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So, you’re out with associates having a pleasant dinner and catching up.
Out of the blue, considered one of your folks tells you that she simply received a brand new job and she or he’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 small print of her new function, you begin questioning, is $55,000 per yr an excellent wage?
Ought to she be choosing up the examine to 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 residence pay. We nonetheless must issue within the taxes that will probably be taken out of every paycheck. As soon as you are taking out taxes, what you’ve gotten left is your true take residence 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 could possibly 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 yr after taxes:
Per Hour: 26.44 x 25% taxes = 6.61 for taxes. 26.44-6.61 = $19.83 Internet Per Hour after taxes.
Per Day: 211.54 x 25% taxes = 52.89 for taxes. 211.54-52.89 = $158.65 Internet Per Day.
Per Week: 1,057.69 x 25% taxes = 264.42 for taxes. 1,057.69-264.42 = $793.27 Internet Per Week.
Per Yr: 4,583.33 x 25% taxes = 1,145.83 for taxes. 4,583.33-1,145.83= $3,437.50 Internet Per Month
The dangerous 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 it’s possible you’ll keep away from paying the state wage tax if you happen to stay in considered one of these states.
The states that don’t at the moment tax wages are: Alaska (truly, you may even receives a commission to relocate to Alaska), Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee.
In case you are contemplating shifting to Tennessee, then it’s best to examine these professionals and cons of residing 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 yr (assuming 52 weeks of labor per yr). Wages had been 7% larger than a yr earlier in 2021.
On your specific state of affairs, it’s onerous to say if 55,000 per yr is an efficient wage as a result of it’s all relative. And it largely relies on what your accustomed to incomes. In the event you’re used to making 40K a yr, a wage of 55,000 might be incredible 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 price range to make 55,000 per yr be just right for you and your loved ones.
You’ll discover that the primary line of our price range is at all times financial savings. It is because we strongly consider in paying your self first.
The one strategy to get forward financially is to save lots of, save, and avoid wasting extra! In truth, we consider in saving at the very least 15% of your revenue, and 20% is even higher.
This price range exhibits how one can save 15% and nonetheless be capable to pay for day-to-day life:
Internet Month-to-month Earnings: $3,437
Month-to-month Price range For A Couple
- Financial savings: $800
- Housing: $1,000
- Automotive Fee: $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
- Automotive Fee: $300
- Utilities $250
- Insurance coverage: $200
- Cellphone: $50
- Meals: $600
- Private: $250
- Leisure: $225
So you may see that $55,000 per yr is a livable wage for {couples} or households however you’ll must put forth some effort to make it work. First, you’ll wish to arrange a price range so you understand the place your cash goes.
Why Ought to I Have A Price range?
Individuals hate the phrase price range, however with a price range you might be telling your cash what to do; not the opposite means round. You probably have a month-to-month price range, you’ve gotten energy over your cash.
A easy price range could be very simple to create. Try our easy price range templates.
Lots of people suppose making a price range limits them to what they’ll do with their cash. In my expertise, it’s simply the alternative. A price range is liberating!
What Precisely Is A Price range?
Merely write down your month-to-month revenue and subtract your month-to-month bills.
Don’t overlook to pay your self first and record your financial savings as the primary merchandise in your price range. That is your price range. The great thing about a price range is that you just’re in management and you may change up your price range at any time.
For example, if you happen to had a automobile 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 automobile cost.
I’d at all times recommend 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, consider me, it would add up over time!
What If I Can’t Afford To Save Cash?
You possibly can’t afford NOT to save cash.
In the event 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 save cash up to now, beginning now, you may prepare your self to save cash.
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 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. Purpose to construct up the fund so you’ve gotten at the very least $1,000.00.
Try how one can save $1000 quick.
How Do You Improve Financial savings?
When you get the dangle of sticking to your month-to-month price range and saving cash each month, you’ll most likely wish to improve your financial savings price.
There are many other ways you may improve the sum of money you save every month. You could have to get artistic, or drastically lower your bills however it would undoubtedly repay.
Attempt a Aspect 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 wish 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 means and it hasn’t been that tough! Among the aspect gigs I’ve picked up are seasonal and solely momentary; others are everlasting part-time gigs.
In the event you’re unsure what sort of aspect hustle is best for you, use these lists to get the ball rolling:
Wrap Up
Now that you understand how a lot $55,000 per yr actually is, you may resolve whether or not that may be a good wage for you and your loved ones. In the event you suppose it’s good to earn extra to have the life-style you need, you may at all times choose up a aspect gig.
Another 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
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