Even in a hot real estate market, it’s possible to learn how to buy a house with no money down. The trick is, you need to know where to look.
Zero down home loans aren’t available everywhere and to every borrower, but if you do qualify and can find an area with a zero down mortgage, homeownership could be much more attainable.
Here’s exactly what you need to know about how to buy a house with no money down.
Can You Buy a House With No Money Down?
You can buy a house with no money down with certain loan programs in certain areas. There are more homeowner resources to help you buy a home than you may realize.
And first-time homebuyer qualifications can be more flexible than you know. Here’s where to look for and what to expect on a zero down mortgage.
💡 Recommended: Learn more about first-time home buyer programs.
How to Buy a House With No Money
Of all the things you need to buy a house, a down payment holds many buyers back.
But there are a few avenues you can take to buy a home with no money down.
• Buy a home with a VA or USDA loan, which are no down payment mortgages
• Receive assistance for your down payment or closing costs from a state or local program or a family member
• Receive a lender credit
• Ask for a seller concession
USDA Loan
A USDA loan requires no money down and is intended for buyers in rural areas. There are two ways the U.S. Department of Agriculture loans money:
• single-family housing direct loans
• single-family housing guaranteed program
The direct loans are issued by the USDA and come with a 33-year term for low- and very low-income households. (Very low-income applicants may stretch the repayment term to 38 years.)
The guaranteed program is run through approved lenders with a 30-year fixed rate for low- to moderate-income households.
The USDA eligibility site shows eligible areas and income limits.
VA Loan
A loan guaranteed by the U.S. Department of Veterans Affairs is a zero down payment mortgage with low interest rates for qualified veterans, active-duty service members, certain reservists and National Guard members, and surviving spouses of those who died in the line of duty or as a result of a service-related injury. Most borrowers pay a one-time funding fee, which can be rolled into the loan.
Lenders can be more flexible with credit scores, mortgage amounts, and debt-to-income ratios.
💡 What credit score do you need for a VA loan?
Down Payment and Closing Cost Assistance Programs
Many city and state agencies offer different mortgage types and down payment assistance to buyers, especially low- to moderate-income homebuyers, first-time homebuyers, veterans, and people buying in federally targeted areas.
The terms vary. Sometimes the assistance for a down payment is in the form of a second mortgage that is repaid over time. Other terms include deferred payments that are only due if the property is sold, loans that are forgivable if the property is occupied by an owner for a specified amount of time, and even grants.
HUD, the U.S. Department of Housing and Urban Development, steers homebuyers to city, state, and nonprofit programs that offer down payment assistance.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Down Payment Gift From a Family Member
A down payment gift from a family member can also help you buy a house with no money down. The main thing to remember about a down payment gift from a family member is that the money must be properly documented with a gift letter. Your lender will likely provide a template to make sure you have all the crucial elements included.
Lender Credits
Lender credits are what you get when you agree to pay a higher interest rate in return for some money that the lender contributes toward your closing costs. The more lender credits you receive, the higher your rate will be. With some lenders, you can cover your closing costs entirely with lender credits. This is a common practice when refinancing a loan.
Seller Concessions
One strategy real estate agents have used is to ask for a credit from the seller, to be contributed toward the buyer’s closing costs. Making an offer above asking price in tandem with the seller concessions makes this option more palatable for sellers in a competitive housing market.
💡 Need more help? Head to the Home Loan Help Center
The Takeaway
Learning how to buy houses with no money takes some research, but could be well worth your time. With a VA or USDA loan, down payment assistance, gift money, or lender credits, it is possible to obtain a no money down mortgage.
Qualifying first-time buyers can still catch a break with a conventional mortgage loan from SoFi by putting just 3% down.
SoFi offers fixed-rate loans and a team of mortgage loan officers to answer all your mortgage questions.
Get pre-qualified for a home loan in minutes.
FAQ
Can cash gifts be used as a down payment?
Yes, but certain rules must be followed for the gift to be documented by the lender, usually in the form of a gift letter.
Are there any homebuyer grants?
Sometimes. They’re usually reserved for first-time buyers, veterans, or people buying homes in federally targeted areas. You might start a search for assistance with your state housing finance agency or HUD and then look for city and county programs.
What are down payment assistance programs?
Down payment assistance programs help homebuyers afford down payments and sometimes closing costs as well. This is done in the form of grants and loans and can vary by location.
What credit score do I need to buy a house with no money down?
For a zero down mortgage backed by the USDA or VA, lenders are advised to look at a borrower’s situation case by case. Approved USDA loan lenders usually require a minimum credit score of 640, though the department itself doesn’t have a credit score requirement.
Most VA loan lenders will want to see a credit score above 620, but again, the VA does not have a minimum credit score. Applicants may qualify with a score below 620 when debt, income, and the ability to shoulder future mortgage payments are given a close look.
Down payment assistance programs often require a minimum credit score of 620.
Photo credit: iStock/Paperkites
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SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Inside: Learn how much your 45k salary is hourly. Plus find tips to make more money and live the lifestyle you want.
You want to know to look into this… Is 45k salary a solid hourly wage in today’s society?
45k salary is a solid hourly wage.
For most people, a solid entry-level job with a degree or certification would be paying just over $45,000 a year. The question that remains is can you make a living off $45k a year.
The median household income was $70,084 in 2021 not much different from the previous year (source). Think of it as a bell curve with $70 at the top; the median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $55,350 for a 40-hour workweek; that is an increase of 1.1% from the previous year (source). That means if you take everyone’s income and divide the money out evenly between all of the people.
But, the question remains… can you truly live off 45,000 per year in today’s society since it is well below both the average and median household incomes? The question you want to ask all of your friends is $45000 per year a good salary.
In this post, we are going to dive into everything that you need to know about a $45000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $45k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this $45k salary?
$45000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 45k a year hourly. That way you can decide whether or not the job is worthwhile for you. The same is true when getting your first job out of college.
For our calculations to figure out how much is 45K salary hourly, we used the average five working days of 40 hours a week.
45000 salary / 2080 hours = $21.63 per hour
$45000 a year is $21.63 per hour
Let’s breakdown how that 45000 salary to hourly number is calculated.
Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $45000 by 2,080 working hours and the result is $21.63 per hour.
Just above $21 an hour.
That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $5K, it would increase your hourly wage to just under $25 an hour – a difference of $2.41 per hour.
To break it down – 45k a year is how much an hour = $21.63
That difference will help you fund your savings account; just remember every dollar adds up.
How Much is $45K salary Per Month?
On average, the monthly amount would be $3,750.
Annual Salary of $45,000 ÷ 12 months = $3,750 per month
This is how much you make a month if you get paid 45000 a year.
$45k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $45k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$45000/52 weeks = $865 per week.
$45000 a year is how much biweekly?
For this calculation, take the average weekly pay of $865 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.
8 hours x 52 weeks = 260 working days
Annual Salary of$45000 / 260 working days = $173 per day
If you work a 10 hour day on 208 days throughout the year, you make $216 per day.
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$45000 Salary is…
$45000 – Full Time
Total Income
Yearly Salary (52 weeks)
$45,000
Monthly Wage
$3,750
Weekly Salary (40 Hours)
$865
Bi-Weekly Wage (80 Hours)
$1,730
Daily Wage (8 Hours)
$173
Daily Wage (10 Hours)
$216
Hourly Wage
$21.63
Net Estimated Monthly Income
$2,863
Net Estimated Hourly Income
$16.52
**These are assumptions based on simple scenarios.
45k a year is how much an hour after taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $142,800.
When you make below the average household income, the amount of taxes taken out hurts your hourly wage.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 45000 a year after taxes?
Gross Annual Salary: $45,000
Federal Taxes of 12%: $5,400
State Taxes of 4%: $1,900
Social Security and Medicare of 7.65%: $3,442.50
$45k Per Year After Taxes is $34,357.50
This would be your net annual salary after taxes.
