Is 40k a Good Salary?

The cost of living is increasing daily, and making ends meet on a salary that does not cover all the expenses is becoming very difficult.
14 November 2023

It’s the dream of every person to have a good-paying job so the family can live a comfortable life. The cost of living is increasing daily, and making ends meet on a salary that does not cover all the expenses is becoming very difficult. So, is a 40k salary good?

Generally speaking, a 40k salary isn’t good for most people, especially if you are living in the United States. A 40k salary annually will categorize you as a low-income earner or below the median individual income in the United States. After taxes, you will have even less money to work with every month and will have to carefully budget your spending.

Most people would struggle to live on that salary, especially if they had a family to support. The cost of living is just too high, and 40k does not go very far. The median household income in the United States is around 67k. This means that half of all households earn less than 67k, and half earn more, so a 40k salary puts you in the lower half.

However, a 40k salary is not all doom and gloom. It is possible to live on a 40k salary if you don’t have a family to support and are willing to live frugally. For a single person, this salary is enough for a credit card. Although it may affect how often you can apply for a Chase credit card. You can save money by living in a cheaper area, eating at home instead of going out, and cutting back on unnecessary expenses. 

What Is a Good Salary?

A good salary is one that meets all your basic needs and leaves you with some money left over to save or spend as you please. It should allow you to live comfortably and provide for your family if you have one. In most cases, a good salary is higher than the median individual income. This ensures that you are in the upper half of the earners and have more disposable income.

An annual salary of 70k and above before taxes is considered good in the United States. This leaves you with enough money to work with after taxes, which is enough to cover all your basic expenses and have some money left over. It is also a salary that puts you in the upper half of earners, which is where you want to be.

A good salary will also ensure you have money for entertainment, vacations, helping others, and other luxuries. It should not be a struggle to make ends meet every month and should give you some financial breathing room.

What Factors Determine a Good Salary?

A reasonable salary is one that meets all your needs and allows you to have a comfortable life. You want to be able to cover your basic expenses, have some money left over for savings and investments, and not have to worry about money every month. The following factors will help determine what is a good salary for you.

Location: The cost of living in different areas will vary, so your salary will have to adjust accordingly. A salary that is considered good in a rural area will not be enough to live comfortably in a big city. Mostly, housing in urban areas is more expensive, and the general cost of living is higher.

Family size: The number of people in your family will also affect how much money you need to live comfortably. A single person will have lower expenses than someone with a family. Therefore, a good salary for a single person will be lower than a good salary for someone with a family.

The key skills: Skills play a vital role when a company or an organization is deciding your salary. The more in-demand and rare your skills are, the higher your pay will be. Most times, your skills will set you apart from other candidates, and this will result in a higher salary.

Years of experience: Your experience level is another important factor in determining your salary. Experience combined with the level of education is always a major deciding factor when companies are hiring. The more experience and education you have, the higher your pay will be.

Supply and demand: The main driving factor for any job or career is the demand. If there are more people looking for a particular job than there are jobs available, then the salary will be lower. On the other hand, if there are more jobs than people looking for them, then the salary will be higher.

Industry: The industry you work in will also play a role in how much money you make. Some industries are known to pay higher salaries than others. For example, the tech industry is known for its high salaries, while the retail industry is not.


A good salary is the one that meets all your needs and allows you to live comfortably. Always consider your unique circumstances when determining a good salary. Also, remember that a good salary is relative and will differ from person to person. Lastly, spend what you earn wisely. Cheers!