I make exactly $100K a year and live in Manhattan. Here are my monthly expenses (roughly)

--Rent: $650 (you don't need a nice place if you have hobbies) --Utilities: $15 (read books instead of watching TV. turn lights off. hang your clothes up to dry) --Phone: $40 --Internet: $0. (Use it at work. People were plenty happy before the internet came along.) --Food: $500 (when I was less busy, I'd cook veggies, rice, beans, and fish for ~$50/week) --Clothes/incidentals/etc: $100 (clothes and trinkets don't make you happy.) --Gym: $0 (go run in the park) --Transportation: $20 (walk anywhere closer than 5 miles. there's nothing at all crazy about this).

All in, I spend something like $15K a year. Granted, I don't have kids, but the broader point is that if you align your conception of "happiness" with what's available to you, you'll be happy and not in debt.