Average expenses in MCOL area for a family of 4

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skor99
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Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 9:56 am

I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 6:49 pm

Surprised not to see any responses. Thought this might be something that folks would like to discuss and compare to see if they are spending more or less.

stoptothink
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Re: Average expenses in MCOL area for a family of 4

Post by stoptothink » Fri Aug 10, 2018 6:59 pm

MCOL, family of four, our total expenses last year were <$45k, including 15yr mortgage, 2 children in full-time daycare, and cash-flowing wife's college tuition. We are are frugal, even by Boglehead standards.

il0kin
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Re: Average expenses in MCOL area for a family of 4

Post by il0kin » Fri Aug 10, 2018 7:13 pm

I don’t have an exact number, but if I recall correctly last time I checked it was approx 60k per year without daycare (not a permanent expense) and an extra $9600 for daycare, so all-in I’ll say 70k.

Edit: Also MCOL, family of 3 soon to be 4
Last edited by il0kin on Fri Aug 10, 2018 7:17 pm, edited 1 time in total.

acegolfer
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Re: Average expenses in MCOL area for a family of 4

Post by acegolfer » Fri Aug 10, 2018 7:17 pm

If you want more responses, I suggest you define "all expenses (except taxes)" more clearly.

For example, should I include or exclude medical insurance premiums, FICA, parent support, property tax, charity, childcare, kid's education?
What if I moved and sold the previous house?

randomguy
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Re: Average expenses in MCOL area for a family of 4

Post by randomguy » Fri Aug 10, 2018 7:23 pm

skor99 wrote:
Fri Aug 10, 2018 6:49 pm
Surprised not to see any responses. Thought this might be something that folks would like to discuss and compare to see if they are spending more or less.
And what does that tell you. You are obviously spending ~2-3x as much as the average family of 4. But who cares if you can afford it. You could chose to live a more average life but what would that do for? Enjoy you high salary and spend on things you enjoy.

skor99
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Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 7:29 pm

acegolfer wrote:
Fri Aug 10, 2018 7:17 pm
If you want more responses, I suggest you define "all expenses (except taxes)" more clearly.

For example, should I include or exclude medical insurance premiums, FICA, parent support, property tax, charity, childcare, kid's education?
What if I moved and sold the previous house?
All expenses including all of the above you mentioned except for FICA as that is income/employment tax. I did not include those taxes as I consider those as not in a person’s control in most part. I have included property taxes as that is based on the choices people make in terms of house size and location.
In fact, I forgot to include the lumpsump I paid for my home when I bought it, so the average is actually around 91K per year. It does include all the mortgage interest paid all these years, but does not include any tax deductions on mortgage or medical insurance... So basically all expenses except for income and employment taxes and deductions on some items .

livesoft
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Re: Average expenses in MCOL area for a family of 4

Post by livesoft » Fri Aug 10, 2018 7:29 pm

I don't know our family of 4 expenses, but $86K is more than our taxable income on Form 1040 for the past 10 years.
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skor99
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Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 7:32 pm

randomguy wrote:
Fri Aug 10, 2018 7:23 pm
skor99 wrote:
Fri Aug 10, 2018 6:49 pm
Surprised not to see any responses. Thought this might be something that folks would like to discuss and compare to see if they are spending more or less.
And what does that tell you. You are obviously spending ~2-3x as much as the average family of 4. But who cares if you can afford it. You could chose to live a more average life but what would that do for? Enjoy you high salary and spend on things you enjoy.
And I guess that is what my question is. The average number of 90K does seem high, but Is it really 2-3x the average , considering I have included everything including payoff of my mortgage and cars ?

randomguy
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Re: Average expenses in MCOL area for a family of 4

Post by randomguy » Fri Aug 10, 2018 7:48 pm

skor99 wrote:
Fri Aug 10, 2018 7:32 pm
randomguy wrote:
Fri Aug 10, 2018 7:23 pm
skor99 wrote:
Fri Aug 10, 2018 6:49 pm
Surprised not to see any responses. Thought this might be something that folks would like to discuss and compare to see if they are spending more or less.
And what does that tell you. You are obviously spending ~2-3x as much as the average family of 4. But who cares if you can afford it. You could chose to live a more average life but what would that do for? Enjoy you high salary and spend on things you enjoy.
And I guess that is what my question is. The average number of 90K does seem high, but Is it really 2-3x the average , considering I have included everything including payoff of my mortgage and cars ?

Median income for a family of 4 in MCOL states (you would have to say what you consider MCOL) in 2008 is around 60k (high cost living are up around 75k and LCOL down around 54k) . Take out a bit for taxes (payroll, state) and savings, and you are looking at 40-50k of money for spending. I.E. about half of what you are doing. 15 years is also long enough for things like inflation to factor in 86k in 2003 is about 120k in 2013 dollars.

