Going broke on $100,000: A sample budget showing how easy it is for a family making six figures and with 2 kids to get sucked into deficit spending. [Dr. Housing Bubble]


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  1. ElizabethD says:

    I can relate to this article. Housing costs in some regions (the Northeast for example) are killer. $100K sounds like a lot of income, but remember TAXES take a big bite as do normal (not luxury) costs of living.

    Also: teenage boys eat a lot. 8-O

  2. johnva says:

    If you’re overspending by $1,000 per month, you need to make some serious lifestyle adjustments. Lots of things on that list that are totally optional.

  3. Mozoltov, motherfucker says:

    Cut out:



    car payment

    and pets.

    and I wouldn’t have kids unless I could afford them. I don’t subscribe to the idea that you HAVE to have kids.

  4. hypnotik_jello says:

    @cubensis: hear, hear. There are too many people in the world as it is.

  5. XTC46 says:

    there are lots of things they can cut…like that 100/mo for charity. Or the cable bill and vacation stuff. Sure thats all nice, but running a 1k a month deficet is bad

  6. samurailynn says:

    Here is what I have done to put them back in the black:

    vacations -250
    dry clean -50
    pets -50
    entertainment -300 (this leaves 200 budgeted)
    clothes -100 (this leaves 50 budgeted)
    work lunch/incidentals -50 (this leaves 75 budgeted)
    cable -65
    charity -100
    gifts -125

    You don’t need to be saving for vacations if you can’t afford your monthly expenses. The same goes for pets, cable, charity and gifts. If you can’t afford to take care of your family, you can’t afford these things. As far as clothing goes – I have survived on a less than $200 per year budget for clothing for a few years now. As an adult, you don’t grow much, so you don’t need new clothes once a month. Since they do have kids, I left some budget for that, but even kids don’t need a new outfit every month. Dry cleaning costs can be avoided if you buy clothes that don’t need to be dry cleaned. If they were to take lunch themselves, they wouldn’t need such a high budget for work lunch and incidentals. I did leave some budgeted because there may be the occasion that they need to buy something while they’re out, or have lunch with a coworker for some reason.

  7. Thaddeus says:

    Don’t forget to cut out vacations. God forbid people go to a park for a BBQ or spend time at home.

  8. ShortBus says:

    Some of these line items are a bit suspect: $250/mo. in “vacation saving”? If you were broke, I doubt that would be in your budget.

    Ditto on $50/mo in dry cleaning, $500/mo entertainment, $100/mo charity, and $250/mo. in household repairs. Contributing 12% of yoru salary to your 401k when you’re in the red is also rather stupid. There’s a lot of fat to be trimmed on this budget. Otherwise, it’s well thought-out and insightful article.

  9. K-Bo says:

    That is just crazy. One of my parents could quit working, and they would still make more than that, yet they live in a house they bought for $150,000. Drive cars they paid cash for until they are at least 10 years old (my dad is driving a 98 Jetta he paid $4000 for a few years back) If you don’t worry about keeping up with the Jonese, you would be amazed how easy it is to live on $100,000 a year, or even 1/2 that for that matter.

  10. t0fu says:

    @K-Bo: most people do not make more than $100,000 on a single income. Consider yourself fortunate.

  11. teh says:

    Lets see, I live in a fairly expensive part of LA. I have go out with friends and take vacations. I have enough money to buy myself clothes, give to charities, and put away about 15% of my income in savings. All that on about 25K per year.

    Make a budget and figure out what’s important to you. Reducing your spending involves a little bit of a paradigm shift, but it is certainly possible.

  12. @K-Bo: Depending on where you live. Here in Joisy, the cost of living is prohibitively expensive and coupled with the highest real estate taxes around and a state government looking to pull even more money from our pockets, you can’t pare down fast enough to keep ahead.

  13. Pop Socket says:

    That $525 car payment is for $26,500 worth of cars at 7% interest and 60 month financing. Do they have two cars that cost $13k each or one decent sized family truckster?

  14. Orv says:

    @xtc46: I agree. For some people charity isn’t optional, though — e.g., some religions require that their members tithe 10% of income. I think that’s kind of a scam but I recognize for some people it’s the most vital thing of all.

  15. zundian says:

    @Pop Socket:

    There was a (2) behind the car payment, so I’m thinking it was two payments of $525.

