If your salary is or would be $40,000 a year and you are curious to know $40,000 a year is how much an hour, you may want to read ahead to get the answers.
To be honest, living comfortably is relative and subjective. In fact, the concept of comfort usually varies according to the tastes and demands of each person. One couple may travel happily the world on less than $25,000 a year, on the other hand, one struggles to maintain their desired lifestyle making $400,000 a year in NYC!
But, to determine your expenses and make a budget under $40,000, you may want to know everything.
$40,000 A Year Is How Much An Hour?
So now, $40,000 a year is how much an hour? It is $19.23 before taxes and around $16.88 per hour (depending on the state you live in).
Check out the breakdown below!
$40,000 per year is equal to:
- Monthly – $3,333.33
- Bi-Weekly – $1,538
- Weekly – $769.23
- Daily – $153.85
- Hourly – $19.23 (If we consider 40-hour work week per week for 52 weeks in a year)
The Yearly / Monthly / Weekly / Hourly Converter at Neuvoo was used to find the numbers above!
Now, let us find out how much do you get an after-tax deduction!
*These numbers will differ depending on the state you live in*
The below example is for California, which I picked because I used to live there!
- Federal Tax – $3,142
- State Income Tax – $888
- Social Security – $2,480
- Medicare Tax – $580
Total = $7,090
So, the net pay you will get $40,000 – $7,090 = $32,910. Now, out of this too, how much will you earn? Let’s see that!
$40,000 per year (after taxes) is equal to:
- Yearly – $32,910
- Monthly – $2,742
- Bi-Weekly – $1,266
- Weekly – $633
- Hourly – $16.88
And this is for the state of California. Head over to the Income Tax Calculator if you would like to see the exact numbers for your state!
Let’s check out the numbers for Washington, a state that doesn’t have income tax.
If this seems like it will be tight for you, a good rule is to try the 50-30-20 plan for budgeting. It means that you need to spend 50% of your income on essentials (such as food and housing) and 30% on other stuff (such as entertainment and travel), and the rest 20%
Moreover, the cost of living varies from city to city. So, while you may be able to fit into the 50-30-20 budget model in some places, in other places it is more challenging to manage!
Now, let’s see the cities where $40,000 a year will be harder to live on!
10 American Cities Where $40,000 May Not Be Enough
In many cities of the USA, with a solid budget, a $40,000 per year salary is more than sufficient to survive. But, there are a few cities in the USA where a $40,000 salary may be harder to live on depending on your circumstances. According to Investopedia, below are the top 10 most expensive cities:
- New York City, NY
- Honolulu, HI
- Washington, D.C.
- San Jose, CA
- Los Angeles, CA
- San Francisco, CA
- Boston, MA
- Oakland, CA
- San Deigo, CA
- Miami, FL
I have lived in San Diego and I was able to keep my expenses low by:
Sharing a room with my friend. And by room, I really mean a *room* not just sharing an apartment. This made our rent only $650 a month which was insanely cheaper than we found anywhere else. Of course, this option isn’t for everyone, but we were great friends and it worked out well for us.
No fancy furniture. Décor was not a thing on my mind what so ever! I used cheap plastic drawers for dressers, had my mattress right on the floor with no bed frame, and never spent any money on quality furniture. Saved me tons!
Finding free hobbies. I became obsessed with beach volleyball which was completely free! You may be thinking sharing a tiny room and not even having a real bed frame seems miserable, but I had a blast living in San Diego! The weather is nice all year round, so decorating and having a boujie home space was pretty irrelevant to me!
Is $40,000 a Year a Good Salary?
If you are like me (sharing expenses with my boyfriend, with no kids, no house mortgage, no car payment, and cognizant of not spending more than I make) then $40,000 a year is more than enough!
I currently make more than that now (because I’m the queen of side hustles and have found a few great tutoring gigs lol) but I have made less and still been just fine!
For example,
My first job out of college was when I moved to San Diego, as mentioned above, and I made $17 an hour working as a lab technician. Using the handy dandy paycheck calculator, that amounts to a whopping $27,753 per year.
And boy, let me tell you! I thought I was living large!
It was my first “big girl” job where I got a steady paycheck every other week. Prior to that, my only other jobs were things like working as a waitress, a doggy day care facility, and odd jobs like babysitting and tutoring.
Is 40k a year a good salary for a single person?
Depending on your circumstances $40,000 per year is an amazing salary!
