Is $28,000 a Good Salary? A Financial Breakdown

The adequacy of a $28,000 salary depends entirely on an individual’s unique circumstances. Its true impact on financial well-being is shaped by a variety of personal and environmental factors that determine living costs and financial needs. This article explores the different elements that influence whether $28,000 can support a comfortable lifestyle.

Evaluating $28,000 in Context

The perception of a “good salary” is highly subjective, tied to individual needs and life situations. What one person considers sufficient, another might find challenging. For instance, a single individual living in a low-cost rural area will experience the purchasing power of $28,000 differently than a single parent supporting dependents in an expensive urban center.

Location profoundly influences the real value of a $28,000 salary due to vast differences in the cost of living across various regions. Housing, transportation, and other essential expenses can vary dramatically. Household size and composition also significantly impact financial requirements; supporting a family necessitates a higher income than supporting only oneself. Lifestyle choices, such as dining out or travel, can quickly consume a larger portion of a modest income. The adequacy of a $28,000 salary is relative to these personal and environmental factors.

Key Factors Influencing Living Costs

Housing typically represents the largest expenditure for most individuals and varies significantly by geographic location. The median monthly rent in the U.S. was $1,123, ranging from $732 in lower-cost areas to $1,651 in higher-cost areas like Hawaii. American households spend about 25.8% of their total earnings on housing, with renters often spending around 30% of their income on rent.

Transportation costs also vary, depending on reliance on public transit or personal vehicle ownership. Car payments, insurance, fuel, and maintenance quickly accumulate, while public transportation offers a more affordable alternative. Food expenses are another major budget item; average monthly grocery costs for one person range from $239 to $558, influenced by dietary choices. Americans spend an average of $504 per month on groceries.

Healthcare expenses are a considerable factor, encompassing health insurance premiums, co-pays, and deductibles. Individual health insurance premiums average around $456 per month for marketplace plans, though employer-sponsored plans are lower at about $111 per month. Unexpected medical events can lead to substantial out-of-pocket expenses.

A significant portion of gross income is reduced by taxes, including federal income tax, state income tax, and payroll taxes. Payroll taxes, which fund Social Security and Medicare, are deducted from wages at fixed rates. For 2025, employees contribute 6.2% of their wages to Social Security (up to an annual wage base limit of $176,100) and 1.45% to Medicare, totaling 7.65%.

Federal income tax is progressive, with different portions of income taxed at increasing rates. For a single filer in 2025, the first $11,925 of taxable income is taxed at 10%, and income between $11,926 and $48,475 is taxed at 12%. State income taxes vary widely, with some states having no income tax and others imposing rates from 1% to over 13%. After these deductions, the gross $28,000 salary is reduced to a lower net income, which is the actual amount available for living expenses.

Managing Finances on a $28,000 Salary

Effectively managing finances on a $28,000 salary requires diligent planning and adherence to a budget. Creating a detailed budget is fundamental, allowing individuals to track all income and expenses to understand where money is being spent. Budgeting methods, such as zero-based budgeting where every dollar is assigned a purpose, or adapting percentage-based rules like the 50/30/20 rule, can provide a structured approach. This involves allocating funds to essential needs, discretionary wants, and savings.

Prioritizing needs over wants is crucial for living within a limited income. Distinguishing essential expenses like housing, food, transportation, and healthcare from discretionary spending allows for informed decisions on where to cut costs. Reducing non-essential spending frees up funds for more pressing needs or savings goals. Managing existing debt, especially high-interest credit card balances, is also important. Paying down these debts reduces monthly interest payments, increasing available cash flow.

Building an emergency savings fund, even a small one, is important for financial stability. A modest goal, such as $500 or $1,000, can provide a buffer against unexpected expenses like medical emergencies or car repairs, preventing further debt. Individuals earning $28,000 might also qualify for government assistance programs. These can include food assistance, housing aid, or subsidized healthcare, which significantly alleviate financial pressure.

Exploring avenues for income enhancement can also contribute to financial improvement. This might involve taking on a side hustle to supplement the primary income or investing in skill development to qualify for higher-paying job opportunities in the future. These strategies, while requiring effort, offer pathways to increase financial flexibility and long-term stability.

Comparing $28,000 to Broader Income Levels

A $28,000 salary stands below national income benchmarks. The U.S. Census Bureau reported the median annual earnings for all workers aged 15 and over was $47,960 in 2022. For full-time, year-round workers, median earnings were $60,070 in 2022. This indicates a $28,000 salary is significantly below the national median individual income.

Compared to the federal minimum wage of $7.25 per hour as of 2025, a $28,000 annual salary (approximately $13.46 per hour for a full-time, 40-hour work week) is notably higher. However, many states and localities have minimum wages exceeding the federal rate, and a $28,000 salary may still fall below what is considered a “living wage” in many areas. A living wage is the income necessary to cover basic living expenses, including housing, food, transportation, and healthcare, without public assistance. This amount varies considerably by location and household size.

It is also useful to compare $28,000 to federal poverty guidelines. For 2025, the federal poverty level for a single person is $15,650, and for a two-person household, it is $21,150. While $28,000 is above the poverty line for a single individual, it falls close to or below the poverty threshold for households with multiple dependents, such as a family of three ($26,650) or four ($32,150). This comparison highlights that while $28,000 provides more income than the federal minimum wage, it may still present financial challenges, particularly for individuals supporting a family, depending on geographic location.