FaZe Clan co-owner and uber-successful Youtuber Brian Rafat Awadis, better known as FaZe Rug, is moving up in the world. Or rather, moving out.
Known for his engaging content that spans from pranks to heartfelt vlogs, the YouTube phenomenon — who has a massive following of over 25 million subscribers — set up residence in a ritzy $4.4 million mansion located in Poway, California, a suburb of San Diego.
The purchase came after a stressful time that saw the Youtuber move back in with his parents due to the pressures of his growing fame, seeking comfort during a challenging time.
Now in a much better mental space, the successful content creator is enjoying life in his lavish new digs, often sharing clips filmed inside his two-story mansion. He’s even given his fans a full tour of the sprawling abode, and his followers had nothing but words of support and admiration.
And if one of his hit videos got you wondering where FaZe Rug lives, we have the scoop on the YouTube creator’s impressive Cali home.
Purchased in 2022 for $4.4M
In January 2022, FaZe Rug shelled out $4.4 million for a luxurious estate in the private gated community of The Heritage in Poway, one of the most popular suburbs around San Diego.
Sitting on a 1.04-acre lot, the 6,714-square-foot home is not the only structure on the property. There’s also an attached guest house, a gazebo, and a private sports court, with a total of 10 parking spaces.
The purchase marked a significant upgrade from his previous living arrangements, signaling a fresh start for the content creator. Prior to this, Rug had opened up about the decision to move back in with his parents for a while due to the pressures of his growing fame.
Property specs & amenities
FaZe Rug’s mansion spans a total of 6,714 square feet, featuring seven bedrooms, six full bathrooms, and one half bathroom.
The property, built in 2017, boasts modern amenities and sophisticated architecture that includes Mediterranean and Spanish influences. Highlights of the home include two grand staircases, a fully equipped open-concept kitchen, and a family room that seamlessly transitions into a stunning outdoor living space.
Beyond the basics: Plenty of unique features
What sets FaZe Rug’s house apart are its many playful, unique features, fully displayed during the video tour the Youtuber recorded for his fans.
A wall made entirely of LEGO bricks not only dazzles but hides miniature-themed rooms, providing quirky surprises that echo Rug’s creative and fun-loving personality.
These rooms feature everything from a LEGO spaceship to a tiny treasure trove, making them a hit not just in person but also as fun spots during his video tours.
It has a grand double staircase
Entering Rug’s mansion, you’re greeted by a grand double staircase reminiscent of a scene straight out of “Dynasty.”
This opulent entryway, complete with a sparkling chandelier and modern, airy aesthetics, sets the stage for the rest of the home’s lavish elements. It’s this kind of dramatic flair that gives the house its soap opera-worthy feel — luxurious, inviting, and just a tad over the top.
“The best backyard in the entire world”
FaZe Rug’s mansion is not just impressive on the inside; the outdoor amenities turn his backyard into a true entertainment paradise, making it perfect for both relaxation and hosting epic gatherings — not to mention shooting wildly creative videos.
The centerpiece is a large swimming pool with an integrated spa, perfect for cooling off or enjoying a soak under the California sun. Surrounding this is a luxurious patio area equipped with comfortable seating and an outdoor fireplace, and there’s also a private sports court and a mini golf course complete with a sandpit.
The backyard — which FaZe calls “the best backyard in the entire world — also comes with a full-scale outdoor kitchen, a pizza oven, and multiple fire pits. With breathtaking views of the surrounding mountains as a backdrop, the backyard offers not just fun and games but also a peaceful escape.
Fans were swept away by FaZe Rug’s house
When FaZe Rug shared his new home with his YouTube audience, the reactions were overwhelmingly positive.
Fans praised not only the house’s beauty and FaZe Rug’s taste but also the inspirational aspect of his success. Comments ranged from excitement about future content filmed in the home to personal messages of congratulations, emphasizing how Rug’s journey has motivated others to pursue their dreams.
“Congrats Rug, you deserve this dream house can’t wait to see your future vids at this house you bloody legend love your vids you deserve this house more than anything,” one fan shared.
“This is what happens when you’re humble and filled with gratitude! Stay you always Rug!” another chimed in.
See also: Inside JoJo Siwa’s $3.5 Million Mediterranean-Style Mansion
Netizens who’ve been following FaZe’s content since he first started out have expressed joy for the content creator’s success: “I have literally watched you grow up thru YouTube, this is nuts! Your home is so beautiful!!!! Congratulations Rug, for anyone dreaming big, you will do it. If you’re thinking about it, Just do it! Don’t worry about what anyone thinks, just worry about you and the ones who support you Let’s get it”
The new house’s resemblance to his former digs didn’t go unnoticed
Other fans were quick to point out the house’s resemblance with FaZe Rug’s parents’ house:
“Can we just talk about how the layout of this house is so similar to his parents house?!!! Maybe that’s what makes it feel so homey. Congrats rug it’s well deserved” one fan noted, with another echoing his observation: “It feels homie because the entrance looks like your parents’ house haha. Congrats,” @therealwaseem said.
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If you’re on the hunt for the right pattern to decorate the walls of your home, look no further than Just Wallpaper in Brookfield.
The wallpaper store’s new location at 9219 Broadway Ave. opened to customers Tuesday. Co-owners Julia Hamilton and Kate Sanderson staff the stop themselves Tuesdays through Saturdays, helping customers who walk in or book appointments browse through the thousands of patterns the store has available to personalize their homes and make their spaces feel lived in.
“Don’t decorate your house gray and white for the future owner. Why are you doing that?” Hamilton said. “You live there. Decorate it for you!”
Berwyn Shops, an incubator program for small businesses in Berwyn’s Roosevelt Road corridor, and realized how much demand there was for a walk-in wallpaper store.
“A week into getting our LLC, the person from the [Berwyn Development Corporation] was like, ‘Oh, hey, do you want to get involved in this?’ And the next thing you know, we donated wallpaper to all 12 of the shops, and we have a park bench with our logo on it,” Hamilton said. “Then, people were like, ‘Well, we want to come check the books.’”
