As much as living in major U.S. cities is glorified in TV and film, the reality can be untenable for most American families. Depending on on one's marital status, health care, child care, transportation, and needs for every day sustenance, some cities are twice as expensive as others just to satisfy basic living necessities. Experts used MIT's living wage calculator to assess the minimum income required to live in these 10 major cities. The calculations are based on a family of two adults and one child, and they don't include any leftover funds for dining out at restaurants, taking vacations, or adding to savings. Additionally, banking experts used the 50-30-20 rule (50% necessities, 20% savings, 30% disposable income) to assess what incomes are necessary to live comfortably in these major cities, including perks like dining out and putting money aside for the future.
1. New York
Living wage: $67,817
Living comfortably: $99,667
The Big Apple certainly has one of the highest rents in the country, averaging $2,295 a month. Groceries and healthcare also contribute to a high cost of living.
2. Los Angeles
Living wage: $65,963
Living comfortably: $87,260
With rent averaging $2,050 a month, property costs consistently present a challenge for affordable living. There's currently a $51,538 difference between median income and what's needed to I've comfortably.
3. Chicago
Living wage $59,215
Living comfortably: $76,086
Chicago's sprawling public transit system gives the city the second-lowest transportation costs among the 50 most populated cities in the U.S.
4. Boston
Living wage: $55,777
Living comfortably: $88,967
With rent averaging $2,100 a month, property and food costs are especially high in Boston. However, the city has one of the lowest annual transportation costs.
5. Atlanta
Living wage: $50,049
Living comfortably: $76,049
Atlanta's recent tech boom is also driving up costs of living. Unfortunately, this means there's about a $26,651 difference between median household income and the minimum salary to "live comfortably."
6. Philadelphia
Living wage: $55,600
Live comfortably: $73,005
Housing is the most expensive aspect of living in Philadelphia, with the median cost of a home averaging $147,000.
7. Denver
Living wage: $56,258
Live comfortably: $77,562
Not too long ago Denver was considered the fastest growing city in the U.S, which drove the cost of living higher. Now the difference between median income and a comfortable salary is still over $20,000.
8. Austin
Living wage: $54,638
Live comfortably: $73,163
Between 2017 and 2018, Austin's booming popularity sparked a large spike in cost of living. Transportation costs and healthcare are particularly expensive.
9. San Francisco
Living wage: $78,386
Live comfortably: $123,268
Out of the 50 most populated U.S. cities, San Francisco is the most expensive. With an average cost of $3,300 per month for rent, that's almost $40,000 a year for property alone.
10. Portland
Living wage: $58,423
Live comfortably: $79,397
After a recent explosion in popularity, the cost of living in Portland has risen with higher rent and property costs. Additionally, transportation is particularly expensive to get around the sprawling city.
When you're contemplating re-locating or settling down for the first time, the cost of living you should budget for can vary wildly depending on your family size, your vocation, and your needs. Consider your health care costs, means of transportation, and whether you plan to rent or own before you commit to a new city.
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The Federal Reserve sets the guardrails for the federal funds rate, and through that helps control the money supply for the nation.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
diy gifts
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.
