If you are earning $15 per hour at your job, you are probably wondering if this is enough money for you to live off. How do you budget this income?
This article will explain how far your $15/hour salary can go in this economy.
While $15 an hour is considerably higher than the federal minimum wage of $7.25 per hour, you may still find yourself struggling to make ends meet. Considering the current situation, a $15/hour salary may not be good enough.
To put things into perspective, the average annual income in the United States in 2020 is $67,521. If you are earning $15 per hour and working full-time 40 hours a week, you will make around $30,000 per year.
This is roughly $30,000 short of the American average income.
Workers with no dependents are likely to live on $15 an hour, but if you have a family to support, you need to make more than this to live comfortably.
The current global economic situation will also make it difficult to live off this salary. For instance, it will be tough to find affordable accommodation due to the soaring prices of housing.
$15 per hour will also not be enough to fund your retirement. As the expenses rise, you will have to look for ways to supplement your meager income.
However, if you are single, free of debt, and live in a place with a low cost of living index, a 15/hour salary should be enough to get by.
If you are a family man, you can make this income work for you by following these tips. First, you should live below your means and avoid going into debt to support your lifestyle.
For those who have existing debt, paying them off sooner will help in managing your finances.
You should also make a realistic budget to keep track of your money. Finally, do not splurge and save unexpected money like an income tax refund or a raise.
If you are living in the United States, your annual salary is considered good if it is between $70,000 – $78,000 before tax. This holds for any state.
However, for most Americans, any income of over $51,480 a year is already considered decent. This is the typical salary for full-time wage workers.
With this income, the city you are living in matters. While your $50,000+ is enough to live off in certain states, this may not be the case in others.
Your job type, education level, and even gender are some of the factors that determine if your salary is good enough.
A $15 per hour salary is adequate if you live by yourself and have no dependents. It should also be enough to live off if you reside in a city or state with a low cost of living index.
You should also note that some places like Florida, Nevada, Washington, and Tennessee do not charge income tax on residents. The same applies to Wyoming, Texas, South Dakota, New Hampshire, and Alaska.
Without the additional taxes that eat away at your income, $15 an hour should be enough to cover your expenses. Just make sure to live within your means.
Depending on how frugal you are, you may even have some leftover money at the end of the month.
If you are supporting a family like raising children or providing for your parents, you need to make more than $15 per hour to live comfortably.
$15 per hour is $2,121 per month after taxes. Looking into your budget, you need to set aside 70% of your income on monthly expenses. These include rent/mortgage, utilities, transportation, groceries, and even entertainment.
The rest of the money should go to your debt repayment and retirement and savings.
If you live alone, you can save some funds on grocery shopping and use it for housing.
Meanwhile, having a family to support means more expenses. You may even need to pick a side hustle just to get by.
Yes, you can own a car with a $15/hour paycheck. However, you should buy a car you can afford. With your income, buying a used car and paying in cash is the way to go.
Workers who earn less than $60,000 a year typically make do by purchasing a used car instead of having a new one. Old cards have cheaper insurance so you can save more.
Even if you factor in the expenses for repairs, you will still spend less than when you buy a new card.
No, you cannot afford to buy a house if you make $15 an hour. Even with no debt, you will likely struggle to pay for the mortgage, insurance, and upkeep of a home.
However, if you have some savings in the bank and have a good credit rating, you can probably buy a house that fits your needs.
For some, renting a house is the easier choice. Your $15/hour paycheck should be enough to shoulder the rent per month, even with the money for the advance and the deposit.
It is also more flexible to rent since you can leave the property if you need to.
If you buy a house, you will need to settle upfront payments, including a down payment, reservation fee, real property tax, home insurance, and real property tax.
This can be difficult to handle if your income is just enough to cover your monthly expenses.
If your hourly pay is $15 and you work full-time at eight hours per day, your daily rate is $120. You simply multiply $15 by the number of your work hours to come up with your daily rate.
$15 per hour in a week is $600. This is if you work full-time for eight hours in five days. To compute, multiply $15 by eight. You get your daily rate of $120. Now, multiply $120 by five. The answer is your weekly rate.
A fortnight means two weeks. To get your fortnight rate, simply multiply your weekly rate of $600 by two. You will get $1,200. This is how much you can earn for a fortnight with a $15 hourly wage.
$15 per hour in a month is $2,600. If you work full-time, you will earn this amount before taxes are applied. To compute, just divide your annual salary by 12 (for months).
If you earn $15 an hour, you have $31,200 in annual salary. Most workers labor for 40 hours per week, 52 weeks a year. This means there are a total of 2,080 hours of work annually. If you multiply $15 by 2,080 hours, you will get $31,200 before taxes.
For those who take an unpaid vacation or sick leave during the year, their annual salary will be around $30,000. This is the pay for working 50 weeks per year.
Depending on the state you reside in, your annual salary can drop anywhere from $24,700 to $26,700 after taxes are applied.
Typically, the tax rate for people earning between $30,000 to $31,200 for an annual salary is 12%. If your income per is $31,200, your take-home pay will be around $27,456.
You should note that state tax rates vary depending on where you live. Your after tax hourly rate can be anywhere from $11.88 to $12.84.
For instance, New York's tax rate of $15 an hour is approximately 11.90 per hour.
If you live in states or cities without taxes applied on earned wages, you can take home your salary without deductions.
Some of these states are Alaska, Wyoming, and Tennessee.
Most $15 an hour jobs in the United States do not require prior experience. However, you will need a high school diploma to be considered for employment at most places. Some of these jobs are butchers, call center representatives, mail clerks, and grounds maintenance officers.
Receptionists, retail workers, switchboard operators, and bank tellers also typically receive a $15 per hour rate. The same applies to tailors/dressmakers and veterinary assistants.
Similarly, workers in the food and tobacco processing field, security, and delivery and logistics receive $15 an hour for their salary.
If you are looking for work-from-home opportunities, you may consider being an online teacher/tutor, or proofreader. They also earn $15 an hour or more.
Some $15/hour wage earners juggle two or more jobs to get by. This increases their cash flow. Some of the side hustles you can try are babysitting, dog walking, or driving for Uber or Lyft.
If $15 per hour is not enough to sustain you, getting a job that pays more is your only option. You just need to find one that suits your skills and experience.
Some of the jobs that make more than $15 an hour are fitness instructors, real estate agents, warehouse associates, and photographers.
Salaries for these jobs range between $37,000 to $47,000 per year.
If you prefer to work remotely, you can try being a website developer or a virtual assistant. These jobs earn around $40,000 to $60,000 annually.