You can include whatever you want in spending. If counting paying off your house as savings instead of spending makes you feel better, go for it.

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 8:02 pm

randomguy wrote:
Fri Aug 10, 2018 7:48 pm
skor99 wrote:
Fri Aug 10, 2018 7:32 pm
randomguy wrote:
Fri Aug 10, 2018 7:23 pm
skor99 wrote:
Fri Aug 10, 2018 6:49 pm
Surprised not to see any responses. Thought this might be something that folks would like to discuss and compare to see if they are spending more or less.
And what does that tell you. You are obviously spending ~2-3x as much as the average family of 4. But who cares if you can afford it. You could chose to live a more average life but what would that do for? Enjoy you high salary and spend on things you enjoy.
And I guess that is what my question is. The average number of 90K does seem high, but Is it really 2-3x the average , considering I have included everything including payoff of my mortgage and cars ?

Median income for a family of 4 in MCOL states (you would have to say what you consider MCOL) in 2008 is around 60k (high cost living are up around 75k and LCOL down around 54k) . Take out a bit for taxes (payroll, state) and savings, and you are looking at 40-50k of money for spending. I.E. about half of what you are doing. 15 years is also long enough for things like inflation to factor in 86k in 2003 is about 120k in 2013 dollars.

You can include whatever you want in spending. If counting paying off your house as savings instead of spending makes you feel better, go for it.
Anything spent on a primary home are expenses in my view. I do not even count the principal in my Net worth. So the less spent on mortgage interest, the better it is in my view.

Gill
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Re: Average expenses in MCOL area for a family of 4

Post by Gill » Fri Aug 10, 2018 8:14 pm

livesoft wrote:
Fri Aug 10, 2018 7:29 pm
I don't know our family of 4 expenses, but $86K is more than our taxable income on Form 1040 for the past 10 years.
OK, I’ll bite. As you well know, taxable income is meaningless. Tell us your accounting income, although I’m sure you don’t know it. :happy
Gill

denovo
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Re: Average expenses in MCOL area for a family of 4

Post by denovo » Fri Aug 10, 2018 8:44 pm

skor99 wrote:
Fri Aug 10, 2018 6:49 pm
Surprised not to see any responses. Thought this might be something that folks would like to discuss and compare to see if they are spending more or less.
These kind of comparisons are arbitrary and pointless.

First, there's no good uniform definition of MCOL. I bet many people would quibble over which metro qualifies as what.

Second, people may have less or more kids than you.

Third, a lot of you expensives involve discretionary stuff like home improvements, vacations, or paying off mortgage early.
"Don't trust everything you read on the Internet"- Abraham Lincoln

MathWizard
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Re: Average expenses in MCOL area for a family of 4

Post by MathWizard » Fri Aug 10, 2018 8:51 pm

Adjusted for inflation between 50 and 60 K.

Most of medical insurance was paid by my employer.

Paid off our student loans, 2 kids through college, mortgage paid off in 17 yrs, paid off all debts, major house improvements done by wife and I.

protagonist
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Re: Average expenses in MCOL area for a family of 4

Post by protagonist » Fri Aug 10, 2018 8:51 pm

denovo wrote:
Fri Aug 10, 2018 8:44 pm

First, there's no good uniform definition of MCOL. I bet many people would quibble over which metro qualifies as what.

There are sites that compare cost of living of a given community with that of the entire country and produce a percentage. I have no idea how accurate they are, but I would propose that if your community lies within one standard deviation of the mean, that would be a decent definition. Thus . if I recall correctly, 68% of communities would be "MCOL". Half of the remainder would be "HCOL " and the other half would be "LCOL" I am assuming a roughly normal distribution. Here is one of those sites....problem is none I could find provide standard deviation. https://www.bestplaces.net/search/?q=sp ... lake,%20nj They state my community is 125% as costly as the average. I would guess that would still be within the range of one standard deviation from the mean but I don't know. NYC is 267% of the mean.

Another factor to consider is if you own your home and if it is paid for. Since housing is, by far, most people's major expense, and since many things (such as food prices and car and gas prices) probably vary regionally less than real estate, if you own your home your expenses may differ from what the overall cost of living figures suggest.
Last edited by protagonist on Fri Aug 10, 2018 9:18 pm, edited 4 times in total.

KlangFool
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Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Fri Aug 10, 2018 8:52 pm

skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool

il0kin
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Joined: Mon Feb 26, 2018 8:19 pm

Re: Average expenses in MCOL area for a family of 4

Post by il0kin » Fri Aug 10, 2018 9:38 pm

KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
In my MCOL area a 330k house is either a 3500-4000 square foot "McMansion" or a 2500 sq ft home in an older and highly desirable part of town. These houses have basements with usable finished square footage, though.

