So, you’re out with pals having a pleasant dinner and catching up.
Out of the blue, one in every of your pals tells you that she simply obtained a brand new job and he or she’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 small print of her new position, you begin questioning, is $55,000 per 12 months a very good wage?
Ought to she be selecting up the test to 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 in the event 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 per 30 days (12 months per 12 months)
Sadly, the numbers above aren’t your true take dwelling pay. We nonetheless must issue within the taxes that will probably be taken out of every paycheck. As soon as you’re taking out taxes, what you might have left is your true take dwelling or “internet” 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 increased or decrease, however 25% is an effective start line.
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 just’ll at all times must pay taxes. The excellent news is that some states don’t have a tax on wages, so you might keep away from paying the state wage tax in the event you dwell in one in every of these states.
The states that don’t at the moment tax wages are: Alaska (truly, 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 transferring to Tennessee, then you need to test these pros and cons of living in Tennessee.
Is 55,000 A Good Wage?
In accordance with the Bureau of Labor Statistics (BLS), the median wage for employees in the USA 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 have been 7% increased than a 12 months earlier in 2021.
In your specific state of affairs, it’s onerous to say if 55,000 per 12 months is an effective wage as a result of it’s all relative. And it largely is determined by what your accustomed to incomes. When you’re used to making 40K a year, a wage of 55,000 might be incredible for you.
If nonetheless, you’re used to creating 70,000 per 12 months, getting used to a wage of 55,000 per 12 months will in all probability take some changes.
The excellent news is that we are able to present you how you can 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’s because we strongly imagine in paying your self first.
The one approach to get forward financially is to avoid wasting, save, and avoid wasting extra! In reality, we imagine in saving not less than 15% of your revenue, and 20% is even higher.
This finances reveals how you can save 15% and nonetheless be capable 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
- Automotive Cost: $350
- Utilities: $200
- Insurance coverage: $200
- Telephone: $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
- Automotive Cost: $300
- Utilities $250
- Insurance coverage: $200
- Telephone: $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 must put forth some effort to make it work. First, you’ll need to arrange a finances so you already know the place your cash goes.
Why Ought to I Have A Finances?
Individuals hate the phrase finances, however with a finances you might be telling your cash what to do; not the opposite approach round. If in case you have a month-to-month finances, you might have energy over your cash.
A easy finances could be very straightforward to create. Take a look at our simple budget templates.
Lots of people assume making a finances limits them to what they will do with their cash. In my expertise, it’s simply the other. A finances is releasing!
- Associated: Best budget planners
What Precisely Is A Finances?
Merely write down your month-to-month revenue 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 finances. That is your finances. The fantastic thing about a finances is that you just’re in management and you’ll change up your finances at any time.
For example, in the event you had a automobile mortgage and simply paid it off, guess what? Now you determine what you need to do with that cash that was going in the direction of your automobile fee.
I’d at all times recommend placing any cash you not want for payments straight into financial savings. Even in the event you don’t assume 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 may’t afford NOT to save cash.
When you don’t lower your expenses, you’ll by no means have cash. Do you actually need to dwell paycheck to paycheck? No approach!
You’re too sensible for that. So even in the event you’ve by no means been in a position to save cash prior to now, beginning now, you possibly can practice your self to save cash.
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 must borrow cash or use a bank card. Everyone knows that monetary troubles pop up on a regular basis so it’s good to be ready.
Open a separate financial savings account that’s ONLY for use for emergencies. Goal to construct up the fund so you might have not less than $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 in all probability need to improve your financial savings charge.
There are many other ways you possibly can improve the sum of money you save every month. You could have to get inventive, or drastically cut your expenses however it is going to positively repay.
Attempt a Facet Hustle
Proper now I’m working a few aspect gigs that to assist pay for my journey to Florida this spring. I made a decision I didn’t need to use my pay from my full-time job and challenged myself to earn sufficient cash with a aspect gig to pay for the apartment we’ll be staying at for a month this spring.
I’ve been working about 15-20 hours per week at my aspect gig since mid-September. I’m properly on my approach and it hasn’t been that tough! A number of the aspect gigs I’ve picked up are seasonal and solely non permanent; others are everlasting part-time gigs.
When you’re undecided what sort of aspect hustle is best for you, use these lists to get the ball rolling:
- 10 Best Remote Side Hustles
- 115 Best Side Hustle Ideas to Make An Extra $1,000 On The Side
- 11 Ways To Make Money In a Small Town
- 32 Ways to Earn Money Online From Home Without Investment
Wrap Up
Now that you understand how a lot $55,000 per 12 months actually is, you possibly can determine whether or not that may be a good wage for you and your loved ones. When you assume it’s good to earn extra to have the approach to life you want, you possibly can at all times choose up a aspect gig.
Another choice to contemplate is transferring 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
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