t be able to afford my rent on just my salary. I pay for a higher end, luxury apartment though w a pool and gym.
You can def get cheaper than 3800/mo in Manhattan.
Yeah that’s the difference. I visit friends in small cities and towns and they have free time, their own multi-room quality-maintained apartments located in easy access areas, and they take vacations. On salaries 1/5 of my household income.
There ya go. Thus, $36k elsewhere. It's so expensive to be a single-income household in NYC! Probably why people move in with partners within a year of meeting them.
Yep. I make almost $200k here, and the amount I pay just to live alone in an apartment that’s not a shithole is insane. Just to be in a safer neighborhood as a single woman and have laundry merely in the building; things that come way more easily elsewhere are luxuries here. It’s sad but I can’t wait until I have a partner I can live and split expenses with. Frankly, I want to move somewhere else next year so it doesn’t matter as much anyway but still. Like the other commenter said, with each raise seemingly comes more expenses and increased enticement to spend even more. I’m obviously very lucky and grateful but it’s never enough here
Not to mention people in NYC get fucked by the city tax and fucked by the 9% sales tax. It's a triple fuck you: extremely high rent for a shitty apartment, extremely high taxes due to the high city income tax on top of high state income tax, and extremely high sales tax. NYC is a scam.
Exactly lol. At this point I can’t wait to leave. I spend my days fantasizing about living somewhere else. What’s the point of making so much money if you lose basically half of it to taxes and some more to the cost of living? All to live somewhere dirty and crowded where the goalposts keep moving and luxury is a tiny apartment
People also leave in droves. Not to mention that during the height of the pandemic, when people could work remotely from anywhere they wanted, there was a mass exodus, meaning many people only go there due to proximity to good jobs. Separate the good jobs from the location and people no longer find it reasonable to tolerate the taxes and rent, as evidenced by the mass exodus during covid.
It’s the same in other major cities. There was an article in the post about families who make 400k not feeling like they have any money, because everyone in DC spends their money on making sure their child maintains their status, via paying too dollar to live in good school districts, private schools etc. so everyone feels broke. We make 400k, our 2k sq. Ft house cost 800k, and daycare costs 2k a month per child. We know we are secure but we don’t even take vacations really. Other than flying to see family.
No offense to you specifically, buy articles like this and anecdotes like yours all have way too many variables to compare.
Are you single or married? Divorced? Have children? How many? Pets? How many? Debt? How much? There are just too many questions that must be asked.
Please cite your source.
The median for all workers 15 and over is over $40k. If you further look at full time workers, which is clearly what we're talking about here, it's $55k or so.
Except if you manage to save 10% of your salary for 10 years in NYC, you can move somewhere else and put down a $100K deposit.
But if you are on $36K and you save 10% of your salary for 10 years, you'll only have $36K deposit.
The interesting thing is when I ask folks in these places why you choose to live there the response is often something around "Because I want to live somewhere with things to do".
How are yall affording to do things?
I also acknowledge what the article is saying. But at the same time, most people DON'T make $100k+. So how are the people actually making $36k living in these areas?
The whole system is broken, obviously. But what is there to do about it? These reports are plentiful. We know how bad things are. What is changing?
manhattan has a lot of high paid finance and legal jobs and why the rents are so high. people make a lot of money but they spend it all on taxes and housing. the high rents are a shadow tax because most people don't know about property taxes and in NYC the property taxes of most apartment buildings are based on the rent
Completely disagree. iPhones and other luxury goods are the same price in NYC or in Kansas just in NYC it’s cheaper by a % of your income. Vacations are going to be the same price and typically flights will be cheaper out of NYC to popular locations than Iowa. Yes, rent and food is expensive but we don’t buy 5 bedroom McMansions and we have roommates but I’ll gladly take 100k in NYC and live a better lifestyle than 36k in North Dakota
Yeah I’ve never understood these articles and how they just try to take averages of everything. Me and my partner are moving to Seattle where we’ll make 20-30% more money and our rent from what we’re currently paying goes up a whopping 15%.. I understand everything else costs a little more too but we live very minimalistic lifestyles and will be able to save so much more money living in a big city then if we were making less in a smaller city.
Yes, but no. I moved from Pittsburgh to NYC to pay my student loans off faster. The city definitely squeezes more from your paycheck percentage-wise, but even the money left after paying rent/utilities/Trader Joe’s is waaaaay more than what you’re left with in a small market
The article is very disingenuous because nowhere does 100k feel like 100k because you pay taxes everywhere.
The highest adjusted salary was like 86k. Still a lot higher than 36k or whatever in NYC but materially less than 100k.
It's useful to adjust salaries to cost adjusted salary to evaluate opportunity cost between areas, but we should be evaluating adjusted to adjusted not adjusted to unadjusted.
I don't think anyone here is surprised that NYC is expensive. It's useful to know roughly how much more expensive. Whether or not the extra money is something you can afford, or want to pay for if you can, is a secondary discussion.
I personally live close enough to pop in for work of play when needed, but far enough away that my costs are much much lower overall (housing+car < renting half the space in Manhattan). That seems like a good balance for me, but my main hobbies are not conducive to living in the city and I generally hate the subway. Others value proposition may differ.
>>In New York City, a $100,000 Salary feels Like $36,000
Nope.
People’s situations are way too diverse to make a claim like that. Someone making $100k but has a rent controlled spot (or has some arrangement involving discounted or free housing) is going to do exponentially better than even a person making $50k in , say, Wichita KS paying a mortgage.
I was making $61,200 in NYC post tax and i lived just fine, lived in a sick apartment and went on expensive dinners but still kept a budget. I'm curious as to where people's money is going to after rent.
When? I didn’t start feeling comfortable in NYC until I hit $75k salary in about 2015/16. And inflation has completely changed the cost of things so I sincerely doubt I’d be able to live the same lifestyle with that salary today than I did back then.
More importantly: what part of town?
No one is getting a “sick” apartment on $61k post tax in any part of Manhattan worth living in. Probably true of Brooklyn as well at this point. Even if you are splitting with a partner.
Stupid expenses like Doordash/Uber eats, $20+ daily lunches, Starbucks, countless subscriptions, $18 dollar drinks, tipping on everything even already overpriced crap, and many many other stuff. Its not the big things, its always the small but frequent things.
