Many people believe the key to all their budgeting and debt woes is simply to make more money. A 2015 SunTrust survey found almost 1 in 3 respondents making $75,000 per year or more live paycheck to paycheck on occasion and 1 in 4 respondents making over $100,000 reported the same.  Thirty percent of respondents blamed a lack of financial discipline and 70 percent of millennials (ages 18-34) who believe they are not saving as much as they should blame dining out expenses.

Only 25% of US households are fortunate enough to make six figures, so is making more money not the answer or is $100,000 just not enough money? That same year, Business Insider argued that $287,000 is the new $100,000. The answer must be, “it’s complicated.”

Tackling a related topic, Esquire wrote two pieces 4 Men with 4 Very Different Incomes Open Up About the Lives They Can Afford and 4 Women with 4 Very Different Incomes Open Up About the Lives They Can Afford. They’re both an interesting read. Esquire’s respondents had income levels of near poverty, $80,000, $350,000, and $1,000,000 for the women and $1,000,000, $250,000, $53,000, and near poverty for the men. There are at least three things overlooked when people discuss how much home, car, and total debt they believe they can afford based on their income.

This is How Much Debt You Can Afford Based on Your Income

Let me begin this section by clearly stating: It’s your money. We didn’t help you make it. You can spend it however you want. But, if by spending it however you want each paycheck you consistently have more month at the end of your money, the following might help you understand why.

Our guest for PB51: The Financial Samurai came on to discuss his viral piece, Scraping By On $500,000 A Year: Why It’s So Hard For High Income Earners To Escape The Rat Race. Our discussion on this topic was one of our fastest downloaded shows. To simplify, we’ll use three gross incomes to estimate how much home, car, and other debt they can afford on $30,000, $50,000, and $100,000 based on best practice recommendations from various industry leaders and lenders. The following monthly breakdown is recommended for each expense category: 30% for mortgage/housing ratio (or rent equivalent), 10% for a car (includes principal balance, interest, and car insurance); and 10% for debt.

Keep in mind that the estimates in the table provided below are max allocations and do not account for federal or local / state taxes for each category. In the real world, you’ll be better off spending less in all three. In fact, a total of no more than 43 percent debt-to-income ratio (all your monthly debt payments divided by your gross monthly income) is recommended, in most cases, since this is the highest ratio most borrowers are allowed to have and still get a Qualified Mortgage according to the CFPB. Based on these max allocations, here is how much home, car, and debt AnonymousInternetPerson247 can afford month-to-month:

Additionally, many millennials face a significant student loan burden. With the average student loan debt for four-year public school institutions reaching $30,000 or more for an undergraduate degree. This great searchable table from LendEDU helps you estimate debt-to-income by showing the starting median salary projections for over 300 different majors.

Remember, banks and lenders are businesses. They are not your friends (or your enemies). Even the above industry-recommended scenarios would put you nearly 50% in debt each month. Banks are lenders. They are not in the business of telling you how much lifestyle you can afford. They are in the business of telling you how much they can lend you to spend, so they can make a profit and maximum return on their investment in you. It is your responsibility to determine what lifestyle you can afford.

The Variance in Cost of Living Across the US Means $100,000 Isn’t Always $100,000

Depending on where your monthly payments fall, the table above either made you really relieved or really upset. Let’s explore some possible reasons why. The simplest of which is that $100,000 isn’t always $100,000. This is why we recommend you use the free CNN Money Cost of Living Calculator if you’re ever thinking of moving or relocating around the country and you want to understand how far your money will or will not go in your new city. If you want an even more detailed breakdown, we recommend using BankRate’s Cost of Living Calculator. BankRate’s even more detailed calculator will tell you everything you need to know down to whether you can still afford cheese on your cheeseburgers (or avocados on your toast).

In the scenario below, our home-based city will be Austin, Texas. AnonymousInternetPerson247 listened to the PaychecksAndBalances podcast and is considering jobs in the following cities. They use CNN Money’s calculator to estimate how much comparable gross salary they’ll need to make in these cities to maintain the lifestyle they’ve become accustomed to at the equivalent of $55,000. As you can see, they need to find a job making over $100,000 in places like New York and San Francisco. Also, cost-of-living can vary widely within the same state, which is why they can maintain the same lifestyle on $5,000 less if they relocate to a lower cost of living city, like San Antonio.

If you want to be like everyone else, you need not change anything about your spending habits or your personal finances. You can do the exact same thing today and expect a different outcome tomorrow, but the odds are not in your favor. However, if you want a different outcome than the average person, you’ll need to make the personal decision to think differently, then equally importantly, you’ll need to act differently. If you practice good personal finance habits, spend less than you earn, and do this consistently over time, one day you might be lucky enough to have someone comment on your social media, “I would never…” and you can react with the best response of all time: no reaction at all.

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