LOS ANGELES, April 18, 2016 /PRNewswire/ -- Millions of Americans are living in cities they simply can't afford, according to a new study from GOBankingRates.com.
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The study used the 50-30-20 budgeting rule to represent "comfortability," which divides income into three buckets: 50 percent of income should be spent on necessities, 30 percent should be set aside for discretionary expenses, and 20 percent should be put toward savings.
The study found that 15 cities have median incomes above what is needed to live comfortably, whereas the other 35 cities investigated have below what's needed for comfortable living, including 18 cities with median incomes that are at least $10,000 below the amount needed to live comfortably.
5 Cities Where People Can Easily Afford to Live Comfortably:
- Virginia Beach, Va.: $16,072 surplus income
- Bakersfield, Calif.: $13,416 surplus income
- Colorado Springs, Colo.: $9,716 surplus income
- Arlington, Texas: $6,151 surplus income
- Mesa, Ariz.: $5,605 surplus income
5 Cities Where People Struggle to Live Comfortably:
- Miami: $46,199 deficit income
- San Francisco: $41,192 deficit income
- New York: $34,709 deficit income
- Boston: $29,937 deficit income
- Los Angeles: $24,689 deficit income
"Too many Americans are barely keeping up with expenses and don't have enough money left over each month to save for retirement, keep an emergency fund, pay off debt or work toward other vital financial goals," said Elyssa Kirkham, lead reporter on the study for GOBankingRates. "It's true that cities with higher costs of living often have higher incomes as well, but those earnings can be stretched thin quickly in America's most expensive areas."
- Tucson, Ariz., has the smallest income needed to live comfortably ― just shy of $40,000.
- In San Francisco, residents need to make about $120,000 per year to live comfortably.
- Necessities ― rent, utilities, transportation, groceries and healthcare ― are most affordable in Tucson and least affordable in San Francisco, with a difference of $39,802 per year.
- The median incomes in the smallest and largest cities on this list are almost the same ― $52,737 in Bakersfield, Calif. and $56,842 in New York ― but the difference in the cost of living is enormous. Bakersfield residents have a $13,416 surplus in their annual budgets, whereas New Yorkers are $34,709 short of the amount needed to live comfortably.
Use the URL above to see data on all 50 cities.
Data on additional cities is available. Use the contact information below to make a request.
GOBankingRates.com is a leading portal for personal finance and consumer banking information, offering visitors the latest on everything from finding a good interest rate to strategies for saving money, investing for retirement, and getting a loan. Its editors are regularly featured on top-tier media outlets, including U.S. News & World Report, Forbes, Business Insider, Daily Finance, and more. It specializes in connecting consumers with the best financial institutions and banking products nationwide.
Katie Johnston, Media Relations