I get it, you have concerns. However, when it comes to whether you are getting paid a good salary or not, there’s not a straightforward answer. On one hand, $60k a year will enable you to live comfortably. On the other hand, someone else is struggling with this salary. So, is a $60k salary good?
Is a $60K Salary Good?
Yes, most people will consider $60,000 a good salary. However, whether or not this is a good salary for you will depend on factors such as where you live, your responsibilities, tax rates, your lifestyle, and your money management skills.
According to career expert Zippia, the median income in the U.S. is around $44,225. This means that if you earn $60k a year, you are generally considered a middle-class earner. However, there are too many factors at play and this statistic alone might not be reliable.
$60K a Year Is How Much an Hour? (Full Breakdown)
To get a clearer idea of whether or not $60k is a good salary, we need to break it down into more relatable numbers. For instance, how much an hour (hourly rate), weekly, or monthly, will you earn? Is it higher than the minimum wage or median income?
Here is a quick rundown.
|Biweekly (Every two weeks)||$2,307.70|
Note that this is the gross income. I have not factored in things like income taxes or insurance. Depending on how your tax deductions, your hourly wage (how much an hour you make) for this yearly salary might be lower.
How to Determine if $60,000 a Year Is a Good Salary or Not
Most people would consider $60,000 a good salary. To understand if it’s good for you, you must look at several factors. So far, you know how much an hour, monthly or weekly, you will be. Now comes the big question; will this yearly salary be enough for your to live comfortably?
That will depend on several things:
- Income taxes and federal taxes
- The cost of living
- The location you live in
- Housing costs
- Health insurance
- Car insurance
- Your spending habits
- Your basic expenses
- How much debt you have
- Social security and other factors
Let’s look at some of these factors below.
Cost of Living in Your Area
It’s crazy how widely salary sufficiency varies depending on where you live. If you live in a city with a high cost of living, you are going to struggle and might not afford a middle-class lifestyle even with a good salary. You will either have to look for ways to make more money, counter the salary offer or look for a new job.
Some of the most expensive cities in the U.S. where $60,000 a year might not be enough include:
- New York
- San Francisco
- Washington, DC,
On the hand, if you live in an area with a low cost of living, $60,000 a year might be a good income level for you to afford a comfortable lifestyle. Some cheap cities in the U.S. where the cost of living is below the national average include:
- Mobile, Alabama
- Winston-Salem, North Carolina
- Memphis, Tennessee
- Florence, Alabama
- Conway, Arkansas
Paying taxes can profoundly affect your net income, even when you earn a great salary. I am talking about:
- Income taxes
- State taxes
- Social security taxes
- Property taxes,
- Payroll taxes.
If you are paying higher taxes, your take-home pay will be lower than if you are footing a low tax rate. The amount you pay in taxes will also vary depending on your state due to differing state taxes.
Responsibilities and Dependents
If you are a single person living alone with few or no responsibilities, you will manage more comfortably on a $60k-a-year salary than someone with a big family or many responsibilities.
Let’s look at the numbers:
- Single person: The average personal income in the U.S. according to Zappia, is around $63,21, while the median is roughly $44,225. So, if you are single, you should be okay with $60,000 a year. However, you will need to consider factors like your basic living expenses, lifestyle, and money skills.
- Family: The median household income in the U.S. is estimated at $61,937 with the average coming in at about $87,864. So, it is possible to survive on a $60,000-a-year salary. However, you will need a good monthly budget. Otherwise, you might have to consider negotiating a higher salary, finding ways to make more money, or moving to a city with a lower cost of living.
Money Management Skills
Many people will ignore this factor when looking at whether $60,000 is a good salary or not. However, I think it is the most important since your money skills and knowledge informs how you make significant money decisions and whether you can live a good life.
Understanding your money can give you financial freedom. You will be able to know how to:
- Create a monthly budget that works
- Avoid extra expenses
- Save more money
- Find ways to make extra money (such as a part-time job or your own business)
- Understand how much you can afford in mortgage payment
- Find the best health insurance and so on
- Come up with a retirement plan
If you have this money knowledge, you should be able to survive on an annual salary of $60,000.
How to Survive on a $60,000 Annual Salary
As you have realized so far, $60,000 a year is a decent salary and might be considered an above-average income for most people. However, in order to survive with this salary, you need a good plan.
Specifically, you will need to:
- Create a budget
- Save more money
- Cut extra expenses
- Pay off debt as soon as you can.
Create a Budget
A reasonable budget can save you from flattening your salary within a short time. $60,00 a year is by no means an excellent salary. However, it is generally an above-average salary, especially if you live alone. As a result, you will need to be careful how you spend it.
A budget will help you prioritize your spending and track where your yearly salary is going. You will also know how much you can afford to save and how much to put toward paying the debt.
If you need inspiration you can look at a sample budget for people who make $60,000 a year to get an idea of what you should be doing.
Save More Money
If you are making $60,000 a year (or $5,000 monthly salary) you can afford to put some good money into your savings account. There are several techniques you can use to determine how much you will need to save after every paycheck.
One of the most popular is the 50/30/20 rule which recommends saving at least 20% of your gross income. So, if you make a $5,000 monthly salary, you can save up to $1,000.
Another popular technique you can use to save money is the envelope method by financial guru Dave Ramsey. It helps you to track how much money you can put in each budget category and how much you can save.
Pay Off Debt
Financial experts argue that paying off debt is the same as saving money. It makes sense because both approaches help you reduce future financial burdens. With an average salary of $60k a year, you should be able to pay off most of your debt.
- Credit cards
- Student loans
- Business loans,
- Personal loans
Will $60K a Year Make You Wealthy?
$60K a year might not make you wealthy per se. However, it is generally considered a good salary, and you should be able to afford basic expenses. To build wealth, you must start investing and diversify your income sources.
How Much Rent Can I Afford if I Earn $60,000 a Year?
You can afford up to $1,500 monthly on rent if you make $60,000 a year. This is based on the 30% rule, which recommends not spending more than 30% of your gross monthly income on rent.
$60,000 a year is a decent salary and is enough for most people. However, the salary will be enough or not depending on factors such as how much taxes your pay, the cost of living in your area, your lifestyle choices, how much debt you have, and your financial literacy.