According to an April 2023 Gallup poll, the average American family of four estimates it needs $85,000 annually to cover living expenses. When Gallup polled the country in 2013, respondents estimated, on average, that their household required $58,000 to make ends meet.
This data indicates that American yearly income needs to have increased by more than $25,000 in a decade.
Other interesting statistics from the poll include:
- Nearly one-third of survey participants believe a family needs at least $100,000 per year — up from ten percent in 2013.
- Only 14% think a family can make it on less than $50,000 annually, down from 29% in 2013.
- Just three percent say that less than $30,000 is adequate, down from seven percent ten years ago.
Interesting insight: The federal poverty level for a family of four in 2023 is $30,000. Households in this earning bracket may be eligible for government benefits, like health insurance subsidies.
So what’s behind this shift? Inflation plays a significant role. For example, according to the CPI Inflation Calculator, $1.00 in April 2013 had the same purchasing power as $1.30 in April 2023. That means the goods and services you buy today cost about one-third more than ten years ago.
Location and current income level are also factors. For instance, high-earners living in east coast cities estimate higher cash needs than middle-class families in rural midwestern towns.
The upswing in cash flow requirements seems to fuel the growth of dual-income households. According to the Bureau of Labor Statistics, the median weekly earnings for Americans in the first quarter of 2023 was $1,100 ($57,200 annualized).
Interestingly, this income level nearly covers the estimated financial needs of families in 2013. But today, it comes up significantly short of the $85,000 mark, requiring households to pursue additional sources of income to bridge the gap.
What To Do
If you earn less than the average income in your state, struggle to cover your family’s living expenses, or want to make more progress toward your financial goals, you can increase the amount of cash you bring home in several ways. For example, you could get a part-time job, launch a side business or work overtime (if paid hourly).
Or, you could learn new skills to earn a promotion at the office or land a new, higher-paying job. There are many free resources online and at your local library to acquire in-demand skills such as writing, graphic design, coding and project management.
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