    Also, aren’t your property taxes, and homeowner’s insurance part of your mortgage payment? I know it’s part of mine.

    What are “household items”? and why do hey cost $225 a month?

  16. ghettoimp says:

    Going bankrupt on that budget can only be done deliberately.

    Buying a cheaper house would avoid $350,000 in debt. Driving used cars would avoid $525/mo in car payments. And spending $500/mo on entertainment is just plain sad.

  17. frankthefink says:

    after having grown up as a family of 5 on about 1/3 of this, i find this article pretty amazing. So this is what the wealthy have been doing with all that money? $500/month on entertainment? I saw 2 movies at a movie theater before I was 18… I think these people can manage.
    And honestly, if you can’t afford to live in a place, leave. Not everybody can/should live in Southern California.

  18. Pro-Pain says:

    This just makes me sick. Family of asshats.

  19. Orv says:

    @ghettoimp: 3-br houses for under $350,000 just don’t exist in some markets. Agree on the other points, tho. When I was a kid we didn’t have much money and our cars were $2000 junkers. People today seem to think they’re entitled to something new and shiny.

  20. wring says:

    $150 on clothing??? I loled at $100 for charity. um, you ARE turning into a charity case!

  21. @Pro-Pain: It’s a HYPOTHETICAL budget. My God.

    And yes, if my money was that tight, there was NO way I’d pay $500 / month for entertainment.

  22. …and I’d buy used cars instead of brand new $25K cars.

  23. SadSam says:

    Isn’t the point of this posting that in many parts of the country a six figure income no longer covers the ‘normal’ trappings of a middle class life style? This example is pulled from LA where housing, and lots of other things, are expensive. Of course there are plenty of things to cut from the budget (cable, cell, vacation, cars payments) but then they are not a ‘normal’ middle class family. Add in some debt servicing, a health care emergency, college educations for the kids and then they are in real trouble.

  24. RandomHookup says:

    Must be in sales. I just got off the phone with someone who said he needed $250k “to survive”. Most high end sales guys (almost never the women) seem to get themselves into some kind of financial trouble.

  25. Trai_Dep says:

    @teh: And you rent and you’re probably too smart to have a car loan (or your job doesn’t require it). You also don’t have kids and its related insurance expenses.
    Kudos to you, but it’s like someone living in S. Dakota saying that since their costs are lower, the article’s invalid. It’s not, but it is clearly about a situation different than yours, as the writer says from the beginning. :)

  26. thegirls says:

    Everybody is a judgmental expert these days!

    I grew up in a family of 6 w/an income of less than 1/3 that as well and it was very hard on us kids! But I also lived in a fairly inexpensive midwest town….So, if you factor in inflation (100k doesn’t go as far today as I’m sure it did when you were a kid), the area of the country you live in and cost of living adjustment, 100k may not go as far as you thought.

    I’m not saying that they can’t cut costs in some places. They definitely can…but I now live in the DC area and the cost of living is very high….If you bought a house that was cheap, you’d be raising your kids in a neighborhood most likely w/higher crime and most likely a sub par school system!!!! So for many, that’s not an option.

    Also, many folks just doesn’t have the luxury to just pick up and move if the area they live in is expensive. Jobs, families and other obligations are big factors that tie folks to an area!

  27. nardo218 says:

    If the author wants to make a point, he shouldn’t inflate his data. $100 to charity every month? $150 for clothes EVERY month? Lots of other items are nudged to add up; it’s like moving the margins on your 1000 word paper until it’s 12 pages.

  28. FightOnTrojans says:

    As a famous, well-respected philosopher once said, “Mo’ money, mo’ problems.”

  29. Reywood says:

    “Contributing 12% of yoru salary to your 401k when you’re in the red is also rather stupid.”

    Contributing to a retirement plan should not be considered optional by anyone but those earning the lowest of incomes. Cuts should be made, but not there. You’d only be putting off your financial problems until a later date.

  30. MsClear says:

    I agree that there’s quite a bit of fat in that budget. Lifestyle inflation. My hubby and I hope to make more money one day, but we’d like to keep our spending about where it is now. I’ve read this advice in quite a few places.

    My parents will spoil their future grandkids and that’s fine. I’ll be buying their clothes at yard sales.

    Of course, now that the great debt machine is grinding to a halt, I wonder what the US economy will run on, if not discretionary luxury items?

