Do you have an idea on how much salary is good enough for you to live comfortably? Will the amount matter whether you’re single, married, or with a family?
If you make enough income, you’ll be able to live comfortably. You don’t have to think about the paycheck to paycheck lifestyle. You can even treat yourself or your family out for a sweet vacation.
Will life be any different if you weren’t too stressed about making money?
Fortunately, we can discuss in this article the good salary to earn so you can live with more ease. You can apply whatever you will learn from this post to make your situation better and loosen up on stress about your income.
What Is A Good Salary To Earn To Live At Ease?
According to a survey conducted with 450,000 participants, people believe that money can buy happiness.
A household with $75,000 income brings more happiness to the members of the household while the happiness begins to fade away after the $75,000.
In a statistical record in 2018, the data showed that the average income of a household is $63,179. In relation to the prior survey, people in the U.S. are still behind the $75,000 income.
Many Americans still have the potential to bring more happiness in their household by earning more for their income.
As observed, the survey results are from the income a household produces. Therefore, the number of people in a certain family doesn’t matter.
You can be single, married or have a family, yet the happiness will come when you have $75,000 or more income.
However, people who earn less than $1,000 monthly have more issues than those who earn more than $3,000.
This situation may be due to the fact that people with low income have decreased happiness during weekends, alone, sickly, or have problems with relationships.
Related Reading: How much per hour is $60k?
What Jobs Can Make The Most Income Monthly?
You’ve found out that a $75,000 income increases happiness and improves living in a household. The next step would be figuring out what careers or degrees do you need to make money monthly.
If we interpret the data from U.S. Bureau of Labor Statistics, we can see that most of the highest paying jobs are under the Science, Technology, Engineering, and Mathematics (STEM) fields.
Not only these careers are high-paying, you don’t stress too much from working in these industries.
However that may be the case, you don’t have to force yourself to go through college and take a STEM degree.
Most high-paying and least stressful jobs are in STEM, but there are many other similar jobs out there.
How Much Should I Be Earning At My Age?
Generating a long-term income may depend on the salary of the person. However, it is just one out of the many factors in building wealth.
Many people are too concerned with the salary they earn. But, a good salary doesn’t always equate to success.
Of course, we all would naturally choose to have a higher salary. It can help us make more fortune.
However, not everyone who earns a high-paying salary manages their money well. Think of this scenario:
Person A makes around $100,000 annually and keeps $10,000 only as a part of savings. The rate of Person A’s amount saved from the salary and income earned is just 10%.
Meanwhile, Person B makes $60,000 yearly and saves $20,000 from it. The rate of Person B’s saving is 33%.
Person A makes more money, but Person B saves more. When it comes to building wealth, Person B is better.
This example shows how most people who earn a higher salary spend their money more rather than increasing their net worth through saving and investing.
Rather than salary, net worth is a better way to measure one’s success. You can increase your net worth by managing your income properly.
Related Reading: How Much Money is 6 Figures? Read Here.
Net Worth Formula
You can get your net worth by subtracting your liabilities from your assets. Therefore, it is like this one:
Net Worth = Assets – Liabilities
Assets are the monetary value that may increase while liabilities are those whose values decrease or will cost you money.
For example, if you buy shares that can help you earn more, then it becomes an asset. You can turn it into an asset when you sell that share later for a higher value.
Therefore, buying stocks can be an asset because it allows you to make money.
On the other hand, purchasing a vehicle can be a liability for you. It sounds like an investment at first, but cars decrease in value when used a lot. The higher the mileage, along with any damages, can lose its value.
If the formula is too much for you, you can look up for net worth calculators online to find your net worth. You just need to put your assets and liabilities in values.
Ideal Net Worth
According to the book “The Millionaire Next Door”, you can use a formula to find out if you are wealthy enough for your age.
Here is the formula:
Expected Net Worth = [(Your Age) x (Income without the tax deduction and inheritances)] / 10
If the actual value of your net worth is higher than the expected net worth, then you are wealthy. If your net worth value is lower, then you are not wealthy.
For example, a 35 year old makes $60,000 annually with a net worth of $180,000. If we use the formula, it will be like this:
Expected Net Worth = [(35)(60,000)]/10
The answer is $210,000.
The net worth $180,000 is lower than the answer we got which is $210,000. Therefore, that person is not wealthy according to the formula.
Remember that the formula takes age and income into consideration, which is applicable to your case. Your net worth will change if your salary increases every year.
Related Reading: Learn More About Personal Finance
Conclusion: What Is A Good Salary?
Reading the article will help you know that according to surveys and research, the household should make at least $75,000 to live with ease. However, not everyone in the U.S. reaches this amount.
Therefore, the challenge in this situation is to increase your salary so you can increase happiness and comfortability as well.
You can consider taking STEM related fields as they are one of the highest-paying careers with a less stressful environment. Or you can also find other jobs outside STEM because there are plenty of it too.
However, a good salary is not just the only basis for success. Savings rate is also one of them. So, use your income to acquire assets like purchasing stocks and trade exchange.
We can never have a specific salary to appoint to ourselves age-wise. Having a good salary doesn’t always guarantee an easier life at the present and even at retirement.
So, begin tracking your net worth to monitor how you are progressing to wealth building. Wealth building needs proper management on your finances.
Lastly, you can use the formula by the book “The Millionaire Next Door” to determine whether you are wealthy or not depending on your age. You can solve it by multiplying your age and gross income, then dividing the answer by 10.