Why $30K a year often is not enough to live on in big cities

[nitpicker]

Let's take a college grad with a $30K job in Northern VA.

But after these takeouts:
$2600 Federal tax
$1200 Virginia tax
$1500 SS/Medicare
$2000 employer-offered health insurance

$22700 net pay

less:
$2000 transport
$2000 food (it Can Be Done)

leaves $18700.

BUT the cost of housing is a killer.

$15000 a year (if lucky) for an efficiency or 1-bedroom apartment without roaches, with heating/cooling/water
$1800 a year for phones/internet (cable extra)

So $1900 a year for everything else.

That's why so many leave here to go to places where rent/utilities are $5000 (or more) a year cheaper, and why builders are constructing microunits. Some employers finally got smart and raised starting wages, but others did not.

[nitpicker]

1. The military-industrial complex is partly to blame for high rents in the DC area

Military members generally get housing allowances that roughly covers average rent and utilities.
The Pentagon..
Fort Myer/Henderson Hall...
Fort Belvoir...
Fort McNair...
Joint Base Bolling-Anacostia...
Andrews...
Walter Reed...
(etc)
Then there are all the college students that there is no room in the dorms for...

[TexasTowelie]

2. Social Security and Medicare are 7.65%, not 5%.

Deduct about $800 more from your "everything else" amount. I expect that the remainder of the money will be used for food because living on $5 and change each day including toiletries is an accomplishment. That also includes absolutely no money for beer or any type of social activities (movies, bowling, dancing, gym membership, etc.)

[yeoman6987]

4. Keep in mind you will get most back from taxes

[nitpicker]

19. Thanks for the catch.

5 am pencil math can lead one into error!

I deliberately chose a best-case scenario for being able to live alone on $30K a year in northern VA- either a paid-off car or Metro costs of $6-7 a day (plus costs of food stock-up runs), no significant college debt, deals on apartments, NO cable (a converter box will do in the DC area), etc.

"Get a roommate"? IF you can find one! The cheapest two-bedrooms run about $1500 a month (if not on special), plus add about another $300 a month for shared utilities (so $900/month for the split) plus your own internet/phone. The $350/month in savings may be enough to allow for a weekly pizza...

The reality is that a lot of the older apartments in northern VA are rented out to persons who are willing to live in dorm-like conditions (or worse). If the big bambino sleeps on the sofa, the other two kids share the second bedroom, and all five work for a total of 120 hours a week at minimum wage ($7.25/hour in VA), they can haul in $870 a week. If they can be employed all year at this rate, that is about $45K a year, less time off sick/etc. Depending on the kids' age and school status, the tax benefits can offset the need to feed five.

That is why one has to ask carefully in the free tax clinics about who else is living in the household, and about any income (off the books, side business, etc) that doesn't show up on a W-2 or 1099-MISC.

[meaculpa2011]

3. That's why there are bridges and tunnels...

Most items we buy... food, clothing, consumer goods... cost the same everywhere. But the three highest ticket items in everyone's budgets... housing, insurance, taxes... are more than double in most large metropolitan areas.

Some people say it's worth more to live in Williamsburgh, Park Slope and Greenwich Village. So be it.

It's a big, beautiful world with plenty of great places to live where they don't suck the life out of you.

Don't get me wrong. New York has been my home since birth and we've been able to build a very nice life here.

I'm not sure that my kids (22 and 25) will be so lucky.

I'm still working, and planning to work until they shovel dirt in face. First because I love my work, but also because I want to leave my kids a lot of money.

[KamaAina]

16. "plenty of great places to live where they don't suck the life out of you"

Trouble is, few of them are transit-friendly, which leaves my non-driving self in the lurch.

[Kilgore]

5. This why we moved from CA to WA years ago

Sold the small CA home and bought a much larger one on acreage in WA for cash.

Across the board everything was cheaper plus no state income tax. For example,

Auto license, CA was $350/year, WA $52
Electricity, CA was averaging $300/month, WA less than $100 for a larger house.
Property tax was about equal in both states.
And the list goes on......

[Johonny]

15. Man, if I could move I would but my job is here in Cal

You make six figures but houses cost seven unless you want to commute hours every day in insanely heavy traffic. If you buy a seven figure house you essentially work for the bank your whole life. That's city life.

[AZ Progressive]

6. Both high demand and foreign investors are driving the prices of housing up in big cities

It will be harder and harder to live in a big city in the future if you don't have a high paying job. College educated millennials that are in the "winning" part of the current economy are moving to big cities, and foreign investors are snapping up properties on both coasts and also driving rents up.

[alarimer]

7. It truly is not enough anywhere.

Texas has no state income tax, for example, and cost of housing is generally low, but they get you in other ways. Property taxes and sales taxes are high (sales taxes were almost 10% in Corpus Christi when I left). Electricity costs went through the roof due to deregulation, despite the claim that deregulation would lower prices. A few years ago, when fuel prices were criminally high, I paid $200 a month for electricity on a one-bedroom apartment. Here, in Annapolis, I've paid no more than $40. Of course using the a/c, as you have to do in Texas means you pay a lot in summer, but even winter bills were high.

The problem for me is that the places where the "rent is too damn high" are the only places with the quality of life that I enjoy. Places where the cost of living is cheap suck, due to the fact that most of them are in right-wing nutjob country infected by conservative and ultra-religious jackasses. Or they are small towns which always suck no matter where they are. No thanks.

