The Truth About Living on 100k as a Family of Four

The Truth about Living on 100k per Year as a Family of Four

Disclaimer: This article is for informational purposes only. It should not be considered legal or financial advice.  You should consult with an attorney or other professional to determine what may be best for your individual needs. 

Earning a six-figure salary was something that I aspired to when I began working.  To me, it represented a dollar amount that could easily sustain a family of four.  It meant a comfortable lifestyle, vacations, extracurriculars, and periodically updating my wardrobe would be no big deal.

A $100k salary is a good salary for an individual. Only 13% of single female households and 20% of single Male households bring in more than $100k. In fact, The average single female household makes $40,233. While the average single male household makes $55,190. So 100k, in fact, is a good salary for a single person, but how does that measure up for a family of four?

Young Son Father Mother and Daughter Walking

My family of three is currently living comfortably on a six-figure household income. Due to the high cost of daycare in my area, our disposable income is somewhat limited, but we don’t have a hard time making ends meet. I thought for sure a family could survive on 100k.  After doing some research, I have discovered the budget is a little tighter than expected when supporting a family of four.

Can a Family of 4 Live on 100k per year?

Yes, a family of 4 can live on 100k per year. The average household income in the United States is approximately 73k according to the US Census Bureau.  At this income level you would have to commute rather than live in the most expensive cities such as Boston, San Francisco, and Manhattan.

I tested the 50/30/20 budget rule to determine if a family of 4 could live comfortably on 100k in the United States. The 50/30/20 budget rule recommends using 50% of your take home income for wants, 30% of your take home income for wants and 20% of your take home income for savings and paying off debt. .

I knew the 50/30/20 budget rule would be difficult to stick to on a 100k income in high cost of living areas such as Manhattan. However, I was shocked to see how that budget translated in moderate cost of living areas.  Keep reading to see how the average costs of living in the United States match up to a 100k per year income for a family of four.

How to Create a Budget for 100k Income?

A budget is simply a plan for how to spend your income.  One modern budgeting concept is the 50/30/20 rule. The 50/30/20 rule recommends spending 50% of your salary on Needs, 30% on Wants, and 20%  of your income to paying off debt.  $2,997 a month for wants, $1,798 a month for needs and $1,188 for savings and paying off debt. To learn more about creating a budget for a 100k salary visit this article on our site Creating a Budget for 100k Income.

Another great book about budgeting is the book I will teach you to be rich by Ramit Sethi. I listened to the audiobook on audible, if you haven’t used audible yet you can get this book for free with an Audible Trial by visiting here.

Take home pay for 100k per year salary

Cash Envelope, Check Book and Pen

I used a take home pay calculator to determine how much someone making 100k per year takes home.   The calculator only included Federal and State Income Taxes. It did not take in to account other deductions some employees have such as 401k contributions, Health Insurance, Union Dues, or Pension Payments. According to the take home pay calculator someone earning a 100k per year slary would take home $5940 per month.

Family of 4 Making 100k 50/30/20 budget rule

A family of 4 making 100k per year would bring home about $5940 per month.  The Table below shows how much they would allocate toward wants, needs, and savings/debt payments using the 50/30/20 budget rule.

Needs 50% $2,970.0
Wants 30% $1,782.0
Savings/Debt 20% $1,188.0
50/30/20 Rule Monthly Family Budget Example

Using the 50/30/20 budget rule, the family would have $2,970 to spend on expenses in the “need” category. The following items are considered needs:

  • housing payment
  • utilities
  • groceries
  • car payments
  • Child care
  • Minimum payments on debt

Using the 50/30/20 budget rule, the family would have $1782 to spend on expenses in the “wants” category. The following items are considered wants

  • Shopping
  • Dining Out
  • Family Outings
  • Hobbies

Using the 50/30/20 budget rule, the family would have $1188 to spend on expenses in the “savings/debt” category.The Savings/Debt can be used for a number of things including:

  • Creating an emergency fund
  • Making ADDITIONAL Debt Payments
  • Savings for a Large Purchase
  • Savings for College
  • Savings for a Vacation

Housing Costs for a Family of 4 Making 100k per year

According to CBS News the average rent in the United States is $1405. Based on the average cost of groceries, utilities, used car payments, and car insurance exceed $2970 which would be 50% of the take home pay from a $100k salary.

