Is 55k a Good Salary – What Sort of Lifestyle Will I Have?

is $55,000 a good salary?

You’ve landed a new job that pays an annual income of $55,000. Once you’ve celebrated your success you may start wondering, “Is 55k a good salary?”

Unfortunately this isn’t a simple ‘yes’ or ‘no’ answer as there are so many variables that affect personal finances.

This guide will reveal exactly how much you can expect to take home as wages and what type of lifestyle you can afford on a 55k salary. We’ve even thrown in some tips on how to make your earnings go further.

Grab a pen and paper and let’s get number crunching.

How much is a $55,000 salary per month?

In an average month you will earn $4,583 before any deductions such as tax. Whilst this may sound like a lot of money to you, it’s still important to allocate that money to different parts of your spending areas to ensure you don’t run out of cash or go into debt.

How much is a $55,000 salary per week?

Before any tax deductions, a 55k salary will earn you $1,058 per week. If you get paid weekly rather than monthly, you will either receive four or five weekly pay checks depending on how many weeks there are in that month.

How much is $55,000 per day?

Breaking down your annual salary to how much you earn per day can help people to manage their finances better. It can also give you a motivational boost when you need it on those tough working days.

If you work five days a week, divide your annual salary by 52, then divide it by five days per week. If you work fewer days, simply change the calculation to factor in how much you work.

How much is a $55,000 salary per hour?

Working out how much you earn per hour will also tell you how many hours you have to work to pay for something. For example, if you work 40 hours per week you would make $26.44 per hour. So, if you want to treat yourself to a new coat that costs $135, you’d need to work over five hours to pay for it. Applying the hourly rate principle to smaller items such as buying lunch instead of making your own is an effective way to help you make the most of your salary and put some aside to save.

The minimum wage in the US is $7.25, putting a salary of $55k a year well above the national average.

How much tax will you pay on a $55k salary?

Before you start mentally spending all of your annual $55k, remember that amount isn’t actually what you will take home.

Each state will have a different tax rate, so it’s important to check how much you will be expected to pay in your area. Some areas have a higher tax rate than others. For example, New York has high state taxes while Florida has no state income tax.

Assuming you live in California, work 40 hours a week and get paid once a month, here is what $55k a year will look like in your account after you pay taxes.

  • Annual salary – $55,000
  • Federal income tax – $12,070
  • Net pay – $42,930

The numbers listed above will change if you have any dependants or contribute to pre-tax deductions such as a pension or health insurance. It’s important to understand the different tax brackets that apply in the US, which determine how much percentage of your salary will be taxed. The more you earn, the higher your tax bill will be.

What kind of lifestyle can you have on a $55k salary?

In 2021, the national average person in the United States earned approximately $51,480.

Earning 55,000 a year will allow you to live comfortably and even save money if you budget. However, the type of lifestyle you can afford will ultimately depend on the cost of living in your area.

Here’s an example budget based on a $55k annual salary ($3,473 monthly) for a couple living in the US.

  • Housing – $1,000
  • Bills – $400
  • Car payment – $350
  • Insurance – $200
  • Phone – $50
  • Food – $350
  • Personal – $250
  • Entertainment – $235
  • Savings – $600

Why should you have a budget on a $55k salary? Whether you earn $55,000 or $100,000 a year, budgeting is crucial if you want to achieve your goals and gain long-term financial independence.

A strict budget plan will allow you to see exactly how much money you earn, how much you need to use for outgoings and how much you can afford to save. Without budgeting, you are won’t know how much you’re spending and will often assume that there’s plenty of money left in your account. Budgeting also allows you to prioritize your savings. Without a budget, you are much more likely to spend more than is necessary and dip back into your savings fund.

Factors to consider on a $55k salary

1. Cost of living

A $55k salary will allow you to afford to live in a decent neighbourhood. Before committing to a property in a particular state, do your research on the cost of living there and work out whether you can afford it. Where you can afford to live will ultimately depend on your initial down payment, however you will still need to consider the cost of food, transport and general living costs in that area as well.

Location – the most expensive cities to live in the USA include New York, San Francisco, Boston and Los Angeles. If you’re on a tight budget, consider living in a smaller city or town instead.

Groceries – on average, US households spend 60% of their food budgets on meals and snacks at home and spend 40% of food costs on eating out. But there are ways you can make your food budget go further. Shopping at local Farmer’s Markets rather than grocery stores can dramatically cut your food bill. This is because food from Farmers Markets has a much shorter field to plate journey than the food in your local grocery store, meaning it’s better for the environment and the price is often less. If you prefer to shop at a grocery store, switching to a cheaper store in your area can help you lower your monthly budget on food.

