In this day and age, can two people live on $25,000 a year?
After all, you could quickly and unexpectedly find yourself in this difficult position. One of you could lose your job or you’re just starting your career and working for minimum wage.
The quick answer to this question is yes—two people can live on $25,000 a year. But it would be very difficult if you had a mortgage, auto loan, credit card debt or student debt.
Plus, you would have to live in an area with a low cost of living. For example, you might be able to do this if you live in a rural area in Nebraska or Kansas. However, you would need a lot of luck to get by on $25,000in an expensive city such as Chicago or New York.
How To Live On $25,000 After Taxes
To live on $25,000 a year after taxes, you would have roughly $2,083 a month to pay for everything —food, rent, medical bills, other necessities and leisure activities.
That doesn’t leave a lot of room for error. Something as simple as a car breakdown could tip your budget into the red. Not to mention an unexpected medical expense, which could throw your budget out the window. Catching up might take years on such a limited income.
So, to make this work, you have to develop a budget and stick to it religiously. For example, you might allocate:
- 45% — or $937 a month — for housing (rent or mortgage payment and utilities)
- 15% — or $312 — for transportation
- 25% — or $520 — for living (food, entertainment, clothing, gifts, cellphones, etc.).
You might budget 15% or about $312 for debt repayment. If you don’t have debts, this could go into an emergency savings fund. If something happens, you’ll be prepared to cover the unexpected expense without breaking the bank.
Soaring Inflation – And Where It’s Easier To Live On $25,000
Of course, it was certainly easier to live on $25,000 a couple of years ago than it is today.As you’re probably aware, by simply going to the grocery store and paying more for everything, Inflation has soared to 40-year highs.The bad news, costs are expected to rise in the foreseeable future.
The rising cost of living means you will have to cut back on key expenses even more than in the past. But this is more doable than you probably think.
Can You Stay On A Budget This Strict?
While the two of you could live on $25,000 a year, it would mean staying on that budget with no exceptions if you want to stay out of debt.
So, you might have to sacrifice a lot of weekend getaways or vacations. You would have to be very careful in your gift giving and it would help if you skipped the car and instead relied on public transportation.
In other words, it would be a very no-frills budget.
If none of this sounds like your cup of tea, remember that you don’t have to settle for this lifestyle. There are many things you can do to improve your financial situation.
The best way to improve it is by boosting your income. Perhaps you could take on a part-time job – after all, employers today are desperate to find workers. There should be no shortage of opportunities.
Another option is to find a side hustle, from reselling items on eBay to driving for Uber.
For example, it’s not unheard of for folks to supplement their income to the tune of $1,500 a month or more simply by reselling yard and estate sale items on eBay. Don’t be surprised if you sell something for double or triple the original purchase price. While it takes a good eye and patience to find that hidden treasure, it could pay you back in spades.
Seize opportunities wherever you find them. Bringing in more money helps you enjoy those extras in life, such as a vacation or a weekend getaway.
Could you live on $25,000 a year? Probably, if you absolutely had to. But there is no need to do so when the opportunities to make more money – and to live more comfortably – are all around you. All you need to do is look.
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FAQs
The quick answer to this question is yes—two people can live on $25,000 a year. But it would be very difficult if you had a mortgage, auto loan, credit card debt or student debt. Plus, you would have to live in an area with a low cost of living.
Can a couple live on $30 000 a year? ›
It's quite possible to live well on $30,000 per year if you're debt-free, but what if you have debt? I would recommend trying to pay it off as quickly as possible with the debt snowball approach. Cut your expenses as much as you can and put the amount you save toward debt each month.
Can one person live on $24000 a year? ›
A2A If you own a house and it is paid up, and a person has a budget, you could live on $24,000 a year. Don't live in large cities. Live in a smaller city and do a lot of walking because cars can be expensive. Living in smaller towns in Florida would be possible.
