Your Money Matters Series: Part 1 – How Much Money You Earn Matters

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(Last Updated On: August 24, 2017)

The new buzz phrase, “(You fill in the blank) Matters.” Well, may I suggest, “Your Money Matters” as a serious “no pun intended” statement. I invite you to stick with me through a six-part series of ways “Your Money Matters.”

Let’s start first by exploring how much money you earn. I’m sure that we can all agree that we need money to live and take care of our responsibilities. The question is how much should you earn? Having a basis for what it cost to live has a direct impact on how much money you earn.

When choosing a career path, the leading indicators in the decision-making process include passion and income. In some cases, income has the heaviest weighting.

Let’s take a look at what it cost to live in Houston, Texas. Data provided by:

Four-in person family cost: $2,964.94 without rent.

A single person monthly cost: $834.82 without rent.

Cost of living in Houston is %23.98 lower than New York.

Cost of living rank 178th out of 518 cities in the world.

Rent Per Month:

1 Bedroom Apartment in City Center area: $1,362.19

1 Bedroom Outside of City Center area: $914.09

3 Bedroom Apartment in City Center area: $2508.88

3 Bedroom Apartment Outside of City Center area: $1588.50

Average Monthly Salary (After Tax): $3,997.93

Utilizing the numbers provided above the total estimated cost for a family with rent, (not living in the City Center area): $4,553.44

These are estimated cost and do not factor in other reasonable expenses that a family would incur. If you are residing on the West Coast, East Coast or Hawaii these costs are considerably higher. Determining what location you will raise a family or pursue career options are critical to how much money you earn. Most salaries are commensurate to the location its offered and cost of living for that area. However, the unknown factor is how we will choose to live. Statistically speaking, a large percentage of Americans are living above their means and drowning in debt. Couples are living on the income of two and singles are pursuing additional streams of income.

How much money you earn matters because what you earn dictates how you will live. Here are some questions you can ask yourself or explore with your significant other to determine what you need to earn and how it should be managed.

  1. Does my/our salary support my/our living expenses?
  2. Are there any opportunities to increase my/our income where I’m/we are currently employed?
  3. Do I/we have a personal financial strategy to minimize unnecessary expenditures and live according to my/our means?
  4. Where will I/we retire and what does it cost to live there?
  5. What amount of money will I/we need to support retirement cost?
  6. Where will I/we raise kids and will they attend public or private school?
  7. What will be the cost? What are the cost of taxes to live in this area?
  8. How much will I/we need to increase my/our cash flow over time to accommodate inflation?

In conclusion, setting goals and having a strategy for how much money you need to earn and how it will be managed is vital. Designing your current living arrangement and future retirement plans are major ingredients of this process. Increasing the money you earn and how much of it you pay yourself is also very important. Understanding how money works and how to make it work for you should be a major priority.

Contact us today at 1-844-700-4463 to participate in our National Campaign for Financial Literacy. Be included in the 1 million people who will be financially educated by 2020. Attend complimentary financial education workshops in and around the Houston area, throughout the United States and Canada and Get Educated!

LaShonda Johnson & Toni Sanders

About the Author: LaShonda Johnson is a licensed certified financial educator. She is also a founder of Hou$ton Hou$ewives of Finance where, “Our clients mean the world to us! To be able to change a life financially is a very rewarding mission. Each principle here at HHF started like everyone else, letting our finances manage our lives. We all knew how to work hard for money and how to spend money. As we embraced the powerful impact of learning how to manage our finances, we each realized that we wanted to teach others how to accomplish what we have – a solid financial foundation!” Please visit our website at: Hou$ton Hou$ewives of Finance.

Your Money Matters Series: Part 1 – How Much Money You Earn Matters