Is 40k A Good Salary?

Is 40k A Good Salary?

In this article, we’ll discuss: “Is 40k A Good Salary?”


Are you a fresh college graduate wondering what can be the optimum salary for a fresher? To answer that question, we will have to find out which field you are trying to look for a job in. If you are an experienced professional trying to switch jobs, you might already be aware of the market standards. But your current job offer is giving you a 40k salary, and you are interested in the profile. 

It is then natural to wonder if 40k is a good enough salary for both a fresher and an experienced professional. 

We have gathered a few data on this subject. And in this article, we will find out if 40k is enough for you to survive in the United States. 

Is 40k A Good Salary?

In simple words, yes, it can be a good starting salary for a single person. But it is slightly lower than the median salary in America. However, this is dependent on various other factors. 

For instance, if you are planning to live in the middle of the city, the expenses will be higher. Besides paying your bills, saving for retirement, you need to have a minimum standard of living to maintain. You will then have to plan for staying in a place where all these do not seem to feel like a burden. 

The flip side is, you will have to spend hours on transportation to the cities, where you will have the main offices. 

Multiple other factors are to be considered before deciding if 40k a good salary for an individual.  

Ways of Surviving On 40k Salary

Now that you have decided to take up the job that will pay you 40k per year. Let us find out how you can manage the budget to make the most out of the income.

  • Find the Ideal Rent

The first thing that comes to your mind when you start living on your own is the house rent. And in such scenarios, there can be two schools of thought. The first is when people think that the total monthly income should be equal to or greater than three times the rent. This indicates that if your gross annual income is 40k, the rent you can afford is $111.1. 

But there are other kinds of people who think that 25% of your take-home should be ideal for your rent. This means that if your annual income is 40k, after all the tax deductions, your take-home per month will be $2775. And therefore, your rent should be approximately $694 per month. 

The rent may seem a little low, but believe us, that should be the least of your worries. If you like being in a big spacious apartment, you can do so and then find roommates to share it with you. That way, you can save a lot on your income. 

  • Plan A Budget

As mentioned earlier, 40k is not that great when you consider the average salary in America. Therefore, you will have to be on a fixed budget to make the most out of your 40k annual income. 

While you are making a budget, you will have to remember that you have to save some retirement savings or emergency fund. This amount can only be used in times of emergency or after your retirement

  • Clear All Your Debts

You have to make sure that you are as far away as possible from any kinds of debts. Having more debts will make it difficult for you to plan your budget and expenses successfully. If you are in any debt, you must immediately make a plan to get out of it. 

  • Keep Track of Your Money

This means exactly what it says. You need to have better financial knowledge of your earning and expenditure. It may take your first few months to understand the balance. But it is essential to start early. Only when you know how much you are earning and how much you are spending will you save better. 

  • Invest

This is perhaps the least explored. A good investment at an early age will give you huge returns after some years. You need to give away a considerable amount of money to investment planning. For example, if you are investing just $500 every month for the next 30 years. With a constant interest rate of 10%, after 30 years, you will earn $100000 only from the interest. You are planning well now, and you will not have to worry about your future or any crisis. 

  • Cities Where A 40k Salary Is Not Enough

There are a few cities like Ohio, West Virginia, Missouri, Arkansas, etc., where a 40k salary is sufficient for a decent living. Unlike these cities, there are a few cities in the United States where it is significantly tough to survive on 40k. They are Manhattan, San Francisco, Brooklyn, Washington, D.C., Seattle, etc. you can barely make your ends meet with 40k annual income. 

Final Thoughts

After careful consideration of all the points, we can neither say it’s easy nor mention it’s difficult to survive on 40k annual income in the United States. You will have to plan your income and budget carefully to live on the amount successfully. Besides this, you can also try for some extra income if possible if you find it difficult in a few months. 


This video will help you understand better if a 40k salary good enough for you. 

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Discolsure: I am not a financial expert and it is highly recommended that you seek out a professional before making any financial decisions. Articles are informational and for educational purposes only.

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