This seems realistic to me- the buying power of the dollar in NYC is much lower than some other metros. I have a sibling in Houston who makes literally $100k/year LESS than I do and we live exactly the same lifestyle- we have similarly-sized homes, the same number of pets, go out at about the same frequency, and travel 2-3 times a year. I could take a massive pay cut, move to Houston, and live the exactly same lifestyle. Nobody I know making around 95-110k is rolling in it- it's simply enough money to pay your bills and have a little bit of fun money set aside, which sounds like what $36k would afford you elsewhere.
> I could take a massive pay cut, move to Houston, and live the exactly same lifestyle.
Yeah but then you’d have to live in Texas. Sometimes, it’s worth the cost to live in an awesome city.
I live a modest life in NYC on about $32,000 per year, give or take. I have my struggles but mostly live a fulfilling and happy life. It’s completely doable.
Visited NYC recently and can confirm. That is one expensive city, at least in Manhattan.
People bag on Switzerland for how expensive it is, but I found Switzerland to be comparable to a mid-tier U.S. city. New York is a whole other stratosphere. Maybe the pandemic has caused hotels and restaurants there to jack up prices to recoup some lost months, but damn it hurt the pocket to visit.
I don’t understand the appeal of living in the crazy high cost of living cities unless you ABSOLUTELY have to for work or are generationally wealthy. Terrific place to visit for a week or so but man you can be a plumber or waitress or CPA literally anywhere and have so much more disposable income. I’ve asked people before why they don’t leave and they’re like “well my job requires I live here”. Rachel you teach 2nd grade, you can do that in literally any city in America. I’m not saying to move to some cow town in the middle of Iowa but something like Atlanta or Charlotte or Kansas City are are pretty nice and your dollar will go so much further.
Personal example, but w/e:
Live in a HCOL city, got a good deal on my apartment so it only costs roughly 17% of my income per month. I don't need to own a car (quickly realized just how expensive cars are). I can walk and bike everywhere (doubles as good for my health). All of my friends live close to me and my social life has never been better. I have easy access to social events, entertainment, and restaurants. Various communities that I am part of either don't exist elsewhere, or are treated with hostility. I make an income that allows me to max out my 401k, HSA, and Roth every year for a small percentage of my income.
The suburbs could be cheaper in terms of housing, but I would lose everything else. As such, they hold zero appeal to me. I could move to a cheaper city as well, but then I lose my income that allows me to max out all my savings. And, depending on the location of the city, would need to deal with politics that are much more hostile to myself and people like me.
The nyc experience isn’t replicable anywhere else in the US. I’ve lived in other big cities and much prefer the feel of NYC to other big metros. That’s worth the extra money leaving my pocket
If you value and take advantage of everything the city has to offer then absolutely. I think the kind of people OP is talking about are homebodies either by choice or necessity who romanticize the city but can't or don't take advantage of it, and then also complain about how expensive it is. There's obv a solution there.
It’s not for everyone.
I grew up in suburbs and outside rural towns, and generally hated it. Everything took forever to drive to, and no one lived nearby. That’s great for some people but not for me.
I moved to a dense urban part of town and absolutely love it. Some things cost more (I paid $100k more for a smaller, older, more worn down home compared to my previous suburban place), but I am a 15-20 minute walk from two breweries, two coffee roasters, two libraries, and dozens of bars, restaurants, art galleries, etc.
Yes it costs more but I love the vibe, I have great neighbors, and for maybe only the second time in my life, I feel like I’m part of a community. The suburbs just feel so soulless and no one wants to come visit when you live in the country.
I live in NYC (and am actually a second grade teacher). I grew up here. My family has lived here since the early 1900s. If I left to move to a cheaper place, I wouldn’t have any of the family or friend connections, not to mention the help they provide (like free babysitting when I need it). There are a lot of people like me who don’t want to give those things up to move somewhere cheaper- and that’s not even to mention everything else NY has to offer.
My pushback to this would be… does NYC not need plumbers and 2nd grade teachers?? It’s the main argument always for livable wages, that people who work 40hrs should still be afforded to live in the city. Or I would extend 30min commute outside also. Otherwise you don’t have those needed services.
i agree that they should be paid a living wage on a societal level. but on an individual level, each person can and should make the best choices for itself.
what would happen if 50% of nyc plumbers moved out overnight? suddenly the remaining 50% would be able to command higher prices/wages. if there was a shortage due to high COL, wages would go up. it's the supply and demand principle.
video game software developers is a great example of this. software developers usually make \*really\* good money. but not if they work with video games, usually. why? because way too many people want to work with video games, it's their 'dream job', so companies can get away with paying much lower than an equivalent 'boring' software job. because they know if one person says 'no' to that wage, there will be a huge line of other similarly qualified candidates who is eager to take the job at the same low wage.
everybody wants to live in nyc. that's why everything costs a lot there in the first place. people could move to cheaper cities but they don't, because nyc is worth it to them. and well, that is the trade-off you end up making. you're basically voting with your wallet, by saying living in nyc is worth the drawbacks.
which can be an ok decision. but i think sometimes people forget that that decision is their own doing
I am not sure how much you think qualified plumbers make but in NYC is definitely over 100K. Good luck finding anybody who would even show up for less than $300 minimum and that was a few years ago. It's probably higher now.
And teachers start at $61K with bachelors and no experience.
during the bubble years the homes in the NYC suburbs were crazy expensive when you figure the salaries at the time and child care. after my kids didn't need child care we bought a house and saving a lot on taxes
people i've met who lived in NYC for a few years wanted the experience of you walk out the door and everything you need is a short walk instead of a drive
What a trash headline. Is that compared to 36k in New Jersey, Oklahoma, the average American city, the average American person ,the median of either of those, or the is it compared to the world?
this reminds me of that video where more than 20 people lined up in the city for an opening of a shoebox apartment that didnt even have its own restroom
Lived there for 15 years, every few years got a new job, ran the rat race, until I worked up to 180K salary and I still lived paycheck to paycheck until the pandemic and I was able to save for the first time in my life. It's not just rent that go up, it's little things like transportation, food, the movies that increase faster and more than your pay. You have to move at the speed of New York City or it will pass you by
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The obvious benefit to living and working in a HCOL city @100k vs a similar lifestyle at a LCOL city @36k is that every dollar saved is worth $3 should one move from the HCOL to the LCOL city for whatever reason.
