I’m a Financial Advisor: This Is the Ideal Budget for a $50,000 Salary
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Jennifer Taylor
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Zuri Anderson
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Budgeting is important no matter how much money you make. Whether you just got a new job with a $50,000 annual salary or want to be more mindful of spending on your existing salary, Ben Loughery, certified financial planner (CFP), chartered retirement planning counselor (CRPC) and founder and financial planner at Lock Wealth Management has some advice for you.
“It is totally doable to live with this salary,” he said. “You may just have to make a few adjustments with living below your means in certain spends.”
As of May 2023, based on the most recent available data, the mean annual wage in the U.S. is $65,470 per year, according to the U.S. Bureau of Labor Statistics. You might think this could make a $50,000 annual salary hard to live on, but carefully following a budget can make all the difference.
Of course, $50,000 per year isn’t the amount you’ll bring home. The IRS will also take a cut, so you’ll need to factor that in. In 2025, the effective tax rate on a $50,000 salary would be approximately 11.8%, which equates to a $5,914 tax liability, Loughery said.
“This is just a simplified calculation and does not account for deductions, credits or other factors that would improve their tax liability,” he said. “There is also state tax and the Federal Insurance Contributions Act (FICA) tax to account for, as well, so this could leave us roughly $40,000 which is just over $3,300 [per] month in spending.”
Ready to find out how to divide your income up each month to avoid overspending? Use the following spending blueprint created by Loughery as a guide.
Savings
- Budget: $500 per month
No matter what your salary, saving money is important.
“Automating savings is always great, and I intentionally put savings first to pay yourself first, so you can automate that, as well,” he said.
Housing
- Budget: $1,000 per month
As of 2023, with the most recent available data, the median gross rent in the U.S. is $1,406 per month, according to the U.S. Census Bureau. For property owners, the median home value is $340,200.
Whether you rent or own your home, Loughery said having a roommate could help make this more affordable.
Food
- Budget: $500 per month
Following a moderate-cost plan, the average cost of food at home for a 19-to-50-year-old male is $381 per month, according to the U.S. Department of Agriculture. This expense drops to $321.60 per month for a 19-to-50-year-old female on a moderate-cost shopping plan.
Of course, you may have dependents, meaning you’re not just shopping for yourself. Regardless, Loughery suggested shopping in bulk at stores like Costco to save money.
Entertainment
- Budget: $500 per month
“This includes going out for a coffee, a drink or even a workout class,” he said.
You’ll need to be mindful of your spending, but you can still get a lot out of $500 per month. To supplement, consider seeking out free entertainment in your local area — i.e., concerts in the park, hiking in local parks and museums offering free admission — at least on certain days.
Transportation
- Budget: $250 per month
“Since this is the ideal budget, it would be great if you could be walkable to work and have all the other lifestyle entertainment right by you — if you are in an area that is friendly for that,” Loughery said.
If you can’t walk to work, consider taking public transportation to cut costs.
Miscellaneous Expenses
- Budget: $550 per month
You can’t anticipate every monthly expense, but you can make extra room in your budget.
“I like having this as our cushion in case you may need to pay a little bit more for housing or maybe there’s like some one-off event that month, or even a pricier dinner,” Loughery said.
Staying on budget isn’t always easy, so he recommended using a budgeting app.
“I like the app Monarch, and personally use this for my own budgeting,” he said. “It is around $8 [per] month but can quickly show how you were staying on track, and it’s nice not having to put everything in excel.”
No matter how you choose to budget, sticking to it is the most important part. As you can see, living comfortably on a $50,000 salary is possible if you spend wisely.
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