Smart Money Moves to Make If You Earn Less Than $50,000 A Year?

What to do if you make $50,000 per year or less.

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There are money moves you can make that will either greatly help your financial future or jeopardize it, depending on how you approach your annual salary of $50,000 per year.

First thing is first, recognize that a $50,000 salary puts you in the top ranks of one of the wealthiest in the world. Not kidding.

make $50,000 smart money moves

A 2013 Gallup poll estimated the annual household income for the world was just $10,000. So the first thing you must recognize is that even though you might not make all the money in the world… you actually kinda do.

So start by being: Grateful.

Gratefulness will help you produce an element of appreciation for what you do have. Being appreciative can easily help us get through the tough times when maybe our money situation, “Isn’t the best.”

Making $30,000, $40,000 or $50,000 per year might not seem like a lot, however, in addition to being grateful, there are some money moves you can make that can set you up for some bigger wins down the road.


1.Be honest with your $50,000 salary.

If you’re someone who makes $50,000 you should first get a grip as to where you stand.

First off, you probably shouldn’t be driving a $60,000 BMW. According to the IRS, if you make $50,000 annually you fall in between the $19,000 and $77,400 taxable income bracket. Thus you’re in the 12% tax bracket.

Factor in local taxes, social security and a few others (Like retirement and insurance) and most likely your monthly take-home is somewhere around $3,000-$3,300 per month. Back to my earlier point – don’t drive luxury cars.

If you take home $750-$825 per week after taxes the first thing to realize when analyzing your salary is that $70 spent is 10% of that weeks income. Spend $350 that week on a car payment – well you just spent 50% of your weekly income.

Simple translation – be really, really honest with what you make and don’t compare your salary or lifestyle to others.

2. Calculate your real hourly value.

So if you know you make about $750 a week, wouldn’t it be nice to know how much you make an hour?

Here is the catch, your real hourly rate is not how much you make when you divide your income by hours, it is how much you make when you factor every single hour work occupies.

For example: If you make $750 a week and you spend 45 hours working, 5 getting ready for work and another 10 commuting, well you’re actually dedicating 60 hours per week to make that $750… or about $12.50 an hour.


At first knowing this number will be a bit disheartening, but it will also motivate you to take action in terms of your finances, especially when it comes to making more money (See below) and doing your best at your job… so you can get a raise!

3. Figure out some ways to make extra money.

Thank you Al Gore for the internet. With the creation of online business models, phone apps and good ol fashioned side hustles, it has never been simpler (not easier) to make money outside of your full time job.

Our grandparents couldn’t offer their car up for ride shares or start a blog to make extra money. Heck, they couldn’t even work a second job in most cases. So with the digital age and the internet, figuring how to make extra money is a must.

Whether you make $50,000 or $20,000, you don’t want to have all your eggs in one basket, so here are some quick ideas to help you make extra money:

  1. Ask for a raise at work (the right way)
  2. Take some surveys
  3. Walk dogs
  4. Rideshare
  5. Work as a caterer on the weekends.


4. Pretend you make $5,000.

Yes, you read that correctly. Pretend you’re 17 again and you’re back at your retail job making a couple thousand per year (If you’re lucky).

While we all know 17-year-old kids don’t pay rent or most bills millennials and most adults are faced with, they also don’t drop $150 going out each weekend. Simply taking out $20 to go to the movies would make you tense up.

On the flip side, sometimes when we were 17 we also spent money on some really dumb stuff like fast food and stickers for our cars (Guilty!). Either way, with your $50,000 salary make sure you’re not overspending or letting your money quickly evade you every time you get paid.

Treat your hard-earned dollars like you worked hard for them… because you did!

Whatever you do, do not buy a new car if you make less than $50,000 per year.

smart money moves

In all actuality, the worst money move a person can make at any time regardless of what they make is to buy a brand new car. Buying certified pre-owned cars will save thousands in the long run and help you combat new car depreciation.

A new car can be a very costly mistake as tying up your income for 4-6 years for several hundred a month really hurts your financial flexibility. As a general rule of thumb, your car purchases should never be more than 25% of your annual salary.

So if you make $50,000 per year your car should be worth about $12,500… no more.


6. Pay off your debts.

Want to know the quickest way to making more money? Free up money that is tied up in payments for debt.

Student loans, credit cards, and car loans account for over $3.5 trillion worth of debt in the United States – and growing. So while it might be pretty common to have debt, that doesn’t mean you should keep it around.

When it comes to paying off debt it is important to keep in mind the following:

  1. Paying off debt is simple once you get going
  2. Every situation is unique
  3. Targeted debt pay off works the best
  4. Start small

Sure, paying off debt is easier said than done, but with a couple of hundred dollars per month to spare, you can knock out $60,000 in three years using the debt snowball approach.