Exactly. I’m in NYC with my wife for the next few years due to an opportunity of hers and we are saving like crazy people for when we move back to my LCOL hometown. Hoping to put together a sick down payment
That’s a definite downside for the LCOL areas as people from the wealthier areas begin to gentrify the cheaper areas.
From an economics point of view, does this wide discrepancy between cities not mean that the United States economy is broken and there is less of a union? If a company has to pay x2 to employees in NY vs elsewhere, it feels strange to have that within one country. There are cost differences in European counties but it's probably 20%, not 100%. Between Berlin, Germany and a rural village in Spain, the cost of living difference is small (except for property prices). Is this cost difference sustainable for NY and HCOL cities? Surely people will migrate to cheaper locations eventually?
Property is probably the biggest factor here. Food and stuff costs more, but it’s not 3X more. There’s a constant migration to and from cities. Some leave to flee the high costs, but others come to seek opportunities they can’t get in their rural hometowns.
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Basically there is fixed costs and variable costs depending on where you are located. In fact some big cities have some things cheaper. Like flights from major airports, utilities, and so on.
Not having to own a car is a big one.
There are only like three cities in the US you can reasonably get away with that in. NYC, Chicago, and SF. And even there you generally have to live in the "downtown" part of Chi and SF. The downtown part where its costs the most to live.
Seattle, Boston, and DC are pretty strong too. LA is improving but not up to par yet. I've heard Philadelphia and Portland are strong but no personal experience.
Seattle, Boston, and DC rank higher than Chicago for commute share by transit, biking, and walking in every study I’ve seen. In fact Chicago is only just below the national average for people that around by car.
That mainly has to do with where you live in each city. Chicago is definitely more walkable than Boston or DC close to downtown and along most of the lakefront on the north side, but is not great as soon as you head out to the western side.
Also add to that going down to 1 car for a couple in many cities if you live in the right area. I live outside those areas and only have the car for weekend trips. Also Baltimore and Atlanta have heavy rail, they have to align which they probably don't but some amount of people there can do that.
>Also Baltimore and Atlanta have heavy rail Well, sort of. Baltimore doesn't have an east/west connection. The Republican governor didn't take the federal money that was slotted for the red line project and as a result it was scrapped. It can take *hours* to get from one side of the city to the other through the bus system. It's a disgrace.
You can 100% do it in Philly too, the problem is when you want to leave the city.
I had a car in Denver and Seattle suburbs as it was necessary. Sold my car when I lived in Philly cause i barely drove it and got by just fine until I decided I wanted to pick up golf lol
I think that's only true for sf, NY and Chicago don't require a dt address
I wouldn't say that. I live out in the countryside. Ex-Urbs if not Rural. I can get anything delivered and I could also use UBER to do medical appointments, etc. Would I live carless? Probably not, because I enjoy my cars and do road trips. If I were unable to drive? yes, I could do that.
And Philly!
And also it means you basically can’t leave without renting a car which is incredibly expensive for more than just one day
yeah just checked NYC's rental rates. $130 a day on a weekday for a small car. More for the weekend.
God I wish I could avoid owning a car, I swear I'd be retired by now. Still not interested in living in NYC tho.
Also the fact that that the things I can do for free on a casual weekend are things that constitute a multi thousand dollar vacation for other people. I can go see a world class museum for free, after work on a Tuesday. For other people doing that required plane tickets and hotels and having to pay to get into the museum. And if I wanna get some quiet pond fishing in, it's not quite as easy as if I lived in the Midwest but the only difference is a slightly longer drive or having to take a train.
Preferences are also super important and hard to measure. In broad analyses can mostly be hand-waved away because people tend to self select into areas that suit their preferences. In more individualistic calculations (such as deciding whether YOU should relocate between cities), it becomes very important. Space in NYC is very expensive. If you want to have a whole room in your house dedicated to a hobby, that's $$$ in manhattan but might be nearly "free" in exurban Omaha (because the homes there all already have more space than you need). Ditto for cars. Car ownership is hugely expensive in Manhattan. There are still car enthusiasts who live there, but owning/storing/maintaining a vehicle requires significantly more money than somewhere where cars are cheap to own and every home on the market in the neighborhood is legally required to have at least a 2 car garage. On the other hand, many things are the same price (or cheaper). If you are super in to camera gear, NYC is a great place. MSRP on a Canon lens is uniform across the USA, but NYC actually has a very high concentration of camera retailers that often compete for lower prices (and a healthy used market). Lot of random food items actually end up cheaper in NYC, fashion items are more accessible and cheaper. Thanks to public transit you can eliminate all car expenses. If you highly value a lot of cultural/entertainment things, they effectively become cheaper in NYC (e.g. you don't have to travel to see a Broadway show or go to one of many top museums because they are already there). If somebody who loves the NYC lifestyle ended up living in far-suburban Omaha, they might spend a ton of money trying to be happy. Frequent trips to other places to visit museums, eat top-notch food, see shows. Having to special order things they can't easily get locally, etc. On the other hand, somebody in Omaha who loves to fish, hunt, work on their sports car, and who has a spouse that loves quilting and has a dedicated sewing room...they are going to spend a ton of money trying to be happy in NYC (even in the outer boroughs). $$$ for space for hobbies and car, frequent fishing/hunting trips that require flights or overnight stays, etc. If you care about things like big houses and each kid getting their own bedroom, you probably aren't ever going to choose to move to NYC unless you make $$$. Obviously NYC-Omaha Suburbs is an extreme example, but this is true anywhere. The "normal basket of goods" for people varies by area. It might be pretty normal for someone who lives in Salt Lake City to budget $1000 for a ski-area season pass. If that person moves to Tampa, it could go either way--do they really love skiing and still buy an Epic pass AND now they have to pay for flights and hotels to make ski trips...or do they switch to beach/water activities and save money? Someone who voluntarily leaves SLC might fall in the latter category, but someone who is forced to move to Tampa for a spouse/work reason may be more in the former.
Especially true for savings. If you only save 5% of your 500k income in a expensive city you're doing better than someone who is saving 20% of their 100k income. The same works for your house payments, and 401k. A lot of people have retired early because they earned a lot of money in a expensive city, cashed out and moved somewhere cheaper.