While Hamilton said she hadn’t envisioned Just Wallpaper having a storefront, she and Sanderson converted a “little, tiny, tiny office space” in Berwyn — the entire building was smaller than the front room of the store’s current space, Hamilton said — into a shop in June 2022 so they could host customers. In January 2023, they had expanded the store’s hours, accepting walk-in customers two days a week. By September 2023, they were open four days a week for walk-ins.
“Most of what we found is that people were coming into the little shop, and they [were] like, ‘Oh my God, thank God I found you. I’ve been on the internet for three months, I’ve spent $100 on samples, and I still haven’t found the [right] wallpaper. Help me!’” Hamilton said. “That’s where it became, like, ‘OK, this is a shop, and we’ve got to find a real store, and this is real.’ We’re solving a little problem, but we’re solving it.”
When it came time for Just Wallpaper to find a new location, Hamilton said the business’s current space felt right as soon as she saw it. She said Brookfield, too, made sense for Just Wallpaper’s new home due to its proximity to Chicago and its central location among the western suburbs.
“One of the things we learned rather quickly is that our clients that were in the city had no problem coming to Berwyn or Brookfield,” Hamilton said. “It’s not that far. It’s no big deal.”
Since the original Just Wallpaper was in Orland Park, “We have a lot of south suburb clients and people that are willing to drive, and they’re not willing to drive into the city,” she said. “We knew our general client is, you know, from Oak Park to LaGrange … We didn’t want to venture far, and Brookfield ended up being the most perfect.”
Hamilton said wallpaper has had a “really big surge” in popularity since the COVID-19 pandemic.
“We’ve seen it in real estate, but in interior design, [there’s a trend of] just making your space more your own, making it more lived in, making it more personal, and wallpaper’s just like a really easy way to do that,” she said. “It can be a luxury product based on price point, but just like anything else, it can also have a core-basics price point as well.”
While Just Wallpaper is just starting out at its Brookfield location, Hamilton said she and Sanderson have their eyes on the future.
“Not on the immediate horizon, but long-term horizon, I would love — you know, assuming we are thriving in the space, and wallpaper is trending in the way it has been — I would love to open more locations and have it be a retailer for wallpaper,” Hamilton said. “That’s the big dream.”
If you’re thinking about refinancing your home loan or paying off your mortgage early, you might request a mortgage payoff statement. The amount due on this document is likely to be different from your current balance because it includes interest owed until the payoff date and any fees due.
Read on to learn more about what a mortgage payoff statement or letter is and when you might need one.
What Is a Mortgage Payoff Statement?
Starting with mortgage basics, a mortgage is a loan used to purchase different types of real estate, including a primary home. A bank or other lender agrees to lend money, which the borrower commits to pay back monthly for a set period of time and with interest.
The different types of mortgage loans include conventional and government-insured mortgages and reverse mortgages.
There are jumbo loans, which exceed the dollar limits set by the Federal Housing Finance Agency, and home equity loans.
Say you have a mortgage and want to know exactly how much you’d need to pay to satisfy the loan. A mortgage payoff letter will tell you that magic number. Unlike your current balance, the payoff amount includes interest owed up to the day you intend to pay off the loan. It may also include fees that you’re on the hook for and haven’t paid yet.
Your monthly mortgage statement, on the other hand, only shows your loan balance and the amount due for your next monthly payment. 💡 Quick Tip: You’ve found an award-winning home. Enjoy an award-winning mortgage experience, too. SoFi has knowledgeable Mortgage Loan Officers to guide you through the process.
How Does a Mortgage Payoff Statement Work?
You can request a payoff statement from your loan servicer at any time. Note: Your mortgage servicer may be different from your lender. The company that manages your loan handles billing, accepts loan payments, keeps track of your principal and interest, and fields questions from borrowers.
You may request a payoff statement for any type of loan, including mortgages, student loans, personal loans, and auto loans. However, if you need your mortgage payoff statement, go to your mortgage servicer directly. The name and contact information of your mortgage servicer is included in your monthly statements.
When you make the request from the company that handles your mortgage servicing, you’ll need to provide the following details:
• Your name
• Address
• Phone number
• Your loan number
• The date you want your payoff to be effective if you’re seeking to pay off your mortgage early.
Asking for a payoff statement does not necessarily mean that you intend to pay off your loan immediately. You may simply be determining whether or not paying off your mortgage early is feasible, for example. The request itself does not initiate the prepayment process.
Traditional lenders, such as brick-and-mortar banks, may mail you a paper mortgage payoff statement. Online lenders may send a payoff statement online.
Recommended: 5 Tips for Finding a Mortgage Lender
What Information Do Mortgage Payoff Letters Contain?
All mortgage payoff letters tend to contain similar information, including:
• Payoff amount: The amount of money that would satisfy the loan.
• Expiration date: The date through which the payoff amount is valid. The letter may also include an adjusted amount should you pay before or after the expiration date.
• Payment information: The letter will also usually tell you who to make the final check out to and where to mail it.
• Additional charges: You will be alerted to any additional fees and charges that you’ll need to include.
💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.
Do You Need a Mortgage Payoff Statement?
There are a few common situations in which you might need a payoff statement.
• Refinancing a mortgage: When you refinance your mortgage, your chosen lender pays off your old home loan with a new one, preferably with a lower interest rate and possibly a new term. When you seek to refinance, your new lender may ask you to provide a payoff statement on your current loan.
• Prepaying a mortgage: It’s possible to pay off a mortgage early. A payoff statement will show you exactly how much you’d need to pay to do so. Most prepayment penalties for residential home loans that originated after January 10, 2014, are prohibited. Still, check before you decide to prepay.
• Working with a debt relief company: If you’re having trouble managing your debts, you’ve fallen behind on payments, or you otherwise need mortgage relief, you may choose to work with a debt relief company that can help negotiate with your lenders. The company will need to see payoff statements to get an idea of the scope of your debt.
