'An economic divide that is widening': Almost one third of Americans earning $150,000 a year or more say they're living paycheck to paycheck and many rely on credit cards to close the gap

Rent in NYC where I live is insane. My partner and I recently toured a place where they broke up the basement of a building into 4 apartments, none of which had a real bedroom, and were asking for $3k each

This is a trend everywhere, I just recently moved to different apartment and I’d say 8/10 apartments I saw on Zillow and the other sites were these “open concept” or whatever 1 bedrooms and hallway kitchens. It’s depressing
- Move to Ohio and you can buy a house for significantly less than your current rent.
  
  And work?
  
  These answers are always aimed at WFH "professionals" but blue collar schmucks like me always get the short end of that stick ever since the WFH trend kicked up. I have to live within range of a job that I have to physically be at (I've done the 1 1/2 hr drive one way) and any lcol area that I look in doesn't have anything even remotely close that pays enough to not make it a relative repeat of my current situation just with lower numbers. It's not that easy for everyone to just do.
  
  There are lots of blue collar jobs in Ohio, yes.
  
  Idk how to answer beyond that without specifics but my point is that changing jobs within your skillset and moving for opportunities is basically what the country was built on, and is not a new concept.
  
  If you're not willing to relocate or change roles for more money there's not a lot anyone can do for you.
  
  I began my career as a high school teacher. Had I remained one, I would make less than half what I make now. Had to change jobs and states to grow my wealth.
Look at the positive side. When sea levels start rising, you'd be first to notice that!
Supply and demand.

You can always move somewhere else and have hope of one day owning property. Or you can rent forever and have nothing to pass on to your kids.

The choice is yours. I wouldn't wait around for others to solve your problems.
- Ya, people should be forced to move away from their family and friends and home by insane cost of living and instead of sympathy we should just expect them to single handedly solve an entire fucked up economic system.
  
  🤡
  
  I'm torn on this one. I do think people should live near their friends and family but if the living situation was totally untenable I'm sure they wouldn't want me to struggle. At the same time, they aren't going to help me pay the bills so how much do they really care anyway?
  
  Entitlement. Thanks for understanding.
  
  Douchebaggery. Thanks for your support for high income inequality and low social mobility
  
  What are you talking about? I support spreading out so there are more developed areas that people want to live.
  
  Passing a bunch of money around in major cities is what exacerbates the disparity in wealth. Why should city people who already have more wealth get even more before those who have less?
  
  I really don't think that's how any of this works, dude
  
  You need to invest in areas if you want them to be "developed" so people want to live in them. If you force poor people to leave places where there are more opportunities (e.g. economic, educational, occupational, etc.) for them, you're basically dooming them and their following generations to poverty. This is why I said you support low social mobility and high income inequality.
  
  Now just think of who the poorest people are in cities - it's a lot of minorities, single parents, people in debt, etc. That should immediately tell you "city people" don't have more wealth than most people elsewhere. As far as I can tell, the working class anywhere serve mainly to enrich the wealthy class.
  
  I've always looked at it this way: should the people that scrub toilets in NY or SF or LA be paid enough to live in the same city? Everything I've seen tells me the average American answers this question with a resounding "No!" People in those areas have to make hour-long commutes to put food on the table for their family. I don't see why we should accept essential workers being paid less than they deserve.
  
  That's exactly how it works. Why do you think it's more expensive to live in major cities than outside of them? Supply and demand. There's more demand and less supply. Why is there more demand? Because more people would prefer to live there.
  
  Why should we invest in major cities that have already reached diminishing returns on their investments instead of spreading out to make more places attractive to more people? Entitlement. Life outside of major cities isn't good enough for some, and they think people living in major cities should get more before everyone else who has less.

Try making $150k in a "reasonably priced area." It can be done, but is not the norm. The problem is that to make a good salary, you have to be in a place that pays those wages. Obviously, this attracts more people, so real estate is more expensive.

The trick is to make $150k in some kind of sweet spot where housing does not compensate. But it's always a moving target and is extremely difficult. Then in you lose your job? Start all over again.

