How much money is enough for a single person to live on?
Generally, $100,000 per year is a good goal for most people.
RANK | STATE | INCOME REQUIRED |
---|---|---|
47 | New York | $73,226 |
48 | California | $80,013 |
49 | Massachusetts | $87,909 |
50 | Hawaii | $112,411 |
On average, single workers in the US require an annual income of $57,200 to make a living wage in America, according to the analysis by GOBankingRates. That amount is a couple thousand less than the average income of all American workers, regardless of marital status β $59,428, according to Forbes.
An individual must earn $96,500 a year before taxes to afford housing, groceries, transportation and entertainment, while also paying off debt and putting some money into savings, according to personal finance website SmartAsset.
The study found that a person needs an average of $96,500 for sustainable comfort in a major U.S. city. It's even more expensive for families, who need to make an average combined income of about $235,000 to support two adults and two children without the pressure of living paycheck to paycheck.
A good monthly income in California is $3,886, based on what the Bureau of Economic Analysis estimates that Californians pay for their cost of living. A good monthly income for you will depend on what your expenses are and how much you typically spend per month.
Thrifty | $241.40 β $309.90 |
---|---|
Low-Cost | $249.60 β $296.60 |
Moderate Cost | $306.90 β $371.70 |
Liberal | $400.80 β $451.80 |
On average, a single person in the US might spend anywhere from $2,000 to $4,000 per month on these basic necessities, with variations depending on the city or state they reside in. For instance, living costs in urban areas like New York City or San Francisco tend to be higher compared to smaller towns or rural areas.
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
Again, living expenses vary significantly by location, but we can use some average numbers. The average monthly living expenses for a single person in the USA are $3,189, which is $38,266 per year. The average cost for a family of four is $7,095 per month, which is $85,139 per year.
How much money do I need to be financially stable?
The median household income in the U.S. is just under $75,000, so it makes sense that the largest proportion of those surveyed (45%) said that it's possible to be financially stable by earning between $50,000 and $100,000 a year.
This means the value of money today is not the same as it will be in the future. To account for this, experts suggest you multiply your desired retirement income by 25 times. So if you want to retire on $20,000 a year, you would need $500,000 saved to live comfortably and never have to work again.
The harsh truth is that $1,000 per month is very hard to live on, even if you lower your costs to the bare minimum. With inflation causing the prices of goods and services to increase every year, $1,000 a month will become harder and harder to live on going forward.
According to Maslyk, living comfortably on less than $2,000 per month during retirement is challenging. He emphasizes that even with a paid-off house, essential monthly costs can amount to about $1,200 per month. This includes expenses like utilities, internet, insurance, property taxes, maintenance and improvements.
Can You Live on 3000 a Month? Whether $3000 a month is good for you depends on the number of family members you have and the quality of living you want to sustain. If you're single and don't have a family to take care of, $3000 is enough to get you through the month comfortably.
The Poverty Threshold in 2023
Under their guidelines, a family of four is considered impoverished if they earn $30,000 or less per year. That number is slightly higher in Alaska and Hawaii, which tend to have higher living expenses.
An adult male from 19 to 50 years of age would account for $86.80 a week on a moderate food budget, and a 19- to 50-year-old woman would be allocated $73.20 a week.
The average household in California spends approximately $297 a week on grocery shopping, according to the data released in November. That is almost $30 more than the reported national average. Here's how much California spends based on household size: One person - $176.81.
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.
- Mississippi. #1 in Cost of Living. #48 in Best States Overall. ...
- Alabama. #2 in Cost of Living. #44 in Best States Overall. ...
- Kentucky. #3 in Cost of Living. ...
- Arkansas. #4 in Cost of Living. ...
- Iowa. #5 in Cost of Living. ...
- New Mexico. #6 in Cost of Living. ...
- South Dakota. #7 in Cost of Living. ...
- Oklahoma. #8 in Cost of Living.
What state has the lowest cost of living?
Mississippi has the lowest cost of living in the United States. With a cost of living index of 83.3, expenses are nearly 17% less than the national average. Mississippi's housing costs are the lowest in the nation. The price of a median, single-family home is $140,818.
Hawaii is the state with the highest cost of living in the US, with a cost of living index of 184.
Rank | City | Mean Income of Top 20% |
---|---|---|
6 | New York, NY | $340,209 |
7 | San Diego, CA | $303,546 |
8 | Los Angeles, CA | $302,890 |
9 | Denver, CO | $292,305 |
The Takeaway
The average annual average salary in the U.S. is $60,575. The median annual salary, which is often less skewed by outlying numbers, is $56,420. It's worth noting that average and median salaries vary quite a bit by state.
In general, people considered having only $878 available either in cash or a bank account to mean they were bankrupt.
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