The $20/Hour Wage Is Enough


There is a common myth that the poor are people who are so unfortunate to be trapped in failing economic conditions that they cannot get out. It is not valid, and Americans on the other side of the economic spectrum should take note. Living in poverty can be very lucrative when you have no expenses for your daily needs.

The joke of a $20/hour wage is more than enough for a 40-hour work week in America. Most would agree that a person with that income can easily survive on $1,000 per month. The fact is; however, many Americans actually earn more than $20/hour and live quite comfortably.

Reasons Why $20/Hour Wage Is Great

$20/hour is more than enough for a single person in an industrialized country. Practically anyone can afford a 1-bedroom apartment and a car, even at that wage. It is made possible because of the low cost of living in America. There are many countries where $20/hour would not even cover the necessities!

The secret to living rich is not how much you earn but how little you spend. Here’s why:

1. Food

The average cost of living in America is practically flat across the board. It costs about the same to live in a prosperous state such as California or Hawaii as it does to survive in a state with a low cost of living such as Arkansas or Alabama. Spending the same amount on food is possible across any state border. The standard is the same, meaning all you have to do is get into the right frame of mind, and you can easily live on $10 per day.

2. Transportation

The average cost of driving is $0.50 per mile. $0.50 per mile multiplied by 40 miles per day equals $20/day in fuel costs, even in a car that’s getting 20 mpg. If you don’t mind public transit, using buses or taking the subway will save you about half of what it would cost to drive daily.

3. Utilities

In terms of energy for your home, keeping it cool during summer and warm during winter will be the costliest part. You can get a system that will keep your home comfortable regardless of the weather. An average electric bill is less than $10 per month, and it’s “only” about 20 miles on the gas meter!

4. Clothing

Clothing costs go down when you live more than $20/hour. The rule of thumb is to buy the absolute minimum, wait for the clothing to wear, and then replace it. If you buy something that will last more than a few months, you spend too much.

5. Entertainment

You can watch TV, surf the net, talk to friends on the phone, read a book or learn a new skill – all free. Going out to eat adds up fast. Instead of restaurants, go grocery shopping at least once a week and save over $100 per month.

How Much Is A $20/Hour Wage in A Year, Month, Week, Or Day?

While working 8 hours per day, 5 days a week, a $20/hour wage is more than enough to live alone in a studio apartment regardless of where you live.

  • Daily- $160- $20 ✕ 8 hours
  • Weekly-$800- $20 ✕ 40 hours
  • Monthly- $3,467- $20 ✕ (2,080 hours / 12 months)
  • Yearly- $41,600 – $3,467 ✕ 20

Taxes You Should Be Aware Of

The IRS considers it your responsibility to report all of your income. If you make $20/hour, you must report every dollar over $20. Many people don’t think to budget for taxes because they assume they will be taken out yearly, but nothing is done automatically.

Federal Taxes

The IRS takes out a flat rate of 15% on the first ,025 for single filers. From $20 to $100, you’re going to owe 4% in taxes, on the highest bracket, you’re going to pay 26%.

State Taxes

On top of federal taxes, you’ll also be paying state taxes. Alabama has a flat tax rate of 5%, for example. It’s as high as 8.3% in the highest bracket in California.

Tips for Living on $20 per Hour Wage

Save your tips! Many people in the service industry do not make much more than $20/hour. Attendants, servers, bartenders, and receptionists routinely get upwards of $2 per hour in tips. If you’re living on $20/hour, consider saving up your tips for emergencies or retirement.

The secret to living rich is not how much you earn but how little you spend.

Americans spend more than they need to daily. Going into debt is simple when so many credit card companies are eager to give you money. When living on $20/hour, it’s important to start watching what you spend. If you have the money for it, there’s nothing wrong with spending $50 per week, but don’t go into debt just because you spent too much.

The Challenges of Living on A $20 An Hour Wage

Unfortunately, $20/hour is not enough for most people who have to support a family because of the tremendous living costs, mostly in major cities like New York, Los Angeles, and Chicago. As a result, the average American spends $3,000 yearly on necessities and has to use that income on everything else.

Of course, plenty of people can live on $20/hour in a decent area of America, but the odds of being able to do this all across the country are very low. The responsibility is higher if you plan to move out West or South because those areas have significantly lower living costs than New York City.


Living on $20/hour is possible, but it takes discipline and a strong will. There’s no excuse not affording to live in a studio apartment for $20 per hour. If you can’t get by with just $20/hour, you will have to find something that pays a little more. Living in America is expensive, and there are no two ways.

author avatar
Michael Solomich

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