I started working remotely and then left America. Now I live in a very low cost of living city and haven't owed more than 1-2% taxes in years.. It blows my mind that more people don't do this.
- If they did, it wouldn't be a low cost of living area for long
  
  There are many low COL areas, so yes you can do this quite a lot.
  
  Gentrify the planet.
- Most people won't do something if they think it's "too hard," even if it will solve their problems.
- Where did you go? And how do you not pay fed taxes working for an American company? Or is it a foreign company?
  
  Georgia (the country) and Turkey mostly.
  
  Qualifying for the FEIE (stay out of America for 330 days per year) means you don't pay taxes on the first $120k you earn. Maxing out the 401k ($22,500) will reduce taxable income as well so it's really like the first $142,500 is tax free.
  
  I work for an American company as a W2 employee.
  
  Thanks, looking to emigrate with a remote job, so good to know. Do you know if the FEIE is for any country or only select ones? And how hard did you find the entire transition in general?
  
  The FEIE is only concerned about your relationship with America. It doesn't matter what country/countries you decide to live in.
  
  As far as the transition, I didn't know it was happening until much later. When I left America it was to travel full time. I wasn't specifically going to one place so saying goodbye to friends and family was like, "I'll be around. Catch you guys later." 2-3 years later I was thinking to myself, "Oh shit.. You're like.. really gone."
  
  For work, I hold myself pretty strictly to working on US east coast hours so there is as little friction as possible with the employers. I moved my phone to a virtual provider and updated all banking and W4 paperwork to use a mailbox service in Florida (no state level income tax in FL).
  
  You do get very bored with tourist stuff though. I think I would rather die than set foot in another museum or see some old building or religious site or whatever.. Now 100% of the travel I still do is to see people I care about.
  
  Good luck.
You just explained how work from home jobs will transform how people buy housing and where they buy it.
- Let's pump up the flyover real estate market?
- Yeah, my job went remote in 2020 and this year I moved out of the city and just bought my first house in my home state where the cost of living is almost 1/2 of my former city. I ~~could've~~ would've never bought a place where I was before. I'm sure someone would have loaned me the money but that felt like a death sentence for my small amount of disposable income.
  
  I make $150k and learned to manage a very strict budget living in the city. Now I have some disposable income and my own house with a yard.
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- Because in your world, mobile home trailer parks are free or even exist in urban areas. Come on. A studio apartment around here starts at $1600/mo. The average home sale price in this area in 2022 was $580k. At 10% down, 30 year fixed, at 6.5% interest, after taxes and fees, that's a mortgage payment of about $4000/mo. Plus about $300-600/mo if you have an HOA/COA. Plus repairs as needed.
  
  Your net take home pay at $150k, after taxes only, is about $9k, making your mortgage 45% of your income. That doesn't include health insurance, retirement, or any other paycheck deductions.
  
  It doesn't include transportation: payments, gas, repairs, tolls, or insurance.
  
  That doesn't include utilities: gas, electric, water, trash, phone, or internet.
  
  That doesn't include food, supplies, clothing, or personal care.
  
  And it sure as shit doesn't include medical issues. God help you if you're a diabetic.
  
  And kids? What are you, fucking Rockefeller? Daycare, schooling (yes, even public schools cost money because of all the extras they ask you to provide like supplies, lunch, etc), and all their needs. At at least 16 years before they might be able to pay rent, that's a long time for a free tenant sharing your resources.
  
  Plus all of life's extra costs.
  
  And looking at Zillow, I can't find any properties within 10 miles of me going for less than $600k. They got townhomes for 1.2 million just down the block. $580k for a house is gonna be hard to find, and probably not in the best condition. Doable, possibly, but not easy.
My salary is $160k in the most expensive region in the country. My total yearly expenses don't exceed $50k, $20k of which is rent. The rest maxes out my 401k and goes towards a house down payment fund. I have a $30k emergency fund in case I lose my job which gives me 9 months of runway.

I'm not a nomad by any means. I have very nice things and I spend a grand a month on wants (eating out, my hobbies, whatever else I impulse order from Amazon), but I'm extremely aware of all my purchases and budget out every transaction at the end of every week. Hell, I just spent $2k on Christmas to get my family very nice gifts, but I've been spending less and sacrificing wants the past few months to offset that to prevent lifestyle creep.

