How making $300,000 in San Francisco can still mean you’re living paycheck-to-paycheck

With the median price of a home in the U.S. at $300,000, you can can achieve homeownership and the idealized middle-class lifestyle in most parts of the country making a salary just under or above six figures.

In San Francisco’s land of $2 million fixer-uppers, the income needed to reach this status is obviously more. But how much more?

S.F.-based finance expert Sam Dogen pinned that number at $300,000, after surveying dozens of readers on his Financial Samurai blog and asking about their incomes and expenses living in the notoriously high-priced coastal cities.

With their feedback, Dogen broke down the budget of a couple with one to two children in San Francisco, Seattle or New York. He found $300,000 is the income necessary to put something away for retirement, save for your child’s education, own a three-bedroom home, take three weeks of vacation a year and retire by a reasonable age. (See Dogen’s blog for analysis and explanation on each expense.)

“It’s not an extravagant lifestyle,” Dogen says. “It’s a middle-class lifestyle if you consider a middle-class person should be able to afford a modest home, have at least one car, have a kid or two. There are no private jets in this budget.”

ALSO: Why a $400,000 income means you still think you’re middle class

Dogen adds that at $300,000, a family is still living paycheck-to-paycheck and not saving outside their 401K and 529 plans.

“We’re in this perpetual grind in San Francisco, and it’s a city for people who are willing to hustle,” he says. “At one point in the past, $300,000 was a lot of money. Now at this amount, you’re probably always going to end up working a long time and having a constant struggle to keep up.”

His recommendation is to make moving out of the region a goal.

“There’s a moving truck shortage in places like San Francisco because so many people are moving out of this expensive city and other expensive coastal cities,” he writes. “If you live in an expensive metropolitan area, consider relocating to lower your cost of living or at least try and take advantage of the valuation differential by investing in Middle America.

“Thanks to technology, there’s no need to grind so hard in cities where the median home price is over $1M.”

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