So, you’re out with pals having a pleasant dinner and catching up.
Out of the blue, one among your folks tells you that she simply received a brand new job and he or she’s making $55,000 per yr.
She’s tremendous excited, in fact as a result of beginning a brand new job is a significant life occasion.
After she fills you in on all the main points of her new position, you begin questioning, is $55,000 per yr wage?
Ought to she be selecting up the verify in your dinner out now that she’s making $55000 a yr?
Is 55,000 {dollars} per yr a livable wage in 2023? What can you actually afford if you happen to make 55k per yr?
Let’s break down how a lot $55,000 a yr actually is:
55,000 per yr = 26.44 per hour (40 hours per week)
55,000 per yr = 211.54 per day (8 hours per day)
55,000 per yr = 1,057.69 per week (52 weeks per yr)
55,000 per yr = 4,583.33 monthly (12 months per yr)
Sadly, the numbers above aren’t your true take dwelling pay. We nonetheless should issue within the taxes that will likely be taken out of every paycheck. As soon as you’re taking out taxes, what you have got left is your true take dwelling or “internet” pay.
I estimate that 25% of our gross paycheck goes in direction of taxes. This quantity is an estimate and the quantity you pay for taxes could possibly be larger or decrease, however 25% is an efficient start line.
So after taking out 25% for taxes, right here’s what you’ll clear on $55,000 per yr 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 Yr: 4,583.33 x 25% taxes = 1,145.83 for taxes. 4,583.33-1,145.83= $3,437.50 Web Per Month
The dangerous information is that you just’ll at all times should pay taxes. The excellent news is that some states don’t have a tax on wages, so you could keep away from paying the state wage tax if you happen to stay in one among these states.
The states that don’t at the moment tax wages are: Alaska (truly, you’ll be able to even receives a commission to relocate to Alaska), Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee.
If you’re contemplating shifting to Tennessee, then you need to verify these execs and cons of residing in Tennessee.
Is 55,000 A Good Wage?
In line with the Bureau of Labor Statistics (BLS), the median wage for staff in america within the 4th quarter of 2022 was $1,084 per week or $56,368 per yr (assuming 52 weeks of labor per yr). Wages have been 7% larger than a yr earlier in 2021.
On your specific scenario, it’s arduous to say if 55,000 per yr is an efficient wage as a result of it’s all relative. And it largely will depend on what your accustomed to incomes. In case you’re used to making 40K a yr, a wage of 55,000 might be implausible for you.
If nevertheless, you’re used to creating 70,000 per yr, getting used to a wage of 55,000 per yr will most likely take some changes.
The excellent news is that we will present you how one can funds to make 55,000 per yr give you the results you want and your loved ones.
You’ll discover that the primary line of our funds is at all times financial savings. It is because we strongly imagine in paying your self first.
The one option to get forward financially is to avoid wasting, save, and avoid wasting extra! Actually, we imagine in saving no less than 15% of your earnings, and 20% is even higher.
This funds reveals how one can save 15% and nonetheless be capable of pay for day-to-day life:
Web Month-to-month Earnings: $3,437
Month-to-month Price range 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’ll be able to see that $55,000 per yr 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 funds so you recognize the place your cash goes.
Why Ought to I Have A Price range?
Individuals hate the phrase funds, however with a funds you might be telling your cash what to do; not the opposite means round. If in case you have a month-to-month funds, you have got energy over your cash.
A easy funds may be very simple to create. Try our easy funds templates.
Lots of people suppose making a funds limits them to what they will do with their cash. In my expertise, it’s simply the alternative. A funds is releasing!
What Precisely Is A Price range?
Merely write down your month-to-month earnings and subtract your month-to-month bills.
Don’t neglect to pay your self first and listing your financial savings as the primary merchandise in your funds. That is your funds. The fantastic thing about a funds is that you just’re in management and you’ll swap up your funds at any time.
As an example, if you happen to 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 direction of your automotive cost.
I’d at all times counsel placing any cash you now not want for payments straight into financial savings. Even if you happen to don’t suppose it’s a lot cash, imagine me, it is going to add up over time!
What If I Can’t Afford To Save Cash?
You possibly can’t afford NOT to economize.
In case you don’t lower your expenses, you’ll by no means have cash. Do you actually wish to stay paycheck to paycheck? No means!
You’re too sensible for that. So even if you happen to’ve by no means been ready to economize prior to now, beginning now, you’ll be able to practice your self to economize.
Begin Small
Step one to saving is to determine an emergency fund.
It is 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 it is advisable to be ready.
Open a separate financial savings account that’s ONLY for use for emergencies. Purpose to construct up the fund so you have got no less than $1,000.00.
Try how one can save $1000 quick.
How Do You Enhance Financial savings?
When you get the hold of sticking to your month-to-month funds and saving cash each month, you’ll most likely wish to enhance your financial savings fee.
There are many other ways you’ll be able to enhance the sum of money you save every month. You could have to get artistic, or drastically minimize your bills however it is 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 rental 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 effectively on my means and it hasn’t been that arduous! A number of the facet gigs I’ve picked up are seasonal and solely non permanent; others are everlasting part-time gigs.
In case you’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 yr actually is, you’ll be able to resolve whether or not that may be a good wage for you and your loved ones. In case you suppose it is advisable to earn extra to have the approach to life you need, you’ll be able to 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 residing is decrease in order that the $55,000 per yr will go additional for you and your loved ones
