This article may contain links from our partners.
Is 100K a year good money?
Whether or not 100k a year is considered good money depends on various factors, such as your location, job industry, level of experience, and personal financial goals.
In some areas, 100k a year may be considered a high salary, while in others, it may be considered an average income. Similarly, certain industries and positions pay more than others.
For example, someone working in tech may earn more than someone in a customer service position.
Additionally, personal financial goals and lifestyle choices also play a role in determining whether 100k a year is good money. Someone who lives in an expensive city, has high expenses, and wants to save for retirement and other long-term goals may consider 100k a year to be a good salary. However, someone who has lower expenses and does not prioritize saving may feel differently.
Is 100k a year a lot? Is 100k a good salary for a family? What does 100k household income look like?
We’re going to answer these questions and more in this article. Let’s go!
Is 100K a year a good salary?
How good is 100K a year?
Well, according to the U.S. Census Bureau, the median household income in San Francisco is $123,859 as of 2019.
That’s probably higher than what you’d expect to hear for a median household income in the U.S. It’s important to note that San Francisco is known for having a high cost of living, so the cost of housing, transportation, and other expenses may be significantly higher than in other areas of the United States.
Additionally, certain industries, such as technology, tend to pay higher salaries in San Francisco, which can skew the overall average income.
Living paycheck to paycheck on 100K a year
In San Francisco, $100K a year could mean that you’re living paycheck to paycheck?
What’s interesting is that this source says, regardless of location, 48% of Americans who make over $100,000 per year are living paycheck to paycheck.
Why?
- Rising credit card debt
- High cost of living
- Dwindling savings
It’s a dream of many to reach six figures in income but who knew that once you got there, you’d still be facing potentially living from one paycheck to the next.
But, location can have a big impact on this.
While over $100K is the median salary in some cities in California, like San Francisco, in other parts of the country, like Kansas City, it’s a much different story.
According to the U.S. Census Bureau, the median household income in Kansas City, Missouri is $55,176 as of 2019. That’s because the cost of living in Kansas City is generally lower than in larger cities like San Francisco or New York City.
The cost of housing, transportation, and other expenses may be more affordable in Kansas City, which can impact the average income needed to live comfortably. Certain industries and job positions may pay more or less than the median household income in Kansas City.
So, there are factors like location that play a role in whether or not $100K a year is a good salary.
You also want to consider:
- Is $100,000 good money if you’re single? Married? Have a family?
And, lifestyle plays a major role in this question as well.
More money, more problems
As the saying goes, more money, more problems.
This suggests that as one’s wealth and financial resources increase, so do their problems and challenges. The idea behind this phrase is that as people accumulate wealth, they may also accumulate responsibilities, obligations, and stresses that come with it.
For example, someone who becomes very wealthy may have to deal with issues like managing their finances, making wise investments, and protecting their assets.
They may also face social pressures and expectations from others, such as family members, friends, or business associates who may ask for money or favors. Moreover, wealthy people may become targets of theft, fraud, or other crimes, which can increase their anxiety and require them to take additional measures to protect themselves.
In some cases, the phrase “more money, more problems” may also refer to the notion that wealth can lead to a sense of isolation or disconnection from others. Some wealthy people may find it difficult to form genuine relationships or may struggle to relate to people who do not share their financial status or lifestyle.
Living paycheck to paycheck or struggling on 100K salary a year could make it tough to save $20,000 in a year or live your most fruitful lifestyle, for example.
What is lifestyle creep?
Have you heard the term lifestyle creep or lifestyle inflation? It goes hand in hand with more money, more problems. It basically means that an individual’s spending and lifestyle gradually increase as their income increases.
As people earn more money, they tend to spend more on non-essential items and experiences, such as dining out at expensive restaurants, purchasing luxury goods, or upgrading to a larger home or a more expensive car.
Lifestyle creep can be problematic because it can lead to increased spending and debt, making it difficult to maintain a healthy financial situation.
As people become accustomed to a certain standard of living, they may feel pressure to maintain that lifestyle, even if it is not sustainable or financially responsible.
To avoid lifestyle creep, it’s important to:
- Be mindful of spending habits and,
- Prioritize financial goals, such as saving for retirement or paying off debt
Creating a budget and regularly reviewing expenses can help individuals maintain control over their finances and avoid unnecessary expenses.
Additionally, finding ways to enjoy life without spending a lot of money, such as engaging in hobbies or spending time with loved ones, can help people maintain a balanced lifestyle without succumbing to lifestyle creep.
What’s it like to live on $100K a year?
If you don’t make six figures and have ever wondered or daydreamed what it might feel like, here are some examples.