  31. jimconsumer says:

    This is stupid. It assumes a complete and utter lack of personal responsibility. Let’s take it from the bottom up, you’re spending $1,076 per month more than you make. How to fix? Look at your budget and rip out:

    Gifts, $125
    Vacations, $250
    Charity: $100
    Entertainment: $500
    Cable: $65
    Cell phone: $50

    Oh, look. Now our budget is balanced with $14 remaining.

    Sorry, but you’re a complete fucking tool if you’re blowing $875 a month on entertainment, gifts and vacations, that’s effectively going onto the credit card because you’re spending way more than you make. Nobody needs expensive entertainment. You don’t need to gift gifts, to donate to charity, and to take vacations. I spent two years paying off $40,000 in combined credit card and automobile debt and I did it by cutting cable, cutting entertainment, not eating out and not taking vacations. So I don’t have an ounce of sympathy for anyone in this not-so-hypothetical situation.

    Oh, and what moron has $525 a month in a pair of car payments while spending themselves into debt month after month? Here’s an idea, SELL THE CARS, moron. Go get you a couple of $1,000 beaters to get by. We drive a really nice used Chevy Malibu with leather interior and a sunroof and all sorts of little luxuries, retail price was $3,000. No car payment. Pretty easy to save up $3,000 and buy a car with cash when you don’t have $525 in monthly car payments.

  32. Orv says:

    @Reywood: Putting money in a 401(k) to earn 6% when you’re borrowing money on credit cards at 20% to do it makes no sense at all.

  33. Ragman says:

    Have to agree with jimconsumer on the personal responsibility.

    Electricity would be at that rate only if they don’t own an air conditioner (SoCal, so it’s possible). The house insurance is freaking cheap – our $190,000 house is at $1200/year, no claims, 1% deductible. I don’t see water, sewer, or trash listed.

    $3000 a year for repairs? Time to take some Home Despot seminars. Or is it figured on somebody buying a “fixer-upper” to flip? I hope this includes maintenance on the two cars, which you could do yourself, anyway. Maybe it includes lawn mowing service.

    $50 in dry cleaning? Time buy some cotton/poly blend and learn to use an iron.

    Sometimes it’s hard to believe that a budget like that has a basis in reality. But, I actually know of people who refuse to give up a lakehouse or boat that would put them out of debt in short order. People who would fix up a nice meal, then scrape any leftovers into the trash without a thought to putting them in the fridge. So, somebody living on a budget similar to this wouldn’t surprise me, but I’d still think they were idiots.

  34. ManPurse says:

    Wow. The posts about this are amazing.

    In southern California you would be hard pressed to find a detached, single family home for less than $350,000.

    Also, in many parts of the country – like Southern California – you can’t just not have a car. There is little public transit to speak of and it’s not like they’re building miles of friendly little bike lanes or even servicable sidewalks where you can walk from your barely affordable suburb 20 miles from your work.

    And what’s with the people saying “cut out the pets.” Once you have pets you can’t just magically make them disappear.

    Look I too see a lot of easy ways to trim this budget back to black. And I too am astonished at the choices real people make today that put them in debt.

    But the gist of the article as I understand it is that the dollar doesn’t go as far as it once did and the middle class life is becoming harder to maintain.

  35. PinguPingu says:


    150 for clothing for 2 kids and 2 parents is not entirely unreasonable. Even with hand-me-downs, my kids outgrow/outwear clothes, shoes, socks, and underwear faster than you would think. Factor in my career which requires ‘professional’ attire aka heels, pantyhose, tailored skirts and blouses, and you’ll be shooting past 150 real fast.

    Not to say that they don’t have some frivolous crap in their budget, but they aren’t living a fabulous life by any means. And on 525 a month for groceries, they aren’t eating steak for dinner every evening.

  36. Bryan Price says:

    @ElizabethD: Yep! As the family dwindles from 6 to 4 to (rather soon) 2, (yep, two sets of twins…) I can attest to that. And then there are the friends that hang around looking for a good meal. At least they consider my cooking a good meal. :-p

    @ShortBus: I don’t think that $50 is out of line for dry cleaning, $500 entertainment seems a bit much but when you consider that’s probably one night out a week (eating out is considered entertainment) and taking the family to a movie once per month, you’ve got to be close. Charity, yeah I’d zero that out. And household repairs really aren’t a luxury. Fixing a broken toilet, a broken window, refrigerator fritzes out, or any other thing that breaks that you really can’t do without, you’ve got to get it fixed

    @teh: I lived in a fairly inexpensive part of Columbus, Ohio, and I was still paying $7,200 in rent/year. 7 years ago. How many house/roommates do you live with to make 25K affordable?

