Once the definition of success, earning $100,000 or more per year doesn’t automatically mean you’ve made it to easy street these days. As kids in the ’80s (or earlier), we might have thought that amount was akin to a million dollars, but now, a six-figure income doesn’t mean as much as it used to. What happened? Inflation, for one.
(Photo Credit: Adam Tinworth/Flickr)
If you want to really wish for days gone by, try plugging $100,000 into the U.S. Bureau of Labor and Statistics’ inflation calculator. What you’ll find is that $100,000 in 1980 is worth $288,638 in 2015 money. Want to get even more nostalgic? Crank the year back to 1960, and you’ll see that 100 grand would get you $803,506 annually in 2015. That’s a lot of cabbage.
In fact, the real value of your wages has decreased 8 percent since 2006. So, if your paycheck is similar to what it was before the recession, it buys less than it did. It’s not your imagination: you really do have less money than you used to.
Why We Don’t Feel Rich
Well, things got expensive. Starting with taxes, we lose about 30 percent of our paychecks to state and federal dudes like FICA and Social Security. Before you go asking “Who’s FICA and why is he getting all my money?” remember that taxes go to good things like roads and bridges (or at least they’re supposed to) and also to paying for incomes when we get old and can’t work. But still, that bite off the top stings a bit.
Also, things cost more. Stuff like housing, transportation, or food will take more out of your paycheck every month than they used to. The mere cost of Thanksgiving Dinner has risen thanks to the increase in the cost of turkey and pumpkin pie mix. College costs more (and so do student loans), so many are starting out in the workforce already in debt.
Then there’s cost of living: $100,000 a year gets you a lot farther in Chicago, for example, than it does in New York. In fact, if you earn $100,000 in Chicago, and want to move to New York and live a similar lifestyle, you’d need to make a whopping $187,136 a year.
Tips for Living Smart on Any Budget
- Don’t count on someone else to save for your retirement. You’re going to have to squirrel away some money every paycheck, and probably invest it too. Automatic savings plans where that money goes right out before you see it in your bank balance are easy and effective. Check with your bank, they probably offer it.
- Make a budget. Know what you’re spending every month by tracking it and keeping to a limit. Already spent your monthly cute boot budget? Sorry, those adorable booties are going to have to wait till next month. You’ll live. I swear.
- Plan for your big ticket items. If you know you want to take a big trip or buy a big house later on, start saving now. Sock away a little bit each month (there’s that automatic savings plan again) and you’ll be surprised how the nest egg can grow. What’s more relaxing than taking a vacation debt-free?
- Strive for that raise. Try to set professional goals so your next job pays even better than your last. Need some tips on what you should be earning? Check out PayScale’s salary survey. It’s free!
Tell Us What You Think!
Do you get by on way less than $100,000 a year, thanks? We want to hear from you! Leave a comment or join the discussion on Twitter.
when we born with nothing. so do not expect many things. when going home, we will leave everything behind. so be happy what we get. and you will no stress. be contend and will be healthy and safe. too many things we want, it will give us stress. if be contended you will no argue and no troubled in life. stress causes by greed. and many other factors. like people around us. we always want to prove to others we… Read more »
Now, I find that I am working three part time jobs, do manage to pay rent, car payment, insurance and get food and still have to scrounge to pay two other bills!!!
http://dressgme.com
This article doesn’t make any sense. What the point of this article other than signing you up searching for jobs?! Pure waste of my 10 minutes today.
Reading this just makes me want to go into a hole and never come out again… I would love to make around figures one day but college is drying me out. I live paycheck to paycheck and I feel like i’m going no where. I feel like I’m in a rut and I hate it. I don’t want to live like this for the rest of my life. can someone give a young person like me some advice on what… Read more »
It’s important to factor in hours worked with salary earned. I earned a six figure salary and at 40 hours a week would have earned $65 an hour, breaking it down to basics. I averaged 70 hours a week, and the salary broken down to hourly was roughly $35. This is not factoring in insurance or other benefits. Quality of life was poor and I shared a high level of stress along with my other colleagues. We weren’t doing life… Read more »
I thought that 43,000 was a lot for me back in the 1980s/1990s. I managed to pay for house, utilities and go on vacation. Now, I find that I am working three part time jobs, do manage to pay rent, car payment, insurance and get food and still have to scrounge to pay two other bills!!! I will be working through retirement, which doesn’t bother me, since I am healthy. But I would like to have something to hold on… Read more »
Plan to work til your able like 78. My dad finally wants to go part time at 90 years of age. He quit his CEO job and traded that job in for treasurer for a small company. He plans to work and save his money until 94. Nursing homes cost and so do CNA’s if you cannot walk, dress or take a bath. My mom took her meds until she was 89 and then 200,000 dollars was spent for 5… Read more »
it doenst tell you what you can expect really to get for 100k tho. Ok so it costs a heck of a lot more to get by in NYC that it does in chicago but does that surprise you…….was expecting more from the article to be honest 🙁
when we born with nothing. so do not expect many things. when going home, we will leave everything behind. so be happy what we get. and you will no stress. be contend and will be healthy and safe. too many things we want, it will give us stress. if be contended you will no argue and no troubled in life. stress causes by greed. and many other factors. like people around us. we always want to prove to others we… Read more »
Quality of life was poor and I shared a high level of stress along with my other colleagues.
This is so true. My husband and I make 200k between the two of us and we are still living paycheck to paycheck in the DC area.
I’m 34, female, no college degree (but loans from part time schooling) making $38,500 as a person who has no kids but lives with a boyfriend (not all bills are split but rent is). I’m okay each month but still feel like I live paycheck to paycheck. It would be nice to have more to put towards savings each month or go shopping once in awhile for clothes WITHOUT feeling guilty. My boyfriend makes about the same as me and… Read more »
very good information …thank y ou.