Do you know how much you need to live a comfortable life?
We all deserve to live without stressing about money. But knowing how much you actually need to do so it isn’t as easy as it sounds. Some people seem to live happily on one income, while others struggle with the same amount.
Don’t worry, we are here to help. Read on to find how much do you need to live comfortably even on a shoe string budget.
The most important thing to remember when working out how much money you need to live comfortably is that it is subjective.
If you have ever traveled around the globe, you will know that what is considered a small amount of money in one country, can be a small fortune in another. Different people also have different views on what they consider a “comfortable” lifestyle. But there is a way to work out how much you need in any location.
The 50-30-20 Plan
While you can review your spending habits and cut down on unnecessary spending, there are some things you can’t do without. In order to work out how much money you need to live comfortably, you need to work out your necessary expenditure.
- Health insurance
Once you know this figure, you can use the 50-30-20 plan to work out how much you need to earn. This financial plan sees you spend 50% of your income on necessities, 30% on unnecessary items (the ones that let you enjoy life) and save the last 20%.
Make sure you use your saves 20% wisely – using a service like family banking could see your saving grow, and further improve your quality of life.
It Depends Where you Live…
Even within the United States, living expenses can vary drastically. Every State, and even every city, has different average incomes and expenses. So when working out how much you need to live, you need to think about where you want to live.
The average cost of living in the USA is $72,704. But that figure doesn’t tell us the whole story. The differences between states can be quite stark.
Arkansas is the most affordable state in the USA, requiring an income of only $59,461 in order to meet the 50/30/20 target. Hawaii, the most expensive state requires more than double, at $136,437.
… So Consider Relocating
Out of the 25 largest cities in the USA, only 5 have average incomes large enough to meet the 50/30/20 target:
- El Paso
- Fort Worth
- San Antonio
This means that these are the cities in which it is easiest to live comfortably. If you are thinking of relocating to improve your quality of life, you could do far worse than any of these.
So How Much do you Need to Live Comfortably?
So there you have it. Although there isn’t a definitive answer to the question of “how much do you need to live comfortably”, we can calculate it for anywhere.
Simply double the necessary expenditure for any area to work out what you need to earn. That way you can spend and save the remaining 50% – which is enough to live comfortably.
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