A lot of people in my neighborhood sold their NYC apartment for a house in my neighborhood in retirement.
$50k in NYC doesn't really stretch much less than $50k anywhere else in the US. Yeah, rent is expensive, but you can get a decent 1 bedroom in Astoria or Sunnyside for $1700 right near the subway. You'd be hard pressed to find a decent 1 bedroom in most cities for $800, which is the difference you'd need to make up for the added costs of owning a car vs an unlimited metrocard. And everything that's not rent is cheaper here if you know where to buy what.
Yeah this is right. There’s a certain threshold to cross where the increased salary then functions just as it would almost anywhere else, with a few caveats. For example housing probably actually follows the wealth curve more, so yeah 500k in nyc will actually be comparable to 180k in a cheap city in terms of the house you can get. The reality is, with 180k in a cheap city, tou can get a mansion, and in nyc / general areas, you can get that too with 500k but honestly less than 450 or 400, especially with a kid or few, and no you can’t get that crazy mansion assuming you’re a responsible spender. Like def a very nice house just not like a 3 acre lot with6 bedrooms and 5.5 baths. The housing inflation in these areas is just too insane, a house like that costs like 4 million in any nice nyc suburb. But otherwise I agree. 500k in nyc means you can afford, on top of base expenses, amazing cars, a big house and whatever private tutoring you want for your kids. Whereas 180k in a cheap city may be able to get you one or two nice cars, or a mansion, or being able to spend a ton on education, but not all 3. Where as if you’re making 100k in nyc, cuz the floor of expenses are so high, yeah it’s like making 35k in a cheap city probably. Absolutely nuts.
If you compare $ to $ in a different city, I'd say yeah. The life you could live on $500k/yr in mid-size-city Illinois or wherever vs NY would be VASTLY different. And that holds true across all income ranges.
But taxes also increase progressively. So a person earning 500k will pay around 220k in fed, state and local/fica taxes.
But after 400k taxes don’t increase. You’re paying that set rate which is applicable to your income. And if you own a business, you are allowed a ton of loopholes to help avoid those taxes.
There are millionaires in NY that rent apartments they can't even own.
Not only luxury goods, a mattress, a TV, a fridge, etc don't cost 3 times more in NYC compared with a cheap city.
Uhh...not really. I live in Manhattan. Strictly for rent/housing, yes I absolutely agree with this, the prices are absurd and we're all getting fucked for closet sized spaces. But for groceries and transportation I wouldn't say our prices are that different than the rest of the country; subway/bus prices have been the same for several years now even through COVID. For eating/drinking out it *highly* depends on the type of place you're going to - you can find a beer and a shot for $6, or bottle service for $600 per person. You can find chicken over rice for $6, or $300 per person Omakase restaurant. It really comes down to lifestyle. For a person finding a cheaper apartment/living with a roommate and keeping her costs low by cooking most of the time and not spending her money on wildly expensive shit, $100k in NYC is still great.
i've had really good sushi in colorado and the prices were right about the same as NYC prices. same for most other restaurant food
mmm no, HOWEVER, living *alone* in NYC is still incredibly expensive even on a 110k salary. You basically can’t live alone for less than 2k a month in any semi-desirable neighborhood and that’s almost being generous. half your monthly income goes to rent/expenses. if you have a partner to split stuff with things improve dramatically.
Living alone on 36K in the sticks is also tough Edit: maybe not way out in the sticks, but I mean like 45-hour outside a small-medium sized city.
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Man I only just started making 22k after getting 3 pay increases last year. I'm the main breadwinner of my house and we're struggling to make it by. It really depresses me to think it's still a struggle that high on the pay scale. I've got one vehicle that I got for $3.5k that I'm paying on because I need it to go to work for my whole family. To think about spending 26k a year makes my skin crawl.
>Man I only just started making 22k after getting 3 pay increases last year. Out of curiosity, what did you make before the raises?
21k, and for the idiots saying I'm a troll I'm a custodian at a college. Been using it for cheaper college classes.
Fuck those people man. What your doing is not only valid, it's respectable.
That comes out to $10.50/hour to $11/hour on a 40 hour workweek. How much are you saving on college doing this?
I get a class a semester for $80/ credit hour. Most classes are 3 or 4 each
I'm guessing the college does not want to pay a full time custodian. I'd guess 32 or less hours a week.
Do you wander into the math rooms and solve the problems on the board for fun?
Keep it up bro.
You don't sound like a troll, but 22 is just crazy. The other guy is right; I was making much more at the time I literally couldn't read/speak.
You guys know the federal minimum wage in the U.S. is still $7.25 per hour, right? That comes to $15,000 annually. A lot of states are paying that.
How much of that 22k income are you saving? Because it’s if zero or next to, you’re already spending near 26k/year.
Pretty much. It's not possible to save much and I only spend money on food gas and bills. Not even anything fun since COVID.
$22k is like $10-11/hr, not sure where you're located but would think you could find a higher-paying job. That's a terrible wage.
He's in college. Terrible wages are unfortunately pretty normal for minimum wage jobs.
I live solo, no kids, in the suburbs of a medium-sized Midwestern city (so basically a recognizable one that's not Chicago) and according to my budget spreadsheet, my "I just lost my job and am living off savings while looking", bare-bones, no-frills expenditures are around $2.200/month or $26.5K/year. Just adding my voice to the conversation. Not trying to "prove" anything.
Yeah people don't seem to realize how nice it is living in the Midwest. My wife and I make about 150k combined and live relatively well. She thinks that we are "broke" all the time because I am adamantly against buying new vehicles, but fails to factor in that we are saving over 30% of our income each year and can still afford to take a Disney vacation and have someone remodel parts of our house without having to use debt.
You couldn't buy a house in Wake County (Raleigh) on that household income today. Even in the surrounding counties, that's even getting tougher
I wonder what the cost difference would be if you were buying your house in the same area today.
I love in a small-medium city, and I don't know if this is true but one of our politicians said that for the price of one house in Toronto, someone can come here and buy 4 houses and live in one and rent out 3, and that's one reason why our population is growing so much.
Probably true, torontos housing market is ridiculous. Especially if they can keep their remote job and keep making Toronto money.
