Income Needed for Family of 4 to Live Comfortably in Dallas (Plano: sales, insurance)

[justsomeguy]

I know this question will have a ton of variables but here are some parameters to think through:

Buying a 2000+ Sq Ft House at today's prices, not prices 5 or 10 years ago. Let's say, with a 10% down-payment available.

House in decent school district (or ability to pay for private school if not)

Comfortably able to pay for a few "luxuries" (e.g. 1x-2x a year vacation, occasional nice restaurants, activities for kids). Not talking about buying all Gucci/Louis Vuitton/"Real Housewives of Dallas" type luxuries.

Save at least 6% of tax-deferred income in a retirement account

Within 1 hour commute of Dallas core/central area

This is just a thought experiment, not looking for living area recommendations or anything like that.

Perhaps another way to phrase my question is, generically speaking, what income is needed for family of 4 to live a comfortable upper-middle class lifestyle in Dallas...not a wealthy lifestyle but also not having to "cut corners" or live excessively frugally to get by.

I am thinking HH income of at least $200k+, possibly higher. Which sounds kind of ridiculous when you think about it.

[TXFin214]

Purely anecdotal, but my thought is that $200K is somewhat on the high side, i imagine $150K or somewhere in that ballpark should be sufficient.

[Threestep2]

10% down only will get you PMI which is not only costly but not always easy to drop. At 150-200k you should be able to come up with 20%.

Comfortable is too broad of a range to say how much you will need.

[justsomeguy]

Originally Posted by Threestep2

10% down only will get you PMI which is not only costly but not always easy to drop. At 150-200k you should be able to come up with 20%.

Comfortable is too broad of a range to say how much you will need.

A $700k house would require $140k down with 20%; certainly doable but not many keep that much cash lying around, I would think...or if they did have it, would possibly not want to sink it all that cash into "the walls of the home" so to speak.

[TurtleCreek80]

Originally Posted by justsomeguy

I know this question will have a ton of variables but here are some parameters to think through:

Buying a 2000+ Sq Ft House at today's prices, not prices 5 or 10 years ago. Let's say, with a 10% down-payment available.

House in decent school district (or ability to pay for private school if not)

Comfortably able to pay for a few "luxuries" (e.g. 1x-2x a year vacation, occasional nice restaurants, activities for kids). Not talking about buying all Gucci/Louis Vuitton/"Real Housewives of Dallas" type luxuries.

Save at least 6% of tax-deferred income in a retirement account

Within 1 hour commute of Dallas core/central area

This is just a thought experiment, not looking for living area recommendations or anything like that.

Perhaps another way to phrase my question is, generically speaking, what income is needed for family of 4 to live a comfortable upper-middle class lifestyle in Dallas...not a wealthy lifestyle but also not having to "cut corners" or live excessively frugally to get by.

I am thinking HH income of at least $200k+, possibly higher. Which sounds kind of ridiculous when you think about it.

$200k is way too high. Somewhere in the $120-140k HHI range is more like it, depending on spending habits. Some of these estimates are on the high side. And assuming no student loans or consumer debt.

$330k home with 10% down is going to be about $2200/mo PITI.
$800/mo other household (utilities, cable/internet, pool if have one)
$1000/mo for 2 cars including payments if needed.
$1200/mo for food
$300/mo kid activities
$300/mo vacation fund
$1500/mo other spending (additional insurance, college funds, medical, clothes, gifts, occasional childcare, charity, additional savings, etc).

That’s a net need of approx $7800/mo. Which grosses up to $125,000 assuming 6% 401k and $1000/mo family healthcare contribution.

$330-360k is the median home price range in Plano, Allen, McKinney, Rockwall, Grapevine, Richardson, etc.

[justsomeguy]

Originally Posted by TurtleCreek80

$200k is way too high. Somewhere in the $120-140k HHI range is more like it, depending on spending habits. Some of these estimates are on the high side. And assuming no student loans or consumer debt.

$330k home with 10% down is going to be about $2200/mo PITI.
$800/mo other household (utilities, cable/internet, pool if have one)
$1000/mo for 2 cars including payments if needed.
$1200/mo for food
$300/mo kid activities
$300/mo vacation fund
$1500/mo other spending (additional insurance, college funds, medical, clothes, gifts, occasional childcare, charity, additional savings, etc).

That’s a net need of approx $7800/mo. Which grosses up to $125,000 assuming 6% 401k and $1000/mo family healthcare contribution.

$330-360k is the median home price range in Plano, Allen, McKinney, Rockwall, Grapevine, Richardson, etc.

