The median salary in the United States for the first quarter of 2021 according to the U.S. Bureau of Labor Statistics was $989. Multiply that by a 52-week year and it equals $51,428. If comparing yourself to the median, anything above this number would be considered a good salary.

Beyond the Numbers

Real life is always more than just the numbers though. There are a lot of variables as to what determines a good salary. Where you live, cost of living, the number of people you support, your needs, and much more all go into the formula of what is a good salary.

For example, a good salary for a single person may not be a good salary for someone supporting a large family. This, and many other topics will be covered in more detail later in this post.

Lifestyle    

Someone who lives a relatively frugal lifestyle will obviously require less money to live on than someone who lives a lavish lifestyle. Somewhere near the median salary for a more frugal person will probably be a good salary. Especially if they continue to keep their living costs down by making their own meals, driving an inexpensive car for a longer period of time, and living below their means.

Related: The Top 5 Reasons I Pay Cash For Cars

 Where You Live

For someone living in an area where housing costs are $1,500 per month or below, the median salary would be considered a good salary, especially for a single person. However, someone living in an expensive city like New York or San Francisco is going to struggle making what would be considered a good salary in a lower cost of living area.

Data pulled from Zumper.com indicates the average rent for a one-bedroom apartment in New York City is $2,985. That means rent alone is going to eat up a large portion of monthly income for someone making the median salary.

If you’re someone with a financial goal of saving over 50 percent of your income and retiring early, you’re going to need to make more than the median if living in an expensive area of the country. Even for a very frugal person, it’s hard to have that high of a savings and investment rate making the median salary in an expensive city.

Your Needs and Wants

There are two categories in this section—needs and wants. Needs refer to actual necessities like food, shelter, and medical needs. For example, someone with a medical condition might need to spend more on treatment than someone without those medical needs. That would naturally increase the amount of money they need on a monthly basis.

Wants aren’t necessities and refer to things someone desires. That could be a nice car, an expensive place to live without roommates, or more nights out to dinner. Someone with a high level of wants is going to require a higher salary than someone with a lower level of wants.

Family

A good salary for a single person might not be a good salary for someone with a family, especially a one income family. A single person making above the median income in a fairly expensive part of the country might be doing very well.

However, if that same person is supporting a family of five or six on that salary, they will likely not be doing as well. The costs of food, healthcare, and incidentals to name just a few, quickly add up. To provide a brief summary:

• Single person living a frugal lifestyle: Will likely consider the median salary to be good
• Married person with one earner: Median salary might still be considered good
• Family of three or four with one earner: Earning median salary could be a struggle
• Family of five or more: Earning median salary would likely be a financial struggle

Benefits

There is more to determining what a good salary is for a single or married person (with or without children) other than just the gross income. Especially in a W2 job where two of the biggest factors are medical insurance and paid time off. Compare these two jobs:

Job Number One:

• $51,000 per year salary
• Five weeks of paid time off per year and 10 days sick leave
• Health insurance including medical, dental, vision: no cost to employee or family

Job Number Two:

• $51,000 per year salary
• One and a half weeks paid time off per year, four-days sick leave
• Health insurance including medical, dental, vision: $200 and $150 per dependent monthly

Both jobs are the same gross salary, but the benefits make job number one much more attractive and financially beneficial. Job number one has five whole weeks of paid time off versus a week and a half for job number two. That means the hourly rate will be higher for job one because the employee is literally working less hours.

Job number one provides health insurance at a much better rate than job number two. A family of four with three dependents on the health plan would pay no cost for health insurance. That same family would pay $650 per month in health insurance with job number two.

Assuming both medical plans are the same quality, job number one saves the employee and their family $650 per month. Over the year that equals $7,800. That’s a big difference in net pay, and certainly a factor that needs to be considered all other things being equal.

Paycheck Calculator

A good tool easily available to anyone is a paycheck calculator like this one from Smart Asset. To use the calculator, input your salary and then add all the deductions and pre-tax contributions you plan on making. You can manually adjust items like state disability, state tax amount, pre-tax contributions, etc.

