A new study from SmartAsset shows the rising cost of living is pushing financial comfort further out of reach for many Texans. To live "comfortably" in the Lone Star State, a single adult must now earn more than $90,000 a year, while a family of four needs over $200,000.
It is not just Texans who are struggling with finances. According to a new study from SmartAsset, the cost of living in Texas has increased significantly, making it unaffordable for many people.
The personal finance website used information from the Massachusetts Institute of Technology's Living Wage Calculator to determine that a single adult in Texas needs to earn $90,771 per year before taxes to live a "comfortable" life. That number goes up to $204,922 for a family of four.
SmartAsset's Director of Economic Analysis, Jaclyn DeJohn, said, "This means being able to afford hobbies, vacations, retirement savings, college funds, and the occasional emergency, in addition to necessities like housing, groceries, transportation, and medical bills."
Uses the well-known 50/30/20 budgeting rule: 50% of income goes to necessities, 30% to extras, and 20% to savings or debt repayment. To determine the comfort level, SmartAsset doubled MIT's estimated living wage, which only covers basic needs, to account for the additional funds required to maintain a safe life.
MIT statistics show that a Texas family with two parents and two children requires $102,463 just to cover basic expenses. That number increases to around $105,000 in major cities like Houston, where rent and childcare are more expensive.
Even though Texas is still relatively affordable compared to other states—ranking 31st for individual comfort and 40th for families—most of its residents still cannot meet these standards. SmartAsset estimates that the median household income in the state should be around $76,000, whereas the Census Bureau reports a lower figure.
The financial gap is getting bigger across the country. To stay comfortable, DeJohn said that people need approximately $5,844 more per year than they did last year, and families require an additional $9,360. Hawaii has the most expensive housing and food, so a single person needs $124,864 a year to live comfortably there. Massachusetts is the worst state for families because it requires a crazy $314,000 in income.
Even though costs are lower in Texas, SmartAsset's research shows that even high earners are having a harder time because daily expenses are rising faster than income.