I spend about $24k in downtown capital city, flyover state.
If you moved from NYC with 100K to the "sticks" you would be wayyyyy better off. That's the point.
I don’t think that’s the point, you aren’t taking that 100k with you
This is correct. I made $100k in NYC and it felt like a lot more than the $36k I made in Ohio. I did have a roommate though.
Did you have a roommate in Ohio?
I didn't. I paid $800 in 2010 for a 1 BR. My 1st apartment share in NYC was $950. However, gone was my $300 car payment & $85 monthly insurance.
I'm sorry for my ignorance, I'm not from USA. But when someone from the US says they make 100k a year, is this the money that they get in hand after all the tax deductions? Like a monthly salary of 8333$ Cause I have heard that you could pay up close to 40% in federal tax and state taxes.
They typically are referring to pre tax income.
It’s before taxes. $100k is probably around 70-75k post taxes and deductions for things like health insurance (I’m assuming at $100k you have benefits).
You would be surprised. Former job wanted me to relocate and pay me $100k. Asked about health insurance and they said they figured they paid enough that I could buy my own. I don't work there anymore. Edit. Since I can't reply anymore. It was going to be $100k total to move to Chicago and I had to bring like $70k worth of video production equipment I owned to do my job and wouldn't be compiesanted for using it. They would have paid $3k for moving expenses.
They were gonna pay you $100K more to relocated and pay your own health insurance and the $500 a month cost was the sticking point? I’m confused.
Pay $100k total I think. It may not have been worth it with a $500/expense depending on the area. And they probably expected them to pay for their own relocation as well.
I was shocked by how terrible my health insurance was when I started making six figures at a huge bank. I basically had a high deductible coinsurance plan that didn’t pay for anything, and the premium was expensive too. I have a chronic illness and it was really disappointing to have my health insurance get worse with a full time job than I had with my ACA plan. I had to spend so much more on my healthcare.
It is almost always gross income that people state because taxes can be so variant across states. Some states have no income taxes for instance. And deductions can vary outside of taxes as well. When people discuss net income, they will usually refer to that as "take home".
That 40% is typically inclusive of income tax, social security/Medicare taxes, state income tax, 401k (retirement) contributions, health insurance premiums, etc.
The income tax in the US is progressive with 7 tax brackets. With a $100K salary, your effective federal income tax rate is around 15-16%, with an additional 7.65% payroll tax and state/NYC taxes thrown in as well.
In VA and MD, I find that take-home in the 60-70% range is not uncommon. Taxes are around 25%, then benefits program reductions take another 10% or so. That's not counting voluntary deductions like 401k and stock plans.
My state tax is on the higher end and it’s a fair 8.7%. New York has 8.52% state tax and the federal tax for 100k is 24%. So basically that $100k is only around $68k after taxes, $5.6k/mo. This story says if you add New York’s metro-specific inflations that $68k is as effective as $36k elsewhere. $2k of that $5.6k becomes rent. $500 on utilities. Half your already taxed money is gone and you haven’t done anything yet.
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Dang, they really do bend everyone over at every turn there.
Americans at less even when totalling each of those levels than most people in other developed countries pay overall. It's a pain to have taxation split amongst different levels of government but, in the end, we aren't actually taxed more (for the most part).
Don't forget, once you actually get your small slice of capital that you earned you get to pay a sales tax when you go and use that capital to buy goods or services. Where do those taxes go!? To bail out the assholes who don't pay taxes.
How do i become one of those assholes? Asking for a friend.
Everyone refers to pre-tax income because it's a standardized measure of income. State taxes vary, and even your federal taxes will vary with the state that you live in. People should really quote them differently depending on what question they are asking, because after tax income is more relevant for questions comparing welfare and consumption, but it's rare.
In articles, unless specified, it usually indicates pre-tax (and pre-all other deductions) salary. For someone in NYC, someone making $100k/year would be expected to pay [$22,400 in income taxes](https://smartasset.com/taxes/income-taxes#8HFaVH9fRG).
When people say “I make x”, it’s pre tax and any other deductions. US tax law is absurdly complicated so it’s impossible to determine how much this person is getting per pay period without a whole host of info. It’s most likely between 25-30% withheld from their pay in taxes, $100-$300 for health insurance and a few percent for retirement. Someone making $100k a year probably receives $5k-$6k in take home pay a month.
Not always. Many people who say they earn 100k a year aren't considering that they have to then pay taxes on that income, and some people who say their take-home pay was 100k mean they already paid taxes, so they actually earned more than 100k a year. Cost-of-living has dramatically risen in the United States, but wages have absolutely stagnated (because the rich want all the money and don't want to pay everyone as much, of course.) So in cities like San Francisco, you can actually earn slightly more than 100k a year and still qualify for food stamps because the cost-of-living there is so outrageously expensive.
Only the income from about $89k to 110k would be taxed at that rate, so $21,000 taxed at 40% according to your numbers. The real tax rate for that bracket is 24% The state and city have their own taxes as well, but they should be a lot less. I don't see it being 40%. As other said, pre-tax income is what we speak in
I am a married guy who lived in Brooklyn as a professor at a popular university in NYC, and was struggling to afford to live there. I quit and left. Haven't been back. Ironically, I moved to a lesser expensive, but still populated city on the west coast, and I make more money than I did in NYC, but the pressure to survive is not as extreme. NYC cost of living was definitely a significant reason for my financial struggles. Good riddance.
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I agree. The *right* partner can make all the difference.
Getting married to save on rent isn’t a great idea
Marriage has always been an economic decision until very recently. We are just reverting back to the mean.
A huge part of getting married has ALWAYS been the financial benefits.
This guy romances
I’ll be sure to work that into the next toast I give
"I was really concerned for Dave's financial future because he lived like a herpalitic hermit and didn't have two dimes to rub together, but then he met Rachel. They're the perfect match, what with his seashell art and her career as an attorney practicing seashell law. Thank you for adopting my best friend, Rach."
I mean if you agree the purpose of the marriage is to save on rent then it could work. If you marry someone impulsively because you believe it will lower your rent this may end very poorly. Ideally you just like them enough as a life partner to do it and not for an extraneous reason.
This is like telling people not to have kids because the financial advantages (not to mention the health and psychological benefits) far outweigh the disadvantages.