    I think some of the budget is whack anyways. $50 for cell phones? I’m sure the adults have them, if not the kids as well. At least $80 for two. And it’s $150+ for four with texting. I speak from experience! I’m planning on $300/month for electricity (I think I got one month with $150 this winter, and I don’t want to see what happens in July/August).

    The one thing that is helping this family is that we are living in a house that we’ve owned for 16 years, only refi’ed once and got an extra $5K to get the roof redone. And our taxes on the house are one tenth too, of that proposed budget.

  37. stinerman says:


    Looking at my expenses, my “entertainment” line says “$17.07”.

    And thats for the YEAR.

  38. stinerman says:


    And where I live, you’d be hard pressed to even find a house that costs $350,000 (except out on the lake).

    It goes to show that where you live makes a big difference.

  39. whatevernever says:

    I can’t believe that people can’t live off of $100,000. I don’t care where you live. Get a second job, cut back somewhere.

    I’m a single mom with 2 boys who are about to hit teen years. I make a little over $30,000 a yr. I don’t get any government help at all because I make too much. My kids do get reduced lunch at school and that is the only help I get. I don’t ask anyone for money, not from family or friends.

    I buy household items through craigslist. I buy clothes on clearance. I use coupons like crazy. I buy used cars not new. If we want to watch a movie we go to the dollar movie or I rent at the kiosk at McDonalds. I take my kids to free events around town or we hang out at home. I recently changed my job location so I could save in gas, instead of driving 50 min. to and from work I now drive 8 min. to and from work. I do live in a big city where housing is somewhat expensive.

    Unless medical bills are bringing someone down with that income I have no pity for people who can’t make it on $100,000 a year

  40. ElizabethD says:

    I am amazed at the judgmental responses to this post. Yes, there are some things that could be trimmed from that household budget.

    But the POINT is that incomes that once were more than adequate for families to afford a decent (not luxury) home in a nice neighborhood, maybe a vacation or two per year (the old car trip to Niagara Falls, not a cruise or European adventure), and enough left over each month to save for college tuitions, just aren’t stretching that far these days, especially in high cost-of-living areas like the West Coast and the Northeast.

    In our case, we need two cars for work and other obligations. They are not at all luxury cars (Hyundais, in fact: cheap, reliable transportation). My husband has been unemployed for a year, and in his early 60s is finding it impossible to even get an interview in his field, never mind a job offer. So he has begun painting houses. How long he can do such physical labor at his age is questionable. Meanwhile, one of our kids is heading to college this fall, and the last one is 2 years behind her. Have you looked at tuitions lately?

    Thank God I am employed. But on a salary substantially less than $100K, we find ourselves having to seriously plan to sell our HOME and move into an apartment. No, I will not give up the dog we have had for nine years. Nor our parakeets! That’s like saying “Give up your children for adoption if your circumstances change and you can’t afford to clothe and feed them.” Sheesh. And yeah, I will just leave my excellent job and benefits, and our lifelong friends, church, relatives, etc, to move to a whole different region at this age. I don’t think so.

    So we, with our college degrees (one is a Ph.D.) and many years of high-level experience in our fields, may find ourselves living in circumstances far more limited than those enjoyed by our middle-class parents and others in their generation.

    I know life is full of weird twists and turns, but these days the crazy housing costs, taxes (we’re in RI which is one of the worst property tax states), inflating price of gas and groceries, etc., are bringing the American Dream to a skidding stop for more people than ever.

    But feel free to imagine that we are foolish, wasteful, and deserving of our predicament. After all, “blame the victim” is the unspoken motto of Consumerist’s comment section.

  41. LibidinousSlut says:

    My parents live in a house that they bought for 100,000 in 1984. Today, if they were to sell it, it would go for 650-750k. It is a tiny, tiny, three bedroom attached townhouse. No garage, no central air, no special amenities. We don’t even have a dishwasher. My house here in VT is bigger and I rent it for 1200K a month (I have two roomates so my share is only 400). It is in NYC but it’s as far as you can be in NYC (queens) and still be in the city. They deliberately chose the neighborhood because when they were buying it was cheap, drug free, and away from suburban property taxes which can go up much more quickly and randomly than the city taxes- a concern in old age.