My 260k purchase price (appraisal approx 300k) is about 3000 sq. ft including the basement and I would not ever want a house bigger than what we have.

KlangFool
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Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Fri Aug 10, 2018 9:48 pm

il0kin wrote:
Fri Aug 10, 2018 9:38 pm
KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
In my MCOL area a 330k house is either a 3500-4000 square foot "McMansion" or a 2500 sq ft home in an older and highly desirable part of town. These houses have basements with usable finished square footage, though.

My 260k purchase price (appraisal approx 300k) is about 3000 sq. ft including the basement and I would not ever want a house bigger than what we have.
il0kin,

In my neighborhood, 400K gets you a 2000 square feet townhouse. Does this mean it is an HCOL area?

KlangFool

il0kin
Posts: 138
Joined: Mon Feb 26, 2018 8:19 pm

Re: Average expenses in MCOL area for a family of 4

Post by il0kin » Fri Aug 10, 2018 9:55 pm

KlangFool wrote:
Fri Aug 10, 2018 9:48 pm
il0kin wrote:
Fri Aug 10, 2018 9:38 pm
KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
In my MCOL area a 330k house is either a 3500-4000 square foot "McMansion" or a 2500 sq ft home in an older and highly desirable part of town. These houses have basements with usable finished square footage, though.

My 260k purchase price (appraisal approx 300k) is about 3000 sq. ft including the basement and I would not ever want a house bigger than what we have.
il0kin,

In my neighborhood, 400K gets you a 2000 square feet townhouse. Does this mean it is an HCOL area?

KlangFool
I think the general consensus is MCOL is sort of arbitrary and up for interpretation. My MCOL is the largest city in the state, and it is a Midwest city. In the top 50 metro areas by population. You can certainly find cheap <100k housing but it would be in bad areas of town. To get a 4 bedroom home in a decent area is going to be 200k+. I would define that as MCOL, but I could be off base.

skor99
Posts: 179
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Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 9:55 pm

KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
Around 2800 sf where I am

delamer
Posts: 6138
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Re: Average expenses in MCOL area for a family of 4

Post by delamer » Fri Aug 10, 2018 10:06 pm

Even people that make heavy use of credit are going to have some constraint on their spending based on their household income.

So what do expenses for a similarly-sized family, even in the same city, really tell you?

randomguy
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Joined: Wed Sep 17, 2014 9:00 am

Re: Average expenses in MCOL area for a family of 4

Post by randomguy » Fri Aug 10, 2018 10:19 pm

KlangFool wrote:
Fri Aug 10, 2018 9:48 pm


In my MCOL area a 330k house is either a 3500-4000 square foot "McMansion" or a 2500 sq ft home in an older and highly desirable part of town. These houses have basements with usable finished square footage, though.

My 260k purchase price (appraisal approx 300k) is about 3000 sq. ft including the basement and I would not ever want a house bigger than what we have.
il0kin,

In my neighborhood, 400K gets you a 2000 square feet townhouse. Does this mean it is an HCOL area?

KlangFool
[/quote]

Maybe but you are at the bottom of HCOL and have a lot more in common with MCOL and LCOL than you do with places like NYC or SF. 200/sq ft is vastly different than the 800+ that those places have. And of course we are making guessing. You can go to a LCOL and have a 400k 2k sq ft house if you go crazy with marble, high end appliances, and so on.

KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Fri Aug 10, 2018 10:35 pm

skor99 wrote:
Fri Aug 10, 2018 9:55 pm
KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
Around 2800 sf where I am
skor99,

So, I pay about $400K for a 2000 square feet townhouse. My annual expense is about 60K per year for a family of 4. And, I am supposedly in an HCOL area. In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Fri Aug 10, 2018 11:22 pm

KlangFool wrote:
Fri Aug 10, 2018 10:35 pm
skor99 wrote:
Fri Aug 10, 2018 9:55 pm
KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
Around 2800 sf where I am
skor99,

So, I pay about $400K for a 2000 square feet townhouse. My annual expense is about 60K per year for a family of 4. And, I am supposedly in an HCOL area. In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool
Does that 60K include mortgage, car, vacations, property taxes etc. ? I have had years where my expense has been around that much but those were the years without any expensive purchases. Is 60K your lowest or the average ?

denovo
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Re: Average expenses in MCOL area for a family of 4

Post by denovo » Fri Aug 10, 2018 11:39 pm

protagonist wrote:
Fri Aug 10, 2018 8:51 pm
denovo wrote:
Fri Aug 10, 2018 8:44 pm

First, there's no good uniform definition of MCOL. I bet many people would quibble over which metro qualifies as what.

