# Is 20 Dollars an Hour a Good Hourly Wage?

2022 marks a year of dire conditions for the American economy. With a hot housing market, skyrocketing inflation that makes pretty much everything more expensive, and rising gas prices, people are struggling to get by. Right now, you might be looking at your bank account wondering how you are going to make it through the next month and be able to afford basic expenses.

## What are your living expenses?

You are not alone. According to money.com, forty percent of Americans are struggling to pay their bills, including medical bills and high interest debt. They are faced with a decision: either make more money or reduce their spending, or both. According to Statista, the median hourly earnings of wage and salary workers in the United States was \$16.36. With it being that low, it’s no wonder people are struggling.

So, you’ve done it. You have managed to land a job that pays twenty dollars per hour. What a relief! Or is it? Yes, that puts you above the federal minimum wage by almost three times (the federal minimum wage is \$7.25 per hour), but is twenty dollars an hour good enough to survive on in this economy? Is it a good salary? That is not a simple question to answer. Everybody’s spending habits are different and everyone has a different view on what a good standard of living is.

Your personal habits of spending and your status financially will determine if twenty dollars and hour is good enough for you to afford basic necessities and have enough money left over to have a life outside of simply surviving. In this article, I will discuss how much twenty dollars an hour is as an annual salary before and after taxes and whether or not you can live making that much money.

## How much is Your Yearly Income if You Make 20 Dollars an Hour and Work Full Time?

To answer that question all you need to do is some basic math. If you work forty hours per week, you can then multiply that by the number of weeks in a year, which is fifty-two. The product of that equation is 2,080 hours per year that you have worked or will work. Then, you can multiply the total work hours in a year by your wage. That would be 2,080 times twenty dollars per hour, which equals 41,600 dollars for your annual income before taking into account income tax. You might be thinking, “Well, that’s not so bad.” But this amount is not exact.

To find the exact amount, you will need to figure out how many working days there are in 2022, which excludes holidays and weekends. There are in fact 250 total working days in 2022, excluding any unpaid vacation as well. At forty hours a week by the total number of working days, equals two thousand hours this year. 2000 times 20 equals 40,000 dollars for your total annual salary. Now, you might be thinking, “That’s not that much less than the previous amount.” But in today’s economy, where everything is more expensive, that extra 1,600 dollars can really make a difference.

## \$20 per Hour is How Much per Year After Taxes?

State income taxes vary by state so that is not an easy question to answer. But you can expect your income to drop to anywhere between 34,000 dollars to 36,000 dollars. Let’s say you live in a state where the income tax rate is 13.3 percent of your gross annual salary. 40,000 dollars per year times 13.3 percent equals 5200 dollars. 40000 dollars per year minus 5200 dollars per year in taxes equals a net income of 34,800. This is also called your take home pay. This does not include federal income tax, and other deductions like Medicare and Social Security, which you will want to consider as well. Now you might be thinking, “That does make a difference.”

Remember though that you should do your research on what the income tax rate in your state is to come to a firmer conclusion as to how much you will make exactly earning 20 dollars an hour. Some states do not have an income tax, though. These states include, Alaska, Florida, and Nevada among others.

## \$20 per Hour is how Much per Day?

Per day on \$20 an hour, is also very easy to calculate. If you work eight hours a day, simply multiply twenty by eight hours worked and the product is \$160 a day before state taxes and federal taxes. Knowing this daily budget is useful to keep tabs on your daily spending. Getting a coffee every single day from the coffee shop on \$160 a day really adds up, especially if you want to save money of what you earned. Have lunch everyday at a deli or restaurant? That can really add up as well, and really put a dent into your daily spending. Consider lowering your daily expenses if you want to live on twenty dollars an hour.

## \$20 per Hour is How Much per Week?

Here is how to calculate the amount you will earn per week making twenty dollars an hour. Remember that the gross income you will make per year is 40,000 dollars, taking into account all actual working days, excluding holidays. Simply divide 40,000 by 52 weeks in a year and you get about \$770. This can be useful when you try to plan out weekly expenses like gas and trips to the grocery store.

