According to a recent study by SmartAsset, Massachusetts is the most expensive state to raise a family of four, requiring an annual income of $301,184 for a family of two working adults and two children to live comfortably. The study defines “comfortable” as the income needed to cover a 50/30/20 budget, with 50% allocated for necessities, 30% for discretionary spending, and 20% for savings or investments. This income calculation is based on data from the MIT Living Wage Calculator, which takes into account the costs of housing, utilities, child care, food, and medical expenses.
The five most expensive states to raise a family of four, in addition to Massachusetts, include Hawaii, Connecticut, New York, and California. Despite high housing costs in many of these states, Massachusetts stands out for its higher total costs across various categories such as child care, food, and medical expenses. In contrast, Mississippi ranks as the least expensive state to raise a family, requiring an annual income of $177,798. Generally, more rural states tend to have lower costs of living compared to states with large cities, but they also have lower wages. This can result in higher costs being offset by higher wages in urban areas.
The study highlights the income needed for a family of four to live comfortably in each state, with Alabama requiring $193,606 annually and Wyoming requiring $235,206. States with a higher cost of living, such as California and New York, also tend to have higher median annual wages for workers compared to more rural states like Mississippi. Some states, such as Hawaii and Connecticut, have notably high costs of living due to factors like housing, which contribute to the overall higher income needed for a family to live comfortably.
Overall, the study provides valuable insights into the varying costs of raising a family of four in different states across the U.S. It underscores the importance of considering factors beyond just housing costs, such as child care, food, and medical expenses, in calculating the income needed for families to live comfortably. By providing a comprehensive breakdown of the income requirements for each state, the study offers a valuable resource for families looking to budget and plan for their financial needs based on their location.
With the cost of living continuing to rise across the country, understanding the income needed to support a family of four in different states is crucial for financial planning. The study sheds light on the disparities in costs across states and emphasizes the impact of factors like housing, child care, and medical expenses on the overall budget for families. By taking into account these various cost components, families can make informed decisions about their finances and plan for a comfortable lifestyle based on their location and income level.