There are sites that compare cost of living of a given community with that of the entire country and produce a percentage. I have no idea how accurate they are, but I would propose that if your community lies within one standard deviation of the mean, that would be a decent definition. Since housing is, by far, most people's major expense, and since many things (such as food prices and car and gas prices) probably vary regionally less than real estate, if you own your home your expenses may differ from what the overall cost of living figures suggest.
As you noted housing is the biggest expense differentiating cost of living. In sufficiently large metros (NY, LA) you can probably find MCOL or HCOL or VHCOL neighborhoods/districts.
"Don't trust everything you read on the Internet"- Abraham Lincoln

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 6:37 am

skor99 wrote:
Fri Aug 10, 2018 11:22 pm
KlangFool wrote:
Fri Aug 10, 2018 10:35 pm
skor99 wrote:
Fri Aug 10, 2018 9:55 pm
KlangFool wrote:
Fri Aug 10, 2018 8:52 pm
skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
skor99,

What is the size of a 330K house in an MCOL area?

KlangFool
Around 2800 sf where I am
skor99,

So, I pay about $400K for a 2000 square feet townhouse. My annual expense is about 60K per year for a family of 4. And, I am supposedly in an HCOL area. In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool
Does that 60K include mortgage, car, vacations, property taxes etc. ? I have had years where my expense has been around that much but those were the years without any expensive purchases. Is 60K your lowest or the average ?
That's how much I spent each year. I do pay yourself first. I cannot spend the money that i do not have. The only exception is now. I pay 50k to 60k each year for my 2 kids college education.

KlangFool

Admiral
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Re: Average expenses in MCOL area for a family of 4

Post by Admiral » Sat Aug 11, 2018 7:13 am

But what is your income? We spend more than that (after taxes and all other retirement contributions are accounted for) for a family a four, but our incomes are 300k and we pay for private school. It's all relative.

86k may be a lot if you make 150k. If you make 400k, not so much. As long as you are saving what you feel is adequate, I don't see a reason to fret. Live is for living.

donaldfair71
Posts: 322
Joined: Wed Mar 06, 2013 4:15 pm

Re: Average expenses in MCOL area for a family of 4

Post by donaldfair71 » Sat Aug 11, 2018 7:22 am

skor99 wrote:
Fri Aug 10, 2018 9:56 am
I went back and looked at my expenses for the past 15 years and averaged them out. This covers the period since my first kid was a toddler until now when the first one is ready to go to college and the other one is ready for high school. This also covers payoff of my mortgage ( for a 330 K home ) , home improvements including deck and finishing basement, as well as the the purchase of 3 cars ( approx 106K fully paid off). All expenses (except taxes) are included. Vacations mostly in US and some international trips but nothing exotic with exorbitant costs. Kids go to public school so no extraordinary expenses there except for supplies, field trips etc.

The long term average comes out to be around 86K per year. Wanted to check with people how this compares to others in MCOL areas.
With a just-turned 6 and a just-turned 3 year u expenses are running at about 73k/year. But that includes 1400/month childcare 10 months of the year. Also it's in northern Va, so I would likely call it HCOL.

In this estimate (my spreadsheet only goes back to 2014, I include none of the approximately 30k in home improvements we did when we first bought in 09. Also, buying in 09 will skew this because we bought our house for 199k, but two previous purchases of it were 365k and 425k a few years earlier. So in very few times ok history would I have housing at only like 1500/month in this area.
Last edited by donaldfair71 on Sat Aug 11, 2018 8:04 am, edited 1 time in total.

acegolfer
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Re: Average expenses in MCOL area for a family of 4

Post by acegolfer » Sat Aug 11, 2018 7:53 am

Average all annual expense (using OP's definition) past 15 years = $121k

protagonist
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Joined: Sun Dec 26, 2010 12:47 pm

Re: Average expenses in MCOL area for a family of 4

Post by protagonist » Sat Aug 11, 2018 8:51 am

KlangFool wrote:
Fri Aug 10, 2018 10:35 pm

In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

Especially in light of the fact that the median household income in the US is only about $59K/year.

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Average expenses in MCOL area for a family of 4

Post by acegolfer » Sat Aug 11, 2018 9:09 am

protagonist wrote:
Sat Aug 11, 2018 8:51 am
KlangFool wrote:
Fri Aug 10, 2018 10:35 pm

In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 9:27 am

acegolfer wrote:
Sat Aug 11, 2018 9:09 am
protagonist wrote:
Sat Aug 11, 2018 8:51 am
KlangFool wrote:
Fri Aug 10, 2018 10:35 pm

In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
And yes, I do understand that I am way above the Country wide median income family , this is more of a bogleheads comparison
Last edited by skor99 on Sat Aug 11, 2018 9:29 am, edited 1 time in total.

