Once the mark of having made it, a six-figure salary doesn’t necessarily get you very far these days. Depending on where you live, it might not even get you your own apartment. For example, there are lots of tech workers in the Bay Area who earn over $100,000 a year and have roommates. (At least they’re not living in a box in their friends’ living rooms, like this guy.)
You get it: six figures isn’t necessarily the guarantee of comfort or the badge of success that it used to be.
But it’s still a lot of money. The 2016 median household income in the U.S. was $57,617, according the United States Census Bureau. Someone earning low six figures is still earning nearly twice the median.
How far that goes depends on a number of factors in addition to location, including student loan debt, financial obligations like mortgage, rent, and car payments, and whether the earner is supporting a family.
Recently, a Quora user asked the question, “What do people spend a six-figure salary on?” The answers were illuminating. Here are a few:
An engineer living in San Diego:
My (low) six-figure salary goes to the 35% total tax liability, $2,200/month rent (a bargain for this town), a $400/per month car payment, $550/month medical insurance, $1,000/month household expenses (electricity, water, insurance, phone, cable, $800/month groceries (mostly whole organic vegetables). If there is anything leftover, it pays down credit cards from vacation and emergency expenses. In Southern California, $125K is working/middle class….
A security manager at Google who makes between $350,000 and $650,000:
A rough accounting:
Taxes: 40% (federal income and payroll, state property and sales)
Savings and investment: 40%
Child care: 5%
Food: 3% (including restaurants)
Travel: 1% (mostly visiting family)
My cars are fairly cheap and paid off. Aside from visiting my wife’s family, most of my travel is local. My hobbies are cheap. It’s easy to rack up big expenses through expensive travel, fancy clothes, race cars, boats, and a big house in the city, but I’d rather retire early.
I actually buy a lot of clothes at Goodwill. Super cheap, good quality, good selection, and a good cause.
A chief architect in the Bay Area, on how earning $200k differs from $100k in a high-cost area:
If you maintain a relatively modest lifestyle, then money over that $200K threshold in an expensive metropolitan area becomes a discretionary cushion. Some people blow it on super fancy houses and cars, etc. Others save, and maybe also spend a little more on eating out, vacations, and so on.
Personally, I have never really changed my lifestyle significantly, regardless of my household income, which has fluctuated depending on whether my wife has a corporate job or is trying to bootstrap her business…. Less income = more modest, smaller apartments and/or even having roommates (did this a lot in my youth) — more income means more savings and more room for things like the occasional vacation abroad etc. I don’t particularly see any reason to splurge on maximally-optioned luxury cars or extravagant houses and so on, no matter what my household income.
A computer scientist in North Carolina:
I’ve read a lot of answers to this question and many, not all, but many, seem to boil down to “It’s really not that much.” …$100K/year is a lot of money. $100K/year puts you in the top 25 percent of household incomes. With the exception of some very expensive areas in the US, someone making $100K a year is making a very comfortable living.
His accounting for a person earning $100,000 per year in his area:
- $2500/month for mortgage (on a really nice house)
- $500/month for cable TV, internet, phone, utilities
- $800/month for “a couple of nice cars, gas and insurance. Not 7 series BMW nice, but we all have to make sacrifices here and there.”
- $1500/month food and entertainment
- About $15,000 per year left over
A professor in Illinois:
I think the most important answer here is Anonymous’ answer to, “What do people spend a six-figure salary on?” It includes some luxuries, but mostly it’s focused on what I focus on (even though I don’t earn anything near six figures):
- Removing stress (e.g., good insurance, paying off debt)
No matter where on the six-figure scale you are, you could spend all of that money. There comes a point where any reasonable person stops being able to, but that’s well beyond six figures. There’s always a newer, more comfortable car, a larger or better-equipped house, a longer or nicer vacation.
Note: answers have been excerpted and lightly edited for style and clarity. For more responses, see Quora.
Tell Us What You Think
Do you think a six-figure salary is more than enough to live on — or is it “just getting by” for your area? We want to hear from you. Tell us your story in the comments or join the conversation on Twitter.