This is a financial literacy problem, not a $150k is not a lot of money problem.

ETA: I split rent 50/50 with my partner in the California Bay area for a decent-sized 2b2.5b townhouse. My friends who do have 5 housemates, as so many of you seem to think I do, pay $1050 a month in rent, or $12.6k a year.
- You live in the most expensive region of the country but you only pay $20k in rent? Is your idea of "most expensive" Akron or something?
  
  No, I bet he has five housemates or something.
  
  I live in the California bay area (not going to get more specific than that), and split rent of a townhouse 50/50 with my partner. I live in a stupid bougie area too, so I'm not doing myself any favors there pricewise.
  
  You cannot get a SFH here for under $2 mil, and our townhouse we rent is worth well over $1 mil. I could easily afford the whole place by myself, but that would be financially irresponsible. I was very fortunate to be taught at a young age that being able to afford something does not make it a good or okay use of money.
  
  If I weren't living with my partner, I'd get a one bed or studio apartment for ~$2200 a month, or an extra $6400 a year. Unless someone took on a mortgage way larger than they could actually afford (again, a financial literacy issue), or has an extremely expensive medical condition, I have 0 idea how anyone could be paycheck to paycheck on $150k a year and unable to massively cut back. The world is expensive, but it ain't THAT expensive.
  
  To get a townhome in the bay at ~2k a month is a complete outlier with respect to rent. I live in a similar COL area and the cheapest you could rent that kind of space is for ~3.5k monthly in the present market.
  
  I didn't say I got a townhome for ~2k a month. The place I split with my partner is $3300 a month, and if I didn't live with them I'd get a smaller, much cheaper apartment.
  
  Edit: Alright everyone can go on believing you need a million dollars a year to scrape by in the bay area lmao. I'm done responding since everyone already has their minds made up about what it's like here, and somehow saying I could get a studio or one bed for $2200 is the same as a whole ass townhouse.
  
  I just hope more people can learn to be good with money, and we can stop this terrible capitalistic cycle of consumer over-spending and debt.
- How many housemates do you have?

Go look at a mortgage or even rent in any major city.

Hi, this is pretty much me, and I concur. If you can't live on $150k then you are definitely making some questionable decisions. That's around $8k/m take home. Even if you are spending $4k on rent/mortgage, you should have plenty left over to live on.
- Do you have kids?
  
  I'm pretty sure I covered the questionable decisions.
  
  Yeah, if you're a single man who doesn't have anyone to take care of and has no physical or mental health problems $150k is great. If you're part of a house with two incomes you're probably OK. If you're on a single incoming supporting parents with disabilities, kids, partners with disabilities, or any combination of similar things, you can maybe get by on $150k as long as you never fuck up and everything goes perfectly in your life and you don't care about or try to help anyone else.
  
  Edit: and I say man, because men are less likely to take on caregiver roles that cost large amounts of money.
  
  My wife is disabled FYI. I get what you are saying, but there is still a good amount of wiggle room in our budget. I also still don't really like the idea of lumping kids, which are a choice with a very clear financial impact, in the same category as dealing with illness and disability. That doesn't seem to be a good faith argument.
  
  A society where having kids is an unsustainable financial decision is a society that can't continue to exist, and a society where caregiving for someone with a disability or having one yourself makes life impossible is also a society that can't continue to exist.
  
  There are also a ton of other factors that can easily push someone over the edge. "We have lots of wiggle room" is great for you but lots of people don't... And even if someone did make a mistake, why should some small mistake put someone in inescapable debt?
  
  I just think the idea that $150k is fine and everyone who can't make it is an idiot isn't taking in to account the obvious data that shows the opposite.
  
  It does always strike me as ridiculous when we live in a world where continuing the existence of the human race is considered bad financial planning. No wonder birth rates are declining massively when the incentives are all on personal productivity and streamlining your life rather than having/raising a family. I don't plan to have children for a number of reasons, but the fact that society is filled with active disincentives certainly doesn't help persuade me otherwise.
  
  Kids are not always a choice, especially now that abortion is illegal in so many places.
  
  In addition, the idea that if you don't have enough money then you just don't get to have a family seems abhorrent.
  