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 9:28 am

acegolfer wrote:
Sat Aug 11, 2018 9:09 am
protagonist wrote:
Sat Aug 11, 2018 8:51 am
KlangFool wrote:
Fri Aug 10, 2018 10:35 pm

In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
acegolfer,

Yes, I know that. But, that still does not change the fact that his annual expense is way above average in the MCOL area. This is even after factoring in the above average house in the MCOL. OP spend way above the housing expense.

This thread should be closed. It is not actionable.

OP can spend whatever amount that he wants as long as he can reach his own personal financial target. Why should it matters that how much others spend?

There are 3 kinds of people out there.

A) Those save first and spend later. For me, I save first. I spend the rest. Hence, my expense could never go beyond a certain amount. I cannot spend the money that I do not have.

B) Those spend first and save later. For those people, they spend first and only save whatever remains. Their expenses are variable.

C) Those that are in between (A) and (B).

KlangFool

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 9:34 am

skor99 wrote:
Sat Aug 11, 2018 9:27 am
acegolfer wrote:
Sat Aug 11, 2018 9:09 am
protagonist wrote:
Sat Aug 11, 2018 8:51 am
KlangFool wrote:
Fri Aug 10, 2018 10:35 pm

In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 10:08 am

KlangFool wrote:
Sat Aug 11, 2018 9:34 am
skor99 wrote:
Sat Aug 11, 2018 9:27 am
acegolfer wrote:
Sat Aug 11, 2018 9:09 am
protagonist wrote:
Sat Aug 11, 2018 8:51 am
KlangFool wrote:
Fri Aug 10, 2018 10:35 pm

In summary, there is nothing average about your annual expense of 86K per year in an MCOL area.

KlangFool

Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool
Thanks for this perspective, Klangfool. My total home purchase price plus mortgage interest was around 410 K , so 15 yr average of home and car is 34 K . Also there were some years where I paid unsubsidized medical insurance , so that would be around 3K extra every year averaged out. So, around 53 K per year for discretionary.

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 10:22 am

skor99 wrote:
Sat Aug 11, 2018 10:08 am
KlangFool wrote:
Sat Aug 11, 2018 9:34 am
skor99 wrote:
Sat Aug 11, 2018 9:27 am
acegolfer wrote:
Sat Aug 11, 2018 9:09 am
protagonist wrote:
Sat Aug 11, 2018 8:51 am



Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool
Thanks for this perspective, Klangfool. My total home purchase price plus mortgage interest was around 410 K , so 15 yr average of home and car is 34 K . Also there were some years where I paid unsubsidized medical insurance , so that would be around 3K extra every year averaged out. So, around 53 K per year for discretionary.
skor99,

Out of your 86K annual expense, 53K aka 60% is discretionary. You choose to spend that money. If you can reach your financial target, it is a good thing. If you cannot reach your financial target, it is because you choose to spend that money.

KlangFool

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Average expenses in MCOL area for a family of 4

Post by acegolfer » Sat Aug 11, 2018 10:44 am

https://www.bls.gov/cex/2016/combined/decile.pdf

This data from Bureau of Labor Statistics (BLS) may help. (They have other data too) You can look up (after-tax) income and expenditure (by category) grouped by 10 income deciles.

For example, for 9th decile (for household income between top 10% and top 20%, presumably OP's group), the averages are
income = $127k
income after tax = $109k
average # of ppl = 3.1
total expenditure = $87k
broken into
food expenditure = $10k
housing = $27k
...

Admiral
Posts: 1367
Joined: Mon Oct 27, 2014 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by Admiral » Sat Aug 11, 2018 10:56 am

skor99 wrote:
Sat Aug 11, 2018 10:08 am
KlangFool wrote:
Sat Aug 11, 2018 9:34 am
skor99 wrote:
Sat Aug 11, 2018 9:27 am
acegolfer wrote:
Sat Aug 11, 2018 9:09 am
protagonist wrote:
Sat Aug 11, 2018 8:51 am



Especially in light of the fact that the median household income in the US is only about $59K/year.
I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool
Thanks for this perspective, Klangfool. My total home purchase price plus mortgage interest was around 410 K , so 15 yr average of home and car is 34 K . Also there were some years where I paid unsubsidized medical insurance , so that would be around 3K extra every year averaged out. So, around 53 K per year for discretionary.
You still have not posted your income. How is any of this relevant or actionable? Who is "average"? What is a "MCOL" area? Are you meeting your savings goals, or not? If not, then if you want actionable advice you need to post specifics and you'll get some useful actionable replies. Just because KF says you are spending "way more than average" (whatever that means) does not mean it has any relevance to your situation.