## How Much is \$20 an hour Bi weekly?

Calculating this amount is useful because then you can predict how much you will make every paycheck if you get paid bi weekly. Simply divide your yearly income by bi weekly time periods. The total time periods in a year would be 26 (52 divided by 2). 40,000 divided by 26 equals about \$1540 every two weeks.

## How much is \$20 per hour per Month?

Calculating your monthly salary is also very useful as you can then plan how much you will have after paying monthly expenses like rent or your mortgage payment. Simply divide your yearly income by the number of months in a year. 40,000 divided by twelve equals about \$3,333 for your gross monthly income.

There are things besides rent that you need to pay for on a monthly basis. Consider following the following budget as a guide. It is simply an example, as I know that monthly expenses vary from person to person, but you should always try to keep your monthly expenses low so that you have extra money for a cushion in the form of a small amount of savings.

• Rent or Mortgage = \$1,000
• Utilities = \$180
• Transportation = \$200
• Credit Card Debt Payment = \$300
• Health Care = \$100
• Food = \$350
• Fun things = \$150

With this monthly budget, you would be spending an average number of \$2,280 per month. With that amount spent, making \$3,333 for your gross pay per month, you would be able to save 1,053 for an emergency fund or retirement savings.

## Full Time Jobs that Pay 20 dollars an Hour

There are many jobs out there that pay 20 dollars an hour and may only require a high school diploma. Some examples of the top jobs and descriptions of their duties include:

• Massage therapist
• According to Zip Recruiter massage therapists make anywhere from \$16 an hour to \$44 an hour. Starting out, you can expect to make about \$20 per hour on average. It’s a hands on job (quite literally) as you would be providing intense muscle massages to clients
• Route Driver
• Being a route driver is a good entry level position that pays about \$20 per hour starting out. You would be providing supplies to meet organizational needs. Most often you would be working for mail companies or other organizations that do routine deliveries
• Freelance Writer
• A freelance writer is a great position that doesn’t require a college degree. You can set your own hours and personally choose the projects that suit your skills and interests. You would most often be working as an independent contractor. Also, after some time, with that income you can scale up your business and own your own business and become a Digital Manager. Upwork.com is a great place to start.
• Dog Walker
• Dog walkers earn \$20 an hour for simply walking dogs around the neighborhood. For you dog lovers out there, this would not even be considered a job, but a very fun activity
• Virtual Assistant
• Becoming a virtual assistant is a growing trend, as with rising prices, people want to save money on transportation and avoid the daily drudgery of driving in traffic to work in an office. Virtual assistants assist clients with typical administrative work, like sending emails, scheduling appointment, light phone work, accounts receivable work, and booking appointments and travel arrangements. Becoming a virtual assistant is a great option if you don’t have a college degree. With some experience, you can climb up the ladder and make very good pay
• Photographer
• This is another freelance position that requires you to travel to events like weddings, bar mitzvahs, birthday parties, and corporate events. You would be capturing the tender and happy moments families and people share on camera and seek approval from your client after the event ends. You set your own hours. It can most certainly provide you a livable wage if you get enough work.
• Handyman
• A great way to turn your hobby working with tools or building things, is to become a handyman. Some examples of the work that you would be doing include home repairs, installing furniture and other carpentry work, or plumbing work
• Bookkeeper
• A bookkeeper is a great job for you if you are good at math and data entry. You would be keeping track of a company’s revenue and doing payroll for the company’s employees. This job doesn’t require a degree, but to stand out from the crowd, you may want to complete a certification course
• Tutor
• Tutors work as independent contractors and supports the learning of students. This is a great job for you if you want to get involved with the education industry
• Bartender
• If you want to have fun, this is the job for you. You would be mixing drinks and serving them to customers. You can stir up a conversation as well, adding to the pleasant experience of the customer. And with tips, you can make even more money
• For this job, you would most likely be a freelancer and independent contractor. You would be proofreading essays, press releases, and other publications and make edits and suggest changes in grammar, diction, punctuation, and tone
• HVAC Technician
• An HVAC tech is a great job that pays about 20 dollars an hour. You would be working on heating and air conditioning, fixing them to meet the needs of customers
• Food Service Worker
• While starting out, you might earn less than \$20 per hour, but with time and persistence you may get a raise for good performance, become a head chef, and meet that 20 dollars an hour income threshold. You would be preparing and serving food to customers
• Computer Programmer
• Programming position start at about 20 dollars an hour, but the earning potential after some time can be much higher than that. They write code for computer programs. Sounds very interesting to me. If you like working with computers, then this is the job for you.

