Is 5k a Month a Good Salary? Is it Enough to Live On?

is 5k a good salary?

When you are figuring out your finances, it can be important to look at your income and work out what you can afford, or what kind of lifestyle you might be able to lead.

This is especially important when you are looking at changing jobs or getting a promotion and pay rise, as it is not always easy to look at income vs cost of living, and a lot of guides sound vague on what to expect from a certain income.

If you are starting a job earning $5000 a month, this helpful guide can show you the things to consider and give you tips and advice for making the most out of your monthly salaries. If your earnings are much higher or much lower, you should make sure that you follow a budget tailored to your income.

5k a month salary breakdown

With some salaries presented as monthly, weekly, or annually, it can be hard to figure out how a salary of $5000 a month compares to other incomes or to the median income of your region. Let’s look at how we can compare $5000 a month to other incomes as the first step towards seeing if $5000 is a good income or not.

What is 5k per month as an annual income?

A salary of $5000 a month would work out as an annual income of around $60k. However, you should also consider any bonuses that you get as this can add to your annual income.

This calculation also only works if your income is stable. If your monthly income fluctuates, your annual salary may not be $60k – it could be either higher or lower. Reasons for fluctuations in income include if you work different numbers of hours each month, if you work different numbers of overtime hours, and how much of your income is from commission for sales. Of course, if you are self-employed, you may find that your income varies greatly in different months. In these cases you may need to consider your hourly wage or daily salary and use these to work out your rough annual income – for example, add up all your daily salary totals for a month in order to work out a more accurate monthly income.

What is 5k a month as a weekly salary?

$5000 a month works out as roughly $1250 per week – though of course some months are longer than others, and you will probably find that on some months your pay packet has to last for five weeks. This works out to $2500 as a biweekly salary.

Nonetheless, knowing either your weekly salary or biweekly salary can help you work out how to save money and help make sure you can live pretty comfortably due to sensible budgeting.

Tax on a 5k per month salary

Sadly the figures above are not the whole story. You also have to consider taxes and other deductions from your salary.

The current federal income tax brackets that affect a salary of $60,000 annually are:

  • Up to $9,950 – 10% of the taxable income
  • Over $9,950 but $40,525 – $995 plus 12% of not over the excess over $9,950
  • Over $40,525 but not over $86,375 – $4,664 plus 22% of the amount over $40,525

This means that with a salary of $5000 a month, or $60,000 a year, the federal taxes you have to pay would be around $14,000. Of course, this may vary from place to place and you may have other payments.

Still, this means that you can expect to have around $46,000 per year after taxes. Knowing this can create a budget that will allow you to allocate funds for expenses, savings, and discretionary spending.

Is tax always going to be the same?

No, the amount of taxes you pay may be higher based on where you live. You will also need to consider any other fees and payments that you have to make based on where you live – for example, housing fees if you live in an area with a Home Owner’s Association.

Will I have less money if I enter a higher tax bracket?

No, it is a common misconception that entering a higher bracket of taxes will leave you with less money. While a higher bracket will have a higher percentage that you have to pay, this higher percentage is only paid on the money you earn within this bracket. Earning more money will not leave you worse off due to taxes.

How does 5k per month relate to average salaries across the US?

While it is not always healthy to compare our financial situation to the financial situation of others, it is only natural to want to know how your salary stands compared to the average salaries across the US.

The average monthly salary across the USA is roughly $5700 per month. This means that a salary of $5000 a month is lower than the mean average. However, the average can be skewed by some of the very high salaries that some people earn.

Comparing median incomes shows that $5000 a month is above the median monthly salary of $2700. This would suggest that $5k is a good monthly income to have, at least in some areas.

Is the average affected by where I live?

Yes, different areas will have vastly different average monthly salaries. This is usually linked to how desirable some areas are, along with the higher cost of living – for example, San Francisco or other expensive cities will have a higher average salary than rural areas such as West Virginia.

Of course, this is still not a hard and fast rule. Even within one state, popular urban areas will likely be more expensive than quieter areas. For example, even within California you will find cheaper areas than the San Francisco bay area.