That might be the median price, but I was under the assumption it would be hard to find a "nice" 2000+ sq ft house with good schools for under $500k-$600k in Dallas? Is that incorrect?

Also are you factoring in FederalIncome Taxes/Payroll taxes, plus miscellaneous expenses that crop up (e.g. car/home repairs, gasoline for 2 commuting parents, etc.?)

[ChristieP]

Originally Posted by justsomeguy

That might be the median price, but I was under the assumption it would be hard to find a "nice" 2000+ sq ft house with good schools for under $500k-$600k in Dallas? Is that incorrect?

No. That’s much too high. The median sales price in DFW is around $350 for most suburbs, most of which have good schools. The house you describe would sell for that. If you went up to $600k, you’d be looking at a 3500 sq ft new build with a pool in Southlake or West Plano. That’s not “median” at all.
For example, the neighborhood I live in in Grapevine has excellent schools, and houses around 2000 sq ft, and they regularly sell for about $310k.

[mastershake575]

Originally Posted by justsomeguy

That might be the median price, but I was under the assumption it would be hard to find a "nice" 2000+ sq ft house with good schools for under $500k-$600k in Dallas? Is that incorrect?

If your referring to Dallas proper (not the suburbs) then it's dependant on what area's

Area's like Far North Dallas and Lakehighlands it's not hard to get a house in the $320-360k range that feeds into good schools

If your referring to the upper class parts of Dallas (preston hollow, melshire estates, regular north Dallas) then no, houses will be double if not triple that. You wouldn't want to live in those area's anyways since most of them feed into terrible schools.

Originally Posted by ChristieP

No. That’s much too high. The median sales price in DFW is around $350 for most suburbs, most of which have good schools. The house you describe would sell for that. If you went up to $600k, you’d be looking at a 3500 sq ft new build with a pool in Southlake or West Plano. That’s not “median” at all.
For example, the neighborhood I live in in Grapevine has excellent schools, and houses around 2000 sq ft, and they regularly sell for about $310k.

Agreed. Most of the suburbs and most of the area's of of Dallas that feed into good schools (Lakehighlands, Prestonwood, campbell green, Northwood) you don't have to spend anywhere close to $600k. Plenty of good houses in the $300-360k range

[mastershake575]

Originally Posted by TurtleCreek80

$200k is way too high. Somewhere in the $120-140k HHI range is more like it, depending on spending habits. Some of these estimates are on the high side. And assuming no student loans or consumer debt.

$330k home with 10% down is going to be about $2200/mo PITI.
$800/mo other household (utilities, cable/internet, pool if have one)
$1000/mo for 2 cars including payments if needed.
$1200/mo for food
$300/mo kid activities
$300/mo vacation fund
$1500/mo other spending (additional insurance, college funds, medical, clothes, gifts, occasional childcare, charity, additional savings, etc).

That’s a net need of approx $7800/mo. Which grosses up to $125,000 assuming 6% 401k and $1000/mo family healthcare contribution.

$330-360k is the median home price range in Plano, Allen, McKinney, Rockwall, Grapevine, Richardson, etc.

Very good write up.

My sister has a family of 4 in Richardson (there right on the Far North Dallas border) and there total month bills/expenses averaged out to about $4000 a month for 2019 (that includes emergency expenses, a vacation, and house maintence)

When they bought there house a few years ago there household income was $110k a year and now it's in the $135k range. They have everything (amenties, good cars, nice 2 story house, good health plan) and yet almost half there net income goes into savings every month. There not penny pinching either, if somethings broke or something needs fixing they do it

Your estimate of $120-140k household income I would say is pretty spot on, would leave you with a good margin for savings and other spendings

[TurtleCreek80]

Originally Posted by justsomeguy

That might be the median price, but I was under the assumption it would be hard to find a "nice" 2000+ sq ft house with good schools for under $500k-$600k in Dallas? Is that incorrect?

Also are you factoring in FederalIncome Taxes/Payroll taxes, plus miscellaneous expenses that crop up (e.g. car/home repairs, gasoline for 2 commuting parents, etc.?)

IN Dallas? Or within 1 hour commute to Dallas? Two different things. I pulled MLS results for Allen, McKinney, Plano, and Rockwall - your 2000sf nice hope is easy to find in all of those suburbs for low to mid $300k’s. It’s the median price point. It’s a ridiculous assumption to think you need to spend 2X the median to find a “nice” 2000sf home.

And yes - my number were net of all taxes. I gave a $1000/mo car allowance to include gas/tolls/payment for two adults and $1500/mo for misc expenses and savings. And stayed on a $125k gross salary.