Your spending rate compared to anyone is not a useful or actionable metric.

if you were to say "Income = 150k, expenses avg 86k, saving 5k per annum per retirement" then I'm sure you would get some helpful tips on how to cut expenses and save more. If your goal is to save 5k, then you don't need any advice or information.

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 11:09 am

Admiral wrote:
Sat Aug 11, 2018 10:56 am
skor99 wrote:
Sat Aug 11, 2018 10:08 am
KlangFool wrote:
Sat Aug 11, 2018 9:34 am
skor99 wrote:
Sat Aug 11, 2018 9:27 am
acegolfer wrote:
Sat Aug 11, 2018 9:09 am


I think you misunderstood what OP meant by "average". He was averaging out his expenses over years. He never claimed his expenses is the average amount in MCOL. OP, correct me, if wrong.
Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool
Thanks for this perspective, Klangfool. My total home purchase price plus mortgage interest was around 410 K , so 15 yr average of home and car is 34 K . Also there were some years where I paid unsubsidized medical insurance , so that would be around 3K extra every year averaged out. So, around 53 K per year for discretionary.
You still have not posted your income. How is any of this relevant or actionable? Who is "average"? What is a "MCOL" area? Are you meeting your savings goals, or not? If not, then if you want actionable advice you need to post specifics and you'll get some useful actionable replies. Just because KF says you are spending "way more than average" (whatever that means) does not mean it has any relevance to your situation.

Your spending rate compared to anyone is not a useful or actionable metric.

if you were to say "Income = 150k, expenses avg 86k, saving 5k per annum per retirement" then I'm sure you would get some helpful tips on how to cut expenses and save more. If your goal is to save 5k, then you don't need any advice or information.
Actually, I do not believe in increasing expenses with income. Some creep is bound to happen, but the principle I have generally followed is to save when the sun is shining for a rainy day. Unless I hit a jackpot of many millions, I will not spend more than $75 for a restaurant meal for the family, more than $5000 for a family vacation, will still clip coupons, just to give you an idea. Comfortable middle class living has always been my goal.

Thanks, ace golfer for the bls.gov link, very useful information

Admiral
Posts: 1367
Joined: Mon Oct 27, 2014 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by Admiral » Sat Aug 11, 2018 11:15 am

skor99 wrote:
Sat Aug 11, 2018 11:09 am
Admiral wrote:
Sat Aug 11, 2018 10:56 am
skor99 wrote:
Sat Aug 11, 2018 10:08 am
KlangFool wrote:
Sat Aug 11, 2018 9:34 am
skor99 wrote:
Sat Aug 11, 2018 9:27 am


Correct. Not saying I am average. I am trying to guage if I am above or below the average 4 person family in MCOL area. The reason to consider 15 years of expenses is that it averages out the big spending years with home and car purchases to the leaner years. No college expenses for me yet.
skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool
Thanks for this perspective, Klangfool. My total home purchase price plus mortgage interest was around 410 K , so 15 yr average of home and car is 34 K . Also there were some years where I paid unsubsidized medical insurance , so that would be around 3K extra every year averaged out. So, around 53 K per year for discretionary.
You still have not posted your income. How is any of this relevant or actionable? Who is "average"? What is a "MCOL" area? Are you meeting your savings goals, or not? If not, then if you want actionable advice you need to post specifics and you'll get some useful actionable replies. Just because KF says you are spending "way more than average" (whatever that means) does not mean it has any relevance to your situation.

Your spending rate compared to anyone is not a useful or actionable metric.

if you were to say "Income = 150k, expenses avg 86k, saving 5k per annum per retirement" then I'm sure you would get some helpful tips on how to cut expenses and save more. If your goal is to save 5k, then you don't need any advice or information.
Actually, I do not believe in increasing expenses with income. Some creep is bound to happen, but the principle I have generally followed is to save when the sun is shining for a rainy day. Unless I hit a jackpot of many millions, I will not spend more than $75 for a restaurant meal for the family, more than $5000 for a family vacation, will still clip coupons, just to give you an idea. Comfortable middle class living has always been my goal.

Thanks, ace golfer for the bls.gov link, very useful information
Oy vey. You are not hearing me. If I posted "I plan to spend $15,000 on a car, what does the average person in my city spend" how is that helpful to me or to anyone else?

That is basically what you are asking. It has nothing to do with increasing your expenses with income. It's the relevance to your specific situation of the answer, and the point of the question.

I agree at this point this thread should be locked.