Using a paycheck calculator similar to this one will give you much more precise numbers of what a good salary is. It doesn’t matter whether you are single, married, or have a family. The paycheck calculator will help you more effectively run the numbers so you can determine for yourself if what you are making is a good salary.

Jobs That Pay a Good Salary

Data taken from Jobted.com lists the following types of jobs paying around the median income per year. Keep in mind that this data is national, and there will be regional differences, maybe even major differences.

• Firefighter: $48,532
• Medical Office Manager: $49,870
• Project Coordinator: $52,780
• Building Inspector: $51,034
• School Counselor: $51,200
• High School Teacher: $51,640

These are just some of the jobs listed. For the complete list, follow this link. Not on this list was freelance work, which has varying salaries depending on level of expertise, services provided, and amount worked.

Age and Salary

People like to know how their salary compares to others of similar age. Common questions include:

• How much should I make at age 35?
• What’s the expected salary for a 45-year old?
• How much should I make at age 50?

However, I don’t think this is a particularly good assessment of how well you are doing financially. Instead, I look at the following factors, among others:

• Are you investing at least 10 percent of your monthly income?
• How much passive or residual income are you making per month?
• What is your net worth?
• Are you on track to meet your financial goals, including retirement?

These questions are more important to your overall financial health than salary alone. For example, a single or married person making what would be considered a good salary who doesn’t save or invest is in a worse financial position than someone making less money. Compare the following two people:

• Person 1: Single or married with family making a salary of $51,000 per year. Invests $700 per month and has a net worth of $850,000
• Person 2: Single or married with family making a salary of $110,000 per year. Invests nothing per month and has a net worth of $10,000

Even though the first person is making half as much, they are in a better financial position than the second person, independent of age. As The Richest Man in Babylon reminds us: It’s not about how much you make, but about how much you keep.

Outside the Box Thinking: Investments Can Pay You a Salary

A salary is traditionally thought of as consistent income coming from a job or business. However, salary can also come in other forms such as:

• Residual income from an invention or product you previously created
• Passive income from rental property
• Stock dividends
• Money pulled from a combination of investments

Reframing the definition of “a good salary” can open up many new doors and opportunities you may have otherwise missed. For example, an investor who owns five rental properties that cash flow $500 per month each. If that investor makes an improvement like adding another bathroom, creating additional parking spots, or converting part of the house to another unit—they have an opportunity to significantly increase cash flow.

A house with a few added parking spots in an area where parking is at a premium might rent for a couple hundred more per month based on that improvement alone. Or a house converted to add another unit may rent for a couple thousand more. Be creative and find ways to maximize your investments so they become a salary of their own.

Net Income

Which of the following is a better question?

• What is a good salary for a single or married person?
• What is the monthly net income for a single or married person?

They are both good questions but I think the second question is better. I’m much more interested in net income than salary alone. Someone with a higher salary can also have significantly higher expenses, leaving them with little money to save and invest. On the other hand, someone with a lower salary and lower expenses may save and invest a large amount of money per month. Consider the following:

Person One

• Monthly salary: $12,000
• Expenses: $11,500
• Money invested or saved: $500

Person Two

• Monthly Salary: $8,000
• Expenses: $4,900
• Money invested or saved: $3,100

Which person is more financially successful, number one or two?  Person one makes a lot more but person two saves and invests $2,600 more per month. My vote is for person two.

Conclusion

There are good questions, and then there are better questions. Asking what’s a good salary for a single person or what’s a good salary for a person with a family is a good question. There are better questions though, and hopefully some of those questions were asked and answered in this post.

Success in personal finance requires outside the box thinking and not taking things at face value. It requires always looking for better answers, methods, and solutions. Keep asking better questions and coming up with better solutions. You’ll be surprised about the creative solutions you develop.

How have you moved your personal finances forward by asking the right questions?