6 Things You Should Not Spend Money On If You Make $60,000 a Year
Written by
David Nadelle
Edited by
Jana Lynch
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According to SmartAsset’s 2024 “Salary Needed to Live Comfortably” report, the average American believes they need an annual household income of $96,500 to live comfortably. That’s a big discrepancy from the typical $60,000 annual salary.
While the study used the 50/30/20 method for budgeting to define a comfortable lifestyle, it’s essential to manage your finances wisely regardless of your budgeting preference. This helps ensure you’re living within your means, saving for the future and avoiding unnecessary expenses.
If you earn $60,000 a year, here are six things to avoid spending money on to maintain financial health.
Expensive Rent
According to Redfin, the median monthly asking rent in the U.S. exceeded $2,000 for the first time in May 2022, rising 15% year over year to a record high of $2,002. While rents have flatlined to slightly under $2,000 since then, the housing market and mortgage rates have risen steadily.
Using the rule of thumb that you shouldn’t spend more than 30% of your income on housing, your rent should hover around $1,500 per month if you earn a $60,000 salary.
Luxury Cars
While the cost of cars also continues to rise, they still depreciate at the same rate as they’ve always done. Spending too much on a luxury car, or even a moderately expensive vehicle, will cost you on high monthly payments, insurance premiums and maintenance expenses.
Unless you’re buying a rare or collector car, most expensive vehicles lose value faster. Opting for a reliable car that fits in your budget will save you money in the short and long term.
High Utility Bills
Failing to pay your utility bills puts you at risk of being cut off from essentials like water, electricity, gas, internet and phone service. But with the average American spending an average of $429.33 per month on utilities, per Forbes, reducing your energy consumption by using energy-efficient appliances, unplugging electronics when not in use and insulating your home properly can help you save money on that 50% budget earmarked for necessities.
Excessive Dining Out (and Ordering In)
Regularly eating out at restaurants or ordering takeout can put a strain on your budget. Cooking at home is a more cost-effective and healthier option – and a source of good entertainment, depending on your adventurousness in the kitchen.
Curbing daily purchases of specialty coffee can also save you money that you can put toward investing or building an emergency fund.
Overpriced Subscriptions
Staying entertained at home is more important than ever, especially when you’re trying to curb your discretionary spending. However, try sticking to one or two subscriptions, streaming services or memberships instead of subscribing to multiple platforms.
As the Wall Street Journal noted, “Paying for the subscriptions you use is not the only reason your bill is probably much higher than you realize. It’s also because you’re overpaying for the ones you don’t use.” When you update your financial plan or household budget, take a look a what you’re spending on subscriptions and memberships and trim those you’re not using.
Expensive Vacations
While it’s nice to get away, you don’t want to go into debt for it. In fact, vacation planning and finding the right price is invaluable. There’s even a whole industry open to those who want to save on travel.
If you’re itching to get away, look for affordable travel options like traveling at off-peak times to save money and avoid unnecessary upgrades such as paying extra for first-class flights or high-end hotels when more economical options are available.
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