Check out the budget example below. I currently live in Seattle and split most expenses with my boyfriend. The numbers used for expenses are the actual cost of my monthly bills and you can see that there would be plenty left over if this were my budget!
But, what if you have a family and/or lots of big expenses like a mortgage or car payment?
How to Make a Budget If You Earn $40,000 a Year?
The best way to save money is to set specific goals, create a budget, and live frugally. It is all about knowing about your requirements and having a clear idea about your wants and needs.
Read More:
- 12 Mindblowing and Effective Tips for Frugal Living
- How to Create a Budget (Even When You Are A Complete Beginner)
Given below are some things you need to consider for making a budget!
1. Is the Car Necessary?
Owning a car in the United States can be essential for anyone. However, you must know how important it is to use it frequently.
Public transportation in Washington (the city with the highest cost) is about USD $237 and the maintenance of a monthly vehicle is approximately $700 according to The Balance. So, if you try to lower the usage of the car you would be saving a lot of money.
However, it is true that for many, having a car is more of a necessity than a want. In this condition, you may want to try saving up on gas by any means!
2. Cheaper Home
Housing is the expense with the greatest impact on the average person’s budget! However, if you want some savings, you may want to go low on the home expenses.
For this, you may want to find a smaller place to live. The goal is to have a space to sleep comfortably, of course, without a lot of luxuries!
Now, there are still many ways you can save up on your home expenses, such as going for cheaper décor or even sharing your apartment with someone.
3. Homemade Diet
In a restaurant, the dishes have an increase of up to 300%! This means that if a plate of food cost $30 at home, you would have paid $90 for it at a restaurant!
Eating out often costs a lot, and it costs even more if you are always opting for Uber Eats or Door Dash for dinner (hello crazy delivery fees and surge pricing!). So, if you choose to reduce eating out you can have significant savings! It doesn’t mean that you can’t eat out, but rather in a controlled manner.
4. Do It Yourself
This may get difficult for you if you have no idea about how to solve problems at home! However, the power of the internet works perfectly for us to do things by our ownself.
The goal is to avoid hiring service people to repair certain things in the home. This includes cleaning, mowing the lawn, and many more!
5. Free Enjoyment
You don’t have to pay a lot to enjoy your life. There are so many parks where you can go for picnics in order to enjoy for free! Additionally, you can also find coupons and vouchers that can give you discounts on a lot of things.
6. Insure Your Medical Care
Visits to a doctor’s office can cost you large amounts, especially in the US! Even a simple routine check-up can lead to big unexpected costs that can cut holes in your pocket.
So, protect yourself against any sudden medical bills by purchasing reliable health insurance if you can!
7. Give Up On Some Bad Habits
Giving up some bad habits can be a great savings system for those who have them.
For instance, drinking alcohol or smoking cigarettes can represent a very high monthly income! And not only these, eating sweets every day and other such habits can also cost a lot of cash.
So, you may want to adopt some healthier and lower-cost habits like going for a walk, jogging, resting in the park, and many more.
8. Have an Alternate Job
It is very common to see people, especially students, with more than one job. And, that is definitely a good thing if time allows.
Having an alternate job may allow you to generate a little more money than usual. But I recommend one in free hours or that you can do it when you have the free time. In fact, this can lead to a 50% increase in salary.
9. Energy-Saving
Even though it may vary by state, the average monthly cost for an electricity bill is $110.76 according to move.org! It may not seem like a lot but in the long run, it can lead to huge bills.
So, try minimizing your energy-related costs to save more. Need some ideas how? Here is a great article by Dave Ramsey: How to Save Money on Your Electric Bill.
How Much Should You Earn to Live Well?
Living in the USA is not an easy thing, especially if you have credit card debt, major student loan debt, or live in an area with a high cost of living!
There are many people who live in luxury and exclusivity every second of their lives. However, they have an annual income of millions of dollars. For an average student or person, this can be a goal to be achieved but with a lot of effort and dedication!
I hope seeing concrete examples of what I have made in the past and how I was able to live comfortable, has made you realize that $40,000 a year is a decent salary.
Also note, that if this is your first job out of college you have many years of opportunity to find better jobs, get a raises, promotions, and perfect your budgeting skills.
Final Thoughts
Now, you are well informed about $40,000 a year is how much an hour. Yet, keep in mind that whether or not you’ll be satisfied by it, depends on your living standards.
However, a good thing is that there are many ways you can save up on money. Additionally, by taking some extra jobs, you can also increase your yearly pay as long as it doesn’t affect your health and studies!
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