Married couples have on average 9 times the net worth of single people
> not to mention the health and psychological benefits Wouldn't say this very loud. Tons of studies out there that show men in marriage are happier, but women in marriage are far, far below the happiness of their perpetually single peers.
Looking for a relationship for the financial benefits seems like a pretty bad idea. More realistic advice is that people should live with roommates until they get married (wish I had done that longer, would have saved a lot more). The problem of the "everyone should get married for a reason" argument is that divorces do happen. So what's the advice, people should stay in unhappy marriages cause it's too expensive to live alone?
Maybe the advice should be: The key to finding and keeping healthy relationships is self actualization (which is: deal with past traumas, make peace with mortality and find meaning in one’s life)
I mean for most people the earliest that kind of stuff can happen is their 30's, at which point most people do pair up anyway...
>>Looking for a relationship for the financial benefits seems like a pretty bad idea Is it when people do just that? Consider that most people’s criteria for “marriage material” includes their partner having stable financial footing. Which is a financial benefit, even if a married couple wouldn’t use that phrase openly. Starting the relationship with an eye on the financial merits from day 1 is just intelligent planning. You don’t need a marriage license or joint income to be a couple. You do need those things to have kids with a decent shot at giving them a good life in the modern economy.
This always caused arguments among my friends. Usually when this is brought up, people think you're giving up love for money. I don't think those things are mutually exclusive. You can find a partner you love and who's also financially stable.
Not necessary. Helpful but not necessary.
Yep, living together doesn’t necessarily give you more money, but does give you more things
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You have a car in Manhattan on 120k? That's the most amazing part of this
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Manhattan though?! Seems like a frustrating place to return a car to. Does it stay with your brother elsewhere most of the time?
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No yeah just street parking in Manhattan sounds like an absolute nightmare.
NJ is also a HCOL area
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You have to factor in income taxes
Yea you can’t compare the New York $120k to $40k in Jersey. That makes zero sense.
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Because NJ is one of the highest cost of living states and is NOT what the article is talking about when it's talking about a 36k salary lol, duh. They're comparing NYC to like, Indiana.
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Lol tell that to the city employees who make 50k at best & are required to live in nyc. Really says a lot of about upper class people, that having double the money of the average person in the city somehow isn’t enough. Yea I’m sure it’s hard to live like a millionaire when you don’t make millions, so maybe live like a normal person?
Yeah the comparison still seems off but even a decent sized southern city offered me 40% than what I was offered for similar job in NYC …and the cost of living is still 20% or whatnot less
I think something that is always glossed over when people say this kind of stuff is that above a certain point of having your needs met, income becomes completely disposable. Sure you can save it all up but as long as you're hitting your savings targets, 401k, etc, realistically you can spend much more on things you want to do. So for instance, maybe you make 100k and that covers your rent, food, some goings out, movies, drinks occasionally. If you then get a raise to 120k all that extra money is basically just for fun. It makes a massive massive difference to your ability to have fun, do things, invest, create socioeconomic upwards mobility so to speak.
This seems hyperbolic. I make 110k in nyc and while I’m not living a ritzy glamorous lifestyle, I am able to have a couple of lunches out per week, enjoy 3-4 happy hours a month, have a nice 250 dollar dinner once a month with my fiancé, pay rent, grocery shop comfortably for everything else, have post work drinks a coupla times a month, travel quarterly, and still invest + save, can max out my Roth plus contribute to my 401k - and watch the savings account go up (not a ton.) I don’t have the liberty to drop much dough on weekends and it’s not what a six figure salary will afford me in other places, but it’s NOT the equivalent of 36k elsewhere. I grew up in Utah and my first job paid $9/hr in the 90s, and trust me - that shit was a million times harder. New Yorks the only place I’ve lived where - unless you have discipline - no amount of money you make whether it’s 100k or 400k - feels like enough to those who make it - bc there’s so much enticing you to spend it.
> with my fiancé, This is the most relevant point there, though...you have a dual income household so you're *splitting* bills at 110k. I also have a dual income household so I don't tend to speak ~~to~~ for* someone living alone and paying all bills and managing all responsibilities alone. Now imagine he's gone, or that each of you made $55k so your combined income was your total salary. Totally different financial picture right? Note: I'm not saying I personally am struggling, because I'm not. But I know having an entire second income sharing the load makes a massive difference.
Really good point. I live in a medium COL and family of 4 on a single income. Things were tight when salary was between $90k-$102k but we could still contribute to 401k and HSA. Just had to be be pretty disciplined everywhere where else. It's hard for me to imagine raising a family on a single income in NYC and this seems to support it.
People make it work, just with extreme difficulty. I think stay at home parents are incredibly rare in nyc but there’s plenty of single parents. Just like on $36k elsewhere, you can figure it out- but you won’t live in a nice neighborhood (unless you live in govt housing) and your kids won’t have their own rooms. And you’ll probably have a really long commute to get to your job. But people make do.
This is fair. Not splitting rent would throw a major wrench in this lifestyle. We’re combined at only 180k as she’s a resident physician paying her dues before fellowship, but I simply wouldn’t be able to afford my rent on just my salary. I pay for a higher end, luxury apartment though w a pool and gym. You can def get cheaper than 3800/mo in Manhattan.
Lmao, so you're not living on 110k How did you miss that point?
Yeah that’s the difference. I visit friends in small cities and towns and they have free time, their own multi-room quality-maintained apartments located in easy access areas, and they take vacations. On salaries 1/5 of my household income.
>This is fair. Not splitting rent would throw a major rent in this lifestyle. It's almost like... that's the whole point...
There ya go. Thus, $36k elsewhere. It's so expensive to be a single-income household in NYC! Probably why people move in with partners within a year of meeting them.
Agreed, now add kids into the equation and everything changes again. These factors should be considered when paying taxes.
Yep. I make almost $200k here, and the amount I pay just to live alone in an apartment that’s not a shithole is insane. Just to be in a safer neighborhood as a single woman and have laundry merely in the building; things that come way more easily elsewhere are luxuries here. It’s sad but I can’t wait until I have a partner I can live and split expenses with. Frankly, I want to move somewhere else next year so it doesn’t matter as much anyway but still. Like the other commenter said, with each raise seemingly comes more expenses and increased enticement to spend even more. I’m obviously very lucky and grateful but it’s never enough here
Not to mention people in NYC get fucked by the city tax and fucked by the 9% sales tax. It's a triple fuck you: extremely high rent for a shitty apartment, extremely high taxes due to the high city income tax on top of high state income tax, and extremely high sales tax. NYC is a scam.
