How much must you earn to live the ‘American dream’ in KY? What one analysis says
AI-generated summary reviewed by our newsroom.
- GoBankingRates sets Louisville's 'comfortable' income benchmark at $106,000.
- Analysis uses 50/30/20 rule to define financial comfort across 50 U.S. cities.
- Louisville ranks 38th in affordability, with annual grocery costs of $8,789.
Americans are consistently worried about inflation and the cost of living, and a recent analysis bears that out, finding the minimum household income needed to live comfortably in the country’s 50 largest cities is approaching six figures.
Drawing data from various sources, the analysis from finance website GoBankingRates.com put the minimum income needed at $89,000 annually, considering factors such as yearly grocery cost and average mortgage expenses. The analysis drew data from Sperling’s BestPlaces, the U.S. Bureau of Labor Statistics Consumer Expenditure Survey and Zillow’s Home Value Index, among other sources.
What it means to live the “American dream” of course varies between individuals, but in its analysis, GoBankingRates followed the 50/30/20 rule as a baseline. The rule states 50% of household income should go to essentials, 30% to discretionary spending and 20% to savings and debt repayment.
Louisville was included in GoBankingRate’s analysis. Here’s the costs that inform that ranking and how the country’s largest cities compare.
How much does it cost to live comfortably in Louisville, KY?
Louisville falls near the middle of the pack in GoBankingRates’ cost of living analysis, ranking 38th. That makes it a much more affordable alternative than the most expensive cities topping the list, such as San Jose, Calif., at No. 1.
Louisville is roughly comparable to Omaha, Neb., and Columbus, Ohio, sitting just between the two in terms of cost of living.
GoBankingRates puts the minimum household income for living comfortably in Louisville at $106,000 annually. The baseline cost of living is half of that at $53,000. Living the “American dream” under the website’s analysis means earning double the annual cost of living. Its cost of living analysis considers expenses for households with married couples who have children.
The median household income in Kentucky stands at $61,118, according to a 2023 estimate from the U.S. Census Bureau’s American Community Survey. For married-couple families specifically, the median household income in Kentucky is a bit higher at $93,544, also per 2023 Census data, the latest available.
In Louisville, Census data puts the median household income at $64,731. In Lexington, the figure is $67,631.
For the purpose of the analysis, grocery costs per year in Derby City amount to $8,789, according to GoBankingRates, and the average monthly mortgage cost is $1,464.
How do other major cities compare on the ‘American dream?’
Here are the top 10 large U.S. cities where the living the “American dream” has the highest income threshold, according to GoBankingRates:
San Jose, Calif.: $319,000
San Francisco: $297,000
San Diego, Calif.: $242,000
Los Angeles: $234,000
New York City: $220,000
Long Beach, Calif.: $215,000
Seattle: $212,000
Oakland, Calif.: $205,000
Boston: $199,000
Washington, D.C.: $187,000
The full analysis is available at GoBankingRates.com.
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