I have been working for several years and have never earned more than 29K. It's a government job that didn't require a degree.
My problem is I think this is a decent amount of money because it's more than enough to cover everything I want/need. But most people I talk to or see online who mention money say $15 per hour is a joke and I don't even make that.
I understand that a person's earnings are mostly based on location. So instead, I just want to know what people expect to be able to do with their money.
What am I missing out on with a low wage?
byu/Initial-Piccolo-229 inpersonalfinance
Posted by Initial-Piccolo-229
41 Comments
Honestly depends on where you live and what your goals are. If you’re covering your needs and have some left over for wants, that’s better than a lot of people making way more but living paycheck to paycheck
The main things higher income usually gets you are faster savings for emergencies, ability to buy instead of rent, nicer vacations, and not stressing about unexpected expenses. But if you’re content and not struggling then you might already have the most important thing – financial peace of mind
> So instead, I just want to know what people expect to be able to do with their money.
Buy a home, save for retirement, travel, have kids, buy nice stuff or food, rent a nice apartment, drive a better car, afford medical care,
I think a fair question is where do you live and what do you define as what you want/need?
People like to impulsive buy whatever they want and then complain about how they don’t make enough to afford things.
Endless consumerism and doing the things and buying the gadgets that social media tells them to buy so they can feel happy.
I work with a lot of traditionally low income folks who are, if they manage their finances appropriately, able to live pretty happy and healthy lives.
I make the least amongst my siblings and have a spouse who doesn’t work, but also have the most saved up and am the most financially happy.
What do most people expect to do with their money?
* Retire…. so they don’t have to work until they physically cannot.
* Feed/clothe their children.
* Support a domicile.
* Take time off of work (ie vacation).
* Explore the world outside of the home-work cycle.
A part of this may be, do you have full healthcare and a pension?
Imagine that you suddenly earned 290k. What would you buy and do with all that extra money? That’s what you’re missing out on.
I raised my income because I wanted better housing, pets, children, holidays, medical and dental care, retirement savings, and home ownership.
You may not want any of those things, but at least find a way to put some aside for retirement.
My initial thought was that you’d miss out aggressively contributing to retirement but if you’re in a government job, I’m assuming you’ll get a pension. If that’s the case, I would work on moving up within the government as most pensions are based on some formula of your last few years of work. Look up training programs offered through the government. There’s definitely people I’ve seen and and read about who get up through the ranks fast and their retirement will sweet. Compare that to a private employee who must fund their own retirement through savings, and investments.
I want to save as much as possible, invest it, and retire as early as possible. I’m 40, my goal is to hit Financial Independence (FI) by 45. To me, FI means “I have enough invested for the gains to cover my living expenses”. So if I lose my job, or decide to take a year off, I’m making at least $60k per year *in profit* off of my investments passively. This will cover all my bills. This means, according to the 4% rule, that I need $1.5m in investments.
Saving for retirement. We got Invisalign – reduced teeth cleanings from previous overcrowding and teeth grinding which triggered migraines. We got to fly to Europe (once is more than never) and see all the art history we learned at school. We took our kids to a really nice hotel resort in our state. Now their expectations are higher. We will be able to pay for coding school and sewing classes for them to get started on skills they actually like + will help them get jobs later. We were able to house our elderly parents in one our rental units instead of inheritance money going to a nursing home. So each of my siblings got a check from their house sale.
So much more with more income!
We’re in a HCOL area and the babysitter is paid $20 an hour, but she can’t afford a house, so factor location location location into it
With a government job you probably have above average healthcare and some sort of retirement/pension guaranteed. If you’re happy with your life there’s no need to struggle for more. Forget what everyone else is doing and find your own happiness.
Dang, I make more than that every month. I would say you’re missing the feeling of freedom to do whatever you would like within reason. Go out for dinner if you feel like it, buy stuff that you want, go on a trip with friends, jump on opportunities if they arise. I’ve been broke, I know what it feels like. Ironically I have more sleepless nights worried about money no than I did when I was broke. Way more to lose.
I don’t believe you live alone and pay all your bills and buy food and clothes and save anything for retirement someday on only $29k/yr.
Retirement. Your future benefits are based on current earnings.
