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Why do people think $40K salary is low?
People always look into making six figures and all, and look down at a 40K salary as if you can't live off of it. If you make only $40K per year, that means you are getting over $3K per month! That should be PLENTY to pay rent and necessities and have some money left over to spend on fun or save. How can people not live on over $3K per month? What are people doing with their money??
- Christin KLv 71 month ago
If your rent is $1500 a month, you won't have enough to do everything you want. That will be 50% of your GROSS pay. What you LIVE on is your NET pay--after deductions, and taxes. Someone who makes $40K may not have enough to pay everything once all those things are taken out of the paycheck. And that doesn't even account for bills: utilities, credit cards, loans, auto expenses, insurance, medical bills etc etc etc.
However--it depends ENTIRELY on where you live and HOW you live. You can pay $1500/monthly in rent almost everywhere--but you don't HAVE to pay that much in some areas. If you pay half of that--$750--you will have plenty of money left over for everything you need, most likely. Even if you pay $800/monthly, you should still have enough. .
This is location dependent. And it's also dependent on what other bills you pay every month. Some people have a lot of debt--which really eats up your paycheck.
I know you can live on $40K because I did it for over 50 years while I was working. Not only did I live well, I bought 3 houses, have extremely good credit and money in the bank. Now that I'm retired, I live on about half that--and STILL live well. So like I said, it's up to the person how they live, and it's also up to WHERE you are.
- Anonymous1 month ago
cuz maybe there is a higher amount than $40K, so...
- n2mamaLv 71 month ago
Average net pay on a 40k salary is around 32,000 per year, or about 2600/month. And that’s just for taxes, not insurance, retirement savings contributions, or other pretax deductions. In my area, a studio apartment is around $1000/month, when you add in utilities and things like cell phone, cable or streaming service, you could easily be looking at over half the take home pay just for a roof and utilities. Lots of people have cars they make payments on, either leasing or financing, that’s a couple hundred a month, then add in insurance (which can be expensive depending on your age, area, and driving record) and gas and your monthly vehicle costs might be 500 or more. Then you need to eat, and while you can choose to eat ramen and peanut butter sandwiches, realistically you are looking at a couple hundred a month in food costs (assuming you are a single person-with two teenagers I can easily spend a couple hundred a week on groceries and that’s not eating out, just the grocery bill). Then you have non-food items ranging from toilet paper and soap to clothing or shoes that you need to replace at some frequency.
Sure, you can live off of a 40k salary. And depending on where you live, you might be able to live well on it. In San Francisco you would be living in a cardboard box, in rural Mississippi you could live quite well. But why not target a higher salary so you can be more comfortable and less stressed?
- Anonymous1 month ago
By the time taxes come out of that money, it is unlikely that you would still have "over" $3K per month.
You need to also consider cost of living in your area. If you are in a very large city, that salary won't go far. If you are in farm country in the mid-west - you could live very well on that salary IF you didn't have expensive taste. (average life in an average home driving an average vehicle)
Personally, I have raised a family of 4 (2 adults, 2 children) on an income that was less than that until just a few years ago. But, it doesn't leave much room for saving money or having much money for emergencies. About the time you have saved some money, something happens that causes that money to be needed again. (big auto expense - unexpected medical bills - unplanned medical leave from work)
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- mindcrime828Lv 72 months ago
That may be an okay salary where you live, but elsewhere could be a real struggle. Housing in higher demand areas can be very expensive, even for a small 1bedroom apt.
The average rental cost for an apt in New York City is over $4k/mo. In Brooklyn it's just under $3k. In the DC area, is $2k. Even in a smaller tourist town, rentals can be over $1.5k/mo.
- Anonymous2 months ago
For a family in many areas its not easy to live on that.
I have lived on less than $20k a year all my life. And because of good/lucky investing when I was younger I retired under 40. Now I live on even less. But as I get older I face potentially large medical bills as my insurance has a $7400 a year deductible and an ER visit would cost that much. So far, I spend less than $800 a year. But I have not had any serious issues.
Minimum wage where I live is $7.25 right now. That's $15,080 a year full time. I worked for as low as $3.10 when I was in high school. Later I became a manager when minimum wage was $3.35. There were not many raises but there were promotions. I went from part time $3.35 an hour to 50 hours a week for $200. Then $230 and then another promotion and the raises kept coming. I left at $428 a week but I also got about weekly and quarterly bonuses which averaged about $65-70 a week.
- A HunchLv 72 months ago
Minimum wage in many places is $29,000 per year (if worked full-time)
Costco announced today that the lowest paid person is will now earn $16 an hour which is $33,000 per year (full time).
The average rent for a one bedroom apartment in my neighborhood is $1800.