[1939]

8. Life is, unfortuantely, full of tradeoffs

I had an engineer I used to know professionally in the DC area that took a downgrade from GS-14 to GS-13 to move from NoVa to an Army depot in Arkansas. I asked him why he did it. He said up here my wife and I live in a very small house with a horrible commute in heavy traffic. I work in a room in a crappy leased building with eight other engineers crammed in cheek to jowl so that you can hardly move around. I have to share one secretary with the boss and the other eight engineers to get my typing done. I have to pay for parking because the government leased the building but not the parking lot. In Arkansas, I will have my own office which is paneled and has a conference table and a sofa. Right outside the door is my own secretary that i do not share with anyone. I can have a decent size house on a couple of acres of land and their will be vary few cars on my commute. I will have my own designated parking place.

[WhaTHellsgoingonhere]

13. Yep, cities, SF and Seattle and others, are gentrifying full force

Cities for the 0.005% now. Probably just a day trip for the rest.

[PasadenaTrudy]

10. I have the same problem

All my favorite places are overpriced! Except they all are a bit cheaper than living here in SoCal. I mean, even Santa Fe NM is cheaper, and that's considered an expensive city. I love Portland, OR and now that's getting $$$...sigh.

[MissB]

17. Portland is truly getting unaffordable - fast.

The rental prices just boggle my mind- let alone the cost of houses!

I really did want to move to a different house within portland after my kids left for college but I think DH and I will be staying put. We couldn't get what we already have for any better of a price. We are seeing houses go for $650k+ in the Sellwood area.

It's crazy.

[PasadenaTrudy]

18. I love Sellwood.

Such a nice neighborhood. Sadly, those same houses would go for $1M here in South Pasadena. I can't afford any house in Portland, but even the rents are getting too high.

[raccoon]

27. I agree with you here, but why don't you say what you really think?

Places where the cost of living is cheap suck, due to the fact that most of them are in right-wing nutjob country infected by conservative and ultra-religious jackasses.

[Blus4u]

9. It's hard to call $22.7k net living...

...unless you mean a subsistence situation. Let alone try to raise a kid.



Peace

[WhaTHellsgoingonhere]

11. That before student loan and car payments

[Gormy Cuss]

12. It used to be that new college grads shared apartments in order to afford city living.

I know that all of my friends who moved to NYC or Boston after graduation did shares for a few years. Then, if they'd had steady employment with income increases they'd move into a place of their own. I point this out only because such charts ignore this option.

The problem now though is that it's not just the big, expensive cities where housing is unaffordable for workers starting out. It's become the norm in many cities.

[1939]

14. Rooming Houses

My father and his brother always slept in the attic and my aunt in an over-sized closet so that my grandparents could use two bedrooms to let out for four men as roomers and boarders. My grandmother saved enough money doing that to set my grandfather up in a business of his own. There were no expectations that a man or woman would move out of their parent's house into a "bachelor's pad" as your first step was usually a rooming house.

[aikoaiko]

20. Which is basically a $15 per hour job at 40 hrs/wk for 50 weeks

[bigwillq]

21. Everything is so expensive.

And it's just getting worse. This country really is a mess.

[Recursion]

22. OK, but you're clearly not going to have a 1BR or studio on your own if you're young in the city

I don't know where people get that idea.

You're going to split a four bedroom with three other people. That's what I did, that's what both of my parents did. It makes it much much more do-able.

[meaculpa2011]

24. When my wife and I got married...

we lived in a one room (that's ONE room, not one bedroom) apartment four flights up ten blocks from Hunter College. We were both working and going to school.

When we brought our kids to our "old" neighborhood and showed them our building, my son looked at me and said:

"I wouldn't live in that rathole."

My daughter (22) now lives in a three bedroom house that should have been condemned before Superstorm Sandy.

The landlord slapped on a coat of paint and put out "For Rent" sign.

It really is a rathole, but it's hers and she shares the rent with two friends.

My son (25) lives in the bedroom where his crib once stood. C'est la vie.

[Recursion]

25. At 22 I was in a barracks, so that doesn't really compare

But, yeah, at 25 I was in a 6BR house with 8 housemates.

I have no idea where people got the idea that living in the city in your own individual apartment would be affordable; I can't think of a time when it ever was.

[meaculpa2011]

26. Our building had fifteen apartments...

Ten were studios (compartments) and most of them were shared, along with five one bedroom slightly larger compartments, all of them shared.

We were the only married couple in the building. We were also the only ones with a car, so we were often recruited by neighbors to help out with errands. We would also pile into the car for weekend trips to the beach.

There was a gay couple on the first floor who had the garden, which is what NYers call the backyard.

At least once a month they would invite everyone for cocktails and BBQ.

As I look back on it, those were the most fun years of our lives.

[WinkyDink]

23. $30,000 as a college grad in N. VA.? Is that at McDonald's?

[TBF]

28. When I started in 1990 in northern virginia -

Many recent grads live in DC for a few years before going back to grad or law school (or ultimately marry and/or move back to other cities). These are top grads from good colleges. Some of the grads had investment banker type parents helping w/their bills. The rest of us cut our expenses with roommates and other jobs. A few did computer consulting work after hours, etc. People worked it out. In 1990 I made $15,500 at a law firm (staff - not lawyer). On the Hill at that time the staffers right out of college made $14,500. Within a few years I had my own apartment because I had enough O/T on top of the salary. But ultimately I married and moved away as many do.

These are really not the folks I would worry a great deal about. These "kids" will make it. It's the people making minimum wage all over this country and not being able to survive. The folks in California cleaning the offices/homes of the tech millionaires. They can hardly afford housing even with roommates.