Utilities – gas and electricity rates will also depend on where you live. The rates you pay in your state will be determined by generation and transmission costs which are set by government regulation and consumption rates. Make sure of comparison sites to compare rates in your area and save on your outgoings.

Childcare – in addition to how many children you have in child care, where you live has a big impact too. The cost of a child care facility in New York and Massachusetts is considerably more than less expensive states such as Tennessee and Louisiana.

Transportation – commuting isn’t normally a choice, it’s a necessity. Working out the annual cost of owning a car compared to using public transport will not only help you budget for this essential spend category but also determine whether it’s cheaper to live in another state.

2. Debt

Debt will eat away at your 55k salary, meaning that there is less for your other spending categories such as saving and living.

Consider cutting up your credit cards, or at least giving them to someone you trust so you only use them in an emergency situation. Removing the temptation of spending is key to successful budgeting and saving.

3. Spending habits

Your spending habits will directly affect where your salary is being spent. Go through your bank statements chronologically and write a list of all your bad spending habits. These could include:

  • Overspending on your cell phone usage
  • Impulse shopping
  • Social media ads
  • Sale shopping
  • Buying to feel better
  • Eating out
  • Shopping trips with friends
  • Spending without keeping track

Pick the two of the biggest areas you can’t stop spending on and focus on them first. Once you’ve stopped spending on one area, continue working through your list of bad spending habits in priority order.

What jobs pay a $55k salary?

If you fancy a career change that will still pay 55k a year, consider these jobs.

  • Fundraisers
  • Curators
  • Historians
  • Elementary school teachers
  • Makeup artist
  • Film and video editors
  • Executive secretaries

Engineers starting salaries average above $50,000.

If you don’t have a salaried job that pays $55k, but you want to boost your earnings to reach that figure, consider starting a side hustle. You can make extra dollars a month through a side business that you can do alongside your full time, salaried job.

Popular side hustles include:

  • Delivering items and food with Postmates and DoorDash.
  • Starting a blog.
  • Proofreading.
  • Becoming a virtual assistant.
  • Selling things on eBay.
  • House and pet sitting.

How to maximise your $55k salary

The money-saving hacks described below will help you stretch your monthly income further, giving you better financial security.

Budget – setting a monthly budget is key to keeping out of debt. Make a list of all your income and all of your outgoings, including any debt repayments. Go through your list and see where you can remove any wasteful spending such as subscriptions. Allocate a realistic budget to each area of spending and stick to it.

Learn to cook – Ditch the expensive takeaways and convenience food and learn how to cook. Cooking your own meals gives you complete control over how much your meals cost, and your health.

Go out less – staying in with friends and family instead of going out is just as much fun, and way better for your wallet.

Be more energy efficient – turning your thermostat down, washing your clothes at a lower temperature and turning appliances off are simple ways to cut your housing costs and utility bills.

What to do with spare money from your 55k salary

If you’re fortunate enough to have money left over after your bills and living expenses have been paid, you might want to consider one of the following options for any spare cash you have.

Save

Paying off debt should be your number one priority if you have spare money. Start by paying off the highest interest debts first such as credit cards and loans and work your way down. For example, if you have one balance on a credit card that charges 18% interest, and one that charges you 15%, tackle the card with the 18% interest first. Without debt, your credit rating will be improved, meaning you are in a better financial position to make big purchases such as a house.

You could also use spare finances to start an emergency fund that could be used for unexpected car and home repairs, medical bills, to replace home technology or utilities and even cover your monthly outgoings if you lost your job or were unable to work.

Invest

If you invest your spare money wisely, your finances can grow. Remember to only invest in something that you understand the risks of.

Stocks: the simplest way to invest in stocks is through an online stockbroker. Once this is set up, start researching companies that you’d be happy to invest in from personal experience as a consumer. Consider starting small and only investing in single shares. You can always add to your portfolio over time.

Corporate bonds: if you’re looking for a low-risk investment, company bonds could be the answer. You can select bonds that are only from large, reputable companies or bonds that will mature within the next few years. Although investments are never risk-free, bonds are generally a lower investment risk than stocks.

So, is $55k a good salary?

Earning $55,000 a year is a fantastic starting salary. If you follow a strict budget and keep to your spending needs rather than wants in order, you can have enough money, a good lifestyle and stay out of debt.

Use the information in this guide to work out what you can afford and use the actionable tips to make your earnings go even further.

Take control of your personal finances with the latest saving and budgeting tips on our blog.

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