• Collections and liens: A lender might send you a payoff statement if you’ve fallen behind on your payments and they are sending your debt to a collection agency. In this case, the payoff statement may tell you how much you need to pay to stop the collection action.
If your lender decides to seize your home to recoup unpaid mortgage payments, they may place a lien on the property. They may send a payoff statement that alerts you that your property will be seized if the specified amount isn’t paid in full.
There are other ways to figure out how much you owe on your mortgage loan. You can talk to your lender and ask for a verbal payoff quote. This will provide an estimate, but understand that it is not a legal agreement and isn’t binding.
The Takeaway
If you have a home loan, you may want to request a mortgage payoff statement, especially if you’re thinking about refinancing or paying off your mortgage early. Requesting the mortgage payoff letter does not initiate any formal processes, so it’s fine to think of it as an information-gathering exercise.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
How do I get my mortgage payoff statement?
Contact your loan servicer to request your mortgage payoff statement.
When should I get my mortgage payoff statement?
Request your mortgage payoff statement when planning to prepay your mortgage, refinance, or consolidate debt.
How long does it take to get a mortgage payoff statement?
Generally speaking, you should receive your mortgage payoff statement within seven business days of your request.
Photo credit: iStock/Vadym Pastukh
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Portfolio beta refers to a popular metric that investors use to measure a portfolio’s risk, or its sensitivity to price swings in the broader market. While past performance does not indicate future returns, knowing a portfolio’s beta can help investors understand the price variability of their stocks, or how much their holdings may move if there’s stock volatility or big gains in a benchmark index like the S&P 500.
Investors often consider beta a measure of systematic risk, or risk that stems from the entire market and that investors can not diversify away. Macro events such as interest-rate or economic changes often fall into the category of systematic risk, while idiosyncratic, stock-specific risk includes events like a change in company management, new competitors, changed regulation, or product recalls.
Table of Contents
How to Calculate Beta of a Portfolio
The Beta of a portfolio formula requires relatively simple math, as long as investors know the Beta for each stock that they hold and the portion of your portfolio that each stock comprises.
Here are the steps you’d follow to calculate the Beta of a hypothetical portfolio:
1. Calculate the total value of each stock in the portfolio by multiplying the number of shares that you own of the stock by the price of its shares:
Stock ABB: 500 shares X $20 a share each = $10,000.
2. Figure out what proportion each stock in their portfolio represents by dividing the stock’s total value by the portfolio’s total value:
Stock ABB’s total value of $10,000/Portfolio’s total value of $80,000 = 0.125.
3. Multiply each stock’s fractional share by its Beta. This will calculate the stock’s weighted beta:
Stock ABB’s beta of 1.2 X its fractional portfolio of 0.125 = 0.15.
4. Add up the individual weighted betas.
Here is the whole hypothetical portfolio with a total beta of 1.22, benchmarked to the S&P 500. That means when the index moves 1%, this portfolio as a whole is 22% more risky than the index.
Stock
Value
Portfolio Share
Stock Beta
Weighted Beta
ABB
$10,000
0.125
1.20
0.15
CDD
$30,000
0.375
0.85
0.319
EFF
$15,000
0.1875
1.65
0.309
GHH
$25,000
0.3125
1.42
0.44375
Sum
1.22
4 Ways to Characterize Beta
Investors always measure a portfolio’s beta against a benchmark index, which they give a value of 1. Stocks that have a beta higher than one are more volatile than the overall market, and those with a beta of less than one are less volatile than the overall market.
Understanding beta is part of fundamental stock analysis. Once you know the beta of your portfolio, you can make changes in order to increase or decrease its risk based on your overall investment strategy by changing your asset allocation.
There are four ways to characterize beta:
High Beta
A high beta stock — one that tends to rise and fall along with the market often — has a value of greater than 1. So if a stock has a beta of 1.2 and is benchmarked to the S&P 500, it is 20% more volatile than the broader measure.
If the S&P 500 rises or falls 10%, then the stock would conversely rise or fall 12%. The same would be true for portfolio beta. While there’s more downside risk with high-beta stocks, they can also generate bigger returns when the market rallies – a principle of Modern Portfolio Theory.
Low Beta
A low beta stock with a beta of 0.5 would be half as volatile as the market. So if the S&P 500 moved 1%, the stock would post a 0.5% swing. Such a stock may have less volatility, but it also may have less potential to post large gains as well.
Still, investors often prefer lower volatility securities. Low beta investment strategies have shown strong risk-adjusted returns over time, too.
Negative Beta
Stocks or portfolios with a negative beta value inversely correlate with the rest of the market. So when the S&P 500 rises, shares of these companies would go down or vice versa.
Gold, for instance, often moves in the opposite direction as stocks, since investors tend to turn to the metal as a haven during stock volatility. Therefore, a portfolio of gold-mining companies could have a negative beta.
So-called defensive stocks like utility companies also sometimes have negative beta, as investors buy their shares when seeking assets less tied to the health of the economy. A downside to negative beta is that expected returns on negative beta securities tend to be weak – even less than the risk-free interest rate.
Zero Beta
A stock or portfolio can also have a beta of zero, which means it’s uncorrelated with the market. Some hedge funds seek a market-neutral strategy. Being market-neutral means attempting to perform completely indifferent to how an index like the S&P 500 behaves. 💡 Quick Tip: Options can be a cost-efficient way to place certain trades, because you typically purchase options contracts, not the underlying security. That said, options trading can be risky, and best done by those who are not entirely new to investing.
How to Calculate an Individual Stock’s Beta
For investors, calculating the beta of all their stock holdings can be time consuming, and typically, financial data or brokerage firms offer beta values for stocks.
But if you wanted to calculate beta for an individual stock, you’d divide a measure of a stock’s returns relative to the broader market over a given time frame by a measure of the market’s return by its mean, also over a specific time frame. Here is the formula:
Beta = covariance/variance
Covariance is a measure of a security’s returns relative to the market’s returns.
