By Kelly Boyer Sagert ·March 18, 2024 · 6 minute read
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What’s considered a “good” salary in Texas depends on your household size and lifestyle, but most Texans make between $45,000 and $100,000 annually.
Texas cities have differing costs of living, of course — Austin is much pricier than Amarillo — so where you live in the Lone Star State also matters. Let’s break it down further.
What Is a Good Salary for Texas?
A good salary, in many people’s minds, is one that allows an earner to save, take vacations, eat out, and so on. But before we can calculate that amount, we need to look at the average income required to cover basic needs in Texas.
Each year, MIT releases living wage figures — the income that one or two working adults, with or without children, must earn to pay for basic living expenses. Living wage numbers are expressed as an hourly rate, and it’s assumed that the person will work full time.
Wages needed to cover basic needs are as follows:
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| Living Wage for 1 Adult | |
|---|---|
| No children | $20.92 |
| 1 child | $35.39 |
| 2 children | $43.60 |
| 3 children | $56.61 |
| Living Wage for 2 Adults, 1 Working | |
|---|---|
| No children | $28.89 |
| 1 child | $34.44 |
| 2 children | $38.55 |
| 3 children | $41.27 |
| 2 Adults, Both Working | |
|---|---|
| No children | $14.44 |
| 1 child | $19.78 |
| 2 children | $24.20 |
| 3 children | $27.97 |
If you multiply the hourly figure by 40 hours a week and 52 weeks, you’ll get the living wage as an annual salary. For an individual with no kids, that comes out to around $43,500.
That income would pay for rent and utilities, minimal food, healthcare, child care, and other basics. But it’s not enough to cover takeout, restaurant meals, a deluxe apartment, vacations, or savings for retirement or a house.
💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.
Average Annual Salary in Texas
So what is a good yearly salary in Texas? According to MIT, the top three professions in Texas pay an average of $113,000, while the three lowest paying fields average out to around $28,000. Most Texans then make somewhere in the middle. However, statewide figures can’t tell you what constitutes a good salary in larger cities like Austin, where the cost of living is much higher.
Another measure of what constitutes a good salary: one that allows you to purchase an average-priced home. The average home price in the Woodlands, one of the most popular suburbs in the country, is around $540,000. A buyer would need to make over $100K to qualify for a mortgage. In the Panhandle or Dallas, however, home prices are considerably lower.
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Average Annual Expenses in Texas
When determining a living wage, MIT considers these expenses: food, child care, medical, rental housing, transportation, internet and mobile, civic, and annual taxes (including individual income tax, payroll tax, corporate income tax, and excise tax, but not property tax). By the way, “civic” is a catchall category that includes cultural attractions, hobbies, and pets, while “other” groups together clothing and personal care items.
As noted above, one adult with no children requires a gross income of $43,500 on average. This is how that income might allocated:
• Food: $3,812
• Child Care: $0
• Medical: $2,992
• Housing: $13,367
• Transportation: $10,216
• Civic: $2,165
• Internet & Mobile: $1,468
• Other: $3,903
• Taxes: $5,584
Supporting a family of two working adults and three children requires an income of about $116,350, which breaks down as follows:
• Food: $13,662
• Child Care: $26,381
• Medical: $9,734
• Housing: $22,290
• Transportation: $17,116
• Civic: $5,191
• Internet & Mobile: $2,048
• Other: $9,841
• Taxes: $10,088
To compare your spending to these figures, sign up for a free money tracker app.
How Much Money Do You Need to Live Comfortably in Texas?
Comfort is in the eye of the beholder. Some people want luxuries while others embrace financial minimalism. This is a “less is more” attitude to spending. People who follow this philosophy focus on purchases that will add meaning to their lives.
When determining the income you need to live comfortably, factor in where you fall on the minimalism to luxury spectrum. There’s no “bad” answer; it’s just important to be honest when budgeting. Also, what changes are you willing to make in order to save more? For instance, would you downsize your home?
Texans with a financial minimalist philosophy will be comfortable with less money than someone who strives for luxury. Minimalists often reap the benefits of living below their means, which can make room for having an emergency fund, spending in ways that are better for the planet, and stressing out less about finances.
If you’d like a more structured approach to saving and spending, the 50/30/20 budget can help. The three numbers represent the percentage of income that will be allocated to needs, wants, and savings, respectively.
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Which City in Texas Has the Lowest Cost of Living?
Harlingen (pop. 71,925) has a cost of living that’s 20.4% lower than the national average, according to recent data from the Council for Community and Economic Research. Harlingen is in the Rio Grande Valley about 30 miles from the Gulf of Mexico. Its median home sale price was $290,600 in March 2024.
💡 Quick Tip: Income, expenses, and life circ*mstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
The Takeaway
What is a good salary in Texas? It depends on your family size, location, and spending habits. Most individuals make between $45,000 and $100,000. You’ll need an income on the higher end of that range if you’re living in Austin, with its high cost of living. In Harlingen, on the other hand, where the cost of living is 20.4% lower than the national average, you can get by on much less. With that in mind, a good salary in Texas is between $55K and $73K. To live comfortably anywhere, it helps to track your spending and saving.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
FAQ
What is a livable salary in Texas?
The answer depends on your spending habits, locale, and how many people live in your household. The living wage for a single worker with no children is $43,500 before taxes, which is just enough to cover necessities. Two working adults with two children need a gross income of $100,689 to cover basic needs
What is considered rich in Texas?
To be considered middle class in Texas, you’ll need to earn between $44,865 and $133,926, according to 2023 data from SmartAsset. In order to move into the upper class, you’ll likely need to earn more than $133,926.
What is the top 1% income in Texas?
You need to earn more than $631,000 per year to be in the top 1% in Texas. This is similar to the national average.
Photo credit: iStock/gustavofrazao
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