Hourly Wage After Taxes
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$34,357.50 ÷ 2,080 hours = $16.52 per hour
After estimated taxes and FICA, you are netting $34,357.50 per year, which is $10,642.50 per year less than what you expected. That is significant!
Budgeting on $16 an hour is much different!
Taxes Based on Your State
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody who lives in a no-tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $45000 income can range from $30,757 to $36,157 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously, you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $45,000 income.
How Much is 45K a year Hourly Salary Calculator
More than likely, your salary is not a flat 45k, here is a tool to convert salary to hourly calculator.
Many entry-level jobs start at this range, which may make you believe that a business degree is worth it.
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person? And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $45,000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.
As we noted earlier in the post, $45,000 a year is slightly below the average income that you would find in the United States. Thus, you have to be wise with how you spend your money.
What a $45,000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
You are able to rent in a decent neighborhood in LCOL and maybe an MCOL city.
Looking for ways to invest 100 to make 1000 a day.
Foucs on being financially stable.
You should be able to meet your expenses each and every month.
Ability to make sure that saving money is a priority, and very possibly save $3000 in 52 weeks.
When A $45,000 Salary Will Hold you Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 45k a year is going to be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending and extra expenses.
Break the paycheck to paycheck cycle.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
Find low-stress jobs that pay well without a degree now.
$45K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money is left for fun spending.
This is how zero based budgeting works.
If you want to know how to manage 45k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $45000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$206
Savings
15-25%
$563
Housing
20-30%
$1069
Utilities
4-7%
$150
Groceries
5-12%
$313
Clothing
1-4%
$38
Transportation
4-10%
$131
Medical
5-12%
$225
Life Insurance
1%
$19
Education
1-4%
$38
Personal
2-7%
$38
Recreation / Entertainment
3-8%
$75
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$887
Total Gross Monthly Income
$3,750
**In this budget, prioritization was given to basic expenses and no debt.
Is $45,000 a year a Good Salary?
As we stated earlier if you are able to make $45,000 a year, that is a decent salary. You are making way more money than the minimum wage and close to double in many cities.
While 45000 is a good salary starting out in your working years. It is a salary that you want to increase before your expenses go up or the people you provide for increase.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $45k salary would be considered a lower middle class salary. This salary is something that you can live on if you are wise with money.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).
The question you need to ask yourself with your 45k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in many modest cities, 45,000 a year will not be a good salary because the cost of living is so high, whereas these are some of the cities where you can make a comfortable living at 45,000 per year.
If you are looking for a career change, you want to find jobs paying at least $60000 a year.
Is 45k a good salary for a Single Person?
Simply put, yes.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $45000 per year.
And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.
Is 45k a good salary for a family?
Many of the same principles apply above on whether $45000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child.
That means that amount of money is coming out of the income that you earned.
So, the question really remains… Can you provide a good life for your family making $45,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Your lifestyle choices.
You can live comfortably as a family on this salary, but you will not be able to afford everything.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 45,000 per year, then the combined income for the household would be $90,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on $45000 Per Year?
As we outlined earlier in the post, $45,000 a year:
$21.63 Per Hour
$173-216 Per Day (depending on length of day worked)
$865 Per Week
$1,730 Per Biweekly
$3,750 Per Month
Next up is making $50,000 a year.
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than in Oklahoma or even Texas.
In addition, if you are early in your career, starting out around 41,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 20 years and still making $45K, then you probably need to look at asking for pay increases, pick up a second job, or find a different career path.
Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
Learn exactly how much do I make per year…
One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.
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One of the best things you can do for your future self is to save for retirement. Unfortunately, recent research indicates that a significant portion of Americans are falling short in this area. According to a 2023 survey, about 22% of Americans have less than $5,000 in retirement savings.
This highlights the importance of early and consistent financial planning for your post-working years. It’s never too early to start thinking about your financial future, and actively contributing to your retirement savings is essential.
If you’re looking for a way to sock money away for retirement, your 403(b) plan could be just what you need. These retirement plans are offered by employers in the nonprofit sector and some other careers, like public education and healthcare. If your employer offers a 403(b) plan, here’s what to expect.
Key Takeaways
A 403(b) plan is a retirement savings plan available to employees of tax-exempt organizations, public schools, and certain other employers. It functions similarly to a 401(k) but is specifically designed for the nonprofit sector.
Contributions to a 403(b) are automatically deducted from your paycheck, can be made pre-tax (traditional) or after-tax (Roth), and may be matched by your employer, providing significant potential for growth through compounding returns and employer contributions.
While 403(b) plans offer advantages like tax benefits and employer matching, they have contribution limits and penalties for early withdrawals, and the investment options are usually limited to mutual funds and annuities, which may carry higher fees.
403(b) Plan
A 403(b) is sometimes called a Tax-Sheltered Annuity (TSA) plan. For practical purposes, it’s basically a 401(k) plan for people who work for qualifying tax-exempt organizations, certain hospital organizations, or employees of public schools. Government employees, church workers, and even librarians might also have access to a 403(b) plan.
See also: What’s the Difference Between a 401(k) and 403(b)?
Your employer chooses what type of plan they are willing to offer, so you can’t choose to participate in a 401(k) instead. Your 403(b) plan will come with different investment options, usually in the form of mutual funds that allow you to create a portfolio that matches your risk tolerance.
However, it’s important to understand that the annuity agreement involved makes for a couple of tricky situations that might not apply to other retirement plans:
Withdrawals are subject to a 20% federal income tax withholding, except in specific circumstances.
To dissolve the annuity investment aspect of a 403(b), there might be a surrender charge of up to 8%.
Speaking with a professional to help you with these situations can help you understand some of the quirks involved.
How does a 403(b) work?
Your employer will automatically deduct your contributions to the 403(b) from your paycheck in many cases. This deduction is usually expressed as a percentage. For example, if you make $2,500 each paycheck and want your employer to withhold 4% of your income, $100 will be diverted to your retirement account each payday.
If you choose a traditional 403(b) arrangement, your employer will deduct your contribution from your pay before taxes are figured. This reduces your tax bill today, but you’ll still have to pay income taxes when you withdraw money later. On the other hand, your employer might offer a Roth option, which doesn’t result in a tax benefit today. Instead, your money grows tax-free, and you won’t have to pay taxes when you withdraw.
Some employers also match your contributions. For example, they may match a certain percentage of your income or offer a dollar-for-dollar match up to a cap. Either way, an employer match on your plan is free money that you can put toward your retirement.
Thanks to compounding returns, the money grows over time, and you have a chance to build wealth, so you have financial resources when you quit working. It’s possible to adjust how much you save by letting your human resources representative know, or by managing your contributions through your employer’s online benefits portal.
403(b) Contribution Limits
The government wants to encourage retirement saving, so they offer tax advantages when you contribute to a 403(b) plan. However, you can’t just put everything into a tax-advantaged plan. Your 403(b) comes with limits.
For 2024, you can contribute up to 23,000 a year, which is a $500 increase over the 2023 limit. If you’re age 50 or over, you can make extra contributions totaling $7,500 a year in 2024. The combined employer and employee contributions can be a maximum of either $69,000 or 100% of your most recent yearly salary, whichever amount is lower.
The IRS also allows for additional catch-up contributions if you’ve given 15 years of service with an employer. Pay attention to the contribution limits and your employer’s plan so you can take advantage of what’s available to you.
When can you withdraw money from your 403(b)?
Because your 403(b) is a retirement plan, you can’t just take money out when you want — at least not without paying a penalty. If you withdraw money before reaching age 59 ½, you’ll have to pay taxes, and the IRS will charge you an extra 10% penalty. The only exception is if you have a Roth account. At that point, as long as the account is at least five years old, you can withdraw your contributions without penalty.