Variance is a measure of the market’s return relative to its mean or average.
Recommended: What Is Covariance and How Do You Calculate It?
Alpha vs Beta vs Smart Beta
Beta is one of the Option Greeks, terminology frequently used by traders to refer to characteristics of specific securities or derivatives in the market. Another commonly used Greek term is Alpha. While beta refers to an asset’s volatility relative to the broader market, Alpha is a measure of outperformance relative to the rest of the market.
Beta also comes up a lot in the exchange-traded fund or ETF industry. Smart Beta ETFs are funds that incorporate rules- or factor-based strategies.
What Impacts Beta?
A variety of factors impact an asset’s beta. In general, stocks seen as riskier than average typically feature higher betas. Stock-specific factors such as debt levels, aggressive management, bold projects, volatile cash flows, and even ESG factors can influence a stock’s idiosyncratic risk. Higher business risk, while stock-specific, can lead to a more volatile stock price than the overall market, hence a higher beta.
Higher betas often appear in particular sectors. There are even investment fund strategies that play on beta – you can buy funds that exclusively own high beta or low beta stocks. A stock’s sector, industry, geographic location, and market cap size all impact a stock’s volatility and beta.
Cyclical and growth sectors like energy, industrials, information technology, and consumer discretionary often feature high betas. Utilities, consumer staples, real estate, and much of the healthcare sector typically have low beta.
Small caps and stocks domiciled in emerging-market economies also often have a higher beta (compared to the U.S. large-cap S&P 500). 💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).
Important Things to Know About Beta
1. A stock’s beta may change over time. Because beta relies on historical price data, it is subject to change.
2. Beta is not a complete measure of risk. It can be a useful way for investors to estimate short-term risk but it’s less helpful when it comes to considering a long-term investment because the macroeconomic environment and company’s fundamentals may change. In some cases, beta is not the best measure of a stock or a portfolio’s risk.
3. Beta is an input when investors are using the Capital Asset Pricing Model (CAPM) — a way to measure the expected return of assets taking into account systematic risk. It’s a method that also looks at the cost of capital for investors.
4. The estimated beta of a stock will be less helpful for companies that do not trade as frequently. Thin liquidity for a stock may bias its beta value since there is less robust historical price data.
5. Beta does not offer a complete picture of a stock’s risk profile as it’s linked to systematic risk. Investors must also consider stock-specific risk when managing their portfolios.
The Takeaway
As discussed, beta is a popular metric that investors use to measure a portfolio’s risk, or its sensitivity to price swings in the broader market. Knowing stock holdings’ betas can be important information when you’re building your portfolios.
You can calculate their portfolio beta using simple math as long as you’re able to obtain the individual betas for your stock holdings. While beta is a helpful tool to try to gauge potential volatility in a portfolio, its reliance on historical data makes it limited in measuring the complete risk profile of an asset or portfolio.
Qualified investors who are ready to try their hand at options trading, despite the risks involved, might consider checking out SoFi’s options trading platform. The platform’s user-friendly design allows investors to trade through the mobile app or web platform, and get important metrics like breakeven percentage, maximum profit/loss, and more with the click of a button.
Plus, SoFi offers educational resources — including a step-by-step in-app guide — to help you learn more about options trading. Trading options involves high-risk strategies, and should be undertaken by experienced investors.
For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.
FAQ
What is a good beta for a portfolio?
In a general sense, a good beta for a portfolio would be 1. That’s only a general guideline or rule of thumb, however, as it means that a portfolio’s value is roughly as volatile as the market overall.
What does a beta of 1.3 mean?
A beta of 1.3 means that a portfolio’s value is 30% more volatile than the overall market, which means its value will swing more wildly than the market.
Why is market portfolio beta 1?
Beta measures a portfolio or asset’s sensitivity relative to the overall market. If a portfolio’s beta is 1, it is equally as volatile as the market, not more or less so.
How do I reduce my portfolio beta?
Perhaps the simplest way to reduce your overall portfolio’s beta is to replace higher-beta assets within the portfolio with assets that have lower associated beta.
Is it possible to have zero beta portfolio?
It is possible, and would amount to a zero-beta portfolio, which means the portfolio itself has no systemic risk whatsoever. In other words, this portfolio would have no relationship to the overall movements of the market, and likely have low returns.
What is the difference between stock beta and portfolio beta?
A stock beta is a measure of an individual stock’s volatility, while portfolio beta is a measure of an overall investment portfolio’s volatility.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes. [cd_ETFs] Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
For those who earn an income that makes them ineligible to contribute to a Roth IRA, a mega backdoor Roth IRA may be an effective tool to help them save for retirement, and also get a potential tax break in their golden years.
Only a certain type of individual will likely choose to employ a mega backdoor Roth IRA as a part of their financial plans. And there are a number of conditions that have to be met for mega backdoor Roth to be possible.
Read on to learn what mega backdoor Roth IRAs are, how they work, and the important details that investors need to know about them.
What Is a Mega Backdoor Roth IRA?
The mega backdoor Roth IRA is a retirement savings strategy in which people who have 401(k) plans through their employer — along with the ability to make after-tax contributions to that plan — can roll over the after-tax contributions into a Roth IRA.
But first, it’s important to understand the basics of regular Roth IRAs. A Roth IRA is a retirement account for individuals (vs. an employer-sponsored account like a 401(k)). For tax year 2023, Roth account holders can contribute up to $6,500 per year (or $7,500 for those 50 and older) of their post-tax earnings. That is, income tax is being paid upfront on those earnings — the opposite of a traditional IRA. For 2024, they can contribute up to $7,000 (or $8,000 for those 50 and older).
Individuals can withdraw their contributions at any time, without paying taxes or penalties. For that reason, Roth IRAs are attractive and useful savings vehicles for many people.
But Roth IRAs have their limits — and one of them is that people can only contribute to one if their income is below a certain threshold.