    I can’t afford to buy their house. And for what I want to do (non-profit/government work related to environmental/media policy) I basically have two places for employment: New York or DC. I’ve looked at cheaper places (philly for example) but there are no jobs. I also don’t want to ever have a car again (I have an old one, on loan from my parents that has already cost me almost a thousand dollars in the six months I’ve been driving when you factor in gas, the cost of towing myself out of ditches (learning to drive in snowy VT is just dumb), insurance, tires, maintenance and repairs (my steering pump broke), and auto-club membership to drive down the cost of towing myself out of ditches. Next week, I’m going to start bicycling the 26 miles roundtrip to and from school (I’m a grad student) just to reduce my gas useage.

    I think the point of this article is not that these people are to be pitied, or that they can’t get out of this debt through some belt tightening, but rather, how costs can build up while people are unaware and before they know it they’re operating at a deficit. It’s saying that 100k salary, particularly in the cities where one is most likely to earn one, is not really middle class if one has to engage in the kind of cust cutting behaviors usually relegated to those with lower salaries. Another thing that I thought was telling is that they don’t mention student loans at all. My friend’s probably make about 200k a year combined (they’re married)and they have 100k in student loans. They have no children, a mortgage on an overpriced, but modest apartment. They take the occasional vacation (mostly using miles off of his corporate card) and pay all of their bills on time, but they definitely do not feel comfortable.

  42. thegirls says:

    My sentiments exactly!

  43. thegirls says:

    If you’re a single mom, then you should be aware that as a parent, working full-time and taking care of children leaves little time for a 2nd job! Many part-time jobs require a certain # of hours. So if you work full-time and especially if you have to commute, that leaves little time to tend to your family….Many could only be so lucky to have the luxury of finding a responsible sitter and part-time income that adequately offsets what you have to pay them to watch your children.

  44. Rusted says:

    @jimconsumer: Actually not the cell, rip out the land line.

  45. CyGuy says:

    @frankthefink: Here’s my guess for how they manage to spend $500/month on entertainment. It has to be either sporting tickets, or gambling, or both.

    It could be something more trivial, if you break it down it’s just $4/family member per day, but I doubt it. My guess is Dad takes in major league sporting event maybe 20 times a year, or bets a $100 week on sports, or the mom drops it at the poker tables.

  46. Silversmok3 says:

    The article omitted something else: Debt.

    And not just credit card debt either.My dad’s paying a $20,000 tax debt due to a shady business accountant.Sometimes youre just in the hole, and not because of Neiman Marcus shopping spees.

    Assuming this family reads the consumerist and does what’s suggested by the commenters, they’d only be BARELY ahead of their bills. Add another 20K in some unexpected debt( medical bills,or student loans) and they’d be in real trouble.

    And what if the breadwinner gets laid off?Game over.Junior cant stay in college, and Ma and Pa are robbing Chase to pay Countrywide .

  47. chutch says:

    Hehe… find a way to transfer your job to a smaller town in Middle Tennessee. Around here, you can get a house with quite a few acres for $200,000. I’ve recently priced a house (forclosure, which explains this price – that and it needs work on the inside) that was 3 BR, 1 1/2 bath, LR, Den, Kitchen, Dining Room, Large above ground pool and 5 person hot tub for $65,000.

    Yeah, I agree. This is an entirely hypothetical budget – I know plenty of people who wouldn’t cut the obvious from their budget. I still feel vacations, entertainment, pets, dry cleaning, and gifts are overdone on this budget. These people are nuts to be paying that much if in debt. I won’t crap too much on charity giving. I feel it’s a bit much, but those that give a 10% tithe would easily be giving this much each month. Even though, this isn’t quite 10% when you figure in 100,000 divided by 12 months.

  48. Daniel-Bham says:

    I have a $50,000.00 household income. Wife, 3 kids, 2 pets, 3 bedroom house, and a car payment. Also, each semester I pay my tuition.

    Yet I manage to *save* money each month while paying extra toward debt payments.

    Secret? I don’t use credit cards without paying the balance each month. I budget to feed my family on $50 +/- per week. I don’t have any expense like satellite/cable/gym at the moment. I’m basically living within my means instead of trying to live above my means like most people.