A $100K salary may sound good in theory, but the reality is sadly much different. We already know the value of $100,000 is less than half if you live in Manhattan–$30,362 to be exact–but there are actually 25 different cities in the U.S. where even if you’re reaching that six-figure salary threshold it’s still not enough to keep you afloat.
According to an analysis done by LendingTree, in one of every four large U.S. metros, a monthly income for a family of three earning $100,000 a year isn’t enough to cover that family’s basic expenses. To add insult to injury, that’s even before you put a cent toward paying down debt.
And the sobering truth is that the average median household income in then U.S. doesn’t even hit six-figures–the most recent estimate from the Census Bureau (2023) says that the average household in then U.S. is bringing in an income of $80,610. Just 10 years earlier in 2013, the average median household income was even lower at just $68,220.
The analysis says:
For generations of Americans, $100,000 has long been a magic number. It has been seen as a level of yearly earnings that says: “You’ve made it. You’re successful.” For some people in some locations, $100,000 is still magical today. However, that has changed dramatically in many of the nation’s biggest metros. In 25 of the 100 largest metros in this country, a six-figure household income isn’t enough to handle the basics.
Let’s get into it. To determine the U.S. cities where a $100,000 salary doesn’t cut it, LendingTree based their calculations on a family of three (two adults and a child) that earns a gross income of $8,333 monthly, or $100,000 annually. They considered eight different spending categories that said family might face that they determined as “the basics.” The categories include:
- Housing: assuming the family rents a two-bedroom apartment
- Child care: assuming the family pays for monthly center-based infant day care
- Transportation: the total cost of transportation including car ownership, travel, and transit costs
- Health insurance: the monthly employee contribution amount based on the average annual family premium
- Food, entertainment, & utilities: assuming the family matches average national expenditures for someone earning $100,000 to $149,999 annually
- Federal & state taxes: assuming the couple filed their 2024 federal and state taxes jointly
- Federal payroll taxes: including FICA, or federal payroll, taxes, which consist of Social Security (6.2%) and Medicare (1.45%) on eligible income
- 401(k) contribution: assuming the family files jointly and invests $6,000 yearly into their 401(k), or $500 monthly
The total of the above basics was then subtracted from the $8,333 in monthly income the family would be earning with a yearly salary of $100,000. The terrifying result: those living in many of the country’s largest metros are left with negative monthly income. The top ten metros where basic expenses are higher than the monthly income of a family earning $100,000 annually are as follows:
1. San Jose, CA – Net monthly income: -$2,207
2. San Francisco, CA – Net monthly income: -$1,804
3. Boston, MA – Net monthly income: -$1,613
4. Honolulu, HI – Net monthly income: -$1,491
5. Oxnard, CA – Net monthly income: -$1,472
6. Washington, DC – Net monthly income: -$1,434
7. Los Angeles, CA – Net monthly income: -$1,254
8. San Diego, CA – Net monthly income: -$1,248
9. Seattle, WA – Net monthly income: -$1,043
10. Poughkeepsie, NY – Net monthly income: -$872
Are you as surprised as we are that NYC didn’t make the top ten? Don’t get your hopes too high though, as it didn’t take long to find NYC on the list–it ranked at #11 with a net monthly income of -$744. Oh, and don’t forget that as shocking as these numbers already are, debt payments weren’t even factored in–if they were, the number of metros in which six-figure earners are still broke would be far worse.
Though it may seem too good to be true, there are some metros where it is affordable to live–nearly 1 in 3–and where $100,000 earners would still have $1,000 or more left over each month after paying basic expenses. The most affordable metro is McAllen, Texas, where residents would have $1,770 left over. Residents in Little Rock, Arkansas, and El Paso, Texas, aren’t far behind, with $1,608 and $1,554, respectively.
Matt Schulz, chief consumer finance analyst at LendingTree and author of the study, stated:
It’s a rough time out there. The fact that you can make six figures in many, many cities across this country and still be broke, even before you factor in debt payments, is scary. That’s the reality for many families today, though, and unfortunately, there’s not much reason to think things are going to improve anytime soon. That means that families are going to be forced to make some tough decisions and real sacrifices to get by.
For those living in metros where $100K isn’t enough, LendingTree suggests taking the some actions to mitigate the impact, from lowering your interest rate to consider signing a longer lease the next time you renew your deal. Beyond the top 10, additional cities making up the top 25 include New York, NY, Riverside, CA, Sacramento, CA, Worcester, MA, Bridgeport, CT, Denver, CO, Stockton, CA, Baltimore, MD, Portland, OR, Minneapolis, MN, New Haven, CT, Fresno, CA, Hartford, CT, Colorado Springs, CO, and Bakersfield, CA.
See the full study.