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A recent analysis by SmartAsset revealed that a family of four needs to make more than $275,000 to live comfortably in some of the most expensive cities in the U.S. The definition of “comfortable” in this analysis is based on a 50/30/20 budget, where 50% of the income goes towards necessities like housing and utilities, 30% goes towards discretionary spending, and 20% is saved or invested. The income needed for this budget was extrapolated based on the cost of necessities using data from the MIT Living Wage Calculator.

The top four most expensive cities for a family of four to live comfortably in are San Francisco, San Jose, Boston, and Arlington, Virginia, all requiring incomes over $300,000. California cities dominate the list, with Oakland, Santa Ana, Irvine, San Diego, and Chula Vista also making the top 20. These cities are known for their high housing costs, with homes in California being twice as expensive as the national average according to the Legislative Analyst’s Office.

Out of the 99 cities analyzed by SmartAsset, the median income needed for a family of four to live comfortably is $226,886. This number drops to $175,219 in Houston, the lowest of all cities examined. However, this is still significantly higher than the national average family income of $92,750. Despite employers in high-cost cities offering higher salaries, housing costs often exceed 30% of household income, leaving families with little room for other necessities like utilities, food, and transportation. This can make it difficult to maintain a 50/30/20 budget.

People living in these expensive cities may have to make sacrifices in order to make ends meet, such as giving up on homeownership, owning a car, or making discretionary purchases. Finding opportunities to earn extra money outside of a primary job can help alleviate financial stress. CNBC offers an online course on How to Earn Passive Income Online, which covers common passive income streams, tips to get started, and real-life success stories. Signing up for this course could provide valuable insights on generating additional income.

In conclusion, the cost of living in the most expensive U.S. cities is significantly higher than the national average, making it challenging for families to live comfortably while adhering to a 50/30/20 budget. While high salaries may be offered by employers in these cities, housing costs can eat up a substantial portion of income, leaving little room for other expenses. Finding ways to supplement income, such as through passive income streams, can help families navigate the financial pressures of living in expensive cities.

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