Sep 13, 2024
When it comes to your financial journey, the amount you earn matters a great deal. In fact, Rachel Cruze, a financial expert and famed radio personality Dave Ramsey's daughter, commented in a YouTube video that "your income is your most powerful wealth-building tool."
Cruze explained that while you shouldn't compare yourself to others since everyone has their own financial journey, the income you make plays a key role in determining if you have enough money to accomplish financial goals.
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Since income does matter a great deal, let's take a look at what the average earning for Americans is so you can see how your salary stacks up.
The average salary in the U.S.
According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary in the country was $65,470 in May 2023. This was up almost 6% from the same period in 2022. The occupations with the highest average annual pay were pediatric surgeons, cardiologists and orthopedic surgeons, except pediatric. The occupations with the lowest average annual pay were shampooers and fast food cooks and counter workers, but this wasn't including occupations like actors and singers that do not generally work year-round, full time.
If you really want to see how you compare, it's also helpful to look at median rather than average income.
The median is the mid-point, or the middle of a group of numbers, while the average is the sum of all the numbers divided by the number of people in the group. The average is more likely to be skewed higher if there's a small number of people earning very big salaries.
According to the Bureau of Labor Statistics, the median annual wage in the U.S. in May 2023 was $48,060. Income varies for many reasons, ranging from age to career choice to geographic location. The median annual wage was $56,840 in New York state and $37,500 in Mississippi.
Still, knowing the median helps you see where you stand.
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Improving your income can impact your finances for decades to come
Whether your income is at the higher or lower end of the spectrum, the key should be being able to live below your means, as Cruze explained in the video. The bigger the gap you can put between your spending and your earnings, the more you have left over to invest for your future.
You can try to find spare money to invest by reducing spending, but you can only drop your costs so far. If you focus on growing income, that goal doesn't come with an upper limit. Develop new talents, advocate for salary increases, and make yourself an invaluable employee to increase what you make over time.
Then, you can earn enough to beat the average, use it wisely, and have more money left over not just to meet today's needs but to set yourself up to meet tomorrow's.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