In 2023 the limit is $138,000 for single people (people earning more than $138,000 but less than $153,000 can contribute a reduced amount); for married people who file taxes jointly, the limit is $218,000 (or between $218,000 to $228,000 to contribute a reduced amount).
In 2024 the limit is $146,000 for single people (people earning more than $146,000 but less than $161,000 can contribute a reduced amount); for married people who file taxes jointly, the limit is $230,000 (or between $230,000 to $240,000 to contribute a reduced amount).
💡 Quick Tip: Did you know that you must choose the investments in your IRA? Once you open a new IRA and start saving, you get to decide which mutual funds, ETFs, or other investments you want — it’s totally up to you.
How Does a Mega Backdoor Roth Work?
When discussing a mega backdoor Roth, it’s helpful to understand how a regular backdoor Roth IRA works. Generally, individuals with income levels above the thresholds mentioned who wish to contribute to a Roth IRA are out of luck. However, there is a workaround: the backdoor Roth IRA, a strategy that allows high-earners to fund a Roth IRA account by converting funds in a traditional IRA (which has no limits on a contributors’ earnings) into a Roth IRA. This could be useful if an individual expects to be in a higher income bracket at retirement than they are currently.
Mega backdoor Roth IRAs involve 401(k) plans. People who have 401(k) plans through their employer — along with the ability to make after-tax contributions to that plan — can potentially roll over up to $46,000 in 2024, and $43,500 in 2023, in after-tax contributions into a Roth IRA. That mega Roth transfer limit has the potential to boost an individual’s retirement savings.
Example Scenario: How to Pull Off a Mega Backdoor Roth IRA
The mega backdoor Roth IRA process is pretty much the same as that of a backdoor Roth IRA. The key difference is that while the regular backdoor involves converting funds from a traditional IRA into a Roth IRA, the mega backdoor involves converting after-tax funds from a 401(k) into a Roth IRA.
Whether a mega backdoor Roth IRA is even an option will depend on an individual’s specific circumstances. These are the necessary conditions that need to be in place for someone to try a mega backdoor strategy:
• You have a 401(k) plan. People hoping to enact the mega backdoor strategy will need to be enrolled in their employer-sponsored 401(k) plan.
• You can make after-tax contributions to your 401(k). Determine whether an employer will allow for additional, after-tax contributions.
• The 401(k) plan allows for in-service distributions. A final piece of the puzzle is to determine whether a 401(k) plan allows non-hardship distributions to either a Roth IRA or Roth 401(k). If not, that money will remain in the 401(k) account until the owner leaves the company, with no chance of a mega backdoor Roth IRA move.
If these conditions exist, a mega backdoor strategy should be possible. Here’s how the process would work:
Open a Roth IRA — so there’s an account to transfer those additional funds to.
From there, pulling off the mega backdoor Roth IRA strategy may sound deceptively straightforward — max out 401(k) contributions and after-tax 401(k) contributions, and then transfer those after-tax contributions to the Roth IRA.
But be warned: There may be many unforeseen hurdles or expenses that arise during the process, and for that reason, consulting with a financial professional to help navigate may be advisable.
Who Is Eligible for a Mega Backdoor Roth
Whether you might be eligible for a mega backdoor Roth depends on your workplace 401(k) retirement plan. First, the plan would need to allow for after-tax contributions. Then the 401(k) plan must also allow for in-service distributions to a Roth IRA or Roth 401(k). If your 401(k) plan meets both these criteria, you should generally be eligible for a mega backdoor Roth IRA.
💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.
Contribution Limits
If your employer allows for additional, after-tax contributions to your 401(k), you’ll need to figure out what your maximum after-tax contribution is. The standard 401(k) contribution limit for all types of contributions to a 401(k) (meaning employee, employer, and after-tax contributions) in 2023 is $22,500 (or $30,000 for those 50 and older). For 2024, the limit is $23,000 (or $30,500 for those 50 and older).
The IRS allows up to $66,000, or $73,500 including catch-up contributions for those 50 and up, in total contributions to a 401(k) in 2023. For 2024, the total limits are $69,000, or 76,500 including catch-up contributions for those 50 and up.
So how much can you contribute in after-tax funds? Here’s an example. Say you are under age 50 and you contributed the max of $22,500 to your 401(k) in 2023, and your employer contributed $8,000, for a total of $30,500. That means you can contribute up to $35,500 in after-tax contributions to reach the total contribution level of $66,000.
Is a Mega Backdoor Roth Right For Me?
Given that this Roth IRA workaround has so many moving parts, it’s worth thinking carefully about whether a mega backdoor Roth IRA makes sense for you. These are the advantages and disadvantages.
Benefits
The main upside of a mega backdoor Roth is that it allows those who are earning too much to contribute to a Roth IRA a way to potentially take advantage of tax-free growth.
Plus, with a mega backdoor Roth IRA an individual can effectively supercharge retirement savings because more money can be stashed away. It may also offer a way to further diversify retirement savings.
Downsides
The mega backdoor Roth IRA is a complicated process, and there are a lot of factors at play that an individual needs to understand and stay on top of.
In addition, when executing a mega backdoor Roth IRA and converting a traditional IRA to a Roth IRA, it could result in significant taxes, as the IRS will apply income tax to contributions that were previously deducted.
The Future of Mega Backdoor Roths
Mega backdoor Roths are currently permitted as long as you have a 401(k) plan that meets all the criteria to make you eligible.
However, it’s possible that the mega backdoor Roth IRA could go away at some point. In prior years, there was some legislation introduced that would have eliminated the strategy, but that legislation was not enacted.
The Takeaway
Strategies like the mega backdoor Roth IRA may be used by some investors to help achieve their retirement goals — as long as specific conditions are met, including having a 401(k) plan that accepts after-tax contributions.
While retirement may feel like far off, especially if you’re early in your career or still relatively young, it’s generally wise to start thinking about it sooner rather than later.
Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
Help grow your nest egg with a SoFi IRA.