Car Payment $381
Car Insurance $150
Utilities $200
Groceries $952
Housing Payment $1,405.0
Total $3,088
Sample Budget for a Family with 100k Income

If these expenses are a family’s only necessary expense, the difference is only about $100.  Rebalancing the 50/30/20 rule slightly will allow this budget to work for a family of four. This could mean that a family would have less to use toward savings or paying off debt. Depending on the amount of debt a family has or its savings goals, this budget could still work with more than $1000 per month allocated toward savings and debt.

My husband and I both entered our marriage debt-free and with some emergency savings. If a family is in a similar situation with no debt and a head start on savings, this is not a big deal. However, if a family doesn’t have any savings an unexpected expense could mean having to take on debt. If, a family has debt that they are not able to pay more than the minimum payment they will pay considerably more in interest and fees.

Family of 4 Living on 100k: Childcare and Student Loan Debt

Childcare and student loan payments can make it impossible to stick with the 50/30/20 rule.  Home-based childcare costs $800 dollars a month per child. If a family has two small children requiring full-time daycare, that is $1600 per month. A family would need to save less and significantly cut back on their wants to make this budget work, but it is still possible.

Car Payment $381
Car Insurance $150
Utilities $200
Groceries $952
Housing Payment $1,405.0
Childcare 800
Total $3,888

Adding childcare for one child to the needs budget means needs budget is now 65% of your take home budget.  Leaving Less money for wants, savings, and paying off debt. A family of four can still live off 100k with childcare expenses.

Another expense that a family of four may have is student loan debt.  The average student loan debt payment is $288. If you have student loan debt and a childcare bill added to the mix. This brings the “needs” portion of the 50/30/20 budget up to  70% of a family’s take home salary. This means that wants and savings must be considerably smaller to accommodate.

Family of 4 Living on 100k in an Expensive City may be overextended

Manhattan, San Francisco, and Boston are three of the most expensive cities to live in the united states. The average rent in Manhattan is $4100 according to USA today. A family of 4 would find it difficult to make ends meet with a $100k per year household income in Manhattan.

Remember the estimated take-home salary from $100k is approximately $5900

San Francisco and Boston are also the high cost of living areas. The average rent in these cities is $500 cheaper than Manhattan. It would still be a stretch for a family of 4 living on 100k in this area. Especially if they have childcare and student loan payments to take into consideration.

 Family of 4 Living on 100k in an Inexpensive Cities

According to USA today Wichita is the least expensive city to live in, with the average rental cost being $639. A family of 4 could live comfortably off of a 100k per year salary in this city following the 50/30/20 rule. Even with the expense of childcare for one child, a family of four could follow the 50/30/20 budget rule. Adding student loan payments does break the 50/30/20 budget, but would still allow a family to leave comfortably.

A family of 4 could live comfortably on 100k, in a city with an average cost f living if they do not have student loan debt or childcare expenses. With childcare and student loan debt factored in, a family could still live in a moderate cost of living city but they wouldn’t be able to allocate expenses according to the 50/30/20 rule. The family would just have less disposable income and money going towards savings.

If a fanily really wanted to make life an an expensive city work, they could consider scaling back the grocery bills. A multigenerational household could mean that your parents or in-laws split household expenses with you making high cost of living areas more attainable.

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Recommended Resources

  • Budget Planner
  • I will Teach You to Be Rich free with Audible Trial

What is the cost of Groceries for a family of four?

According to the USDA, a moderate grocery budget for a family of 4 is $239 per week.  That’s about $956 per year and about $1250 per year.  

How to create a simple budget?

A budget is a plan for how to spend your income.  To create a budget you need to compute your income and your expenses.  If you have money left over you then need to decide how to spend it in order to meet your goals.

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