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Everyone talks about "six figures" but let's see how a $100,000 salary for a single mom of two breaks down. A short thread:
[Shoutout to @StephenStorey]
[Shoutout to @StephenStorey]
Let's say she lives in an "affordable" city, like Charlotte. Uncle Sam finna take $28k right off the top. So, the family is essentially starting with $72k/yr. That's $6,000 per month. Still a lot, right? Well, let's keep going...
Her family health plan costs $1,100/mo. That brings the net down to $4,900. Not bad. Unfortunately, she wants a roof over her family's head. Which brings us to housing costs...
She and her two kids live in a modest, two-bedroom apartment. It's safe for her kids but not particularly luxurious. Rent is $1,200/mo. That brings the net down to $3,700. Let's ignore little things like renter's insurance and let's assume she doesn't need new furniture. Next...
Transportation. She has good credit. She leases a car for $325/mo. Car insurance is $100/mo. Gas is $75/mo. The net is now down to $3,200/mo. Nice. But wait...she goes to work...which means her kids, who are under 5, need daycare...
The best daycare center near her drive to work costs $1,500/mo., per student. She opts for a cheaper school that's only $1,000/mo., per student. The family net is down to $1,200...
The mom, like many Americans, is still paying off her student loans. Her monthly payment is $800, which is still less than many of her peers. The family net is down to $400. They need to eat, so they spend $350/mo. on food. Mom packs her lunch and they don't eat out...
That leaves $50 ($25/paycheck) that mom can use for her 401k, IRA, her kids' 529 plans, savings, Bitcoin, real estate, precious metals, haircare, skincare, orthodontics, any medical emergencies, life insurance, and a rainy day fund. But to the rest of the world, she's made it.
By the way, median household income in the U.S. for 2018 was just under $62,000.