Be aware, too, that when you reach age 70 ½, you’ll have to start taking Required Minimum Distributions (RMDs) from your non-Roth 403(b). The government uses a formula to determine how much you should be taking each year in RMDs. You’ll have to pay taxes on the amount, as with any other tax-deferred retirement plan withdrawal.
As you approach retirement and begin figuring out how much money to withdraw and which accounts to start with, consult a retirement professional. A knowledgeable professional can help you manage your different accounts and figure out how withdrawals interact with Social Security benefits.
What happens if you leave your job?
You might have a vesting requirement with your 403(b). Vesting requires you to be with an employer for a set amount of time before you get to keep all the money from the match. However, the money you contribute on your own is not subject to vesting.
In some cases, you might be able to keep your money in the 403(b) account, even after you leave. However, you can’t make new contributions. As a result, it might make sense to roll your money into an IRA. That will allow you to keep growing the account and control where the money is invested.
How much should you contribute to your 403(b) plan?
Putting money into an employer-sponsored retirement plan is one of the easiest ways to save. It comes out of your paycheck, so you don’t have to think about it. However, you might be concerned about how much you can afford to divert from other goals.
A good place to start is to maximize your employer match. If your employer will match your contributions up to 3% of your income, consider saving 3% of your income. That way, you at least get some additional free money going toward your financial future.
If your employer doesn’t offer matching contributions, your 403(b) is not required to meet the burdensome oversight rules of the Employee Retirement Income Security Act (ERISA). This means you could have lower administrative fees than you would with 401(k)s or other funds subject to greater oversight.
Factors to Consider
Next, you need to consider different factors related to your current situation. Some things to keep in mind as you determine how much to put into your 403(b) include:
Debt: High-interest debt can weigh you down. It’s ok to save a little less for retirement in the name of paying down debt faster. You can work toward both goals, but just know where the bulk of your focus should be, based on your goals.
Emergency fund: Once you have a baseline established for retirement saving, you might want to focus on another goal. Consider building at least three to six months’ worth of expenses in an emergency fund.
Other savings goals: Maybe you have goals like buying a home or starting a college fund. You don’t want to put your own retirement at risk to pay for your child’s college, though. Think about what you want your money to accomplish, and then go from there.
Once your goals are met, return to the 403(b) and considerably boost your retirement savings. It’s a good idea to increase your retirement savings each time your finances improve, or you get a raise.
How to Invest in a 403(b)
The investment options available in a 403(b) plan are generally more limited compared to other tax-advantaged retirement plans. These options typically include mutual funds and annuities.
Unlike 401(k) plans, it is not typically possible to invest in individual stocks, exchange-traded funds (ETFs), or real estate investment trusts (REITs) through a 403(b) plan. However, many 403(b) plans do offer low-cost bond and stock index funds, which are often recommended by financial experts for retirement investing.
To determine the right mix of stock and bond funds, you should consider your age, risk tolerance, and the amount of time you have before retirement. As you get closer to retirement, it may be appropriate to increase the proportion of bond funds in your portfolio.
Target-date funds, which are mutual funds that automatically adjust their holdings to suit your target retirement date, can be a good choice if they are offered by your 403(b) plan. Alternatively, you can consider investing in an annuity through your 403(b).
However, it is important to be aware that annuities can be complex financial instruments with high fees and potentially lower returns than other options. It is a good idea to speak with a financial advisor before deciding to invest in an annuity.
If your 403(b) plan does not offer the investment options you want, consider using an individual retirement account (IRA) to supplement your portfolio. If your employer offers a matching contribution to your 403(b) plan, ensure that you are contributing enough to take advantage of this benefit before investing in an IRA.
Are there other ways to prepare for retirement?
A 403(b) is not the only way to save for retirement. In fact, you should consider retirement planning holistically, working it into your other short-term and long-term money goals.
In addition to using a 403(b), you can also open an IRA to set aside money in an account that you have more control over. If you qualify, you might also be able to use a Health Savings Account to begin saving up for healthcare costs in retirement.
Please keep in mind that you might have other accounts from previous jobs. Rolling them all into one IRA can help you consolidate the money to more effectively plan for the future. Make sure you consider taxable investment accounts, savings accounts, pensions, and even Social Security benefits in your planning.
For the most part, though, the first step is getting in the habit of saving money. You might not feel like you have “enough” money to invest for retirement. This isn’t true. Even if you only set aside 1% of your income, it’s still better than nothing.
Here are some tips for managing your retirement portfolio:
Work toward increasing your contribution a bit each year.
Review your accounts once a year and rebalance as needed.
Consolidate accounts to reduce fees and improve management.
Be realistic about your retirement needs and plan accordingly.
Incorporate other financial goals and prioritize retirement.
Use windfalls, bonuses, and other unexpected income sources to pad your account.
Bottom Line
The earlier you start saving for retirement, the less you have to contribute each month to meet your goals. However, it’s better to start late than never. Put as much as you can into your 403(b) from the get-go, taking special advantage of any employer match. As you develop the habit of setting goals and saving for them, you’ll position yourself for financial success.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
30k salary is a solid hourly wage; above most minimum hourly wage jobs.
For most people, an entry-level job would be paying just over $30,000 a year. The question that remains is can you make a living off $30k a year.
The median household income is $70,784 in 2021 and increased with hot inflation over the past couple of years (source). Think of it as a bell curve with $71K at the top; the median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $55,640 for a 40-hour workweek; that is an increase of 6.9% from the previous year (source). That means if you take everyone’s income and divided the money evenly between all of the people.
But, the question remains can you truly live off 30,000 per year in today’s society since it is well below both the average and median household incomes. The question you want to ask all of your friends is $30000 per year a good salary.
In this post, we are going to dive into everything that you need to know about a $30000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $30k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this salary?
$30000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 30k a year hourly. That way you can decide whether or not the job is worthwhile for you.
30000 salary / 2080 hours = $14.42 per hour
$30000 a year is $14.42 per hour
Let’s breakdown how that 30000 salary to hourly number is calculated.
For our calculations to figure out how much is 30K salary hourly, we used the average five working days of 40 hours a week.
Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $30000 by 2,080 working hours and the result is $14.42 per hour.
Between $14 an hour and $15 an hour.
That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $5K to $35K per year, it would increase your hourly wage to almost $17 an hour – a difference of $2.41 per hour.
To break it down – 35k a year is how much an hour = $16.83
That difference will help you fund your savings account; just remember every dollar adds up.
How Much is $30K salary Per Month?
On average, the monthly amount would be $2,500.
Annual Salary of $30,000 ÷ 12 months = $2,500 per month
This is how much you make a month if you get paid 30000 a year.
$30k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of a $30k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$30000/52 weeks = $577 per week.
$30000 a year is how much biweekly?
For this calculation, take the average weekly pay of $577 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.
8 hours x 52 weeks = 260 working days
Annual Salary of$30000 / 260 working days = $115 per day
If you work a 10 hour day on 208 days throughout the year, you make $144 per day.
$30000 Salary is…
$30000 – Full Time
Total Income
Yearly Salary (52 weeks)
$30,000
Monthly Salary
$2,500
Weekly Wage (40 Hours)
$577
Bi-Weekly Salary (80 Hours)
$1,154
Daily Wage (8 Hours)
$115
Daily Wage (10 Hours)
$144
Hourly Wage
$14.42
Net Estimated Monthly Income
$1,909
Net Estimated Hourly Income
$11.01
**These are assumptions based on simple scenarios.
30k a year is how much an hour after taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $160,200.
When you make below the average household income, the amount of taxes taken out hurts your hourly wage.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 30000 a year after taxes?
Gross Annual Salary: $30,000
Federal Taxes of 12%: $3,600
State Taxes of 4%: $1,200
Social Security and Medicare of 7.65%: $2,395
$30k Per Year After Taxes is $22,905.
