Is a $150K Per Year Salary Good?

Imagine this; you got a job offer with a salary of $150,000/year. You’re elated because you just landed an awesome job with an upper-middle-class salary. However, a part of you is also wondering, is a $150k salary good? 

Is a $150K Salary Good?

Yes, $150,000 a year is a good salary for most people. It’s more than double the median household income in the United States of around $70,784. That means if you make a $150K annual income, you are making more than 80% of the population and, therefore, considered an upper-middle-class earner. 

Female employee reading information on computer in office

With a $150k salary, you can live comfortably depending on where you live and your lifestyle choices. For example, if you live in New York City, you might need more than this to cover all your expenses. However, living in a small town with lower living costs could give you the financial freedom you want.

How to Determine if $150,000 Is a Good Salary for You

Undoubtedly, $150k is a good salary reserved for high-income professionals. However, to determine if it will enable you to achieve financial independence, you must honestly assess your lifestyle and financial goals. 

In particular, you will need to factor in things like

  • The cost of living in your area
  • Your spending habits and expenses 
  • Your current financial situation
  • Your long-term financial goals
  • Taxes

The Cost of Living in Your Area

A $150K annual salary could be excellent or lousy, depending on where you live. For example, a $150K salary could enable you to cover your basic expenses and some if you live in a middle-class city like Ontario, California. 

However, if you live in an expensive city like San Francisco, that same salary might be less generous, even if you are single. This means you will need to make more money by looking for another job or negotiating a higher salary to cover more expenses. 

Some of the best U.S. cities to live if you make $150k a year include: 

  • Memphis
  • Detroit 
  • Cleveland 
  • Houston 
  • San Antonio

Your Spending Habits

If you are naturally frugal and like to save money, $150k will be a good salary. However, if you like to splurge and spend on unnecessary expenses, this salary could go quickly and leave you with very little savings.

I always recommend watching your spending habits and working with a budget. No matter how much you earn, you will always live from paycheck to paycheck if you are an unapologetic spendthrift. 

Person holding cash while a calculator app is opened on a smartphone

So whether you make a bad salary like $20k a year or a good salary like $150k, you will always need to be mindful of your spending and cut your expenses. Otherwise, if you are a lifestyle creep, you likely have no money left at the end of the month.

Your Current Financial Situation

According to data from the Federal Reserve Bank of New York, the average household debt in the U.S. was $16.51 trillion as of September 2022. Additionally, the average American owes around $96,371 in consumer debt.  

This means that more than half of your $150k salary might go into paying off debts such as credit card balances, student loans, and mortgages. So, if you are currently deep in debt and struggling to make ends meet, you might still have some financial loopholes even with this kind of salary. 

On the other hand, a $150,000 salary will help you strengthen your financial portfolio even further if you already have a healthy savings account and investments.

Your Long-Term Financial Goals

What are your long-term financial goals? Do you want to buy a house in the next few years? Are you saving up for retirement? Or do you want to travel the world and live a nomadic lifestyle? 

Generally, if you don’t have that many financial goals to reach (and you should), $150,000 a year will seem like a good salary to live a good life. This is because you do not save or invest in anything. 

However, if you are saving for a home, widening your investment portfolio, or starting a side hustle, you might need to increase your income.


Based on the latest income tax brackets, you will pay around 24% in federal taxes if you make $150k per year. That is assuming that you are a single filer, married and filing separately or filing as the head of a household. 

However, if you are married and filing jointly, you will pay 2% less for the same salary. That said, you could end pay anywhere from 10% to 40% in tax deductions depending on your state. That means that your take-home pay could be significantly less than $150K. 

So, this salary might not be enough if you have a huge tax burden. 

Woman having video call on netbook in modern workspace

How to Make the Most Out of a $150K Salary

Undoubtedly, $150,000 is a good salary for most people. However, without a solid financial roadmap, it can be easy to squander away all that money. To make the most out of your $150K salary, I recommend taking a few steps:

  • Create a budget
  • Start saving
  • Start investing
  • Track your spending

Create a Budget

A budget will help you have an idea of where your money is going. That’s why this is a great way to stay on track with your finances and ensure that you are not overspending.

With a budget, you will succeed, even with an upper-middle-class salary of like $150k a year. To help you, I recommend using the 50/30/20 budget rule.  

It recommends allocating 50 percent of your income towards necessities, 30 percent for lifestyle purchases, and the remaining 20 percent for savings or paying the debt.

For someone earning $150,000 a year, the 50/30/20 rule would look something like this:

  • Necessities (50%): 75,000
  • Lifestyle (30%): 45,000
  • Savings (20%): 30,000

Start Saving

If you are good with money management, you will have a lot left for savings with a $150,000 salary. After taking care of your expenses, putting away something for a rainy day is always wise. 

Start by setting up an emergency fund and work towards other savings goals. According to the 50/30/20 rule, you should save 20% of your income which is around $2,500 per month. 

Start Investing

Investing can be a great way to grow your money further and reach your financial goals. You should invest your salary to build wealth and achieve financial freedom. 

Senior businessman holding money in hands while sitting at table near laptop

Financial experts recommend investing at least 15% of your pretax income. So, if you are making $150k annually, you should save less than $1,875 monthly. 

Watch Your Spending

Lastly, it’s important to track your spending. Even if you have a significant budget and are investing your money smartly, it can be easy to overspend without even realizing it! 

Make sure to watch where your money is going each month so you don’t waste any of your $150K salaries on unnecessary expenses.

You can use financial planning apps such as the Mint, and You Need a Budget to help you keep track of your income. 

Related Questions

What Percentage of the US Population Makes Over $150 000 a Year?

About 7.54% of the US population makes more than $150,000 per year. This is according to data from the Salary comparison site, Payscale.

Will a $150,000 Annual Income Make You Rich?

Yes, a $150,000 annual income can help create wealth and make you rich. However, note that this depends on how efficiently you manage and invest your finances. If done correctly, having a $150K salary is enough money to become wealthy in the long term.


If you are single, live in an area with low living costs, and have the necessary financial knowledge and discipline, this will be a good salary for you. 

However, it might not be enough to achieve financial independence if you are a family or living in an area with a high cost of living. 

Jared Bauman is the owner and editor of He has started and sold several companies, along with owning several investment properties. His interest in personal finance started as a young kid, developed through his entrepreneurial ventures and real estate investments, and continue through his conversations with friends and colleagues.

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