The cost of living in Texas, while on the rise, still sits below the national average, as per a recent study conducted by SmartAsset. However, Texans earning the median salary are trailing behind the national median. The study showed that in order to live comfortably as a single adult in Texas this year, one would need an income of $90,771—an increase of $5,844 from the previous year. For a household of four, the required income hits $204,922, marking a $9,360 hike since last year, according to KHOU.
In comparison to the rest of the U.S., Texans are making an adjusted median annual income of $73,718, according to WalletHub's latest findings, reported by the Houston CultureMap. This is below the national median of $81,000 per year. Despite this disparity, the state ranks 11th overall for "highest" incomes, with the wealthiest top five percent of Texans pulling in more than $504,000 annually, adjusting for cost of living. Meanwhile, the bottom 20 percent earn a starkly lower adjusted total of $17,461.
Moving forward with budgeting in the Lone Star State, SmartAsset recommends following the 50/30/20 rule—allocating 50% of income to necessities, 30% to discretionary expenses, and 20% towards savings or debt repayment. This framework, however, may be challenging for Texans whose earnings don’t align with the study's comfortable living standard.
Houston, one of the nation's wealthiest cities, sees even greater income disparities, with its wealthier suburbs often attracting high earners. "Earning a "comfortable" wage in Houston now costs $15,000 more than it did in 2024, and being a middle-class earner means making a minimum of $41,754 a year and as much as $125,274," WalletHub analyst Chip Lupo commented on the findings, as noted by the Houston CultureMap. There is also a significant population of high-net-worth individuals, with 18 billionaires and about 82,000 millionaires calling Houston home.
Across the U.S., the issue of income inequality remains prevalent. Lupo shared that "the highest-earning 10 percent of individuals in the United States earn over 12 times more than those in the lowest-earning 10 percent," as mentioned by the Houston CultureMap. It's important to note that the gap between incomes in Texas does not exist in isolation but is part of a broader national financial landscape that shows an immense and growing divide between the highest and lowest earners.