This would be your net annual salary after taxes.
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$22,905 ÷ 2,080 hours = $11.01 per hour
After estimated taxes and FICA, you are netting $22,905 per year, which is $7,095 per year less than what you expect.
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
Taxes Based On Your State
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody that lives in a no tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $30000 income can range from $20,505 to $24,105 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $30,000 income.
How Much Is 30K A Year Hourly Salary Calculator
More than likely, your salary is not a flat 30k, here is a tool to convert salary to hourly calculator.
You can find many early morning jobs in this salary range and some pay this part time!
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person. And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $30,000 a year is going to be extremely difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can afford the cost of living and maybe save more money. Thus, you have more fun spending left in your account each month.
As we noted earlier in the post, $30,000 a year is well below the average income that you would find in the United States. Thus, you have to be wise with how you spend your money.
What a $30,000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
You are able to rent in a decent neighborhood in LCOL.
You should be able to meet your basic expenses each and every month.
Save money with the 50 envelope challenge.
Not be able to afford many of the fun spending luxuries.
Ability to make sure that saving money is a priority, and very possibly save $1000 in 52 weeks.
When A $30,000 Salary Will Hold you Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 30k a year is going to be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending and extra expenses.
Break the paycheck to paycheck cycle.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
$30K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money leftover is left for fun spending.
If you want to know how to manage 30k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $30000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$125
Savings
15-25%
$375
Housing
20-30%
$725
Utilities
4-7%
$100
Groceries
5-12%
$209
Clothing
1-4%
$25
Transportation
4-10%
$88
Medical
5-12%
$150
Life Insurance
1%
$13
Education
1-4%
$25
Personal
2-7%
$25
Recreation / Entertainment
3-8%
$50
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$591
Total Gross Monthly Income
$2,250
**In this budget, prioritization was given to basic expenses and no debt.
Is $30,000 a year a Good Salary?
As we stated earlier if you are able to make $30,000 a year, that is a low salary. You are making around or just above minimum wage.
While 30000 is a decent salary just starting out in your working years, it is a salary that you want to rapidly increase before your expenses go up or the people you provide for increase. If not, you will be left working multiple jobs to make ends meet.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $30k salary would be considered a lower class salary. You must make each dollar count in your budget.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).
The question you need to ask yourself with your 30k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in many modest cities a 30,000 a year is not a good salary because the cost of living is so high, whereas these are some of the cities where you can make a decent living at 30,000 per year.
If you are looking for a career change, you want to find jobs paying at least 38000 a year.
Is 30k a good salary for a Single Person?
Simply put, you can make it work.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live comfortably on $30000 per year.
And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.
Is 30k a good salary for a family?
Many of the same principles apply above on whether $30000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
At the 30K salary with a family, you would need more than one income stream to make this possible without government help.
The cost of raising a child is expensive! Any of us can relate to that!
Did you know raising a child born in 2015 is $233,610 (source). That is from birth to the age of 17 and this does not include college.
Each child can put a dent in your income, specifically $12,980 annually per child.
That means that amount of money is coming out of the income that you earned.
So, the question really remains is can you provide a good life for your family making $30,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Desire to improve your career and make more money.
Your lifestyle choices.
You will not be able to afford everything on this salary.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 30,000 per year, then the combined income for the household would be $60,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on 30000 Per Year?
As we outlined earlier in the post, $30000 a year:
$14.42 Per Hour
$115-144 Per Day (depending on length of day worked)
$577 Per Week
$1,154 Per Biweekly
$2,500 Per Month
Next up is making $32000 a year!
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a lower-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than Oklahoma or even Texas.
In addition, if you are early in your career, starting out around 29,000 a year, that is an okay place to be getting your career. However, if you have been in your career for over 20 years and still making $30K, then you probably need to look at asking for pay increases, picking up a second job, or finding a different career path.
Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.
As an Amazon Associate and member of other affiliate programs, I earn from qualifying purchases.
This is the perfect side hustle if you don’t have much time, experience, or money.
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Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Homebuyers retreated from the market for the week ending May 31 as they balked at high mortgage rates, sending applications for home loans plunging during what is typically the hot season for the housing sector.
Read more: How Much House Can You Afford?
Applications for mortgages fell by more than 5 percent compared to the prior week, according to the Mortgage Bankers Association (MBA). Refinancing of home loans also fell 7 percent, while the Purchase Index, which focuses on buying activity independent of those looking to change terms on their loans, dropped 4 percent.
The depressed activity in the mortgage market came amid rising costs of home loans, Mike Fratantoni, MBA’s chief economist, said in a note shared with Newsweek.
“Mortgage rates moved slightly higher last week, with the 30-year conforming rate reaching 7.07 percent—its highest level since early May—despite incoming data indicating somewhat slower economic growth,” Fratantoni said. “After adjusting for the Memorial Day holiday, both purchase and refinance application volumes were down, with purchase activity specifically 13 percent below last year’s level.”
Home loan applications across the different mortgage market segments were down, though some less than others.
Read more: Guide to FHA Loans
“Government purchase volume was down less, helped by growth in VA applications. The market is relying on first-time homebuyer demand, and many first-time buyers do use government lending programs,” Fratantoni added.
The decline in mortgage applications echoed recent market trends that show buyers are staying out of the market amid rates that are at their highest in close to two decades. Sales of homes are down during the spring season, a time of the year that typically tends to be highly active.
Homes in a residential neighborhood on September 15, 2022, in Pearland, Texas. Buyers are staying out of the market amid elevated mortgage rates. Homes in a residential neighborhood on September 15, 2022, in Pearland, Texas. Buyers are staying out of the market amid elevated mortgage rates. Brandon Bell/Getty Images
Mortgage rates are elevated while price of homes are also expensive, a double whammy for buyers interested in purchasing property.
Read more: Compare the Best Mortgages for First-Time Homebuyers
One development that experts note has been growing is lower-priced properties that are smaller, offering an opportunity for first-time homebuyers. While price per square foot is still rising, the share of homes priced between $200,000 to $350,000 available in the market is increasing, according to Realtor.com’s chief economist, Danielle Hale.
“We have seen the number of homes, that are priced in those lower price categories, are a growing share of what’s on the market,” Hale told Newsweek recently. “So that means, even though prices are still going up on a per-square-foot basis, there are more options in that affordable price tier which tend to be smaller homes and so that is good for entry-level buyers.”
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Inside: Learn $35000 a year is how much an hour. Plus find an 35k salary budget to live the lifestyle you want.
You want to know to look into this…35k salary is a solid hourly wage; above most minimum hourly wage jobs.
For most people, an entry-level job would be paying just over $35,000 a year. The question that remains is can you make a living off $35k a year?
The median household income was $70,084 in 2021 not much different from the previous year (source). Think of it as a bell curve with $70 at the top; the median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $55,350 for a 40-hour workweek; that is an increase of 1.1% from the previous year (source). That means if you take everyone’s income and divide the money out evenly between all of the people.
But, the question remains… Can you truly live off 35,000 per year in today’s society since it is well below both the average and median household incomes? The question you want to ask all of your friends is $35000 per year a good salary.
In this post, we are going to dive into everything that you need to know about a $35000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $35k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this salary?
$35000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 35k a year hourly. That way you can decide whether or not the job is worthwhile for you.
35000 salary / 2080 hours = $16.83 per hour
$35000 a year is $16.83 per hour
Let’s breakdown how that 35000 salary to hourly number is calculated.
For our calculations to figure out how much is 35K salary hourly, we used the average five working days of 40 hours a week.
Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $35000 by 2,080 working hours and the result is $16.83 per hour.
Just below $17 an hour.
That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $5K to $40K per year, it would increase your hourly wage to almost $19 an hour – a difference of $2.40 per hour.
