If you have an annual income of $70,000 dollars you might be wondering if you’re making enough to live a good life. Without giving it much thought, the answer seems to be an easy yes, but that might not actually be the case. Let’s go into a little more depth to determine is $70,000 a good salary or not.
Is $70,000 a Good Salary?
There is a lot that goes into what makes a salary a good one or a not too great one.
It will depend on your lifestyle, your debt, and your expectations.
One major factor is where you live. If you’re on either coast, then there is a good chance that $70,000 won’t be enough money to pay your bills and leave you enough extra for savings and having some fun.
The cost of living is simply too high in places like New York City and San Francisco, to enjoy your life on this amount of money.
While in other parts of the country you’ll find that the cost of living is much less.
For example, I live in the middle of a cornfield in a very small town in Illinois. Living here is pretty darn cheap.
You can buy a nice house for under $100,000 dollars. I actually paid $35,000 for mine.
Before you get an image of some falling down dump, it actually was and is a pretty nice house.
Since I bought it, I have been adding new plumbing and heating. The inside of the house is actually really nice, but I’ve gone ahead and painted and added some new fixtures.
Next year, I plan on having the house resided. The roof and windows were already new when I bought it.
The point is, I bought a $35,000 house and will end up putting about $60,000 dollars into it.
I’ll have a basically brand new house for under $100,000 dollars.
I’ve been able to do so because it is super cheap to live here in this small town.
$70,000 dollars a year would put me in the top 10 percent of earners here, not counting all the farmers.
But, think about it. If you were living on the coast, you wouldn’t even be able to buy a lot for $35,000 dollars let alone a 2,000 square foot house.
That’s the advantage of the housing market here, and the low cost of living.
So, if you living in a small or mid-sized town in the Midwest, then $70,000 dollars is a great salary. If you live on either coast, then not so much.
How to Determine if $70,000 is a Good Salary for You
There are a number of factors you must consider to determine if making $70,000 dollars a year is going to be a good salary for you. These include the following.
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1. Your Debt
You want to think about how much debt you currently have. If it is a high amount, the monthly payments could take a big bite out of your monthly income.
Debt could include:
- Credit card debt
- Personal loans
- Student loans
If you have been using your credit cards to pay for emergencies or just impulse buys, your credit card payment could eat up a large part of your take-home pay.
Credit card interest rates tend to be quite high and should be paid off as quickly as possible. This will free up more of your income for savings and retirement accounts as well as having some fun.
If you have two or three credit cards, you might want to consider consolidating them with a personal loan with a lower interest rate.
2. Monthly Expenses
Next, take some time to determine your monthly expenses. You will want to determine if there are expenses that you can do away with or reduce.
Mortgage payments tend to be one of your biggest expenses if not the largest. If you have a higher interest rate, consider refinancing if possible.
Other monthly expenses you should take a look at include:
- Homeowners insurance
- Homeowners association fee
- Renters insurance
- Life insurance
- Car payments
Your mortgage or rent plus your utilities tend to be the biggest costs you will have each month.
Keep in mind, that what you spend a month on housing shouldn’t be more than one-third of your total take-home pay. And don’t forget your yearly property tax.
3. Health Care
There is a good chance that your employer is paying the lion’s share of your health insurance and maybe even part of your life insurance.
Even so, if you do become sick, there are co-pays and deductibles that you need to take care of.
Depending on your health and the health of the other members of your family, health care costs can add up and take a good percentage of your annual salary.
4. Number of Income Earners
Another aspect you want to look at to determine whether or not $70,000 is a good salary is how many earners there are in your household and what your take-home income is when it is combined.
Are you single? Do you have children? How many people depend on you and your income to live?
This will be a big factor in whether or not $70,000 dollars will be enough to live on.
If you’re single with no children living in the middle of the country, then you’re in good shape.
If you have a couple of kids and live in a more expensive area, you may find yourself struggling.
What is A Middle-Class Income?
So, you might be wondering what is a middle-class income. Currently, if you make between $25,000 dollars and $100,000 dollars you are considered middle class, but that’s a pretty big range.
Let’s face it if you live in Atlanta and you make $25,000 dollars you are going to feel pretty poor and being middle class might seem like a dream.
A better way to look at your $70,000 salary is through the lens of the median salary or median income in the United States.
According to the U.S. Census Bureau, the median salary or income is $63,179 dollars. That means at $70,000 dollars you are just a little bit above that.
How Much is $70,000 per Year Hourly?
If you make $70,000 dollars per year, that breaks down to $33.65 an hour before taxes.
That’s based on working 52 weeks per year and 40 hours per week.
Is 70K Enough for a Family?
$70K can be enough for a family if you live in a smaller town in the middle of the country.
If you live in a larger city or on either coast, you will struggle to make ends meet if you have a couple of kids and a partner that doesn’t work.
To Sum it All Up:
If you want to know whether or not $70,000 is a good salary, you will need to take a close look at where you live, your monthly expenses, your debt, and your lifestyle. This will tell you whether or not you will be able to pay your bills and live the life you want or whether you will just get by.