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Average expenses in MCOL area for a family of 4

Post by acegolfer » Sat Aug 11, 2018 11:17 am

This is another useful one. https://www.bls.gov/cex/csxresearchtabl ... gherincome

It's older data (2014) but has more groups for higher income

between $70k - $80k
$80k - $100k
$100k - $120k
$120k - $150k
150k - $200k
$200k and more

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 11:31 am

Admiral wrote:
Sat Aug 11, 2018 11:15 am
skor99 wrote:
Sat Aug 11, 2018 11:09 am
Admiral wrote:
Sat Aug 11, 2018 10:56 am
skor99 wrote:
Sat Aug 11, 2018 10:08 am
KlangFool wrote:
Sat Aug 11, 2018 9:34 am


skor99,

The answer is obvious. For normal people, the largest expense is house and car.

1) Your PITI is probably 20K per year.

2) Your cars (105K) spread over 15 years. Let's say 10k per year.

3) So, your house and car only account for 30K per year. You have another 56K per year.

4) You spend way above average. Your discretionary expense beyond basic food, shelter, and transportation is way above average.

How is this actionable for you? If you track your expenses, the answer should be obvious to you.

KlangFool
Thanks for this perspective, Klangfool. My total home purchase price plus mortgage interest was around 410 K , so 15 yr average of home and car is 34 K . Also there were some years where I paid unsubsidized medical insurance , so that would be around 3K extra every year averaged out. So, around 53 K per year for discretionary.
You still have not posted your income. How is any of this relevant or actionable? Who is "average"? What is a "MCOL" area? Are you meeting your savings goals, or not? If not, then if you want actionable advice you need to post specifics and you'll get some useful actionable replies. Just because KF says you are spending "way more than average" (whatever that means) does not mean it has any relevance to your situation.

Your spending rate compared to anyone is not a useful or actionable metric.

if you were to say "Income = 150k, expenses avg 86k, saving 5k per annum per retirement" then I'm sure you would get some helpful tips on how to cut expenses and save more. If your goal is to save 5k, then you don't need any advice or information.
Actually, I do not believe in increasing expenses with income. Some creep is bound to happen, but the principle I have generally followed is to save when the sun is shining for a rainy day. Unless I hit a jackpot of many millions, I will not spend more than $75 for a restaurant meal for the family, more than $5000 for a family vacation, will still clip coupons, just to give you an idea. Comfortable middle class living has always been my goal.

Thanks, ace golfer for the bls.gov link, very useful information
Oy vey. You are not hearing me. If I posted "I plan to spend $15,000 on a car, what does the average person in my city spend" how is that helpful to me or to anyone else?

That is basically what you are asking. It has nothing to do with increasing your expenses with income. It's the relevance to your specific situation of the answer, and the point of the question.

I agree at this point this thread should be locked.
What's the point then of any of the average/median studies ( like the bls.gov link )if it is not helpful ? I think some of the information I have seen on this thread is very useful, so it is your personal opinion that there is no point to this thread. Thanks anyways :-)

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 11:39 am

skor99 wrote:
Sat Aug 11, 2018 11:31 am

What's the point then of any of the average/median studies ( like the bls.gov link )if it is not helpful ? I think some of the information I have seen on this thread is very useful, so it is your personal opinion that there is no point to this thread. Thanks anyways :-)
skor99,

Please tell me why it is useful to you? I really want to know. Personally, I do not care about the average//median studies. The average/median Americans are in serious financial trouble. I do not want to be one of them.

KlangFool

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 11:53 am

Klangfool , I have a different perspective on the studies. It provides very useful information to use as benchmarks . Comparisons are bad when you blindly copy the joneses but We as income earners/ spenders do not exist in a vaccum.
The market will only pay us what other people with our skills are willing to accept and stuff we buy will be priced to what the average consumer can pay, so comparisons are permeated in every aspect or our life.
As somebody has said very wisely, there are times when you don’t have to outrun the bear but just the other person.
Last edited by skor99 on Sat Aug 11, 2018 11:55 am, edited 1 time in total.

Ron Ronnerson
Posts: 935
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Average expenses in MCOL area for a family of 4

Post by Ron Ronnerson » Sat Aug 11, 2018 11:54 am

I think you’re not getting too many direct responses to your question for a couple of reasons. First, I’m not sure that people keep long-term averages of their spending over the years. First, you have to define long-term. If it’s 15 years, what if the person lived part of that time at home with parents? What if they moved from a HCOL or LCOL area to a MCOL area sometime in between those 15 years? If someone paid cash for a car 16 years ago and is planning to purchase a new one soon, is it still an expense category for them?