Much of my life I was made to feel like a schmuck for paying taxes by people who cheated. Now that I’m older, my social security payment will be almost enough to live on. While those who cheated taxes are looking to be homeless in their 60s and 70s.
My guess is if you counted all of the expenses that get covered by other people in your life you’re actually living like you make a lot more than that
My biggest need for increased income definitely came with having a family. Anything before that was more of a “want” – nicer car, new watch, etc.
I do think retirement and savings is likely the biggest factor in cost of living, regardless of family status – 401k, Roth IRA, HSA, etc. Always having enough in a HYSA to know I could cover significant issues gives me flexibility to breathe a bit and not live in constant stress.
With kids and a family – sports, 529, insurance, mortgage, home upgrades, home maintenance, college savings, marriage savings, etc. things add up. And that’s with us only having one income earner so we don’t need to have daycare. I want my kids in a good school district which means paying more to be in a good neighborhood. If not, we would need to pay for private school which is around 20k per year per kid.
I also feel like continual learning gives me great happiness and sense of growth, and hobbies tend to cost money – 3D printing, miniature painting, mountain biking, YouTube content creation, off-road jeeping, rock climbing, even good hiking equipment (kid carriers, backpacks, etc.).
I could survive with less, but feel I, and my family, are flourishing and growing in a magnificent way that less income would make impossible. In other words, more income to me means growth instead of sustainment.
Buy a home, save for retirement…
According to the McDonalds corporation, if you had a better wage you could afford to splurge on something decadent and unnecessary…like heat.
A lot of Americans consider living with roommates to be roughly equivalent to dying
You’re right that location is a big factor. In my area, $15 would have you on the streets or living with multiple roommates.
Finances are incredibly personal but for me I want to be able to live either alone in a 1 to 2 bedroom home/apartment, or with my partner in a 2-3 bedroom place. I don’t have or want kids, but we both work from home so having different areas to work is a priority for us. Especially because we both spend a lot of time on calls during the day.
I also want to be able to take 1-2 modest vacations a year. I’d like to be able to buy gifts on holidays and birthdays without stressing it too much. I want to be able to buy healthy foods, eat out once or twice a week, and save for retirement so I can retire on time (or even a few years earlier) without stressing about money.
I’d like to make enough to eventually own my own home, ghave a solid savings and investment account for emergencies, a new car every 10 years, and be okay if I were to experience job loss.
I consider these reasonable goals. Some people may disagree. I don’t want anything fancy but I do want to be able to afford decent quality things that will last a long time. I want to be able to take unexpected expenses in stride. I want to be able to plan for large expenses (like cars) to the point where I’m not going into debt, or if I am minimal debt, when they come along.
I don’t need to be rich, but I do want to be comfortable and live without financial stress. I have finally achieved this place in life and it feels very good. In my area that meant a salary of about 90k. Everything I buy is nice and reliable, but modest. I don’t buy fancy cars, but I do have a newer car from a reliable brand – brand new it cost about 30k in 2022 after taxes and registration fees – and I plan on driving it into the ground. I’ll replace it with a similar car when it starts needing regular repairs. I don’t buy designer watches, clothes, or bags, but I do spend a ~little bit more to have something that will last.
This is a nice income level for me. I can invest a bit on the side, continue to grow my savings, put 15% of my income into my 401k, and still have a bit of money left over for entertainment. If my income goes up over time, I don’t plan on buying more things or going for luxury brands. I’ll invest anything extra in the hopes that I can retire early or more comfortably.
Finances are personal. Some people may want less than I do. Some people may want more. My focus is quality and minimal stress – others want status symbols and luxury, others want small cabin in the woods and are happy thrifting every purchase and enjoy bargain hunting. It’s all relative.
Honestly if your frugal and you use your money efficiently. Not much. I mean money just opens up options. That all it does. It opens op options and accentuates who you are.
More money means you can be more reckless with it. You could potentially retire earlier than you considered. You can buy that house faster. But if you already have all the options you want available to you. Then you really aren’t missing much.