FAQ
Are mega backdoor Roths still allowed in 2023?
Yes, mega backdoor Roths are still permissible in 2023.
Is a mega backdoor Roth worth it?
Whether a mega backdoor Roth is worth it depends on your specific situation. It may be worth it for you if you earn too much to otherwise be eligible for a Roth IRA and if you have a 401(k) plan that allows you to make after-tax contributions.
Is a mega backdoor Roth legal?
Yes, a mega backdoor Roth IRA is currently legal.
Are mega backdoor Roths popular among Fortune 500 companies?
A number of Fortune 500 companies allow the after-tax contributions to a 401(k) that are necessary for executing a mega backdoor Roth IRA.
What is a super backdoor Roth?
A super backdoor Roth IRA is the same thing as a mega backdoor Roth IRA. It is a strategy in which people who have 401(k) plans through their employer — along with the ability to make after-tax contributions to that plan — can roll over the after-tax contributions into a Roth IRA.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Some federal student loans can indeed be forgiven after 20 years. Borrowers can access forgiveness through income-driven repayment (IDR) plans and other options. These programs can make a significant difference for those who are working their way through their debt and the stress that can accompany it.
In fact, in January 2024, the Biden administration revealed that it successfully canceled nearly $5 billion in student debt for 74,000 borrowers. Of these borrowers, 30,000 received forgiveness under an IDR plan.
Getting your loans forgiven through this process isn’t as immediate and sweeping as what President Biden had originally proposed (more on that in a moment) to assist those with student debt. However, the new program effectively forgives student loans after 20 years. Here’s what to know about IDR plans and other paths to student loan forgiveness.
Forgiveness With Income-Driven Repayment Plans
First, to address what you may have heard about on the news: Yes, the Supreme Court decided in the summer of 2023 to strike down President Biden’s cancellation relief plan of up to $20,000 in forgiven federal loans.
However, there’s the $5 billion in forgiveness mentioned above, and there’s still help to be accessed. Income-driven repayment plans help make your installments more manageable by stretching your term and reducing how much you owe each month. They also forgive federal student loans after 20 years or 25 years of payments, depending on the plan.
There are four IDR plan options, and each recalculates your required payment amount based on your family size and discretionary income.
• Saving on a Valuable Education (SAVE) Plan. The SAVE Plan sets your monthly payment at 10% of your discretionary income over 20 years for loans that went toward your undergraduate education. If you borrowed any federal loans for graduate school, you’ll be eligible for forgiveness after 25 years.
Also, as of summer 2024, there is the possibility that some borrowers will pay just 5% of their discretionary income and have their loans forgiven at the 10-year mark. Research the details to see if you might qualify.
• Pay As You Earn (PAYE) Plan. The PAYE Plan also has payments at 10% of your discretionary income, but payments are capped. They must be lower than what you’d pay on a 10-Year Standard Plan. The repayment period is for 20 years.
• Income-Based Repayment (IBR) Plan. IBR plans calculate your monthly payment at 10% of your discretionary income for a 20-year term. However, if you followed your loans before July 1, 2014, your payment is 15% of your discretionary income for 25 years.
• Income-Contingent Repayment (ICR) Plan. Borrowers on ICR have the highest payments in relation to their income. The ICR Plan sets payments at 20% of discretionary income for 25 years before you’d qualify for forgiveness.
Depending on your situation, you might qualify for a monthly payment of $0. After completing all payments under your IDR plan, the remaining balance on your eligible loans is forgiven. Note that based on current IRS guidelines, the canceled amount through an IDR forgiveness might be considered taxable income.
These programs can help you end your federal student loan payments and apply the money that’s freed up to other financial priorities. 💡 Quick Tip: Ready to refinance your student loan? You could save thousands.
Eligibility Criteria for Income-Driven Repayment Plans
There are a few requirements to meet eligibility requirements, depending on the IDR plan you’re interested in. First, some points to know:
• Only Direct Loans that were borrowed by the student are eligible for any IDR plan.
• Borrowers with other federal non-Direct Loans, like Federal Family Education Loan (FFEL Program Loans) or Parent PLUS Loans, must first convert their loan into a Direct Consolidation Loan to access IDR.
• Parents who do this for their Parent PLUS Loans are only eligible for the ICR Plan after consolidation.
• Only new borrowers can enroll in PAYE. New borrowers are those who didn’t have a pre-existing federal loan balance upon receiving a federal loan on or after October 1, 2007, and received their loan disbursement or Direct Consolidation Loan on or after October 1, 2011. You must meet both requirements for PAYE.
• Your loans must also be in good standing and not in default. If you have defaulted loans, you must get them out of default before enrolling in IDR. One way to do so is by participating in the Fresh Start program.
• Once you’re enrolled in an IDR plan, you must recertify your income and family size information every year. If your income drops during the year, you don’t have to wait until your due date to recertify. Instead, you can recertify immediately and have your monthly payment adjusted accordingly.
• If you’re interested in applying for an IDR plan, submit an online application by logging into your StudentAid.gov account, or by contacting your loan servicer.
Note: You can use Student Aid’s Loan Simulator to see how much your payments might be under each IDR plan.
Pros and Cons of IDR Repayment Plans
An IDR plan is a nuanced repayment approach that has its share of benefits and disadvantages. Below is a quick overview of the pros and cons of these federal programs.
Pros:
• Helps you access impactful loan forgiveness programs.
• Might lower your monthly payment, possibly to $0 per month.
• Frees up cash flow in your budget for other expenses.
• Doesn’t require good credit.
Cons:
• You’ll pay more interest over time.
• Requires annual income and family size recertification.
• You might owe taxes on the amount forgiven by the IDR plan.
• It technically keeps you in debt longer. 💡 Quick Tip: If you have student loans with variable rates, you may want to consider refinancing to secure a fixed rate in case rates rise. But if you’re willing to take a risk to potentially save on interest — and will be able to pay off your student loans quickly — you might consider a variable rate.