Two people could have the same spending other than housing. The first individual could put a large down-payment (or pay in cash) while the second one puts a small down-payment and has a mortgage that’s of a much longer term. It would seem the second one has lower expenses but that ignores the bigger picture.

A family with a stay-at-home parent would likely have lower day-care costs but also lower income.

Someone who experienced an emergency could have their expenses dramatically affected by the situation. This could be for a short while or for the long term.

Also, shouldn’t people adjust for inflation each of the 15 years and then calculate the average to make it more meaningful?

Basically, I’d focus on saving/investing an amount that will help you to meet your goals since comparisons with others are not easily done. It’s usually apples to oranges. People have wildly different circumstances.

If you are simply curious about how much people are spending in MCOL areas and just want to get some idea, you might ask a simpler question that focuses on how much people’s expenses are now rather than over a long stretch of time. It still would ignore individual circumstances but I would think that you might get some more responses that give you specific dollar amounts.

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 12:13 pm

skor99 wrote:
Sat Aug 11, 2018 11:53 am
Klangfool , I have a different perspective on the studies. It provides very useful information to use as benchmarks . Comparisons are bad when you blindly copy the joneses but We as income earners/ spenders do not exist in a vaccum.
The market will only pay us what other people with our skills are willing to accept and stuff we buy will be priced to what the average consumer can pay, so comparisons are permeated in every aspect or our life.
As somebody has said very wisely, there are times when you don’t have to outrun the bear but just the other person.
skor99,

<<We as income earners/ spenders do not exist in a vaccum. >>

Only 10% or less of the American household has a million or more in net worth. So, there is nothing average about millionaire household.

<<The market will only pay us what other people with our skills are willing to accept>>

If your goal is to be paid as an average person, go right ahead.

<<stuff we buy will be priced to what the average consumer can pay, >>

Ditto. I do not pay the same price as the average consumer. I shop around. The average consumer does not shop around.

<<As somebody has said very wisely, there are times when you don’t have to outrun the bear but just the other person.>>

Average American save 5% or less of their income. So, if your goal is to be the top 10% or higher (millionaire), you will have to go further.

What is your financial goal? Living paycheck to paycheck like the average American or FIRE?

KlangFool

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 12:15 pm

Ron, the whole point about long term averages was to account for some of those circumstances. As an example, I had a 30 year mortgage and I paid only the minimum amount for a couple of years which would distort the housing expense numbers if you look at only those years as my aim was to payoff the 30 year in 15 and therefore I made extra principal payments most of the years.
Same with the medical expenses, I had a couple of years with high expenses and other years with just a couple of family doctor visits.

skor99
Posts: 179
Joined: Mon Jun 26, 2017 5:51 pm

Re: Average expenses in MCOL area for a family of 4

Post by skor99 » Sat Aug 11, 2018 12:20 pm

Klangfool, comparing with the best in terms of financial awareness and savings/expenses is the whole reason I posted on this forum and not on some median american site. :-)
I am aware that the median person has way less financial awareness and therfore more expenses and less savings

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 2:02 pm

skor99 wrote:
Sat Aug 11, 2018 12:20 pm
Klangfool, comparing with the best in terms of financial awareness and savings/expenses is the whole reason I posted on this forum and not on some median american site. :-)
I am aware that the median person has way less financial awareness and therfore more expenses and less savings
skor99,

1) 60% of your annual expense is discretionary. You get to decide how much to spend every year. So, how do others spend every year matters to you? It does not.

<<Klangfool, comparing with the best in terms of financial awareness and savings/expenses is the whole reason I posted on this forum and not on some median american site. :-) >>

2) Just assume whatever normal folks think is basically wrong:

A) Do not get pay the average market pay. Learn how to do better.

B) Do not pay the market price for anything. Shop better.

Do not be normal.

3) I do not think about the expense. I save first and spend later. I think about savings. Normal people do the reverse. They pray and hope that they could save something after all the expenses.

A) I have a number aka a financial target. In my case, it is 1.5 million.

B) I set a saving target. Now, I save nothing since I use all of my annual savings for my kids' college education. But, with 1.2 million, I could reach my goal in a few years with zero savings.

C) I adjust my savings if my annual review shows that I cannot reach my goal with the current saving number.

4) Above a certain income level, it is all about discretionary expenses. Especially in an LCOL and MCOL areas.

KlangFool

KlangFool
Posts: 10191
Joined: Sat Oct 11, 2008 12:35 pm

Re: Average expenses in MCOL area for a family of 4

Post by KlangFool » Sat Aug 11, 2018 2:07 pm

OP,

It is very simple.

Do you believe that you control your own savings and expenses? Yes or no?

Average American believes that they have no control. Hence, they save less than 5%. If you want to do better, you have to answer yes and take your own action accordingly.

KlangFool

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