To break it down – 40k a year is how much an hour = $19.23
That difference will help you fund your savings account; just remember every dollar adds up.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
How Much is $35K salary Per Month?
On average, the monthly amount would be $2,916.
Annual Salary of $35,000 ÷ 12 months = $2,916 per month
This is how much you make a month if you get paid 35000 a year.
$35k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $35k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$35000/52 weeks = $673 per week.
Here are jobs that pay weekly.
$35000 a year is how much biweekly?
For this calculation, take the average weekly pay of $673 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.
8 hours x 52 weeks = 260 working days
Annual Salary of$35000 / 260 working days = $134 per day
If you work a 10 hour day on 208 days throughout the year, you make $168 per day.
$35000 Salary is…
$35000 – Full Time
Total Income
Yearly Salary (52 weeks)
$35,000
Monthly Salary
$2,916
Weekly Wage (40 Hours)
$673
Bi-Weekly Wage (80 Hours)
$1,346
Daily Wage (8 Hours)
$134
Daily Wage (10 Hours)
$168
Hourly Wage
$16.83
Net Estimated Monthly Income
$2,227
Net Estimated Hourly Income
$12.85
**These are assumptions based on simple scenarios.
Do you know how many work days in a year you work? This answer may surprise you.
35k a year is how much an hour after taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $142,800.
When you make below the average household income, the amount of taxes taken out hurts your hourly wage.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 35000 a year after taxes?
Gross Annual Salary: $35,000
Federal Taxes of 12%: $4,200
State Taxes of 4%: $1,400
Social Security and Medicare of 7.65%: $2,667.50
$35k Per Year After Taxes is $26,722.50
This would be your net annual salary after taxes.
Hourly Salary After Taxes
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$26,722.50 ÷ 2,080 hours = $12.85 per hour
After estimated taxes and FICA, you are netting $26,722 per year, which is $8,277 per year less than what you expect.
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
Taxes Based On Your State
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody who lives in a no tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $35000 income can range from $23,922 to $28,122 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take-home pay. It is one of those things that you should acknowledge and obviously, you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $35,000 income.
How Much Is 35K A Year Hourly Salary Calculator
More than likely, your salary is not a flat 35k, here is a tool to convert your salary to hourly calculator.
Many entry level jobs start at this range, which may make you believe that a business degree is worth it.
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person? And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $35,000 a year is going to be extremely difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can afford the cost of living and maybe save more money. Thus, you have more fun spending left in your account each month.
As we noted earlier in the post, $35,000 a year is well below the average income that you would find in the United States. Thus, you have to be wise with how you spend your money.
What a $35,000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
You are able to rent in a decent neighborhood in LCOL.
Driving a beater car is normal.
You should be able to meet your basic expenses each and every month.
The focus is on becoming financially sound.
Not be able to afford many of the fun spending luxuries.
Ability to make sure that saving money is a priority, and very possibly save $5000 in one year.
When A $35,000 Salary Will Hold You Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 35k a year is going to be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending and extra expenses.
Break the paycheck to paycheck cycle.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
$35K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money is left for fun spending.
If you want to know how to manage a 35k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $35000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$160
Savings
15-25%
$438
Housing
20-30%
$817
Utilities
4-7%
$117
Groceries
5-12%
$244
Clothing
1-4%
$29
Transportation
4-10%
$117
Medical
5-12%
$175
Life Insurance
1%
$15
Education
1-4%
$29
Personal
2-7%
$29
Recreation / Entertainment
3-8%
$58
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$690
Total Gross Monthly Income
$2,917
**In this budget, prioritization was given to basic expenses and no debt.
Is $35,000 a year a Good Salary?
As we stated earlier if you are able to make $35,000 a year, that is a low salary. You are making around or just above minimum wage.
While 35000 is a decent salary just starting out in your working years, it is a salary that you want to rapidly increase before your expenses go up or the people you provide for increase. If not, you will be left working multiple jobs to make ends meet.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $35k salary would be considered a lower class salary. You must make each dollar count in your budget.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).
The question you need to ask yourself with your 35k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in many modest cities, 35000 a year is not a good salary because the cost of living is so high, whereas these are some of the cities where you can make a decent living at 35,000 per year.
If you are looking for a career change, you want to find jobs paying at least $45000 a year.
Is 35k a good salary for a Single Person?
Simply put, you can make it work.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live comfortably on $35000 per year.
And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.
Is 35k a good salary for a family?
Many of the same principles apply above on whether $35000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
At the 35K salary with a family, you would need more than one income stream to make this possible without government help.
The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child and this does not include college.
That means that amount of money is coming out of the income that you earned.
So, the question really remains… can you provide a good life for your family making $35,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Desire to improve your career and make more money.
Your lifestyle choices.
You will not be able to afford everything on this salary.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 35,000 per year, then the combined income for the household would be $70,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on 35000 Per Year?
As we outlined earlier in the post, $35,000 a year:
$16.83 Per Hour
$134-168 Per Day (depending on the length of day worked)
$673 Per Week
$1,346 Per Biweekly
$2,916 Per Month
Next up is making $40,000 a year.
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a lower-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than Oklahoma or even Texas.
In addition, if you are early in your career, starting out around 32,000 a year, that is an okay place to be getting your career. However, if you have been in your career for over 20 years and still making $35K, then you probably need to look at asking for pay increases, picking up a second job, or finding a different career path.
Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
Learn exactly how much do I make per year…
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A self-directed IRA (SIDRA) allows you to save money for retirement on a tax-advantaged basis while enjoying access to a broader range of investments. Opening a self-directed IRA for real estate investing is an opportunity to diversify your portfolio with an alternative asset class while potentially generating higher returns.
Using a self-directed IRA to invest in real estate offers the added benefit of either tax-deferred growth or tax-free withdrawals in retirement, depending on whether it’s a traditional or Roth IRA. Before making a move, however, it’s important to know how they work. The IRS imposes self-directed IRA real estate rules that investors must follow to reap tax benefits.
What Is a Self-Directed IRA?
Individual Retirement Accounts (IRAs) allow you to set aside money for retirement with built-in tax benefits. These retirement accounts come in two basic forms: traditional and Roth.
Traditional IRAs allow for tax-deductible contributions, while Roth IRAs let you make qualified distributions tax-free.
When you open a traditional or Roth IRA at a brokerage you might be able to invest in mutual funds, exchange-traded funds, or bonds. A self-directed IRA allows you to fund your retirement goals with alternative investments — including real estate.
You can do the same thing with a self-directed 401(k).
Self-directed IRAs have the same contribution limits as other IRAs. For 2024, you can contribute up to:
• $7,000 if you’re under 50 years of age
• $8,000 if you’re 50 or older
Contributions and withdrawals are subject to the same tax treatment as other traditional or Roth IRAs. The biggest difference between a self-directed IRA and other IRAs is that while a custodian holds your account, you manage your investments directly.
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How Self-Directed IRAs for Real Estate Investing Work
Using a self-directed IRA to invest in real estate allows investors to invest in various funds or securities that, themselves, invest in property or real estate. Those securities may be real estate investment trusts (REITs), mutual funds, or ETFs focused. Investors with self-directed IRAs can, then, direct retirement account funds toward those securities.
Other types of real estate investments can include single-family homes, multi-family homes, apartment buildings, or commercial properties — actual, physical property. For investors who do want to buy actual property using an IRA, the process generally involves buying the property with cash (which may require them to liquidate other investments first), and then taking ownership, which would all transact through the IRA itself. It’s not necessarily easy and can be complicated, but that’s the gist of it.
With that in mind, the types of investments you can make within an IRA will depend on your goals.
For instance, if you’re interested in generating cash flow you might choose to purchase one or more rental properties using a self-directed IRA for real estate. If earning interest or dividends is the goal, then you might lean toward mortgage notes and REIT investing instead.
