So, you’re out with buddies having a pleasant dinner and catching up.
Out of the blue, one among your mates tells you that she simply obtained a brand new job and she or he’s making $55,000 per 12 months.
She’s tremendous excited, after all as a result of beginning a brand new job is a serious life occasion.
After she fills you in on all the main points of her new function, you begin questioning, is $55,000 per 12 months an excellent wage?
Ought to she be choosing up the verify on your dinner out now that she’s making $55000 a 12 months?
Is 55,000 {dollars} per 12 months a livable wage in 2023? What can you actually afford should you make 55k per 12 months?
Let’s break down how a lot $55,000 a 12 months actually is:
55,000 per 12 months = 26.44 per hour (40 hours per week)
55,000 per 12 months = 211.54 per day (8 hours per day)
55,000 per 12 months = 1,057.69 per week (52 weeks per 12 months)
55,000 per 12 months = 4,583.33 monthly (12 months per 12 months)
Sadly, the numbers above aren’t your true take dwelling pay. We nonetheless should issue within the taxes that can be taken out of each paycheck. As soon as you’re taking out taxes, what you’ve got left is your true take dwelling or “web” pay.
I estimate that 25% of our gross paycheck goes in the direction of taxes. This quantity is an estimate and the quantity you pay for taxes might be larger or decrease, however 25% is an efficient place to begin.
So after taking out 25% for taxes, right here’s what you’ll clear on $55,000 per 12 months after taxes:
Per Hour: 26.44 x 25% taxes = 6.61 for taxes. 26.44-6.61 = $19.83 Web Per Hour after taxes.
Per Day: 211.54 x 25% taxes = 52.89 for taxes. 211.54-52.89 = $158.65 Web Per Day.
Per Week: 1,057.69 x 25% taxes = 264.42 for taxes. 1,057.69-264.42 = $793.27 Web Per Week.
Per 12 months: 4,583.33 x 25% taxes = 1,145.83 for taxes. 4,583.33-1,145.83= $3,437.50 Web Per Month
The unhealthy information is that you simply’ll at all times should pay taxes. The excellent news is that some states don’t have a tax on wages, so chances are you’ll keep away from paying the state wage tax should you stay in one among these states.
The states that don’t at present tax wages are: Alaska (really, you possibly can even get paid to relocate to Alaska), Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee.
If you’re contemplating shifting to Tennessee, then it is best to verify these pros and cons of living in Tennessee.
Is 55,000 A Good Wage?
In keeping with the Bureau of Labor Statistics (BLS), the median wage for employees in the US within the 4th quarter of 2022 was $1,084 per week or $56,368 per 12 months (assuming 52 weeks of labor per 12 months). Wages had been 7% larger than a 12 months earlier in 2021.
To your specific scenario, it’s exhausting to say if 55,000 per 12 months is an efficient wage as a result of it’s all relative. And it largely is dependent upon what your accustomed to incomes. If you happen to’re used to making 40K a year, a wage of 55,000 might be implausible for you.
If nevertheless, you’re used to creating 70,000 per 12 months, getting used to a wage of 55,000 per 12 months will most likely take some changes.
The excellent news is that we are able to present you finances to make 55,000 per 12 months give you the results you want and your loved ones.
You’ll discover that the primary line of our finances is at all times financial savings. It is because we strongly consider in paying your self first.
The one technique to get forward financially is to avoid wasting, save, and avoid wasting extra! In reality, we consider in saving at the least 15% of your revenue, and 20% is even higher.
This finances exhibits save 15% and nonetheless have the ability to pay for day-to-day life:
Web Month-to-month Earnings: $3,437
Month-to-month Finances For A Couple
- Financial savings: $800
- Housing: $1,000
- Automobile Cost: $350
- Utilities: $200
- Insurance coverage: $200
- Cellphone: $50
- Meals: $350
- Private: $250
- Leisure: $225
Right here is identical $3,437, this time budgeted for a household of 4:
- Financial savings: $562
- Housing: $1,000
- Automobile Cost: $300
- Utilities $250
- Insurance coverage: $200
- Cellphone: $50
- Meals: $600
- Private: $250
- Leisure: $225
So you possibly can see that $55,000 per 12 months is a livable wage for {couples} or households however you’ll should put forth some effort to make it work. First, you’ll wish to arrange a finances so you understand the place your cash goes.
Why Ought to I Have A Finances?
Individuals hate the phrase finances, however with a finances you’re telling your cash what to do; not the opposite manner round. When you’ve got a month-to-month finances, you’ve got energy over your cash.
A easy finances may be very straightforward to create. Take a look at our simple budget templates.
Lots of people suppose making a finances limits them to what they will do with their cash. In my expertise, it’s simply the alternative. A finances is releasing!
What Precisely Is A Finances?
Merely write down your month-to-month revenue and subtract your month-to-month bills.
Don’t overlook to pay your self first and listing your financial savings as the primary merchandise in your finances. That is your finances. The great thing about a finances is that you simply’re in management and you’ll swap up your finances at any time.
As an example, should you had a automotive mortgage and simply paid it off, guess what? Now you resolve what you wish to do with that cash that was going in the direction of your automotive fee.
I’d at all times recommend placing any cash you now not want for payments straight into financial savings. Even should you don’t suppose it’s a lot cash, consider me, it’s going to add up over time!
What If I Can’t Afford To Save Cash?
You’ll be able to’t afford NOT to economize.
If you happen to don’t lower your expenses, you’ll by no means have cash. Do you actually wish to stay paycheck to paycheck? No manner!
You’re too sensible for that. So even should you’ve by no means been ready to economize prior to now, beginning now, you possibly can practice your self to economize.
Begin Small
Step one to saving is to ascertain an emergency fund.
This can be a fund to pay for any emergency so that you don’t should borrow cash or use a bank card. Everyone knows that monetary troubles pop up on a regular basis so you might want to be ready.
Open a separate financial savings account that’s ONLY for use for emergencies. Goal to construct up the fund so you’ve got at the least $1,000.00.
Take a look at how to save $1000 fast.
How Do You Improve Financial savings?
When you get the dangle of sticking to your month-to-month finances and saving cash each month, you’ll most likely wish to enhance your financial savings price.
There are many alternative ways you possibly can enhance the amount of cash you save every month. You might have to get inventive, or drastically cut your expenses however it’s going to undoubtedly repay.
Attempt a Facet Hustle
Proper now I’m working a few facet gigs that to assist pay for my journey to Florida this spring. I made a decision I didn’t wish to use my pay from my full-time job and challenged myself to earn sufficient cash with a facet gig to pay for the condominium we’ll be staying at for a month this spring.
I’ve been working about 15-20 hours per week at my facet gig since mid-September. I’m properly on my manner and it hasn’t been that tough! A number of the facet gigs I’ve picked up are seasonal and solely short-term; others are everlasting part-time gigs.
If you happen to’re unsure what sort of facet hustle is best for you, use these lists to get the ball rolling:
Wrap Up
Now that you know the way a lot $55,000 per 12 months actually is, you possibly can resolve whether or not that may be a good wage for you and your loved ones. If you happen to suppose you might want to earn extra to have the approach to life you want, you possibly can at all times choose up a facet gig.
An alternative choice to think about is shifting to a metropolis and state the place the price of dwelling is decrease in order that the $55,000 per 12 months will go additional for you and your loved ones
