The lockdown days are over and job hunting is probably one of the activities quickly taking the center stage now that we’re all out of our caves. If you’ve been lucky to land a job that pays $80,000 a year, chances are you’ve wondered whether the money is good enough. So is 80K a good salary?
80K may or may not be a good salary depending on your spending habits, lifestyle, marital status, demography, tax bracket, and number of dependents. It also depends on how much debts you have in student loans and whether you have additional deductions besides tax.
We can sum up these factors into one thing: cost of living.
Understand that the cost of living varies and therefore essential and non-essential expenses will vary from place to place.
One thing that we tend to overlook most of the time when deciding whether a salary is good enough is the condition of the work. We strongly believe that work output and standard operation procedures an also determine whether 80K is worth living on.
The goal of this guide is very simple:
We want to help you know whether $80,000 a year is a good salary. Whether you already have a job that pays that much or you’re currently looking for one, you’ll find this guide helpful.
Let’s get started.
Factors That Determine Whether 80K a Good Salary
Like everything else in life, people will always look at money differently. Some may see 80K a year as a good salary, some wish they can earn at least 100K, and others simply want more.
In other words:
The mileage of an individual’s salary has never been universal. If anything, whether 80K is a good salary depends on several factors, and they’re as follows:
1. Your Family’s Size
You can live your life to the fullest if you’re a single person making $80,000 a year. You’ll have fewer expenses to cover every month because no one depends on you for financial support.
It’s a different case if you’re married with kids. In such a case, the number of people who look up to you for financial support will determine whether 80K is a good salary or otherwise.
According to the census conducted in 2020, the median salary for a household of four people stands at $68,400 a year. The analysis put the 80K salary cap substantially higher than what the average Americans make.
It’s likely that people in your family won’t need much. For what it’s worth, they’ll need food, clothing, and shelter for the most part of their lives, which shouldn’t be difficult to provide.
We strongly suggest that you evaluate the cost of housing and living in your area to determine how far 80K can go depending on the size of your family.
2. Your Demography
The cost of living isn’t constant by any mean. So whether to consider $80K as a good salary will depend on where you live.
Let’s have example, shall we?
Washington DCis one of the most expensive states in America. Here, the average monthly rent for a two-bedroom apartment is $3,500.
Someone making $80,000 a year pre-tax takes $6,666.67 per month home. Depending on whether you’re a single or married filer, the actual amount you take home will be $5,200 after taxation.
With $5,200 a month, you can survive in DC, but you’ll be living in a bit of a stretch and not be able to enjoy your life to the fullest.
It’s a different case for the people that live in inexpensive states such as Alabama, West Virginia, and Michigan. You can afford to live a very comfortable life in such state, treat yourself to some luxury every once in a while, and have money to save.
To be clear, your demography has an impact on more than how much you spend on housing on a monthly basis. You also have to consider the cost of living in term of commute expenses, utilities, and food.
Overall, a salary of $80,000 a year can likely afford you more if you live in rural areas or cheap states compared to the metropolitan cities.
3. Your Expenses – Or How Much You Spend Every Month
You can’t easily tell if $80,000 is a good salary unless you know what your monthly expenses are.
For example, if you have student loans and credit card debts now, you may have a difficult time living your life to the fullest. But the best part is that it doesn’t last long before you clear the debts as long as you continue to make money.
Your spending habits also determine whether $80K can be good. If you have the tendency to squash money on anything and everything, there’s a high chance you’ll be broke long before your next paycheck.
But if you’re someone who has disciplined himself or herself to live on the 50-20-30 budgeting rule, you can live on $80K comfortably even if you have a family depending on you.
4. What Your Financial Goals Are
What are your short and long-term financial goals exactly? There’s a high chance you may want to:
- Save money for retirement
- Work hard to build yourself or your family a home
- Make a larger purchase than you’ve ever done before
Whatever it is, you have to consider what your financial goal for the future are before you can judge whether $80,000 would be good enough to live on for the next 12 months.
Some professionals who begin earning a significantly greater salary than before may experience lifestyle inflation, which occurs when they begin spending more money as a result of their increased pay.
So, it’s important to understand the effects of lifestyle inflation on your financial goals once you start earning $80K.
How Much is 80K a Year Hourly?
The table below shows a summary of how much $80K is an hour:
We like to break down salary in this manner because you can never truly know how much you earn until you determine how much you actually work for every hour.
Now, it’s important to understand that the current hourly wage in the United States of America stands at $7.25.
Someone who earns a salary of $6,666.7 makes $9.92 an hour, which is above the average hourly rate that majority of Americans make.
Is 80K a Good Salary for a Single Person?
Some people would argue that it depends, especially since have differing spending habits.
But if you give this one last thought, you’ll realize that an annual salary of $80,000 is good enough for a single person to live on – especially if they don’t have debts such as student loans.
Being a single person means that you don’t have anyone looking up to you. So it’s up to you to decide how much further you’d like to stretch your salary.
The bottom line is that single people tend to spend less than they would if they had to provide for someone else. Because your expenses and actual budget tend to be lower, you can live an extremely comfortable life on an 80K annual salary in different parts of the United States.
Is 80K a Year a Good Salary for a Family?
The answer to this question is never going to be in black and white. And this is where we conclude that it depends.
Because whether or not $80,000 is a good salary for a family depends on the number of people that you should provide for and exactly what you have to provide.
The rule of spending remains:
Never spend more money than you earn. Teach yourself to save even if you have a family. And cut down on the things you don’t really need.
Is 80,000 a Year Middle Class?
The median household salary in the United States is $60,000. So $80K would be an upper-middle class. That’s because $80,000 is an amount you can live on comfortably.
What Can You Get With an 80K Salary?
Every last one of us want to live a good life, but it’s not possible to get there unless you’re on a job that pays you well – and you know exactly what you can afford with the money.
So the question is:
What can you afford if you earn $80K a year or $6.666.7 a month?
Well, it depends.
You can live the kind of life you want in Michigan, West Virginia, and Alabama if you don’t have student loans, credit card debts, and other debts to pay.
For what it’s worth:
- You can afford to rent out a property in your desirable neighborhood.
- You’ll find it easy to pay for your monthly expenses.
- It should be easy to adopt and stick to the 50-20-30 rule, where you save at least 20% of your monthly income
- You can go on vacations on a regular basis
We can’t stress enough how important it is to live within your means. Never spend more than what you earn, especially if you’re a single person.
Final Thoughts: Is 80K a Good Salary?
As we already mention, the minimum hourly wage for an American citizen currently stands at $7.25.
So if you make $80K a year, it means you make between $9.25 and $38.4 an hour depending on the number of days you work a year. And that means you make one to five times of the minimum wage.
According to the Bureau of Labor Statistics, the average American makes $865 a week working full time. That’s about $45,000 a year, so a salary of $80K is above average.
Depending on your financial goals, $80K a year may be a good salary or you may have to look for an additional stream of income to live your life to the fullest.