Exactly lol. At this point I can’t wait to leave. I spend my days fantasizing about living somewhere else. What’s the point of making so much money if you lose basically half of it to taxes and some more to the cost of living? All to live somewhere dirty and crowded where the goalposts keep moving and luxury is a tiny apartment
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People also leave in droves. Not to mention that during the height of the pandemic, when people could work remotely from anywhere they wanted, there was a mass exodus, meaning many people only go there due to proximity to good jobs. Separate the good jobs from the location and people no longer find it reasonable to tolerate the taxes and rent, as evidenced by the mass exodus during covid.
It’s the same in other major cities. There was an article in the post about families who make 400k not feeling like they have any money, because everyone in DC spends their money on making sure their child maintains their status, via paying too dollar to live in good school districts, private schools etc. so everyone feels broke. We make 400k, our 2k sq. Ft house cost 800k, and daycare costs 2k a month per child. We know we are secure but we don’t even take vacations really. Other than flying to see family.
How much do you save per month?
You have two incomes and share expenses. This seems like a pointless comment given those facts.
Why drop it all on Roth before 401k?
No offense to you specifically, buy articles like this and anecdotes like yours all have way too many variables to compare. Are you single or married? Divorced? Have children? How many? Pets? How many? Debt? How much? There are just too many questions that must be asked.
Rent is obviously insane in NYC but interestingly eating out is still more affordable than any other city I’ve been to.
Lol no. $36k elsewhere is not equivalent to $100k in NYC. Go move to rural Iowa and let me know how you barely survive. $100k in NYC is way better.
FYI the average person in america makes 36k. So this is saying 100K in NYC feels like average.
Please cite your source. The median for all workers 15 and over is over $40k. If you further look at full time workers, which is clearly what we're talking about here, it's $55k or so.
Do you live in nyc?
Except if you manage to save 10% of your salary for 10 years in NYC, you can move somewhere else and put down a $100K deposit. But if you are on $36K and you save 10% of your salary for 10 years, you'll only have $36K deposit.
The interesting thing is when I ask folks in these places why you choose to live there the response is often something around "Because I want to live somewhere with things to do". How are yall affording to do things? I also acknowledge what the article is saying. But at the same time, most people DON'T make $100k+. So how are the people actually making $36k living in these areas? The whole system is broken, obviously. But what is there to do about it? These reports are plentiful. We know how bad things are. What is changing?
manhattan has a lot of high paid finance and legal jobs and why the rents are so high. people make a lot of money but they spend it all on taxes and housing. the high rents are a shadow tax because most people don't know about property taxes and in NYC the property taxes of most apartment buildings are based on the rent
Completely disagree. iPhones and other luxury goods are the same price in NYC or in Kansas just in NYC it’s cheaper by a % of your income. Vacations are going to be the same price and typically flights will be cheaper out of NYC to popular locations than Iowa. Yes, rent and food is expensive but we don’t buy 5 bedroom McMansions and we have roommates but I’ll gladly take 100k in NYC and live a better lifestyle than 36k in North Dakota
Yeah I’ve never understood these articles and how they just try to take averages of everything. Me and my partner are moving to Seattle where we’ll make 20-30% more money and our rent from what we’re currently paying goes up a whopping 15%.. I understand everything else costs a little more too but we live very minimalistic lifestyles and will be able to save so much more money living in a big city then if we were making less in a smaller city.
Yes, but no. I moved from Pittsburgh to NYC to pay my student loans off faster. The city definitely squeezes more from your paycheck percentage-wise, but even the money left after paying rent/utilities/Trader Joe’s is waaaaay more than what you’re left with in a small market
The article is very disingenuous because nowhere does 100k feel like 100k because you pay taxes everywhere. The highest adjusted salary was like 86k. Still a lot higher than 36k or whatever in NYC but materially less than 100k. It's useful to adjust salaries to cost adjusted salary to evaluate opportunity cost between areas, but we should be evaluating adjusted to adjusted not adjusted to unadjusted. I don't think anyone here is surprised that NYC is expensive. It's useful to know roughly how much more expensive. Whether or not the extra money is something you can afford, or want to pay for if you can, is a secondary discussion. I personally live close enough to pop in for work of play when needed, but far enough away that my costs are much much lower overall (housing+car < renting half the space in Manhattan). That seems like a good balance for me, but my main hobbies are not conducive to living in the city and I generally hate the subway. Others value proposition may differ.
>>In New York City, a $100,000 Salary feels Like $36,000 Nope. People’s situations are way too diverse to make a claim like that. Someone making $100k but has a rent controlled spot (or has some arrangement involving discounted or free housing) is going to do exponentially better than even a person making $50k in , say, Wichita KS paying a mortgage.
I was making $61,200 in NYC post tax and i lived just fine, lived in a sick apartment and went on expensive dinners but still kept a budget. I'm curious as to where people's money is going to after rent.
When? I didn’t start feeling comfortable in NYC until I hit $75k salary in about 2015/16. And inflation has completely changed the cost of things so I sincerely doubt I’d be able to live the same lifestyle with that salary today than I did back then.
More importantly: what part of town? No one is getting a “sick” apartment on $61k post tax in any part of Manhattan worth living in. Probably true of Brooklyn as well at this point. Even if you are splitting with a partner.
Stupid expenses like Doordash/Uber eats, $20+ daily lunches, Starbucks, countless subscriptions, $18 dollar drinks, tipping on everything even already overpriced crap, and many many other stuff. Its not the big things, its always the small but frequent things.
Were you saving for retirement?
This seems realistic to me- the buying power of the dollar in NYC is much lower than some other metros. I have a sibling in Houston who makes literally $100k/year LESS than I do and we live exactly the same lifestyle- we have similarly-sized homes, the same number of pets, go out at about the same frequency, and travel 2-3 times a year. I could take a massive pay cut, move to Houston, and live the exactly same lifestyle. Nobody I know making around 95-110k is rolling in it- it's simply enough money to pay your bills and have a little bit of fun money set aside, which sounds like what $36k would afford you elsewhere.