Federal Programs That Forgive Student Loans Sooner
Federal student loans aren’t just forgiven after 20 years or longer. There are other cancellation programs you can reach in less time, depending on your employment or loan type.
• Public Service Loan Forgiveness is available to full-time public service employees at eligible jobs. It lets you reach loan forgiveness after 120 qualifying payments while on an IDR plan. This means you could qualify for federal loan forgiveness in 10 years, instead of 20 years or longer.
• Other cancellation programs include Teacher Loan Forgiveness (TLF) which cancels up to $17,500 in federal Direct and Stafford Loans. To qualify for TLF, you must complete five years of full-time and consecutive teaching service with a qualifying educational agency or low-income school.
Recommended: What Percentage of Your Income Should Go to Student Loans?
Plan for the Future
Understanding the basics of student loans, including your repayment options, can make managing your debt smoother. Remember, student loans aren’t forever; they are a financial phase you are moving through, as you would with a mortgage or car loan.
• Make interest-only payments. If you have unsubsidized student loans, they accrue interest as soon as the loan funds are disbursed. To avoid interest capitalization (i.e. interest added to your principal balance) later, consider making interest-only payments while you’re in school.
• Put cash windfalls toward your loans. If you can afford to, redirect cash windfalls (say, a tax refund, cash gifts, or annual performance bonus) toward your student debt. This can go a long way at paying them off sooner.
• Ask about employer student loan assistance. Some companies help their employees pay off their student debt faster, by matching all or a portion of an employee’s monthly loan payment. Talk to your human resources department to see if your employer offers this benefit.
• Private education loans don’t qualify. Remember that private student loans aren’t eligible for federal loan forgiveness or other programs. If you’re struggling with your private loan payments, reach out to your lender ASAP to learn about your options.
Refinancing Options
Another alternative repayment option is a student loan refinance. This involves having a private lender pay off one or more of your existing federal loan balances and then create a new loan for the amount it paid on your behalf. The refinanced student loan will have a new rate, term, and features, and you’ll make your payments to your new lender.
Some advantages of refinancing student loans include potentially finding a lower interest rate, simplifying your repayments, and/or decreasing your monthly payment, but there are also downsides.
• If you refinance federal loans, they’re no longer eligible for federal benefits and protections, such as loan forgiveness programs or forbearance. So, before refinancing, ensure you won’t need these federal benefits in the future.
• Also, if you refinance for an extended term, you will likely pay more interest over the life of the loan. It’s important to consider how this may impact your overall financial picture.
If refinancing does seem as if it might be a good path for you, compare rates from a handful of lenders, and review the terms and costs carefully, perhaps using an online student loan refinancing calculator.
The Takeaway
Putting money toward student loans can have a dramatic impact on your day-to-day cash flow. And, if you’re like many student loan borrowers, you’re eagerly looking forward to paying off your debt. Getting forgiveness of student loans after 20 years might sound painfully long. But with some federal plans, you might get out from under that debt sooner, reduce your payments to as low as $0, and/or get any remaining balance canceled anyway. It’s important to research your options and the qualifications so you can move past student loan debt as soon as it makes sense for your particular situation.
This prospect alone is worth talking to your federal loan servicer to see if you qualify for enrollment.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
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SoFi Student Loan Refinance If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
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Inside: Learn how much your 70k salary is hourly. Plus find tips to make more money and live the lifestyle you want.
You want to know to look into this… Is 70k salary a solid hourly wage in today’s society?
When you get a job and you are making about $19 an hour, making over $70,000 a year seems like it would provide amazing opportunities for you. Right?
The median household income was $70,084 in 2021 not much different from the previous year (source). Think of it as a bell curve with $70 at the top; the median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $55,350 for a 40-hour workweek; that is an increase of 1.1% from the previous year (source). That means if you take everyone’s income and divide the money out evenly between all of the people.
Obviously, $70k is above the average and median incomes; yet, most people feel like they can barely make ends meet with this higher than average salary.
But, the question remains… Can you truly live off 70,000 per year in today’s society? The question you want to ask all of your friends is whether $70000 per year is a good salary.
In this post, we are going to dive into everything that you need to know about a $70000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $70k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this salary?
$70000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 70k a year hourly. That way you can decide whether or not the job is worthwhile for you.
70000 salary / 2080 hours = $33.65 per hour
$70000 a year is $33.65 per hour
Let’s breakdown how that 70000 salary to hourly number is calculated.
For our calculations to figure out how much is 70K salary hourly, we used the average five working days of 40 hours a week.
Typically, the average work week is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $70000 by 2,080 working hours and the result is $33.65 per hour.
Just below $34 an hour.
That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $10K, it would increase your hourly wage by $4.81 per hour.
To break it down – 80k a year is how much an hour = $38.46
That is a huge difference in what you are able to afford! Every dollar adds up to under $40 an hour.
How Much is $70K salary Per Month?
On average, the monthly amount would be $5,833.33.
Annual Salary of $70,000 ÷ 12 months = $5,833.33 per month
This is how much you make a month if you get paid 70000 a year.
$70k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $70k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$70000/52 weeks = $1,346 per week.
$70000 a year is how much biweekly?
For this calculation, take the average weekly pay of $1,346 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight-hour work day.
8 hours x 52 weeks = 260 working days
Annual Salary of$70000 / 260 working days = $269 per day
If you work a 10 hour day on 208 days throughout the year, you make $336 per day.
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$70000 Salary is…
$70000 Salary – Full Time
Total Income
Yearly Salary (52 weeks)
$70,000
Monthly Salary
$5,833
Weekly Wage (40 Hours)
$1,346
Bi-Weekly Wage (80 Hours)
$2,692
Daily Wage (8 Hours)
$269
Daily Wage (10 Hours)
$336
Hourly Wage
$33.65
Net Estimated Monthly Income
$4,453
Net Estimated Hourly Income
$25.69
**These are assumptions based on simple scenarios.
70k A Year Is How Much An Hour After Taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with a salary range of up to $160,200.