What are average salaries in more desirable areas?

Some of the more desirable areas, such as California, have far higher average or median incomes. The median income in California is roughly $83,000 per year – this is a salary of roughly $7000 per month, and it is important to note that this is the median income for one individual. The median income for a household in California is around $120,000 per year – compared to this, $5000 a month is not a good monthly income to support yourself.

Obviously, this can be worrying if you want to live in Califorina on a salary of $5000 a month. While a salary of $5000 a month may not be considered poverty level in these areas, you may still struggle to live comfortably or struggle to afford all the things you would want to.

What areas would 5K a month be above average?

Generally, you will find that less desirable areas will have lower cost of living and thus a lower median necessary living wage. This is particularly the case in rural areas – cities often have a higher cost of living. Some areas with lower median salaries include Mississipi, Oklahoma, Georgia, and Alabama.

There are a lot of other areas in the USA with lower median monthly salaries – for example Mississipi has a median household income of roughly $45,000 yearly, which works out as around $3750 per month – which would make a $5,000 per month a good salary.

Is $5k per month a middle-class income?

Middle class income is generally between $40,000 annual income, and $120,000 annual income. This means that an income of $5000 a month or $60000 a year is at the lower end of the middle class range. However, you should still bear in mind that this will vary a lot in different areas. While $5000 per month is unlikely to be considered poverty level anywhere in the USA, you will find that some places have a high cost of living that makes a middle class lifestyle unobtainable on this salary.

Can I live well on $5k per month?

How well you can live off a certain salary is determined by a lot of different factors. People can have vastly different lives, and this can mean that they have vastly different financial requirements. You might find that one person lives well on a certain salary in a certain location, but under different circumstances it may not work out so well.


First of all you will need to consider what kind of lifestyle you want to have. Some people want a frugal lifestyle with a small home – to them, this is living well. However, to other people, living well can include having enough cash flow for conspicuous consumption – buying whatever items they want, including flashy cars, designer clothes, and other luxuries. It is important to look at what a good standard of living looks like for you, since this lets you address how much money you will need.

How many people you support

There is a huge difference in trying to support yourself on your salary compared to trying to support a family. While $5000 a month is good money to support one person, if you have to support children, parents or other dependants, this may not be enough.

Of course, if you are living in a shared home or with a partner and have other earners, you should absolutely consider their income as well – bills for two people will usually be less than double the bills for a single person, meaning that having a second income in the household can be very beneficial and help with saving and paying for expenses.

Where you want to live

As already discussed, the cost of living varies hugely between different places – everything from rent costs, car insurance, fuel costs, other living expenses will all be different. Even grocery stores will have vastly different prices from place to place.

If you want to live comfortably but find your current area too expensive, you might want to look at where else you can live. A lot of jobs can be completely remotely, meaning that you can look at moving to a different city, state, or even other countries across the world, if you want to look for cheaper areas to live in.

Can I support a family on $5k per month?

The number of dependants you have absolutely affects whether or not you can live comfortably on your salary. $5000 a month can be below the median necessary living wage in some expensive areas such as popular cities. This means that you would probably struggle to support a family on this salary in expensive cities.

However, in cheaper areas, such as Mississipi where the median household income is roughly $42000, you could feasibly support others on a salary of $5000 a month. Of course, if you have another income earner in your household, then you can live comfortably with a family.

Of course, if you have a particularly large number of dependants or do not have another earner, you may find that $5000 is not a good salary for raising children or supporting others – it all depends on how much your expenses will be.

What areas can I live in with $5k per month?

As mentioned previously, you will find that different areas have very difficult costs of living.

There are a number of areas that you should be able to afford to live in with a wage of $5k per month. Most of these areas will be smaller towns or rural regions.

What areas would I struggle to live in with 5k per month?

While $5k per month is a good salary for some areas, you would probably struggle to live comfortably in more expensive areas such as popular cities such as San Francisco, central New York, or Washington.

Can I afford a house on $5k per month?

Whether or not you can afford to purchase a home on an income of $5k per month depends on what other expenses you have, as well as the cost of the house you want to buy. If you have your spending managed and have a deposit, you could look for a mortgage lender to help with purchasing a property.