Can two people live off $40,000 a year? ›
Well, it depends. A $40,000 salary may be sufficient for an individual in a low-cost area, but it may not be enough for a family to live comfortably in most parts of the US. Rising inflation has made it more challenging to live on a $40,000 salary, but it still exceeds the poverty threshold for families.
What salary is needed to live comfortably in the USA? ›
The national median for living comfortably alone is $89,461, which suggests that a 50/30/20 budget might not be practical for most single people.
Is $25,000 a year poverty? ›
The U.S. Department of Health and Human Services uses the Census Bureau threshold to determine who is eligible for certain government assistance programs, like SNAP (food stamps). Under their guidelines, a family of four is considered impoverished if they earn $30,000 or less per year.
What is a livable wage for a couple? ›
Living Wage Calculation for California
| 1 ADULT | 2 ADULTS (BOTH WORKING) |
|---|
| 0 Children | 2 Children |
|---|
| Living Wage | $27.32 | $33.26 |
| Poverty Wage | $7.24 | $7.50 |
| Minimum Wage | $16.00 | $16.00 |
The quick answer to this question is yes—two people can live on $25,000 a year. But it would be very difficult if you had a mortgage, auto loan, credit card debt or student debt. Plus, you would have to live in an area with a low cost of living.
Is 20k a year poverty? ›
Pew Research considers middle class to be $56,000 to $156,000 for families of three. Thus, a family of three on $20,000 is not middle-class; it's actually below the poverty level. While an individual on $20,000 a year is not below the poverty line, they are still not considered middle-class.
Can two people survive on one income? ›
I have known a number of dual-income families over the years who desire to become one-income – typically experienced in conjunction with the birth of a child. This post is written with them in mind. My wife and I have lived our entire married lives (13 years) on one modest income. We have proven it is possible.
These guidelines are adjusted each year for inflation. In 2023, the federal poverty level definition of low income for a single-person household is $14,580 annually. Each additional person in the household adds $5,140 to the total. For example, the poverty guideline is $30,000 per year for a family of four.
Can two people live as cheaply as one? ›
Everyone's heard the phrase “two can live as cheaply as one.” In one sense it's absolutely true: when you live in a home by yourself and someone moves in with you – a roommate or spouse who pays his own way – your per capita expenses will go down. You have someone to split the rent and utilities with.
Can a single person live on $36,000 a year? ›
Is $36K a good salary for a single person? A single person can afford to live on $36,000 a year in more affordable places in the U.S., but it could still be difficult to afford to buy a home in today's real estate market.
What is a good hourly wage to live comfortably? ›
SmartAsset says a single working adult must earn at least $114,000, or about $55 an hour, to support themselves in the Golden State. When it comes to a basic “living wage,” MIT says a single adult in California needs to earn $27.32 per hour or $56,800 per year.
What is a really good salary in us? ›
A Smart Asset report based on MIT's Living Wage data found that the average salary required to live comfortably in the U.S. is $68,499 after taxes.
What is a good salary in 2024? ›
Decent Salary
| Annual Salary | Monthly Pay |
|---|
| Top Earners | $86,000 | $7,166 |
| 75th Percentile | $68,500 | $5,708 |
| Average | $44,910 | $3,742 |
| 25th Percentile | $24,500 | $2,041 |
Let's say you consider yourself the typical retiree. Between you and your spouse, you currently have an annual income of $120,000. Based on the 80% principle, you can expect to need about $96,000 in annual income after you retire, which is $8,000 per month.
How much house can I afford with a 30k salary? ›
One rule of thumb is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.
Is $30,000 a year enough to live on? ›
Is $30,000 a Good Salary for a Single Person? No, $30,000 is not a great salary for a single person, but it can be livable depending on the person's location and expenses. The average personal income in the United States is $63,214 per year, which is more than double the $30k mark.
What is a livable salary for one person? ›
But just how much does a single person in California need to make to live comfortably? A new study from Smart Asset determined that a person must make at least $ 89,190 to get by comfortably.