  Can confirm. My wife and I live in a high cost of living area. Combined we make about $155k and our budget is painfully tight.
  
  Yeah, if you’re a single man who doesn’t have anyone to take care of and has no physical or mental health problems $150k is great. If you’re part of a house with two incomes you’re probably OK
  
  Why would it matter how many people it takes to make the 150k?
  
  If you're making $150k and someone else is making another amount of money...
  
  Then your family isn't making 150k and you're not part of this discussion.
  
  Also if you're making more than 150k and can't pay your bills, I have 0 sympathy for you.
  
  It must feel good to feel superior to all these people who are struggling. I bet that makes you feel really smart and capable.
  
  You wanna stop lashing out and make an actual point?
  
  I make 150k, have 3 kids (one in college), a home, 2 cars, etc and I am most assuredly not living paycheck to paycheck
  
  Good for you. I'm glad you don't care about other peoples problems because you're fine.
  
  That's the opposite of my stance. These people are fine and they're comparing themselves to people who are not.
I own a home just outside of a city and my mortgage is 1060/mo. 3BR, 3 bath, finished basement, on a half acre.
- Good for you. I bet you have to drive everywhere and you don't even realize that the cost of the infrastructure to make your life convient is bankrupting your closest city.
  
  What a dumb shit comment lol.
  
  I literally volunteer on campaigns to change local zoning to be more dense and contain more public transport.
  
  "You countered my point so quick let me think up some way to attack you as a person" lol.
  
  Telling people to "go move outside the city like I do" does exactly the opposite of what you say you're trying to support, so why even bring it up?
  
  When you advocate for density, you are de facto arguing to have more people where you are.
  
  Look, I'm glad you're advocating for good things. People need to be doing that. I'm done with the US and I really have no hope for it so it really doesn't matter anymore to me either way. I'm lucky enough that I never have to come back.
  
  It fucking sucks getting gentrified out of places you lived when you're making over $100k, and its absolutely absurd. I live in the Netherlands now. Because there's a functional tax system my neighbors are bike mechanics and students, instead of literally everyone either being a boomer who bought their house in the 80's or a tech bro on a single income. People should be able to live in cities, and cities should be high density. If people say they're struggling on $150k/y then believe that what they're saying is real, because it is. If people are struggling on $150k/y then theres a huge problem. But you know what's nice? It's not my problem anymore.
  
  I really hope your volunteering works out because it's needed.
  
  How were you able to move there? On paper I'm absolutely worthless... I'm stuck in a place I can't afford to stay in, but too poor/undesirable to be welcomed into another country.
  
  I'm really privileged and I sacrificed a lot. It's not an option for most people and if I didn't work for a big evil company I probably couldn't do it. They paid for most of it and organized a lot of it, but it was still a ton of work that we couldn't have done without a bunch of help from our family. Also being fueled by pure terror helped.
  
  As much as I say I don't care, I have so many friends who couldn't do the same thing and are stuck like you. If I thought I could help by staying, I probably would have. I thought about leaving when Trump got elected, but decided to stay and try to make things better. Then I got shot by a Trump supporter. So this time my family and I figured out an exit plan and left. Well... My partner and kids got out, but everyone else is still in the US.
  
  Everyone should have the opportunity to live in a place that makes sense. I wish I could make the US a place with living in. I wish that borders didn't exist.
  
  But if you want to escape to Europe, you want to figure out how to get citizenship in a place in the Schengen zone. The easiest to get in to legally are Spain and Portugal, which are a lot cheaper. It's also easier and cheaper to move if you're not taking anything and not supporting any kids or a partner.
  
  I wish I could give you useful advice.
  
  I appreciate your abrupt change in tone and your effort to engage with me as a person. I feel like we share many of the same goals and ideals, and are not as far apart as pithy comments may make us seem.
  
  I hope the Netherlands is as kickass as I've heard it is from friends
Good thing there are plenty of places to live outside of major cities.

The only people who this isn't a solution for are those who feel they're entitled to live in places they can't afford 🤷
- A lot of people like not commuting several hours a day, or having access to actual culture, or not being constantly robbed by meth heads, or not being murdered because of their Identity, or about a million other things that are difficult to impossible outside of cities...
  