The most important thing to know is that if you use a retirement account to invest in real estate, there are some specific rules you need to know. For instance, the IRS says that you cannot:
• Use your retirement account to purchase property you already own.
• Use your retirement account to purchase property owned by anyone who is your spouse, family member, beneficiary, or fiduciary.
• Purchase vacation homes or office space for yourself using retirement account funds.
• Do work, including repairs or improvements, on properties you buy with your retirement account yourself.
• Pay property expenses, such as maintenance or property management fees, from personal funds; you must use your self-directed IRA to do so.
• Pocket any rental income, dividends, or interest generated by your property investments; all income must go to the IRA.
Violating any of these rules could cause you to lose your tax-advantaged status. Talking to a financial advisor can help you make sense of the rules.
Pros and Cons of Real Estate Investing Through an IRA
Using a self-directed IRA for real estate investing can be appealing if you’re ready to do more with your portfolio. Real estate offers diversification benefits as well as possible inflationary protection, as well as the potential for consistent passive income.
However, it’s important to weigh the potential downsides that go along with using a self-directed IRA to buy real estate.
Pros
Cons
• Self-directed IRAs for real estate allow you to diversify outside the confines of traditional stocks, bonds, and mutual funds.
• You can establish a self-directed IRA as a traditional or Roth account, depending on the type of tax benefits you prefer.
• Real estate returns can surpass those of stocks or bonds and earnings can grow tax-deferred or be withdrawn tax-free in retirement, in some cases.
• A self-directed IRA allows you to choose which investments to make, based on your risk tolerance, goals, and timeline.
• The responsibility for due diligence falls on your shoulders, which could put you at risk of making an ill-informed investment.
• Failing to observe self-directed IRA rules could cost you any tax benefits you would otherwise enjoy with an IRA.
• The real estate market can be unpredictable and investment returns are not guaranteed — they’re higher-risk investments, typically. Early withdrawals may be subject to taxes and penalties, and there may be higher associated fees.
• Self-directed IRAs used for real estate investing are often a target of fraudulent activity, which could cause you to lose money on investments.
Using a self-directed IRA for real estate or any type of alternative investment may involve more risk because you’re in control of choosing and managing investments. For that reason, this type of account is better suited for experienced investors who are knowledgeable about investment properties, rather than beginners.
Real Estate IRAs vs Self-directed IRAs For Real Estate Investing
A real estate IRA is another way of referring to a self-directed IRA that’s used for real estate investment. The terms may be used interchangeably and they both serve the same purpose when describing what the IRA is used for.
Again, the main difference is how investments are selected and managed. When you open a traditional or Roth IRA at a brokerage, the custodian decides which range of investments to offer. With a self-directed IRA, you decide what to invest in, whether that means investing in real estate or a different type of alternative investment.
💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.
Opening an IRA With SoFi
Opening a self-directed IRA is an option for many people, and the sooner you start saving for retirement, the more time your money has to grow. And, as discussed, a self-directed IRA allows you to save money for retirement on a tax-advantaged basis while enjoying access to a broader range of investments, including real estate.
Once again, using a self-directed IRA to invest in real estate offers the added benefit of tax-deferred growth and tax-free withdrawals in retirement. There are pros and cons, and rules to abide by, but these types of accounts are another option for investors.
Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.
FAQ
Can you use a self-directed IRA for real estate?
You can use a self-directed IRA to invest in real estate-related or -focused securities and other types of alternative investments. Before opening a self-directed IRA to invest in real estate, it’s important to shop around to find the right custodian. It’s also wise to familiarize yourself with the IRS self-directed IRA real estate rules.
What are the disadvantages of holding real estate in an IRA?
The primary disadvantage of holding real estate in an IRA is that there are numerous rules you’ll need to be aware of to avoid losing your tax-advantaged status. Aside from that, real estate is less liquid than other assets which could make it difficult to exit an investment if you’d like to remove it from your IRA portfolio.
What are you not allowed to put into a self-directed IRA?
The IRS doesn’t allow you to hold collectibles in a self-directed IRA. Things you would not be able to hold in a self-directed IRA include fine art, antiques, certain precious metals, fine wines, or other types of alcohol, gems, and coins.
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Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
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Mortgage interest rates were mixed compared to last week, according to rate data compiled by Bankrate. Read on for a breakdown of how each loan type moved.
The tune has changed around the direction of mortgage rates. The movement of fixed mortgage rates parallels the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy, inflation and Federal Reserve decisions. At the close of the latest Fed meeting on May 1, policymakers held firm and opted not to cut rates. The next announcement from the Fed comes June 12.
“Markets are assuming that the Fed will cut the overnight rate only one time during the rest of 2024,” says Dick Lepre of RealFinity. “Rates will be flat for the rest of 2024.”
Often, though, the decision to buy a home isn’t based on market shifts. It comes down to what you need. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than chancing that buying a home will become more affordable.
Rates as of June 5, 2024.
The rates listed here are Bankrate’s overnight average rates and are based on the assumptions here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, June 5th, 2024 at 7:30 a.m. ET.
30-year mortgage dips, -0.03%
The average rate you’ll pay for a 30-year fixed mortgage today is 7.10 percent, down 3 basis points since the same time last week. Last month on the 5th, the average rate on a 30-year fixed mortgage was higher, at 7.19 percent.
At the current average rate, you’ll pay a combined $672.03 per month in principal and interest for every $100,000 you borrow. That’s lower by $2.03 than it would have been last week.
The 30-year mortgage is the most popular option for homeowners, and this type of loan has a number of advantages:
Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower, more affordable payments spread over time.
Stability: With a 30-year fixed mortgage, you lock in a set principal and interest payment, making it easier to plan your housing expenses for the long term. Remember: Your monthly housing payment can still change if your homeowners insurance premiums and property taxes go up or, less likely, down.
Buying power: With lower payments, you might qualify for a larger loan amountor a more expensive home.
Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
Read more: What is a fixed-rate mortgage and how does it work?
15-year fixed mortgage rate stays put
The average rate you’ll pay for a 15-year fixed mortgage is 6.64 percent, unchanged over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost $879 per $100,000 borrowed. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.
5/1 ARM rate climbs, +0.26%
The average rate on a 5/1 adjustable rate mortgage is 6.82 percent, up 26 basis points from a week ago.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.82 percent would cost about $653 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Jumbo mortgage rate falls, -0.01%
The average jumbo mortgage rate today is 7.21 percent, down 1 basis point over the last seven days. This time a month ago, jumbo mortgages’ average rate was above that at 7.27 percent.
At today’s average jumbo rate, you’ll pay principal and interest of $679.47 for every $100,000 you borrow. Compared with last week, that’s $0.67 lower.
Mortgage refinance rates
30-year mortgage refinance rate drops, -0.05%
The average 30-year fixed-refinance rate is 7.10 percent, down 5 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was higher at 7.20 percent.
At the current average rate, you’ll pay $672.03 per month in principal and interest for every $100,000 you borrow. That represents a decline of $3.38 over what it would have been last week.
Where are mortgage rates heading?
The rates on 30-year mortgages mostly mirror the 10-year Treasury yield, which changes with the market, while the cost of variable-rate home loans more directly mirrors the Fed’s moves.
If and when the Fed cuts interest rates depends on evolving economic data, such as the inflation rate and the jobs market. While inflation has fallen since its peak in 2022, it’s still above the Fed’s target rate of 2 percent, and that doesn’t appear to be changing for now. When it evaluates inflation, the central bank prefers the Personal Consumption Expenditures (PCE) index. The newest PCE report is due out May 31.
“Tepid demand at Treasury auctions and an update to the Fed’s preferred inflation measure on May 31 pose the risk of rates moving up in coming days,” says Greg McBride, Bankrate’s chief financial analyst.