How much can I borrow for a house?

The general rule of thumb is that you can usually save between 4 and 5 times your annual salary for a mortgage. This means that you could potentially borrow around $300,000 for buying a property. However, the exact amount you can borrow will depend on several other factors.

Factors that change how much you can borrow for a mortgage include:

  • How much of a deposit you can put forward – a larger deposit will sometimes mean that you will be offered a larger mortgage.
  • Your credit rating – if your credit rating is good, you will often be able to borrow more money. Your credit rating will be higher if you make sure you pay off any debts you have promptly. If you take on more debts or fail to make repayments, your credit rating will go down.
  • Whether or not you are self employed -If you are self employed you may find it hard to prove your income, which means that you may only be eligible for a smaller

How big should be deposit be?

The larger your deposit is, the less you will have to borrow as a mortgage. This can be beneficial as it means you have to borrow less money and will have a smaller loan to pay interest on. However, you should make sure that you do not put yourself into financial difficulty by using all of your savings on a mortgage deposit.

Would it be better to rent on $5k a month?

Mortgages are considered good debt because they build equity – this means that the money you pay earns you an asset. Mortgages are often thought of as particularly good investments because housing prices can often go up, but they can go down as well.

However, there are some situations where it is better to continue renting a property rather than buying one. If you feel that you may be unable to make your payments, you should not be too hasty to get a mortgage. If you miss payments, you may be at risk of having the property repossessed, meaning that you can lose the money you have put towards it so far.

You may also want to continue renting if you are not yet sure where you want to live, or if you plan to move around a lot. It can be more difficult to move when you are buying ap property compared to renting.

How do I make the most of my $5k per month salary?

It can be hard to make sure that you use your money properly to get the most out of it. Some of the things are you should consider are:

Savings on $5k per month

It is always wise to make sure you having savings. These can be useful for if you have any unexpected expenses such as car repairs, appliance repairs, or medical bills. Savings can also be useful if you lose your job or have other unexpected problems.

How much should I aim to save?

A popular general budgeting rule is that you should aim to have savings equal to at least three month’s worth of expenses, including rent, food bills, health insurance, car payments, and anything else you need to pay. This means that if you lose your job, you should have time to find another one before meeting financial difficulties. It is also always worth having savings to cover expenses such as new appliances, as well as savings for holidays and other discretionary expenses that you may want to fund – and these are important things for most people to save for to help enjoy life.

Can I start to invest with 5k per month?

Depending on where you live, you may have a larger or smaller amount of money left over each month to consider saving. It does not matter how much you have left over each month – you can always start investing, assuming that you are meeting your monthly expenses and have sufficient funds in an emergency fund.

What kind of investments should I look at?

While a lot of people want to invest in property, this may not be feasible on a salary of $5k a month, especially if you live in an area where $5k a month is close to the median living wage. Nonetheless, you can look at investments such as stocks or shares. These investments have risks, and should be discussed with a professional.

Should I get professional help with my investments?

You should always consult a professional advisor before starting to invest money. Investments can gain a return, but they also have risks, and you could lose your money.

What can I buy on 5k per month to save money?

While $5k per month may not be enough for conspicuous consumption and buying everything you want, it is still possible to buy items to improve your life, and items that you can enjoy. However, you should be careful – while a $5k monthly salary can let you live pretty comfortably, you should always make sure that you keep your expenditure less than your income.
If you struggle to keep your spending to a budget, you should look at budgeting methods such as incremental budgeting or the snowball budgeting method.

Should I buy a new car or other large purchase?

It is always tempting to make large purchases, especially if your income has recently increased. However, there is a big risk that making too many large purchases, especially if they are on payment plans, can cause financial difficulties. It is worth always making sure that any large purchases can be made without draining any emergency funds you have.

Final thoughts

Finances are a difficult thing to manage, and it can be hard to picture what your life will be like when you change salary. You should always make sure that your approach to finances is appropriate for the amount you are earning – this gives you the best chance to get an emergency fund set up, make plans for the future, and live a good life.

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