Can you live comfortably on 100k a year in Texas?
Texas is known for its affordable cost of living compared to many other states. But just how far can a $100,000 annual salary go in the Lone Star State? Let's take a closer look at what it's like to live on a six-figure income in different parts of Texas.
How Much Take-Home Pay is $100K in Texas?
First, it's important to understand how much of that $100,000 you'll actually take home after taxes. Texas has no state income tax, which is a big advantage. However, you'll still owe federal income taxes.
According to SmartAsset's paycheck calculator, a single filer earning $100,000 in Texas will take home around $74,515 after federal taxes. If you're married and filing jointly, your take-home pay would be around $80,380. So right off the bat, you're ahead of earners in states with high income taxes.
Cost of Living Varies Across Texas Cities
While Texas as a whole is an affordable place to live, your mileage may vary depending on which city you call home. The cost of housing, food, utilities, and other necessities can differ quite a bit from one Texas metro to the next.
For example, the median home price in Austin is $385,000, while in El Paso it's just $159,000.. Rent prices also span a wide range, with the average rent for a two-bedroom apartment in Austin at $1,500 compared to $800 in Amarillo.
According to MIT's living wage calculator, a single adult needs to earn at least $20.92 per hour, or around $43,500 annually, to cover basic expenses in Texas. For a family of four with two working adults, each adult needs to earn $24.20 per hour, or $50,300 annually.
So a $100,000 salary puts you well above the minimum needed to cover the basics in most parts of Texas. But how much you'll have left over depends on your specific living situation and expenses.
Breaking Down a $100K Lifestyle in Major Texas Metros
Let's look at how a $100,000 salary translates to a monthly budget in a few of Texas' biggest cities:
Houston: After taxes, you'd take home around $6,500 per month. The average rent for a two-bedroom is $1,235, leaving $5,265 for other expenses like groceries ($465), utilities ($365), healthcare ($463), and transportation ($613). You'd have around $3,000 left over each month.
Dallas: Your monthly take-home would be similar at around $6,500. Rent for a two-bedroom averages $1,730, leaving $4,770. Allocating for groceries, utilities, healthcare, and transportation would leave around $2,500 extra per month.
San Antonio: You'd see around $6,500 in your bank account each month. Typical rent for a two-bedroom is $1,189, leaving $5,311 for expenses like groceries ($465), utilities ($365), healthcare ($463), and transportation ($613). After necessities, you'd have about $3,400 left monthly.
Austin: Monthly take-home pay would be in the $6,500 range. The average two-bedroom rent is steep at $1,500. Budgeting for food, utilities, health, and transport would leave you with a still-respectable $3,000 or so extra each month.
As you can see, a $100K salary allows for a very comfortable lifestyle even in Texas' pricier cities. Of course, your budget will also depend on factors like your housing situation (renting vs. owning), family size, debt payments, and other expenses.
Speaking of extra expenses, many busy professionals find it worthwhile to outsource time-consuming chores like cleaning. Luckily, Austin cleaning service options are plentiful and affordable.
Other Factors to Consider
Housing and basic necessities aren't the only things to think about when deciding if $100K is enough to live on in Texas. Here are a few other important considerations:
Taxes: While Texas has no income tax, it does have higher-than-average property taxes and sales taxes. If you own a home or regularly purchase expensive items, this could take a bigger bite out of your budget.
Transportation: Texas cities tend to be sprawling, so you'll likely need a car to get around. Factor in the costs of a vehicle, gas, maintenance, and insurance.
Children: The expenses of raising kids can add up fast. According to the USDA, the average cost of raising a child is $12,000-$14,000 per year. If you have or plan to have children, you'll need to budget accordingly.
Lifestyle: Do you like to eat out, travel, or enjoy expensive hobbies? Make sure to leave room in your budget for discretionary spending to support the lifestyle you want.Hiring a cleaning services Austin company can free up your time to enjoy the city's great restaurants and entertainment.
Savings: Ideally, you'll want to allocate some of your income to saving and investing for the future. Many experts recommend saving at least 20% of your gross income for retirement and emergencies.
The Verdict
So, can you live comfortably on a $100,000 annual salary in Texas? The answer is a resounding yes.
In most parts of the Lone Star State, a six-figure salary allows for a very comfortable lifestyle, with ample room for housing, food, healthcare, and additional expenses. While $100K won't go as far in high cost-of-living metros like Austin, it's still more than enough to live well.
Of course, everyone's situation is different. Your specific lifestyle and financial goals will dictate how far a $100,000 salary will stretch. But for most Texans, it's more than sufficient to live a life of comfort and enjoy all the great things the state has to offer.