What Income Do You Need To Be Financially Stable? Here’s What Most Americans Say
Written by
Gabrielle Olya
Edited by
Gary Dudak
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Many Americans are worried about money, but at the same time, they feel that financial stability is achievable for fairly modest income earners. A recent survey conducted by Moomoo Financial Inc. found that the majority of Americans (69%) believe that financial stability is achievable for those earning less than $100,000, with 25% believing they would only need less than $50,000 in annual income to be on firm financial footing.
Here’s a closer look at why many Americans feel this way, and how much you realistically need to earn to be financially stable today.
Can You Be Financially Stable Earning the Median Income?
The median household income in the U.S. is just under $75,000, so it makes sense that the largest proportion of those surveyed (45%) said that it’s possible to be financially stable by earning between $50,000 and $100,000 a year.
“Most people are already close to living within their means,” said Justin Zacks, VP of strategy at Moomoo.
It’s also very possible for people earning the median income to save money and build future wealth.
“If you’re able to save 15% or 20% of your income annually, you’re going to be in a really good spot financially if you’re prudent about your investments,” Zacks said. “If you’re looking to have that emergency savings fund, to have that stability, a lot of that can come from incremental things. It is something that’s achievable for most people.”
How Much You Need To Be Financially Stable Depends on Lifestyle and Location
Americans earning the median income — and less than the median income — can achieve financial stability, but it depends on their unique financial circumstances. In cities with higher living costs, for example, it might be harder to be stable earning $75,000 or less.
“Housing in Los Angeles is off the charts and in New York City it’s the same,” Zacks said. “What you do have to think about is not everyone lives that way, and everyone’s situation and what they need is different. If you’re a single parent and you have seven kids and you live in San Francisco, that amount of money might not be good for you. But if you’re a single person and relatively healthy and you’re frugal and you’re living in Iowa, you probably don’t need that much money to live quite a good lifestyle.”
How To Achieve Financially Stability If You’re Earning a Lower Salary
Because housing is typically the largest expense, focus on reducing this cost to achieve financial stability if you are not a high-income earner.
“The housing piece becomes the biggest problem,” Zacks said. “Some people will have assistance — they have rent stabilization. If you locked in your 3% mortgage years ago, you’re in a good situation. If you live with your parents or a roommate, you’re going to have a lot lower cost than if you tried to live on your own. It is a way to save a lot of money and to be able to live and save on a middle-income salary, even living in a place like Manhattan.”
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