How Much Do Americans Make in 2023? (And How Does Your Paycheck Compare)
According to a recent GOBankingRates survey of 1,091 American adults, most people make $60,000 or less annually. But while knowing how much Americans earn can be a great starting point for determining how well you compare, your financial well-being is about more than just your salary.
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Even if your paycheck is higher — or lower — than the average, how financially secure you are depends on a number of other factors. This includes things like the cost of living where you live, your household size, any current debts you may have, and your short- and long-term financial goals.
With that in mind, here’s how much Americans make in 2023 along with some ways you can increase your income if you feel you’re not earning enough.
How Much Americans Typically Make in 2023
Here’s how much Americans are making this year, according to the GOBankingRates survey:
$0 to $20,000 = 23% of respondents
$20,001 to $40,000 = 24.38% of respondents
$40,001 to $60,000 = 20.34% of respondents
$60,001 to $80,000 = 10.35% of respondents
$80,001 to $100,000 = 7.61% of respondents
$100,001 to $200,000 = 11.64% of respondents
$200,001 or more = 2.47% of respondents
A person’s income depends on a variety of factors, including their education level, experience, location, industry, position, and other demographics. But based on the survey, approximately 67.72% of Americans earn $60,000 or less a year.
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Is Your Salary High Enough?
Although there’s no one answer to how much money people should be making, there are several ways to determine whether or not you’re earning enough money. Among other things, you should be able to cover your everyday or recurring expenses, while still living comfortably. You should also ideally have a solid emergency fund, enough retirement savings, minimal debt, and an investment portfolio that makes sense for your future’s financial stability.
“The amount of money needed really varies depending on where you live as some places have a much higher cost of living than others,” said Kendall Meade, Certified Financial Planner at SoFi. “Some people may make enough to support themselves as soon as they start working while others may take a while to get to that point. This varies depending on career, cost of living in your area, debts, and more.”
Coming up with the exact figure that works with your situation can be tricky, though. And, if you’re like most people, even if your salary is high right now, it might not be high enough to keep up with rising costs.
When asked whether or not Americans in general earn enough money, Kelly Ann Winget, founder of Alternative Wealth Partners (AWP), responded with the following:
“Not at all, and they haven’t for a very long time. There are tremendous biases that still exist that prevent a majority of Americans from achieving 6-figure incomes. Opportunities to grow within a company are not offered fairly across the employee base, there is a lack of pay transparency and clearly defined expectations for promotion, and excessive executive compensation are huge contributors to the pay gap that exists for your average salaried workers.”
Young Pham, a financial advisor and investment analyst affiliated with BizReport, also weighed in:
“Although I do believe that incomes in the US are relatively high compared to the global standards, because of the cost of living, taxes, and the consumer-driven culture in the country, most Americans will feel they do not make nearly enough to be able to live a more fulfilled and complete life.”
What To Do If Your Salary Isn’t High Enough
If you believe you’re not making enough money, there are several ways you can increase your income and improve your financial stability. Here are just a few.
Reexamine Your Budget
Take a moment to reevaluate your budget and see if your income and expenses align with your goals. If you don’t currently have a budget, now’s a good time to create one — remember, you can always adjust it as needed to fit with your financial situation later on.
“Without a proper budget it can be easy to get to a place where you are unable to save. Put a practical budget in place and keep it simple so you can easily stay on top of your finances and increase your odds of success,” said Meade. “Even a basic budget can help you reach your financial goals, whether it’s to have a financial cushion, put a down payment on a new home, go on your dream vacation, or all of the above.”
Eliminate Debt
Being able to save and invest are important when it comes to building financial security for yourself, but you might have trouble doing this if you have a lot of debt.
“Many consumers may be unable to save currently due to tight budgets and high-interest-rate debt. As of Q2 2023, credit card balances increased by $45 billion to reach a high of $1.03 trillion,” said Meade. “If you already have a significant amount of credit card debt, then you will want to look into debt consolidation/pay-off methods to pay it off as soon as possible.”
Debt pay-off and consolidation options include low-interest personal loans, home equity lines of credit, and home equity loans. Before taking on a new loan, make sure you can comfortably afford its monthly payment, or you could end up with more financial difficulties.
Keep in mind that not all debt is automatically bad. Certain types of debts could prove beneficial to your long-term financial gain.
“If you have a good credit score, take advantage of affordable debt to buy income-generating assets like real estate,” said Pham. “That way, you can generate enough passive income to supplement your current income while also paying off the debt itself.”
Contribute to a 401(k)
“It is important to invest your long-term savings so that it can grow for you and generate additional income,” said Meade. “If you have an employer match through work, you should start participating as soon as you are eligible. You should always take advantage of any employer match offered as it is essentially free money.”
Meade added, “However, if you have no employer match, you should start contributing to a 401(k) as soon as you have taken care of foundational items such as paying off high-interest-rate debt and building an emergency fund. The amount we recommend saving is around 15% of your gross annual income.”
Take Advantage of Compound Interest
“When one’s income only goes so far, there may be a need to get creative about how and where to make that money go further,” said Maya Sudhakaran, Head of Growth and Acquisition at Plynk. One such way is through investing and taking advantage of compound interest — and the sooner you start, the better.
“By capitalizing on compounding returns through investing, individuals can supplement their earnings and work towards achieving financial security,” said Sudhakaran. “No matter where you find extra money to invest, you don’t need a lot to start. When you invest in stocks, exchange-traded funds (ETFs), or mutual funds, your money has the potential to grow over time, thanks to the impact of compound growth.”
Negotiate a Raise at Work
If you simply want to make more money, consider asking for a raise.
“Individuals can proactively ask for salary increases through frequent negotiations, particularly if they consistently outperform expectations or undertake additional responsibilities,” said Kelly Ann Winget.
And if that doesn’t work, it may be time to start looking for a better-paying job. “In some cases, transitioning to an entirely new career may be the solution,” added Kelly Ann Winget. “If you feel there is no more room to grow in your current situation, focus on making a change as soon as you can. Some industries, such as trades services, technology or specific vocational fields, will pay you to transition.”
Keep Improving Your Skills
“As they say, skills pay the bills. The best way to make more money is to invest in upgrading your skills,” said Todd Stearn, founder and CEO of The Money Manual. “Look for skillsets that companies pay more for. Your new skills can lead to a promotion and raise, a new, better-paying, job, or even your own business or side hustle.”
Among other things, Stearn recommended learning some technical, communication, and people management skills.
“Explore continued education and skill development opportunities, especially if an employer is willing to pay for such career growth,” added Kelly Ann Winget. “Take advantage of the opportunities offered to you.”
Start Up a Side Hustle
Last but not least, consider picking up a side gig to supplement your income. Even if it’s only temporary, it could help you pay the bills, get ahead on debt, or contribute to your savings or investments.
“If you need to increase your income immediately, you can work in the gig economy, post your existing talents for sale as a freelance worker, or sell some of your possessions,” said Stearn.
Pham added, “An online-based business that practically runs on autopilot should be a great start.”
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This article originally appeared on GOBankingRates.com: How Much Do Americans Make in 2023? (And How Does Your Paycheck Compare)