These are just some examples, but really with independent contractor work the options are endless.

## So, Is 20 dollars an Hour good?

To answer this question, it all depends on the person. Your financial standing, including any outstand debts (like credit cards, student loans, medical debt, mortgage payments) and your spending habits will determine if 20 dollars an hour is a good wage for your personal situation. 20 dollars an hour is just okay if you don’t have any substantial bills to pay every month. Also, if you are a single person, you can get by with 20 dollars an hour somewhat comfortably.

You must take into account the cost of living in your state compared to the average cost of living nationally. If the cost of living in your state is below the national average, that will help tremendously to make that 20 dollars an hour wage stretch as much as possible. Then, it would be pretty easy to live on 20 dollars an hour, especially if you can make a point of living within your means. Maybe consider moving to a LCOL (low cost of living area) to save even more money.

Just as I have done above, you will want to create a similar budget to track your expenses and save money for an emergency fund. You can do this using the Microsoft Excel program on your computer to help manage your spending. There are also many budgeting tools that can be found online. It is simply data entry. Put in all of your income and expenses numbers and the budgeting tool does the rest.

A summary of tips to live on 20 dollars an hour are listed below:

• Create a budget
• This one we already went over
• If you pay off all your debts, this can better qualify you for a mortgage for example. I will discuss this in the next section.
• Cut down on spending that is unneeded
• You should pick out things that you definitely don’t need, like those streaming services you love (I hate to say it, but it’s true – you don’t need them) Or stop your subscription to your cable service
• Perhaps start doing a job on the side to supplement your income
• Door Dash is a great example of this

## If You Make 20 dollars an hour, can You Afford to Buy a Home?

Good news! Yes, it is possible! Lenders take into consideration many things, including your gross monthly income, which remember is your total monthly salary before taxes. They also consider your recurring monthly spending, such as debts you owe like car payments, student loans, and credit card debt. Lenders have strict criteria such as: people applying for mortgages should spend no more than 28 percent of their gross monthly income on housing expenses, and not more than 36 percent on total debts.

In summary, getting a mortgage depends primarily on your spending habits. Lenders will probably want to acquire your credit report, which states the total amount of debt you owe according to the reporting agencies like Equifax, Experian, and TransUnion. If you make 20 dollars an hour and your financial status is good with no major debts affecting your qualification, you will most likely get a mortgage.

## Conclusion

20 dollars an hour is good enough to get by if you cut down on your daily, weekly, and monthly spending by making some sacrifices like not eating out as much, buying only basic necessities, and paying off your debt. If you buy a smaller house and live in an LCOL city, you should be able to survive on 20 dollars an hour. HCOL (high cost of living) cities are attractive with more people in a beautiful metropolis with all the aesthetics that you are looking for, but on 20 dollars an hour, you would not be able to survive, as the demand is higher than the supply for housing, groceries, and transportation for example.

It’s all about sacrifices. You will not be able to live in expensive cities. You need live within your means, and if you don’t, it just logically doesn’t make sense. Other factors that come into play are household size and the number of dependents you have. Making 20 dollars an hour for a single person is pretty good money for a single person. But if you have a growing family that makes things even more difficult. Maybe put off starting a family if you only make 20 dollars an hour. I know, that is a big sacrifice, but you must live within or below your means to survive. It’s about what makes sense. Practice frugality.

So, are you ready to change your current position financially and make 20 dollars an hour at a new job? There are plenty of jobs out there, so get searching already! Remember, 20 dollars an hour is nothing to sneeze at, especially if you have been making at or just barely above minimum wage. You will be well on your way to financial independence. But you may need to get creative with your search for a side hustle and watch your spending. I’ve done it. It’s not so hard! You might not have enough money to get to have an early retirement, but you can survive and be happy.

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