There was a time when a $100,000 salary could create a very comfortable lifestyle - but now those dollars don’t go nearly as far as they used to.
“Earning $100,000 used to be the point where you could say, ‘I can afford to do what I want and live the way that I want,’” Ashley F. Morgan, owner of bankruptcy law firm Ashley F Morgan Law, PC, said in an email to The Independent.
Some 18 percent of U.S. adults earn at least $100,000, according to a 2024 survey from YouGov. And though $100,000 is more than double the national median salary of $46,960, financial stress remains for many six-figure earners.
In fact, those making $100,000 or more have now adopted the shopping habits of lower-income households as they struggle with affordability, Dollar General CEO Todd Vasos said at a recent retail conference. That remark has some consumers second-guessing the value of such a salary.
“I think a lot of people got to six figures and thought, ‘Wait, why doesn't this feel like as much money as I expected?’” Steve Sexton, owner of financial firm Sexton Advisory Group, told The Independent in an email.
The numbers tell the story
The average American household’s monthly costs total $8,856, according to an analysis by The Independent.
The figures are based on the latest numbers from sources including the nonpartisan think tank Tax Foundation; nonprofit think-tank Urban Institute; vehicle marketplace Edmunds.com; student loan analysis site Education Data Initiative; the U.S. Energy Information Administration; wireless and internet provider Astound; and internet provider comparison site BroadbandNow.
The Independent also used Progressive’s national average for medium-priced car insurance.
- Rent: $1,890
- Federal taxes: $1,175
- Groceries: $1,050
- Health insurance: $611
- Gas: $192
- Electricity: $154
- Cellphone: $155
- Internet: $81
- Car insurance: $113
- Student loans: $434
- Used car payment: $572
- Childcare: $2,425.
An American earning $100,000 gets paid around $8,333 a month before taxes - $519 less than the average household monthly spending.
While the above list considers some basics for an average American, not every home or individual has each expense on the list - and some may have additional costs. A good number of people don’t have to pay childcare or own a car. Others may live in one of the 41 states with state taxes or a place with city tax like New York.
Also, the list doesn’t account for expenses like gifts, charity contributions, clothing, streaming services or discretionary spending on entertainment or dining out.
The sting of city living
The gap between a $100,000 salary and monthly expenses is even wider in some major cities, where rent, groceries, and insurance tend to be more expensive.
For example, the average rent in San Francisco is $3,638, according to housing marketplace Apartments.com. Rent that high would create a $2,271 monthly deficit for a $100,000 earner. On the other hand, average monthly rent in El Paso, Texas, in October is $1,007, low enough to create a $360 surplus each month.
“Often, whether $100,000 is a significant salary depends [on whether] you have children, your housing costs, how much debt you have, whether you have student loans, what you pay for health insurance and whether you need a car,” Ashley F. Morgan, owner of bankruptcy law firm Ashley F Morgan Law, PC, said in an email to The Independent.
“In high cost-of-living areas, housing alone can consume a significant portion of someone’s take-home pay. Add a car payment, insurance, groceries, utilities and debt payments, and someone earning $100,000 can have surprisingly little money left at the end of the month.”
Creeping costs
Those earning $100,000 may feel like they’re living paycheck-to-paycheck for reasons that have nothing to do with cost-of-living, Morgan said. Lifestyle creep - spending more as you earn more - can also drain a six-figure salary.
“Wanting nicer things is not generally an issue,” Morgan said. “The problem is that if every increase in income immediately becomes an increase in monthly expenses, earning more doesn’t necessarily create any more financial stability. I regularly see people making good incomes who are living paycheck to paycheck.”
Identifying needs and wants is a good way to temper lifestyle creep. Write down a max dollar amount you want to spend on wants every month, then stick to that budget.
The ‘new’ $100,000
If this salary is no longer what it once was, what’s the “new” $100,000?
“If you made me pick a number, I’d probably say $150,000 is starting to feel more like the old $100,000,” Sexton said.
Morgan noted that “earning $100,000 can be something to celebrate. It just shouldn’t be confused with being wealthy.”
She added: “The better measure is what you are able to keep, save and invest after paying for your life. Financial stability usually comes from flexibility, not from reaching a particular salary.”
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