I found this article which interviewed 8 different people and got their personal perspective on living on their $100K salary. Here’s what they said:
- Alison is a homeowner with her husband and she says she has extra money to grab food when her and her husband don’t feel like cooking
- Greg says he feels like he’s failing because he can’t afford to get his kids private lessons like other kids have. The housing market makes the home he wants unaffordable and out of this budget at his current price range.
- Marisa says her $20K raise which took her from $77K to $97K doesn’t “feel” like it’s made an impact. She says things feel the same as at her previous salary.
This is just the tip of the iceberg.
You can see how $100K can. vary from person to person based on where you live, if you’re single or married or have a family, health, lifestyle and other factors can influence how you spend that $100K too!
Let’s look at a budget for 100k salary for a single person compared to someone who is married with two kids.
Budget for 100K salary | Single person
Here’s a budget breakdown for a single person earning a $100,000 annual salary:
Monthly Income:
- Gross Monthly Income: $8,333
- Net Monthly Income (after taxes and other deductions): $5,500 (approx.)
Monthly Expenses:
The monthly expenses are: housing, food, transportation, personal care, entertainment, savings and investments
Housing
- Rent/Mortgage: $1,500 – $2,500 (depending on location and preferences)
- Utilities (Electricity, Gas, Water, Internet, etc.): $150 – $300
Food
- Groceries: $400 – $500
- Dining Out: $200 – $300
Transportation
- Car Payment: $0 (if no car payment) or $300 – $500 (if car loan)
- Car Insurance: $100 – $200
- Gas and Maintenance: $150 – $300
- Public Transportation: $50 – $100
Personal Care
- Health Insurance: $300 – $500 (may be provided by employer)
- Gym Membership: $50 – $100
- Clothing and Personal Care: $200 – $300
Entertainment
- Streaming Services: $50 – $100
- Hobbies/Activities: $100 – $200
- Travel: $200 – $500
Savings and Investments
- Emergency Fund: $500 – $1,000
- Retirement Savings: $1,000 – $1,500
- Other Savings/Investments: $500 – $1,000
Total Monthly Expenses:
$4,200 – $7,400 (depending on location, preferences, and lifestyle)
This budget is just a general guideline, and your actual expenses may vary depending on your personal circumstances and location.
It’s important to always keep track of your spending and adjust your budget as needed to ensure that you’re living within your means and saving for your future financial goals.
Budget for 100K salary | Married couple with 2 kids
Is 100k a year a lot? Here’s a budget breakdown for a married couple with two children and a combined annual income of $100,000. Let’s take a look and see:
Monthly Income
- Gross Monthly Income: $8,333
- Net Monthly Income (after taxes and other deductions): $6,000 (approx.)
Monthly Expenses:
The monthly expenses are nearly identical to the budget for 100k salary for the single person except there’s one additional category: childcare
Housing
- Rent/Mortgage: $1,500 – $2,500 (depending on location and preferences)
- Utilities (Electricity, Gas, Water, Internet, etc.): $200 – $400
Food
- Groceries: $600 – $800
- Dining Out: $100 – $200
Transportation
- Car Payment: $0 (if no car payment) or $300 – $500 (if car loan)
- Car Insurance: $150 – $300
- Gas and Maintenance: $200 – $400
- Public Transportation: $50 – $100
Childcare and Education
- Childcare: $1,000 – $1,500
- School Tuition and Supplies: $100 – $200
Personal Care
- Health Insurance: $500 – $1,000 (may be provided by employer)
- Life Insurance: $100 – $200
- Clothing and Personal Care: $200 – $400
Entertainment
- Streaming Services: $50 – $100
- Hobbies/Activities: $100 – $200
- Family Outings: $100 – $200
Savings and Investments
- Emergency Fund: $500 – $1,000
- Retirement Savings: $500 – $1,000
- College Savings: $200 – $400
Total Monthly Expenses:
$4,050 – $8,500 (depending on location, preferences, and lifestyle)
Again, this is a a general guideline but, it can help you create your own personal budget. The actual expenses can fluctuate and differ based on your personal circumstances and location.
Very interesting comparison, side by side, isn’t it?
So, what’s the bottom line, is making 100k a year good?
Bottom line: Is 100K a year good?
Is 100k salary good? Striving for $100K is the dream of so many people but, unfortunately for many, it doesn’t ger you as far as you might think.
I watched a podcast from the creator of My Wife Quit Her Job today. He talked about how and his wife had to think about their future when she got pregnant and wanted to quit.
They lived in Silicon Valley and needed to find an income replacement for her job. It worked out for them, as they founded a business which made them six figures in the first year and went on to create more successful businesses.
It doesn’t work out that way for many.
This certainly makes you think.
Would you be comfortable living at $100K a year?