I’m very frugal. So no. ~30K wouldn’t scare me. If I woke up in your shoes, I mean it’s not that far off from the way I already live. I mean everything I have was done on low wages. I have a higher wage now. And sometimes I get some flack for it like if I try to give my dad some financial advice. He usually dismisses it and claims I don’t know what I’m talking about because I have a larger shovel than he does. But that wage is new. It’s only been this way for a few years. The house I have. The cars I have. The “toys” I have. My investments. They were all acquired on a low salary. The only thing I’ve really noticed with the benefits of having a higher wage is it opens up options and I can shift faster.
I have a friend who makes a little more than me. He’s always buying cars and boats and remodeling his house. Every time I go over there it’s something new. He’s also in debt to his eyeballs. It’s not the life that I would want. But it’s what you can do with a larger shovel. Don’t let anybody tell you you cannot accomplish things on your wage. They are just bad at handling money. To a point. I mean if your still wearing the same pair of jeans from 30 years ago or something weird. Then I might advocate for some wage or personal improvements.
It all comes down to peace of mind. Idc what anyone says this is a personal thing. Some people are happy loving in the woods and off the land – some need fancy cars and the latest gadgets. These require vastly different incomes.
So as long youre happy and doing what you want to do then the amount of money you’re making is fine.
Not having to worry about the price of groceries is a big one. So is being able to afford kids.
I had a buddy that worked in purchasing at the county hospital. I got him a job in healthcare sales.
He went from 35K to about 200.
Hos life didn’t change one bit, he’s still paycheck to paycheck. If anything he was happier back then. Less stress and toys to take care of.
* people expect to be able to afford housing within a decent commute of their workplace for around 1/3 of their take-home. Most people expect to afford housing on their own terms, rather than “having to” live with roommates, after sometime in their 20s or 30s.
* People expect to be able to save money toward their goals, such as travel, hobbies, events, etc.
* Some people expect to support a partner and children on one income, which increases household costs significantly
* In the current media landscape, a lot of people expect to acquire new products at roughly the same rate as the influencers they watch, which can cause some serious debt problems
If you are content, why does it matter? Comparison is the thief of joy.
I took my fiancée out for date night last night. We went to an adults-only event at our local science museum.
– Tickets were about $60 total
– transportation (public transit) was $13 total
– Dinner after was $45 total not counting on drinks
– Putting drinks as a separate line item since it’s totally optional, but we had 3 drinks each at about $12, so $72 on drinks.
In total, date night ran $190, which at $15/hr would be more than 12 hours of labor. Probably closer to 15-16 hours once you factor taxes and other payroll deductions – that’s two whole days.
My first job out of college only paid $20/hr in one of the most expensive cities in the country and I used to constantly do that kind of math any time I spent money. It’s very freeing to not have to worry so much about money when I do something fun.
What are your expenses on $14 an hour? Your post honestly annoys me because I’m struggling like a mf on ~100K household and I don’t live the high life. Hope you don’t get a surprise medical emergency. Or home repair if you can somehow afford one on that income. Let’s see the breakdown on your spending.
I was paying over $30k/yr for daycare for a single toddler in the Seattle area. I wiuld have been-$1k /yr. People in different areas have different expense structures.
If you’re happy, you do you. However, I’m really curious how you manage to have everything you need on that salary. Where I live, that’s below minimum wage. Plenty of people spend that much just on rent.
Are you secretly independently wealthy? Are you living in your mom’s basement and she actually pays for everything? Are you sleeping on a friend’s couch and raiding their fridge for food?
If you are somehow able to support yourself on that salary, are you also able to save for the future? Do you have retirement savings?
You might be getting by, but you’re not planning for the future. There’s no way you’re setting aside enough to retire on and I greatly doubt your $29,000/year government job comes with a large pension that will take care of you when you’re old.
Examples of my living situation at different wages:
$20,000: renting a 900 sq ft house for $350/mo, I had a beat up, barely functional 2004 Ford Explorer and was 38 miles from work. My mom and I lived together, and we shared most expenses. I had health insurance through my work, but it was fairly expensive at $60/pay period for a high deductible plan that I would never actually use.
$35,000: kept renting the house. You could hear the wind from one side to the other. The truck broke down. I bought a 2003 Nissan Maxima for a little under $4000. I took a small loan and paid it within the year. I swapped to the copay plan at work, so I could actually see doctors. I filled out my benefits package to include all available.
