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How much do you need to make to live comfortably in Las Vegas?

Updated October 15, 2024 - 10:52 am

Las Vegas Valley residents need to make $111,416 a year to “live comfortably,” according to a new Go Banking Rates study.

This puts the valley as the 16th most expensive metro to live in the U.S. out of 50 metros analyzed with the Las Vegas Valley ranking above such cities as Atlanta, Nashville, Tennessee, and Phoenix.

The study uses a popular economic model called the “50/30/20 rule” where someone should not spend more than half of their earnings on essentials such as rent, utilities, groceries, transportation and health care.

Stephen Miller, research director at UNLV’s Center for Business and Economic Research, said the Las Vegas Valley’s economic situation can best be described as the “California effect,” meaning our close proximity to the Golden State plays into the Silver State’s financial makeup.

“I wouldn’t compare Las Vegas to say Atlanta, that’s not a fair comparison,” he said. “I would compare Las Vegas to Orange County or San Francisco because that’s where most of our migration comes from.”

The top five cities in the study are all in California, with San Jose coming in first ($258,255) and with Las Vegas just behind Sacramento ($116,807). The most affordable city in the country is Detroit ($64,725).

‘Consumption smoothing’

Miller said the key word to take into account with this study is “consumption smoothing,” meaning people’s wages fluctuate throughout their lifespans.

“When you are in a younger phase of your life, you tend to accumulate debt,” he said. “And then in your middle years your income rises, so initially your consumption is more than your income.”

Miller explained a one-sized fits all number is a crude analogy for affordability, and also noted the economic concept that when people’s wages rise, their spending tends to go in lockstep.

“If you’re not earning a lot, what you call necessities will turn out to be a much smaller group of items than if you’re earning a lot of money, then everything’s a necessity.”

Matt Hennessy, a Las Vegas-based mortgage adviser, said it’s best to take these types of studies with a grain of salt because it only offers one number and people need to be more aware of their financial situation and not boil it down to a singular figure.

“Money isn’t talked about as often as it should around the dinner table,” he said. “Whether it’s an unexpected financial emergency or the bad habits of putting more on our credit cards without paying off the balances in full, most struggle with putting together a consistent savings plan only to find themselves never getting ahead. The average consumer oftentimes makes a financial decision solely based on whether or not they can qualify for a particular purchase instead of should they.”

Nevada voters said the economy is the biggest issue, next to housing affordability, according to a recently conducted survey by Emerson College Polling/The Hill of voter attitudes in swing states.

Regarding mortgage payments, Nevadans now need to make at least $111,557 to afford a monthly mortgage payment, according to a new study from Bankrate. This is a 56 percent income increase from four years ago as related to what it takes to afford a median-priced single-family home in the state.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.

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