The Consumer Price index (CPI) is another report on inflation that the Fed keeps an eye on. The next CPI report comes out June 12 — the same day as the next Fed announcement.
While the Fed bases its decisions on rate changes due to broader economic factors, your rate is also affected by personal finances. Depending on your credit score, down payment, debts and income, you could be quoted a rate that’s higher or lower than the trend.
What today’s rates mean for you and your mortgage
Mortgage rates fluctuate daily, but it appears that, for now, they will remain above the historical lows of recent years. If you’re shopping for a mortgage, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Coming up with enough cash for a down payment to buy a house can be the single biggest roadblock for prospective home buyers. But how much of a down payment do you really need? That depends on the type of loan, your lender and your priorities.
Mortgage loans from our partners
Mortgage loans from our partners
What is a down payment?
A down payment is the cash you pay upfront to make a large purchase, such as a home. You use a loan to pay the rest of the purchase price over time. Down payments are usually shown as a percentage of the price. A 10% down payment on a $350,000 home would be $35,000.
When applying for a mortgage to buy a house, the down payment is your contribution toward the purchase and represents your initial ownership stake in the home. The mortgage lender provides the rest of the money to buy the property.
Lenders require a down payment for most mortgages. However, some types of loans backed by the federal government may not require down payments. (More on that below.)
Do you need to put 20% down on a house?
You may have heard that you need to make a 20% down payment on a home, but that’s really just the threshold many lenders use for requiring mortgage insurance on a conventional loan. You don’t have to make a 20% down payment to buy a house.
In 2023, the typical down payment for first-time home buyers was 8%, according to the National Association of Realtors. The typical down payment was 19% for repeat buyers.
🤓Nerdy Tip
Making a lower down payment can get you to your goal of homeownership more quickly. However, a higher down payment brings down the principal (and lifetime interest payments), which might cost you less overall. Weigh the pros and cons to decide what’s best for you.
Minimum down payment requirements
The minimum down payment required for a house varies depending on the type of mortgage you plan to apply for to purchase a home.
Minimum down payment required
Conventional
3.5% (with a credit score of at least 580)
10% (with a credit score of 500-579)
Second homes or investment properties
VA and USDA loans: 0% down payment
Guaranteed by the U.S. Department of Veterans Affairs, VA loans usually do not require a down payment. VA loans are for current and veteran military service members and eligible surviving spouses.
USDA loans, backed by the U.S. Department of Agriculture’s Rural Development program, also have no down payment requirement. USDA loans are for rural and suburban home buyers who meet the program’s income limits and other requirements.
Conventional mortgages: As low as 3% down payment
FHA loans:As low as 3.5% down payment
FHA loans, which are backed by the Federal Housing Administration, require as little as 3.5% down if you have a credit score that’s at least 580. If you have a credit score that’s between 500 and 579, FHA loans require a 10% down payment.
Jumbo loans: As low as 5%-10% down payment (varies)
Jumbo loans are home loans that fall outside of the Federal Housing Finance Agency’s conforming loan limits. Because these outsized loans can’t be guaranteed by the GSEs, lenders tend to ask for higher down payments to offset some of the risk.
With low- or no-down-payment loans, you pay for the guarantee through fees or mortgage insurance, depending on the program.
Benefits of a larger down payment
Saving enough money for a substantial down payment takes time, so a zero- or low-down-payment requirement may speed up your ability to buy a home. But making a larger down payment has advantages that include:
A better mortgage interest rate. Lenders may shave a few fractions of a percentage point off your interest rate if you make a larger down payment. When you borrow less of the home’s price, there’s less risk for lenders, and they tend to reward this with more favorable terms.
More equity in your home right away. Your home equity is your home’s value minus the amount you owe on your mortgage. In other words, it’s the extent to which your home is an asset rather than a debt. More equity means more wealth.
A lower monthly mortgage payment. Borrowing less of your home’s price lowers your principal, which also means you’ll pay less interest over the life of the loan.
Lower upfront and ongoing fees. Low- or no-down-payment government-backed mortgage programs reduce lenders’ risk by guaranteeing a portion of the loans. If a borrower defaults on one of these loans, the associated government agency will reimburse the lender. To offset some of that cost, these loans can come with significant one-time costs, like the VA funding fee, or added ongoing costs like FHA mortgage insurance.
How much should you put down on a house?
The right down payment for you depends on your goals and financial situation. While there are plenty of pluses with a larger down payment, putting down too much could leave you strapped for cash after you move in.
Conventional mortgages usually require you to pay for private mortgage insurance if you put down less than 20%. Once you start making mortgage payments, you can ask to cancel PMI after you have over 20% equity in your home.
Try out some different scenarios to help you better understand how changing the size of your down payment can affect other costs.
Other considerations to determine your down payment
Your mortgage payment is just one piece of your overall household budget. With that in mind, here are some other factors to consider when planning for the size of your down payment:
Keep some savings in the bank. Avoid using your entire savings for a down payment. You could end up “house poor,” spending too much of your income servicing your mortgage or depleting your emergency fund.
Don’t forget about closing costs. It’s also important to make sure you have enough cash on hand to cover closing costs, which are usually 2%-6% of the home’s purchase price.
Plan for the ongoing costs of homeownership. Leaving a cushion for home maintenance and repairs, as well as potential emergencies, is a good idea even if you’re purchasing a move-in-ready home. In all, you want to be sure your down payment leaves you with enough room to cover all the costs of buying a house — and furnishing it once you’ve moved in.
Shop around. Do your research and compare mortgage rates from three to five lenders. Don’t forget to look into programs offered by lenders and consider down payment assistance options, especially if you’re a first-time home buyer.
Frequently asked questions
How much is a down payment?
The amount of your down payment varies depending on the cost of the home and what percentage of the offer price you’re making as a payment. Using a down payment calculator can help you easily see down payment amounts and how altering your down payment affects your monthly mortgage payment.
What is the purpose of down payments?
A down payment allows you to make a large purchase, like buying a house, without having to pay all of the money at once. Instead, you pay a percentage of the purchase price upfront and borrow the rest. The loan balance is repaid over time, spreading the cost into manageable monthly payments.
How is a down payment paid?
When you buy a house, the down payment is paid on closing day — the day that you actually transfer money and get the keys to your new home. Your down payment will make up the largest chunk of that money, along with other closing costs. Because it’s a substantial sum, closing costs are usually paid via a wire transfer or cashier’s check.
Inside: Learn how to save 5000 in a year by following this step-by-step guide. You’ll be able to save money for your goals – retirement, vacation, or emergencies.
I started my $5,000 Savings Challenge on February 16th and haven’t missed a day since. I’ve already saved over $3,500 so far – can you beat that?
A savings challenge is just like any other contest or competition that is designed to get people motivated into saving more than what they normally would.
It works by setting short-term goals for yourself (such as opening one additional account per month), rewarding your progress with some kind of prize at the end (in this case, a $5,000 gift card), and tracking your progress with some kind of tool.
The average person spends $1,000 per year on fast food. If you can save that money by eating out less, you could put it towards your retirement fund or any other savings goal.
There is always a reason not to save money, but once you prove to yourself you can save money, that is a gamechanger.
In this post, find out how this $5000 saving challenge works as well as tips for setting goals that will work best for you.
Why Save $5000 in a Year
One of the most common questions I get is “How do you save so much money in a year?”. The number one reason people don’t save is that they think it’s impossible. The truth is, anything in life worth doing takes time and energy to achieve.
Typically when people think about saving money they think of it as a one-time event that would only save them $50-$100, which is not worth the time or effort.
But when you think about saving money as making a small change to your daily life that will lead to long-term savings, it’s a lot less intimidating.
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Reasons to Save $5000 a Year:
I saved 5000 dollars in a year when I started to realize I was spending my money in ways that were frivolous and did not align with my long-term financial goals.
You can do the $5k saving challenge too!
