In his stimulus plan, President Biden proposed that the federal minimum wage be raised from $7.25 an hour to $15/hour. But what does this mean for our wallets? $15 an hour is how much per year?
As you can see so far, it’s more than double the current wage!
15 Dollars an hour is how much a year?
We already know that there are 52 weeks in a year. Assuming you work 40 hours every single week, you would be working 2080 hours per year. A person making $15 an hour would make about $31,200 per year.
$15 an hour breaks down to:
- $120 per day ($15 x 8-hour workday)
- $600 per week ($15 x 40-hour week)
- $1,200 biweekly (Weekly x 2)
- $2,600 per month (Annual ÷ 12 months)
- $31,200 per year ($15 x 2080 hours)
However, after taxes, $15 per hour would be reduced to around $11.88 to $12.84 (depending on the state you live in). That means that after taxes your annual salary would be $24,700 – $26,700 per year. Your total take-home paycheck could be:
- Hourly pay= $11.88 to $12.84
- Daily paycheck= $95.04 to $102.72
- Weekly paycheck= $475.20 to $513.60
- Biweekly paycheck= $950.40 to $1027.20
- Monthly paycheck= $2,058 to $2,225
Ouch! That’s a drop of $4,500 to $6,500 between the highest and lowest taxed state. To make the most of your salary, you might want to live in a state that does not tax your income.
States that don’t tax wages: Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee.
However, it is also beneficial to compare the cost of living in different states. Your money can go further in some.
15 Dollars an Hour Jobs
These are jobs paying an hourly wage of at least $15.
- Target employees (They made it a goal by the end of 2020)
- Customer Service Representative
- Warehouse Workers
- Recreation Programs Specialist
- Leasing Agent
- Library Specialist
(I found these positions by searching job boards for my area.)
Is $15 an hour good?
$15 per hour is certainly much better than the current federal minimum wage, however it still isn’t a great salary. $7.25 per hour is $15,080 per year, so $31,200 is quite an increase, but you would still need to budget and spend money wisely in order to get by.
My family of two has successfully done this living on $2500 a month. That would be about $17 an hour after taxes, but we certainly still have a lot of wiggle room. By not having a car payment, that budget would drop a little over $250/mo.
I think that $15 an hour is a livable wage for a small family, but it can be hard for larger families unless there is another source of income. It will also largely depend on where you live and how you budget.
How to Live on $15 an Hour
No matter how much money you make, the most important thing is to live below your means. The main reason why people end up in debt, even rich people, is because they are spending more than they earn. If you want to live a life of financial freedom, that is not good.
The 4 main steps to being financially secure with your income are to:
- Create a budget: Learn how to create a simple budget here.
- Save money: Remember, make saving a priority before spending.
- Lower your expenses: Here are 40 cheap living tips that I live by.
- Pay off debt fast: Paying the minimum fee results in crazy interest amounts. Fast track your debt payoff by doing these things.
Learn more tips with my guide: How To Live On A Budget.
For example, you can save money on housing by:
- Renting a room
- Living in a smaller home
- Living outside of the city (cheaper homes but longer commutes).
I also have a post on my monthly grocery shopping list where I only spend $200 (meal plans included)!
$15 is a good hourly wage, but if you can’t make this salary work for your lifestyle, then it might be best to look for a better paying job or pick up a side hustle.
$15 an hour budget example
Not sure how to budget and live off $15 an hour?? Maybe this will help.
This budget breakdown will be based on the lower of the two after-tax monthly salaries: $2,058. Of course, the expenditures in your life may be completely different.
Play around with the numbers and find what will work for you while still allowing you to save money and live a good life.
- Savings of 10% = $205.80
- Rent/ Mortgage + Utilities= $679 (⅓ of income)
- Car Payment= $0 (You can purchase a cheap Honda or Toyota for about 2k.)
- Car Insurance= $100
- Health Insurance= $100
- Cellphone= $50
- Internet= $50
- Gas= $60
- Groceries= $100
- Personal & Misc= $100
- Entertainment= $50
- Total = $1494.80 with $563.20 leftover
It may not be easy to budget on this salary, but it is doable. The key is to prioritize your needs and not waste money.