How much you need to earn to comfortably afford both college and life

Tuition versus cost of living in the U.S., state by scary state.
JUN 06, 2017

Everybody dreams of living in Hawaii, but have you considered the exotic splendor of Indiana? If you've got kids to put through college in the U.S., maybe you should. The island state requires a salary higher than any other to live comfortably while paying tuition, and Indiana the lowest, according to a study out today from GoBankingRates. In the top five, after Hawaii, the states demanding the highest salaries to comfortably afford both college and life were California, Massachusetts, Colorado and Connecticut. The required wages ranged from $126,454 for Hawaii down to $91,140 in Connecticut. The least costly states after Indiana were Arkansas, Ohio, Missouri and Kentucky, all in the low to mid-$60,000s. https://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2017/06/CI11067166.JPG"​ To figure out which states offer the most bang for the buck, GoBankingRates used the average price of tuition and fees at publicly funded four-year institutions, from the College Board, and the cost of living in those states, including housing, groceries, transportation and health care. Then the financial services website calculated the salary needed to afford both higher education and life using the "50-30-20 budgeting rule — in which 50% of income covers necessities, 30% covers discretionary items, and 20% is for savings." The survey assumes that the parent, not the student, is paying the tuition. A 2016 study by lender Sallie Mae found that 29% of college expenses were covered by parental income and savings, second only to scholarships. And how affordable is college in these United States? Not very. While the "comfortable" salary in California was over $106,000, the median annual household income there is $61,818, according to U.S. Census Bureau data from 2011 to 2015. Similarly, despite a relatively high median household income of $69,515, Hawaii is still far from GoBankingRates' comfort threshold of $126,454. Even in Indiana, the required salary was well above the state's median household income of $49,255. So if you're planning to retire in paradise and help your kids pay for college, maybe get the college part over with first.

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