You can fund any of the following by saving 5 grand a year:
You cannot afford to start saving now.
If you want to save more, then start looking at your saving percentage!
How to Save 5000 in a Year
This is how to save $5,000 in a year.
Saving $5,000 in a year is no small feat.
But if you’re feeling excited about what that could do for your future with just this one investment of time and money, you’re not alone.
No matter what your financial goals are, saving $5k in a year will help get you there faster and with less stress.
That’s why we are challenging you to the $5,000 savings challenge.
We want to help you save more and build your financial future.
1. Save a Flat Amount
Each month or week you will need to save the same amount.
This is the easiest way to save $5,000 in one year is by saving the same amount (e.g., $416.67) each month for 12 months.
If you are saving on a weekly basis, you will be saving $96.15 a week.
If you are saving on a bi-weekly basis, you will be saving $192.31 a week.
Monthly Amount Saved = $417
Semi-Monthly Amount Saved = $209
Weekly Amount Saved = $97
Bi-Weekly Amount Saved = $193
Knowing these amounts helps you to deduct these amounts straight from your paycheck into your saving account for the $5k savings challenge.
This is a great challenge for those who make 5000 a month.
2. Start Small and Save More
With this method, you will start saving a smaller amount of money and grow to save more each month.
By starting to save smaller amounts of money, you can find ways to become more frugal as you continue with the challenge. Also, this works well if you plan to make more money throughout the year.
You start by saving $120 and add an additional $50 to the previous month’s total.
Month 1 = $150
Month 2 = $200
Month 3 = $250
Month 4 = $300
Month 5 = $350
Month 6 = $400
Month 7 = $450
Month 8 = $500
Month 9 = $550
Month 10 = $600
Month 11 = $650
Month 12 = $700
At the end of one year, you will save $5,100!
The downfall to this challenge is things get more difficult. Thus, making you more likely to give up.
3. Start Big and Save Less
This will give you a buffer if something happens in your life.
You save more money upfront and then taper how much you save each month or week.
This method is preferable especially if you start with a no spend challenge.
You start by saving $600 and deduct $33 from the previous month’s total.
Month 1 = $600
Month 2 = $567
Month 3 = $534
Month 4 = $501
Month 5 = $468
Month 6 = $435
Month 7 = $402
Month 8 = $369
Month 9 = $336
Month 10 = $303
Month 11 = $270
Month 12 = $237
At the end of one year, you will save $5,022!
The upside to this challenge is you get the majority of saving completed in the first part of the year. Thus, you get a jump start on seeing progress and sticking to habits.
Savings Challenge Tracker
A savings challenge tracker is a tool that helps people with saving money.
It offers an interface to track various savings goals, such as retirement, education, and emergency funds.
These goals are set by the individual and can be changed at any time. The tool also offers a goal calculator, which allows users to predict how much they will need to save in order to meet a certain goal.
This is why you need a savings challenge tracker.
10 Simple Ways to Save $5,000
There are many ways to save $5,000 in a year. With the right strategies and preparation, it is possible to reach your goal even if you’re not financially well-off.
Here are tips and practical ways to cut expenses to help you save $5000 money.
1. Track your Spending
The first step to saving $5,000 is to track your spending.
When you do this, it will help you see where you could be wasting money and identify areas that need improvement.
Also, we highly recommend recording daily expenses so that there isn’t any confusion at the end of the month. Also, this helps identify areas where you are wasting money and adjust your spending accordingly.
2. Reduce your Cell Phone Bill
Switching to a discounted carrier can save hundreds of dollars. If you switch from one of the leading carriers to a discount carrier, you could potentially save $840 per year.
3. Save Money on Food
The most obvious way to save money is by using your credit or debit card to analyze your spending. Add up your food spending for the past three months.
If you are not careful, you could spend a lot of money on food without realizing it.
There are several ways to reduce the amount of food you spend including being more conscious of what you spend at restaurants.
To save money on food, I recommend shopping at discount grocery stores like Aldi or sales at your local stores. By shopping less often, you will not be tempted to spend more money.
Meal planning is another great way to save money by buying only what you need and planning your meals ahead of time so that you don’t overbuy.
4. Use Cash Back Apps
One of my favorite ways to save money is to take advantage of cash back apps.
There are many different websites and apps that allow you to earn cash back on purchases.
There are 3-personal favorites:
Rakuten
Ebates
Ibotta
5. Credit Card Rewards or Signup Bonuses
There are many ways to save a lot of money in a year. Credit card offers can earn you anywhere from $100 to $500 as a one-time bonus. and if you use them responsibly, this can add up over the year. This is also known as credit card hacking.
Cash Back rewards are a great way to save money. Credit card offers can range from 2% – 5% of cash back, but it will take some work on your end to make sure you categories match up to your highest spending areas.
6. Get Cheaper Insurance
If you have a lot of insurance, it’s possible that you could save money by moving to a different company or making some adjustments to your policies.
It’s easy to get quotes from multiple insurance companies.
There are lists of the best home insurers and best auto insurers when you’re ready to start your shopping.
7. Find Free or Cheap Things to Do
Fun things with friends and family are a great use of your time, but there are ways to cut back on entertainment expenses without sacrificing fun.
Things like going to the movies, sporting events, concerts, as well as trips to the bar or meals out with friends can really add up fast. So, here is a list of 101+ things to do with no money.
8. Set Limits on Fun Spending
Give yourself a hard limit on how much you can spend on entertainment
You must set limits on how much you spend each day, weekly, or monthly.
This may include how often you shop. Shopping is fun, but it’s also costly and time-consuming if you do it often.
9. Watch Out for Small Purchases
When each purchase feels so small, it’s hard to believe how quickly it all adds up.
those $10 or $20 purchases over the course of the year will add up quickly to the tune of $100-4000 a year!
Wait 24 hours to make sure you still want the item.
10. Find Side Hustles to Make Money
There are so many ways to make extra money that will speed up your savings.
Here are some ideas that will have you saving $5k in a year:
Flea Market Flipping: Buying and re-selling items for higher prices
Freelance Writer: There are many different types of services that can be offered as a freelancer.
Pet sitting and dog walking: Simple side hustle for extra cash
Freelancer: Graphic design, web design, web development, photography, and social media marketing specialists are always needed.
Drive for DoorDash: a flexible way to make money
Take online surveys
Learn to Invest in the Stock Market: This one should not scare you away. By investing, you are able to grow your money with passive income. This is a skill we all need.
Related Reading: 21+ Genius Ways on How to Make Money Fast
More Ways to Save Money:
Dump your cell phone plan
Cancel those gym memberships
Stop subscribing to Netflix or Hulu
Cut back on groceries by buying in bulk at Costco
Shop on Amazon for clothing and other goods (just beware of daily deliveries)
Stop paying for cable
Rent instead of buying an expensive TV
Get rid of your car
Switch to a low-cost airline
Stop buying expensive coffee
Once you’ve done all of these things, you will be impressed with how you save your money. You’ll have $5000 in just one year!
How to Save $5000 in a Year Chart:
The saving money chart shows the average amount of money that can be saved in a year by making small changes to your spending habits.
It is important to note that this figure is an average and not a goal.
It is important to set realistic financial goals and to track your progress in order to really achieve the savings you want.
Here are two how-to save $5000 in a year printable chart – one for monthly savings and another for weekly savings.
What can you do with $5,000 in Savings?
The $5,000 Savings Challenge can help you start saving more money than you thought was possible! You have to be ready to dedicate the resources and determination to make it happen.
Where are you at in your savings journey?
This $5000 saving challenge may or may not be right for you! And that is okay!
We have plenty of money saving challenges to help you succeed here on Money Bliss.
This challenge is for anyone who wants to save money and reach their savings goals.
It’s designed to help you start saving today with an easy plan.
Money Saving Challenge:
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.