What Is a Decent Salary to Make?

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Everyone dreams of having enough money to fund the lifestyle they want. While some are lucky to be born with more than enough money, most of us have to grow up and find ways to earn it. And for most of us, this means getting a job and earning a decent salary.

But how much a good salary is can depend on a lot of factors. An annual salary of $50K is a good salary if you live in a rural area in the United States with a low cost of living, but not so much if you live in an expensive city like New York or San Francisco.

So, for Millennials and fresh grads out there wondering how much they should make to lead a comfortable life, the answer is this: there is not one basis on what is a decent salary. But here are things to consider to see if you should be earning more to live comfortably.

The Average Salary in the US

The average salary for an employee in the United States is $49,764 annually or $957 per week. Take note that the average salary is different based on which state you work, your gender, age, education, occupation, ethnicity, and other factors. So, if you earn more or less than the median income, then there may be a lot of reasons behind it.

Comparing yours against the average national salary isn’t a good way of knowing if you’re making a decent salary. For one, while it shows how much you’re making compared to the majority of working Americans, it doesn’t show the different factors. For example, the average 19-year-old in 2017 would make around $422 weekly, but the average 35-year-old would be making more than twice that amount at $976 weekly.

You could be making less than the national average also because of occupation. The mean salary of a doctor in 2018 is $299,000 per year, but a caregiver could earn around $15,000 as a home health aid. There’s also educational attainment: a high school dropout earns an average of $20,241; a high school graduate $30,627; and a bachelor’s degree holder $56,665.

While the average salary is not a good indication of whether or not your salary is a decent one, it can give you an idea if you are making more or less than the general population. This can help you understand if you are making enough within your given demographic, occupation, or any factors that affect your salary.

Earn Enough To Pay Rent

One way of telling whether or not you make a decent salary? If you own or rent a home and are spending less than 30 percent of your income on housing costs (rent, utilities, taxes, repairs), you’re making a decent salary. But if you’re spending more than 30 percent, it supposedly means you’re not earning enough.

This is because if you’re spending more than 30 percent on rent, you have less than 70 percent to spend on your other living needs. And in many cases, people who fall under this category are low-income earners, people with debt, those who cannot afford the cost of living in a certain area, and households that cannot pool enough income.

But this traditional 30 percent rule isn’t an indication of whether or not you make enough. In fact, over half the population in the United States has paid more than 30 percent; as of writing, the average rent costs 38.6 percent of incomes. But if you can pay less than 40 percent of your income on housing, consider yourselves lucky.

For many low-income earners, the cost of living in a certain city or state is too high that over 40 percent of their income goes to housing. This means three things: only a fraction of the real estate market fits within their budget (and it’s likely not one of the better neighborhoods); their debt makes them unable to afford a better living situation; and their other costs of living (food, water, clothing) are compromised.

Minimum Living Wage

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A good indication of whether you make a good salary is whether or not you earn more than the cost of living in an area. Each state has a “living wage,” an amount one person has to make annually to live comfortably in that area. Visit GoBankingRates to see the data of your state’s living wage.

Based on their data, the median living wage in the United States is $67,690. This is much higher than the average salary, which means if you’re making around the average salary per year, you will need a second job to offset the difference or pool your household income with others.

If you live in low-living wage states like Mississippi, you need to make at least $58,321 a year to live comfortably on your own. This means a $70,000 salary is more than enough to live comfortably while splurging on a few luxuries every now and then.

But a $70,000 salary is not enough if you live in Hawaii, where the living wage is $136,437. So, 70K is a decent salary in Mississippi, but not if you live in Hawaii or any of these most expensive states:

  • California: $99,971
  • New York: $95,724
  • Massachusetts: $93,895
  • Oregon: $93,285
  • Maryland: $92,227

Based on Happiness

living alone

Statistics aside, studies show that a good salary is based on what you yourself may think is enough to be happy. A 2010 study from Purdue University found that $75,000 was the average income people believed they needed in order to be happy.

By 2018, however, the study was updated and found that people’s expectations were lower, citing salaries starting at $60,000 up to $75,000. This meant that after $75,000, people did not expect that a higher salary would bring any more happiness, if it hadn’t yet.

You’d think that people would try to cite a million-dollar salary like corporation owners, but this wasn’t the case. People recognized that money wasn’t everything and there was a certain threshold where, as long as their needs were met and they could afford to splurge every now and then, a huge salary wasn’t necessary.

Is 50K a Year a Good Salary?

Let’s take a look at the different factors that could help you decide if your annual $50,000 salary is a good one.

Based on the data of living wage alone, it’s clear that you won’t be able to live comfortably. Your family can survive, but not without sacrifices and limiting the luxuries you have at home. If you live alone, it may be more doable, but with a family to support, it could be a tight stretch. But you won’t be within that threshold of happiness because of the lack of funds.

With a $50K salary, you can only afford rent/mortgage and other housing expenses of $15,000 or $1,250 per month. This is much less than the average monthly rent for an apartment in the US which is at $1,468. It’s difficult to find a decent apartment for one below that price, so you may have to find a roommate to split the costs of housing.

So, while you can survive on a 50K salary, I wouldn’t call it “good.” You’ll be living below the average of the annual average household income, which can make it difficult for you to make ends meet. This means sacrificing almost all your luxuries as well as a few of your basic needs (e.g. eating cheap foods like cup noodles and chips instead of a more expensive but well-balanced diet).


While there is no one measurement of a good salary, you can still determine if you’re making enough to live comfortably. By earning a certain amount, you can live a comfortable life with few sacrifices, while those who earn less may need to tighten their belts and wallets.

But even if you earn above the average, that is no assurance for happiness. Money isn’t everything, and at some point, the salary you have won’t make you any happier no matter how many zeroes it has.

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