$40,000: they went up on the rent. I didn’t want to pay more. I was able to finagle an FHA loan on a modest house, mortgage being around $500 (now $600) a month. Car situation stayed the same.
$50,000: Housing situation stayed the same. I got lasik, which was one of the most life changing things I’ve done. I bought a 4 year old Mazda CX-5. It’s been stupid reliable. Love it. I put a third down on it, and the payments were $230. I paid it off a year early, but it never pressured my bank account.
$65,000: Housing situation stayed the same. Car situation stayed the same. I started contributing to an IRA. I went on my first big vacation.
$75,000: Had to do my first big housing repair. I paid cash for Central unit. Car situation stayed the same. Another big vacation, flew this time around. Company started a 401k. I contributed to get the match.
$72,000 (OT availability changed): another big housing repair. Car situation stayed the same. Increased retirement, IRA, savings contributions. Another big trip
$84,500: Went to salary and now have an opportunity to get a meaty bonus. Housing situation stayed the same (is now below 8% of my gross income). Used bonus to back fill from paying off car and buying a gaming computer. Used promotion to up IRA and savings contribution.
This is all in a VLCOL area. I make a little over double what the median household makes.
I don’t budget as well as I should. In fact, I’m bad with money and make sure a sizable chunk of money never comes close to my hands to mitigate this. My income means that I don’t really have to think about small purchases. There is planning for larger purchases (I’m doing a kitchen remodel soon ish, I will want 2x the estimated cost in savings when I do it). My actual month to month expenses are pretty minor. My job is stable, I’ve been there almost 9 years, and had lateral or vertical promotions seven times in that time frame. I’m considered to be one of the best at what I do in our network. I’m decently compensated, but not so much so as to be a good target for layoffs or downsizing. The value I bring is something that can be proven with about five achievements.
The ability to have enough money to not worry about money.
Shopping for groceries and not even looking at prices.
Buying anything you want that looks fun.
And the obvious, having enough money to not need to work to make more money.
Well, I expect to retire one day. 29k does not give you a lot to contribute to an IRA or 493(b) account.
Also, people often want to travel, have a nice car, have nice clothes, eat at a good restaurant, afford to have children, etc. you may not want these things, but most people want some version of this.
Retiring. You’ll never retire with that wage.
It’s options and opportunity! When you make a lower wage you often feel stuck. Which if you make a lower wage but love your life nothing wrong with it. When I made a lower wage but lived in a city I hated. I felt stuck in both so I moved and made more money. Now my quality life is better and I can save money. Which I wasn’t able to do before.
– Emergency savings to avoid taking on high-interest debt. Provides security and peace of mind.
– Ability to buy nutritious food.
– Ability to rent a safe, healthy home accessible to your work location.
– Ability to buy, maintain, insure, and pay taxes on a home if that’s a lifestyle choice that interests you. The ability to invest in renovations that make a home suited to your lifestyle and tastes.
– Ability to buy, maintain, insure, and pay taxes on a car if you require one where you live.
– Ability to travel for vacation or to see friends and family who don’t live nearby.
– Ability to save and invest for retirement so you don’t need to work until you die or become financially dependent on family members.
– Ability to pursue higher education, trade school, certificate programs, and other forms of professional development that allow you to pursue rewarding work aligned with your skills and interests.
– Ability to provide for children or pets, should you want to.
– Ability to care for aging parents, grandparents, disabled family members, etc.
– Ability to afford decent health insurance, see a doctor regularly, and afford necessary dental care.
– Ability to pursue hobbies and recreational activities (equipment, classes, clubs, events) to meet people with shared interests and build community.
– Ability to afford small luxuries like getting takeout occasionally without guilt.
Save for retirement. It’s nice to know that I can retire at 59, presuming the stock market keeps growing 😅 Social security isn’t enough, and will most likely be less by the time I hit 59
Travel. Seeing how other countries are run will give you a better understanding of your country. I live in a city with slums and high property crime. It is good to be in safe and clean cities.
Take care of family, whether that be children or parents.
Have money work for you. Stocks. Bonds.