Earning a six-figure income has traditionally been viewed as a symbol of success and financial security in the United States.
Six-Figure Earners Struggle Financially in California
However, a recent study conducted by Lending Tree reveals that even families reaching this income level may face financial challenges, particularly in California, due to high inflation and cost of living expenses. The study examined the purchasing power of $100,000 for a family of three in 100 major U.S. metropolitan areas. Shockingly, the findings indicate that in 16 cities, families with a six-figure income still struggle to meet their monthly bills, with eight of those cities located in California.
Topping the list as the most expensive city for six-figure earners in San Jose. The city’s average monthly expenses exceed $9,000, primarily driven by exorbitant housing and transportation costs. However, it is worth noting that the study does not account for taxes, which were not included in the analysis.
The researchers utilized various government data sets to determine the cities where $100,000 had the greatest purchasing power
They also calculated the average monthly expenditure for basic necessities, including housing, childcare, transportation, healthcare, student loans, food, entertainment, utilities, taxes, and savings. Supporting the study’s findings, Redfin’s rental market research conducted in April revealed median rents well above $3,000 per month in San Jose, San Francisco, Los Angeles, and San Diego.
Despite the financial challenges faced by six-figure earners in California, the Lending Tree study did highlight a silver lining. It identified Fresno and Bakersfield as cities where residents earning $100,000 can cover their monthly expenses and still have a few hundred dollars remaining in their bank accounts.
These findings shed light on the financial strain experienced by families earning six-figure incomes in California, emphasizing the need for careful budgeting and financial planning to navigate the high cost of living in the state.
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