Here's What It's Like to Live in New Jersey as a Family of 4 on $150,000

My friends Joe and Jill (not their real names) are hardworking folks. Joe's an engineer of some sort (don't ask me exactly what he does) and Jill's a teacher in a low-paying district who loves her work and her students.

All told, they bring home a joint income of $150,000. And that's an income you'd think would go pretty far, given that it's about twice the median U.S. household income as of 2022.

But a big reason Joe and Jill are struggling financially is due to where they live. And unfortunately, despite having a pretty nice joint income, they're barely scraping by.

When you live in a high-cost state

A lot of the reason Joe and Jill aren't in a better place financially is because they live in New Jersey. They're both from New Jersey, their families still live in New Jersey, and they can't see themselves leaving New Jersey.

But the reality is that it takes a much higher income to live comfortably in the Garden State than in most of the country. Zillow puts the average New Jersey home value today at $503,432. Meanwhile, the average U.S. home value is $347,716. So generally speaking, homeowners in New Jersey are looking at larger mortgage payments.

Meanwhile, last year, the average property tax bill for New Jersey homeowners was $9,803. But based on recent numbers, the median property tax bill for U.S. homeowners is $2,971.

A big reason Joe and Jill have such a hard time saving money and managing their bills is that housing eats up almost 40% of their income, which is beyond the 30% threshold that's generally recommended. Also, while Joe and Jill drove older cars for many years, they had to replace one of theirs a couple of years ago when vehicle prices were high. So now, they have an expensive car payment to make monthly, too.

Then there's groceries, which is probably the biggest expense in their budget after housing and transportation. Feeding a family of four easily costs them $200 a week, and that's with shopping at discount grocers and barely dining out.

All told, Joe and Jill have little savings and pretty much no money left over for extras beyond their basic bills. Their one big indulgence, if you will, is the money they pay so their kids can do extracurricular activities.

They don't take vacations because there's not enough money for it. And while they have been known to get financial help from their parents on occasion to cover expenses like home repairs, their parents don't give them money on a regular basis because they can't afford to. So all told, they're a bit stuck.

It could pay to abandon a high-cost area

Joe and Jill feel stuck in New Jersey because they have roots here. Moving to a less expensive state would mean giving up their support system and struggling to see family. So for them, that's not worth it.

You, on the other hand, may be someone who lives in a high-cost state without those same ties. If so, and your job is one you're doing remotely, it could pay to run the numbers and see if it makes sense financially to move to an area with lower living costs on a whole. This could especially make sense if you're self-employed, since conceivably, your income shouldn't be based on where you live.

Now if you're a remote employee, it may be the case that your company bases salaries on geographic location. So if you're earning $100,000 a year now, your employer might slash your pay to $85,000 if you move to a ZIP code with much lower living costs attached to it. However, you might still benefit financially if you can pay a lot less for expenses like housing, so it may be worth looking into.

It's easy to assume that a six-figure salary will make for a comfortable lifestyle no matter what. But in a state where the average property tax bill is almost $10,000 a year, that's not a given.

Joe and Jill are trying to take steps to boost their income and improve their financial situation. You may want to do the same if you're struggling. But also, if it works for you, consider relocating if the part of the country you currently call home is just overwhelmingly expensive.