18 Dollars An Hour Is How Much A Year: Can You Live Off Of It?
Nowadays, the prices of everything keep rising, but the salaries remain the same, making it difficult for people to maintain a comfortable lifestyle. The situation becomes more difficult if you do not know how to budget your yearly salary efficiently.
If you are working at a rate of $18 an hour, you may have many questions in mind, such as how much you earn weekly, monthly, or yearly from this hourly wage. You may also wonder whether this salary covers your expenses or not.
This article will look at 18 dollars an hour, how much a year, and whether you can live on it.
How Much Is 18 Dollars A Year?
Before getting into the details, let’s find the answer to the primary question that $18 an hour is how much a year?
If you do a full-time job and work 40 hours per week at an hourly wage of 18 dollars, you would get $122 per day. According to a rough estimate, you will earn $37,440 per year with a salary of $18 per hour before tax deduction.
However, after-tax deduction, you are expected to earn $31,769 annually by working full time.
On the other hand, if you work part-time, that is for 20 hours a week at an hourly wage of $18 an hour, you will earn $23,400 before tax.
How Much is 18 Dollars an Hour Per Month?
On average, your monthly income will be around $3,120. It is straightforward to calculate monthly income, just divide your annual income by 12.
However, It may vary depending on the number of hours and days you worked in a month.
How Much Do You Pay In Taxes?
We all know that a specific percentage of our salary is deducted for tax purposes depending on how much we earn monthly or yearly.
The money deducted as tax is used for different things such as social security, Medicare, and federal or state taxes.
So now the question is, how much amount does the tax department take from your hourly salary altogether? Determining the ‘average’ taxpayer in the United States is a complex task due to the progressive tax system in place. In 2021, seven tax brackets ranged from 10% to 37%. Consequently, the average tax rate could be estimated at approximately 24.57%.
Your tax rate depends on your annual income. Therefore, you must calculate your tax rate depending on how much you get paid.
You can also find online salary tax calculators on how much you will pay weekly and monthly, depending on your salary and financial situation.
Is 18 Dollars An Hour A Good Salary?
Now that you know how much you can earn by working on a $18 per hour rate, it’s time to move to the following question: is $18 an hour enough to maintain a comfortable lifestyle?
In 2020, the median income for a family in the United States stood at $78,500. By 2021, this figure had risen to $79,900. When you earn $37,000 annually at $18 an hour, it becomes evident that you fall significantly below the national median family income.
However, it is essential to note that many households have multiple income earners. In a scenario where two individuals each bring in $37,000 annually, the combined income amounts to $74,000. While this still falls slightly short of the national median, it is a more manageable figure for many families.
For individuals who lead frugal lifestyles and do not have any dependents, $18 an hour may be sufficient to cover their basic needs and living expenses. Ultimately, this wage’s adequacy depends on your circumstances, financial goals, and cost of living in your specific location.
Can You Buy A House With $18 Per Hour Income?
It is a tricky question because several factors count for purchasing a house, such as your location, credit score, debt-to-income ratio, and how you spend your income.
You can purchase a modest-sized house with an $ 18-an-hour wage if you spend sensibly and buy a home in a low-cost area. Moreover, your debt-to-income ratio should be 43 or less.
However, you can not afford to purchase a home for $18 per hour if you live in a high-cost area, struggle to live on a budget, or do not work full-time.
Is 18 Dollars An Hour Enough?
Whether $18 per hour wage is enough for you to live off depends on several factors, which are as follows:
- Number of people dependent on you in your family
- The cost of living in your country or state
- Your lifestyle and expenses
- Loan repayment
- Savings
Depending on these factors, $18 an hour might be enough for some while meager for others. For instance, monthly loan repayments will consume a portion of your income, limiting the budget available for covering other expenses.
Similarly, if you love to dine out and do it frequently, you must keep some money aside for outside. More importantly, the more dependents in a family, the more your utility and grocery bills will be, which generally means a high living cost. The situation is more difficult in a family where only one member works, and others eat.
With all the above responsibilities, $18 an hour may not be a liveable wage. But if you live alone or do not have more dependents and live a modest life, you can live comfortably with a wage of $18 an hour.
How To Budget $18 an Hour Salary?
If you work full-time and earn 2,647 per month, it is beneficial for you to organize your income and create a financial plan. It will enable you to spend your money with ease and enjoy a comfortable lifestyle.
A great way to manage your money is using a 70/20/10 budget where 70% of your income goes to basic expenses such as utility bills, entertainment, transportation, rent, and groceries, 20% is set aside as savings, and 10% goes towards debt payment.
This budgeting method may be challenging for some. If you have different needs, you can cut expenses in one area and put it where you need more. If your essential expenses are more, there is no need to set aside money for entertainment. You can spend this money to fulfill your basic requirements.
Most importantly, allocate a certain percentage to each expense and do not overspend. If you spend less in any month, save that extra money.
Tips To Live On $18 Per Hour Salary
Maintaining a lifestyle on an $18-an-hour income can cause challenges depending on your unique circumstances.
However, with adequate planning and adjustments to your way of living, you can achieve financial stability and avoid the constant worry that often comes when you check your bank balance.
Here are some suggestions for managing your income and expenses.
i. Stick to Your Budget
The first and most important thing is to adhere to your budget strictly. One common mistake is turning off the budget, which can become a harmful habit. It is crucial to avoid falling into this behavior.
If you have saved 5% of your basic expenses in a particular month, resist the temptation to increase spending in other areas, like dining out. Instead, allocate that extra money to your savings for future needs.
ii. Start A Side Business
Explore the potential of side hustles. Although launching a side business while working full-time may not always be practical, you can explore less time-consuming opportunities to generate passive income.
iii. Look For Discounts
Be attentive to cost-saving opportunities. Make savvy choices when shopping for groceries, clothing, or other items. Consider hunting for discounted items or explore thrift stores where you might uncover hidden gems.
Regarding groceries, take advantage of coupons and discounts offered by many stores. Additionally, explore cash-back rewards through your credit cards for grocery purchases.
Above all, opt for free grocery pickup services to minimize the risk of making impulsive purchases inside the store.
Final Thought - 18 Dollars An Hour Is How Much A Year
In conclusion, living on an income of $18 an hour requires careful financial planning and adapting to individual circumstances. While this wage may fall below the national median income, it can still provide a comfortable lifestyle for those who manage their expenses wisely, live in cost-effective areas, and have fewer dependents.
Budgeting, seeking side income opportunities, and being mindful of discounts are essential strategies to maximize this wage and ensure financial stability.
Ultimately, the key to living on $18 an hour is prudent financial management and making informed choices that align with your financial goals.
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