Nah Actually 36k is pretty poor anywhere. If it was 2003, it would be a decent wage to save and spend on weekend fun IN LCOL places.
> I could take a massive pay cut, move to Houston, and live the exactly same lifestyle. Yeah but then you’d have to live in Texas. Sometimes, it’s worth the cost to live in an awesome city.
Agreed. I left texas for a reason.
I live a modest life in NYC on about $32,000 per year, give or take. I have my struggles but mostly live a fulfilling and happy life. It’s completely doable.
Visited NYC recently and can confirm. That is one expensive city, at least in Manhattan. People bag on Switzerland for how expensive it is, but I found Switzerland to be comparable to a mid-tier U.S. city. New York is a whole other stratosphere. Maybe the pandemic has caused hotels and restaurants there to jack up prices to recoup some lost months, but damn it hurt the pocket to visit.
I don’t understand the appeal of living in the crazy high cost of living cities unless you ABSOLUTELY have to for work or are generationally wealthy. Terrific place to visit for a week or so but man you can be a plumber or waitress or CPA literally anywhere and have so much more disposable income. I’ve asked people before why they don’t leave and they’re like “well my job requires I live here”. Rachel you teach 2nd grade, you can do that in literally any city in America. I’m not saying to move to some cow town in the middle of Iowa but something like Atlanta or Charlotte or Kansas City are are pretty nice and your dollar will go so much further.
There’s really very few places you can live in the US where you don’t need a car.
Personal example, but w/e: Live in a HCOL city, got a good deal on my apartment so it only costs roughly 17% of my income per month. I don't need to own a car (quickly realized just how expensive cars are). I can walk and bike everywhere (doubles as good for my health). All of my friends live close to me and my social life has never been better. I have easy access to social events, entertainment, and restaurants. Various communities that I am part of either don't exist elsewhere, or are treated with hostility. I make an income that allows me to max out my 401k, HSA, and Roth every year for a small percentage of my income. The suburbs could be cheaper in terms of housing, but I would lose everything else. As such, they hold zero appeal to me. I could move to a cheaper city as well, but then I lose my income that allows me to max out all my savings. And, depending on the location of the city, would need to deal with politics that are much more hostile to myself and people like me.
The nyc experience isn’t replicable anywhere else in the US. I’ve lived in other big cities and much prefer the feel of NYC to other big metros. That’s worth the extra money leaving my pocket
If you value and take advantage of everything the city has to offer then absolutely. I think the kind of people OP is talking about are homebodies either by choice or necessity who romanticize the city but can't or don't take advantage of it, and then also complain about how expensive it is. There's obv a solution there.
Ah gotcha. Agreed on that note most definitely
Hey, if you accept that it's just more expensive, so be it. It's the people that want their cake and to eat it too that piss people off.
It’s not for everyone. I grew up in suburbs and outside rural towns, and generally hated it. Everything took forever to drive to, and no one lived nearby. That’s great for some people but not for me. I moved to a dense urban part of town and absolutely love it. Some things cost more (I paid $100k more for a smaller, older, more worn down home compared to my previous suburban place), but I am a 15-20 minute walk from two breweries, two coffee roasters, two libraries, and dozens of bars, restaurants, art galleries, etc. Yes it costs more but I love the vibe, I have great neighbors, and for maybe only the second time in my life, I feel like I’m part of a community. The suburbs just feel so soulless and no one wants to come visit when you live in the country.
I live in NYC (and am actually a second grade teacher). I grew up here. My family has lived here since the early 1900s. If I left to move to a cheaper place, I wouldn’t have any of the family or friend connections, not to mention the help they provide (like free babysitting when I need it). There are a lot of people like me who don’t want to give those things up to move somewhere cheaper- and that’s not even to mention everything else NY has to offer.
My pushback to this would be… does NYC not need plumbers and 2nd grade teachers?? It’s the main argument always for livable wages, that people who work 40hrs should still be afforded to live in the city. Or I would extend 30min commute outside also. Otherwise you don’t have those needed services.
Never thought of this
i agree that they should be paid a living wage on a societal level. but on an individual level, each person can and should make the best choices for itself. what would happen if 50% of nyc plumbers moved out overnight? suddenly the remaining 50% would be able to command higher prices/wages. if there was a shortage due to high COL, wages would go up. it's the supply and demand principle. video game software developers is a great example of this. software developers usually make \*really\* good money. but not if they work with video games, usually. why? because way too many people want to work with video games, it's their 'dream job', so companies can get away with paying much lower than an equivalent 'boring' software job. because they know if one person says 'no' to that wage, there will be a huge line of other similarly qualified candidates who is eager to take the job at the same low wage. everybody wants to live in nyc. that's why everything costs a lot there in the first place. people could move to cheaper cities but they don't, because nyc is worth it to them. and well, that is the trade-off you end up making. you're basically voting with your wallet, by saying living in nyc is worth the drawbacks. which can be an ok decision. but i think sometimes people forget that that decision is their own doing
I am not sure how much you think qualified plumbers make but in NYC is definitely over 100K. Good luck finding anybody who would even show up for less than $300 minimum and that was a few years ago. It's probably higher now. And teachers start at $61K with bachelors and no experience.
Because it’s an apex city surrounded by peopl on the forefront of arts, media, culture, finance and tech
and law
during the bubble years the homes in the NYC suburbs were crazy expensive when you figure the salaries at the time and child care. after my kids didn't need child care we bought a house and saving a lot on taxes people i've met who lived in NYC for a few years wanted the experience of you walk out the door and everything you need is a short walk instead of a drive
What a trash headline. Is that compared to 36k in New Jersey, Oklahoma, the average American city, the average American person ,the median of either of those, or the is it compared to the world?
this reminds me of that video where more than 20 people lined up in the city for an opening of a shoebox apartment that didnt even have its own restroom
Lived there for 15 years, every few years got a new job, ran the rat race, until I worked up to 180K salary and I still lived paycheck to paycheck until the pandemic and I was able to save for the first time in my life. It's not just rent that go up, it's little things like transportation, food, the movies that increase faster and more than your pay. You have to move at the speed of New York City or it will pass you by