  But fuck all the queer and trans people who escaped to the safety of cities. If they can't afford t, they shouldn't be there, right? /s
  
  If they can’t afford t, they shouldn’t be there, right?
  
  What makes them exempt from supply and demand?
  
  "The invisible hand" is literally a metaphor for god. Sorry, I'm not in the capitalist suicide cult.
  
  So... what do we do when there is scarcity?
  
  Share
  
  Totally. I wish we lived in a culture that valued taking excess from those who have it and giving it to those who need it.
  
  We have to create that culture. You're not alone. That's the world that most people want to live in. The more we talk to each other and the more we're able to connect, the more we can work together to make that happen.
  
  There's obviously enough for everyone, but we choose to pretend there isn't. We choose to pretend that the people who artificially restrict access to things people need to survive are ligitmiate and have the right to restrict access to food and housing. We pretend the people who enact that violence on behalf of these borders are heros. We pretend the imaginary rules they enforce on us have power. We pretend paper and imaginary numbers should dictate who lives, who dies, and who has the right to dictate the actions of others.
  
  We're playing a game together with made up rules. We pretend that there isn't enough so that people who have too much can take even more from people who don't. This is a stupid game that we should stop playing. Just by being aware of this, we can start to change the rules.

Hmmm you're not going to be making 150k a year in a shit fly over state.

I moved from the Bay Area to the East side of Washington near Seattle, folks here don't make as much as I do for sure, at least not on average. We both have good salaries so we can afford a lot of things. We essentially got to keep most of our bay area salaries.

But even then if we need a big repair we still have to sit down and plan out the money.

I can't even imagine what it's like for folks around here.

I live in Nebraska, and all comp included make around 155k per year salary + bonus. You can make that kind of money even here in the "shit"
- What's your title?
  
  I'm a software architect, though even when I was just a senior java developer I was making 130k, software pays well even in the fly overs.
  
  I'm a level 2 Engineer and I make close to what you're making TC. Hopefully maybe more come next year. And I don't work for the big 5. I work for a hospital group. Seniors make well close to double that in TC. Principals make slightly more.
  
  Also there are more jobs for higher levels than in non tech hubs. Career wise you'll probably be making more complex systems too.
  
  You have it good for sure, but you're the outlier my guy.
  
  I know that, I was just refuting the claim that "your not going to make that kind of money in a flyover state", it is possible, and you don't have to work the big 5 here either, and the cost of living is way less.
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- That's good what's your title?
  
  Titles at my company are kinda dumb, but I'm the head of employee development for a manufacturing company
  
  I'm pretty sure my title only exists at my company so I deleted it just in case.
  
  How many years of experience did you need to get that job?
  
  I have 13 years of experience but my first Directorship was after 5 (comparable budget and authority).
  
  This job is technically a step down for me but the money was right and it's a unique opportunity

In California, a new mortgage payment is 8-15k/month. Rent on an apartment is 3-4k/month. $150k salary isn’t enough for the mortgage and will struggle to cover that cost of rent.

In California, a new mortgage payment is 8-15k/month. Rent on an apartment is 3-4k/month

Buddy of mine lives in LA and was just posting angry complaints about his rent going up to 1800/mo, so no.

I've got three friends in the LA area and one in the Bay and none of them pay anything close to 3k/mo rent or 8k(!!!!!) on their mortgages.

Those numbers are insane.
- LA is cheap compared to the Bay Area. Also, I’m quoting numbers for new mortgages and new rentals. If you got your mortgage even 3 years ago, the numbers will be different.

Terrible assumption

Household income not personal income? And gross not net, correct? After healthcare, taxes and retirement deductions my net is 50% of gross so let's say that calculates to 6,250 a month. It is a lot of money! But for a household of 4, 2 paid off cars 3 drivers and one college student with no tuition costs, and one high schooler in a school that gives everyone lunch(so it could be much worse) here the average community monthly costs are:

2.5k mortgage with the tax & insurance in there, make that 3k if you are renting.

