Many people believe the key to all their budgeting and debt woes is simply to make more money. SunTrust survey found that 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 living paycheck-to-paycheck as well.

What about thrifty millennials? Seventy percent of millennials (ages 18-34) believe they are not saving as much as they should. The primary culprit? They blame spending too much on dining out (See how we cut our food spending in half).

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 have found that you consistently have more month at the end of your money, the following may help.

For example, our guest on PB51: The Financial Samurai discussed his viral piece, Scraping By On $500,000 A Year: Why It’s So Hard For High Income Earners To Escape The Rat Race.

This was one of our fastest downloaded shows. To simplify, we’ll use three gross incomes to estimate how much home, car, and other debt you can afford if you make $30,000, $50,000, and $100,000, respectively. We’ll reference best practice recommendations from various industry leaders and lenders to reach our conclusions. According to the experts, the monthly breakdown recommended for each expense category is no more than: 30% for mortgage/housing ratio (or rent equivalent), 10% for a car (includes principal balance, interest, and car insurance); and 10% for debt.

The estimates shown above are the max allocations per category and do not account for federal or local / state taxes. In the real world, you are better off spending less on all three.

For instance, the CFPB recommends borrowers have no more than a total debt-to-income ratio (all your monthly debt payments divided by your gross monthly income) of 43 percent. If your ratio is above this amount, they do not recommend you receive a Qualified Mortgage.

What About Student Loans?

The average student loan debt for a four-year public school undergraduate degree is over $30,000 in the U.S. If you’re not in college yet, then LendEDU has a great searchable table covering over 300 majors that may help you estimate your future debt-to-income.

Find a lower student loan rate without impacting your credit score.

Remember, banks and lenders are businesses. They are not your friends (or your enemies). The industry-recommended scenarios above would put you almost 50% in debt every month.

Banks are lenders. They are not in the business of telling you how much debt you can or cannot afford. They are in the business of telling you how much they can lend you to minimize their own risks and maximize their profits. That’s capitalism. It is your responsibility to determine what lifestyle you can actually afford.

Cost of Living Differences Across the United States Means $100,000 Isn’t Always $100,000

Only 1 in 4 US households are fortunate enough to make six figures. Further, Business Insider has argued that $287,000 is the new $100,000.

We recommend you use the free CNN Money Cost of Living Calculator if you’re thinking of moving or relocating around the country. You should have a clear understanding of how far your money will or will not go in your future home city.

If you want an even more detailed breakdown, we recommend using BankRate’s Cost of Living Calculator. BankRate’s calculator tells you everything you need to know about cost of living changes, right down to whether you can still afford cheese on your cheeseburgers (or avocados on your toast, for the Millennials).

Let’s take a test drive.

In the scenario shown below, our home-based city is Austin, Texas. Based on the Cost of Living in Austin, CNN Money’s calculator estimates the comparable gross salary you will need to make to maintain your lifestyle in other cities across the country.

Source: CNNMoney

As you can see, due to the higher cost of living, to maintain the same lifestyle in a city like New York or San Francisco you will need a job making well over $100,000.

You’ll also notice that cost-of-living can vary widely within the same state, which is why you can maintain the same lifestyle on $5,000 less if you relocate to a lower cost of living city within the same state, like San Antonio in this instance. Try the calculator yourself for free here.

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