Even if people are working, they may be struggling to pay for basic necessities such as housing, food, utilities, transportation, health care and still having enough to save, have some cash set aside for rainy days, enjoy leisure activities and have some cash set aside for the occasional splurge. However, what wage per hour can a common employee afford to lead such a luxurious life? The answer to that question depends on so many factors such as where you live or the overall amount of money you have at your disposal. However, there are some general principles that give a start towards ascertaining how many hours of work at what wage will permit a decent existence.
Location Matters
A closer look at the living cost in the United States reveals that the expenses differ a lot across the country. Metropolitan coastal areas have filed the highest costs of living, especially in aspects such as housing, food, and others. Hence, the ‘Hourly Rate’ required to sustain a comfortable living standard should be higher. While $60,000 per year is considered a fairly good average wage in New York City, it would just provide a livelihood in a rural Midwestern town with a decent quality of life. Compare your region’s common charges for accommodations, meals, energizes, and other essentials to figure out how much net income is attainable at various hourly wages. This can be useful for reducing the list down to an appropriate range.
Overall Budget
When they set up a monthly budget that divides the costs into fixed and variable expenses, the next step is to determine the wage that would not only make it possible to scrape through but also save a little and have fun sometimes. You should not only focus on the bare necessities such as the place to live, and the means to get a meal in your locality. Be sure to build in costs for things like:Be sure to build in costs for things like:
- Healthcare insurance/expenses
- Car payment, insurance, and fuel.
- Mobile phone
- Internet/TV
- Retirement savings
- Emergency fund
- Dining/entertainment
Calculating these numbers at varied hourly wage offers decent understanding concerning the amount that would be needed for the extra margin besides the cost of the requirement. There is a basic rule that you should save at least 10-15% of your income, so this is something that has to be considered when creating the budget.
Income Requirements for Own Residence
Another considerable aspect is that it is always better to buy a home rather than renting all the time, in order to achieve a comfortable standard of living. Working for wages paid per hour which one is capable of affording a house within few years brings a chance for stability unlike what rent offers, no ownership. The home price that your income can qualify for and the required down payment vary greatly, but as an estimate:The home price that your income can qualify for and the required down payment vary greatly, but as an estimate:
- Those earning above $15/hour may be eligible to buy cheaper homes for longer term loans.
- The price range of $20-25 per hour is necessary for cleaning an average priced suburban house.
- It would require $30+ per hour for a small property in high cost metros even for simple tasks.
Of course, there are always compromises that can be made, such as finding other people to share the place, living in a less centrally located dwelling, or opting for a condo rather than a house. In general, $15 an hour has an indication of ownership but less of it than when one earns over $25 an hour.
The location of the house, the kind of house, the behavioral aspects of spending, and the planned or expected incomes all combine in the definition of how much money compels a comfortable life. However, by taking all of these into consideration you are able to determine the exact magical hourly wage in order to enjoy the kind of life you want to live. The above estimates do make good starting points for that evaluation.