800/ month car insurance

600/month electric, water, internet

200/month family cell phone service

50/month streaming and donations to community radio

600/month average repair & maintenance on home and cars

Leaving 1700 for food for 4, gas, vet bills, credit card payments (because if someone is making bank now, they got there by making less for years). It's certainly reasonable but here it's about the least you can make household - wise and be solid, so if you are making 50k, you need three people working not two. And I can see how a family could get behind. That 2.5k plus $600 housing cost can be much more if you bought a house in the last year or so, and car loan or tuition could also blow this up, as could a medical emergency.

800/ month car insurance

The fuck? Why is your car insurance so expensive?

600/month electric, water, internet

The fuck? Why are you water and electric bills so high? I live alone, but my water bill is always <$40 and my electric bill is $70-$150 depending on if I'm running the A/C or heater.

Internet for me is only $25/month because I use my phone for Internet and have unlimited data with Visible.

200/month family cell phone service

Switch to Visible, like I said. $25/month per line and you all have unlimited data so you can cut your cable Internet.

50/month streaming and donations to community radio

Complete waste of money. You don't get to do these and then complain you don't have enough.

600/month average repair & maintenance on home and cars

Lol, what? Are you constantly hitting your walls with hammers? Do you do offroading in a sedan? No way you're spending $600 per month on home/car repairs (on average) unless you're driving a Benz or BMW.

That said, thank you for listing out your expenses. It's a way more fruitful discussion when we talk actual numbers instead of vague "I don't have enoughs."
- Nope. 2 cars and 3 drivers here with one of them 18 years old. Highest cost car insurance market in the nation. But without that third driver our household income wouldn't hit the $150k.
  
  Electric, Water, Internet. That's mostly electricity. Electric bill is higher since I'm working from home, and everything in the house is electric (no gas bill) we don't eat out much, cook a lot. Very high in the summer. Big windows, high ceilings, old house. Water includes garbage and is usually $100 or so. Internet about $75 FIOS so I can work from home mostly (2 cars not 3 that way).
  
  The $200 is a legacy t mobile plan covering 8 people so if needed I could get the grown kids to cover half of it, that one is high but not per line, we just pay it because if we cut them off it would still cost us $200 for 4 lines.
  
  House is older and cars are too. Tenting for termites has to happen every 10 years and costs 10k, we've had to fix plumbing, electric, replace an old porch, need blinds to help with the electrical cost, and the cars won't last forever - I honestly think the $600 may be underestimating the cost of maintenance, not overestimating.
  
  And of course every month something happens. Vet bills, or some medical cost, or car repair eats the 600 AND the plumbing springs a leak, or I have to work weekends and we buy restaurant food - no month is just bills.
  
  It's easy to go cheap for awhile, I have done that plenty. We have dry beans, rice, a garden. But things fall apart. I am putting here the cost of maintenance because if we don't accrue this $600ish, it will end up costing even more. It's a real cost.
  
  Oh, and I know this isn't poor, lol. In my 20s lived with 3 families in one house and dumpster dived to make ends meet. Then raised 4 kids with a guy who, halfway through, decided he couldn't work. 6 people living on what I could make, we are paying that deficit now too. Even so, this is is an awesome life, I am not complaining at all. Just saying that the bills do take most of the netpay if the real cost of housing and transportation is included.
  
  I'm driving a 26 year old car and don't even spend $600 on maintenance in a year. $600/month ($7200/year) sounds crazy high. That's like replacing an engine or transmission every year.
  
  Correct, it's mostly house. For a year, cars are about $400 in oil changes plus $300 in regular maintenance (brakes, etc.) and usually one repair or tires purchase of high cost, $600-1200. Its staying way below the cost of a new one.
  
  The house is the real money eater.
  
  Ah, I didn't realize you were lumping home and vehicle maintenance together. My water heater recently died after 19 years of solid use and that was more than a $2k project. I'm dreading the day the furnace goes out. Homes aren't cheap.
- I'm buying whatever I want and putting 10% in my 401(k) and that's exactly the same as being poor
  
  These people lol

Student loans

Or you only consider your expenses after savings and think that you are "living paycheck to paycheck" because you use up all your non-invested money by the end of the month.

I know a few programmers that are broke because they spend every penny that comes in and bought a $90k car the moment they got their jobs.

I don't understand why people give up financial security willingly like that

100% agree

PS: porque no los dos?

It's both. People try to always live above their means. Inflation causes that to catch up