When you start getting into a higher salary range, the more you make, the more money that you have to pay in taxes.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 70000 a year after taxes?
Gross Annual Salary: $70,000
Federal Taxes of 12%: $8,400
State Taxes of 4%: $2,800
Social Security and Medicare of 7.65%: $5,355
$70k Per Year After Taxes is $53,445.
This would be your net annual salary after taxes.
Hourly Wage After Taxes
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$53445 ÷ 2,080 hours = $25.69 per hour
After estimated taxes and FICA, you are netting $53,445 per year, which is $16,555 per year less than what you expect.
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
Taxes Based On Your State
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody who lives in a no tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $70000 income can range from $47,845 to $56,245 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously, you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $70,000 income.
How Much Is 70K A Year Hourly Salary Calculator
More than likely, your salary is not a flat 70k, here is a tool to convert your salary to hourly calculator.
If you make 70000 a year, learn how much house can you afford.
70k salary lifestyle
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person? And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $70,000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.
As we noted earlier in the post, $70,000 a year is above the median income of $60000 that you would find in the United States. Thus, you are able to live an above-average lifestyle here in America.
What a $70,000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
When A $70,000 Salary Will Hold you Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 70k a year is going to be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending until that happens.
Break the paycheck to paycheck cycle.
Live a lifestyle that you can afford.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
$70K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money is left for fun spending.
If you want to know how to manage 70k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $70000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$583
Savings
15-25%
$1167
Housing
20-30%
$1400
Utilities
4-7%
$146
Groceries
5-12%
$394
Clothing
1-4%
$29
Transportation
4-10%
$175
Medical
5-12%
$292
Life Insurance
1%
$15
Education
1-4%
$20
Personal
2-7%
$88
Recreation / Entertainment
3-8%
$146
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$1389
Total Gross Income
$5,833
**In this budget, prioritization was given to savings, basic expenses and no debt.
Is $70,000 a year a Good Salary?
As we stated earlier if you are able to make $70,000 a year, that is a good salary. You are making more money than the average American and slightly less on the bell curve on the median income.
You shouldn’t be questioning yourself if 70000 is a good salary.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $70k salary would be considered a middle-upper class salary. This salary is something that you can live on very comfortably.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 91 percentile globally for per-person income (source).
The question you need to ask yourself with your 70k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in some expensive cities, 70000 a year is not a good salary because the cost of living is so high, whereas these are some of the cities where you can make a comfortable living at 70000 per year.
If you are looking for a career change, you want to find jobs paying at least $90,000 per year.
Is 70k a good salary for a Single Person?
Simply put, yes.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $70000 per year.
And… most of us probably regret that we didn’t learn how to spend money wisely. Oh well, lesson learned.
Is 70k a good salary for a family?
Many of the same principles apply above on whether $70000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child. Plus this does not include college.
That means that amount of money is coming out of the income that you earned.
So, the question really remains is can you provide a good life for your family making $70,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Your lifestyle choices.
You can live comfortably as a family on this salary, but you will not be able to afford everything you want.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 70,000 per year, then the combined income for the household would be $140,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on $70000 Per Year?
As we outlined earlier in the post, $70,000 a year:
$33.65 Per Hour
$269-336 Per Day (depending on the length of day worked)
$1346 Per Week
$2692 Per Biweekly
$5833 Per Month
Next up is making $75000 a year.
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than in Mississippi or even Texas.
In addition, if you are early in your career, starting out around 45,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 20 years and still making $70K, then you probably need to look at asking for pay increases, picking up a second job, or finding a different career path.
Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
Learn exactly how much do I make per year…
One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.
As an Amazon Associate and member of other affiliate programs, I earn from qualifying purchases.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
Are you passionate about words and reading?
If so, proofreading could be a perfect fit for you, just like it’s been for countless of readers! Learn how you can create a freelance business as a proofreader.
Check out this free workshop!
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
Bookkeeping is the most stable, reliable & simple business to own. This is how to make a realistic income -either part-time or full-time.
Find out TODAY if this is THE business you’ve been looking for.
You can make money as a freelance writer. Learn techniques to find those jobs and earn the kind of money you deserve! Plus get tips to land your first freelance writing gig!
Learn how to buy and resell items from flea markets, thrift stores and yard sales. They will teach you how to create a profitable reselling business quickly
…no matter how much or how little experience you have.
Learn how to supplement your daily, weekly, or monthly income with trading so that you can live your best life! This is a lifestyle trading style you need to learn.
Honestly, this course is a must for anyone who invests. You will lose more in the market than you will spend this quality education – guaranteed.
Read my Invest with Teri Review.
Designed as a 101-level course on freight brokerage, you’ll learn the basics of freight brokering in this online course.
This course is designed for freight brokers in any setting, regardless of their employment status.
If you want to start your brokerage, we’ll show you exactly how to do it. If you are an agent or employee of a brokerage, we’ll take you through sales and operations modules designed to help you source more leads and move more freight.
The Empowered Business Lab teaches you how to sell your digital products naturally with strategies that just make sense.
Monica helps thousands find momentum and create revenue streams in their businesses.
After taking a second job as a driver for Amazon to make ends meet, this former teacher pivoted to be a successful stock trader.
Leaving behind the stress of teaching, now he sets his own schedule and makes more money than he ever imagined. He grew his account from $500 to $38000 in 8 months.
Check out this interview.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Inside: r/personalfinance is full of popular subreddits with ideas on how to make money and save money or invest. Know best practices for Reddit personal finance and ways to learn from them.
Reddit is a popular online community where people can share content, ask questions, and comment on news articles and topics. One of the most popular sections for personal finance discussions is /r/personalfinance.
Here are some of the best posts from that section:
“How has your finances changed post-graduation?”
“I was able to pay off my student loans as well as move back into my parents’ house without any difficulty.”
“My financial situation isn’t too bad right now, but I worry about the future.”
Reddit has some great threads that cover personal finance topics.
This blog post will give you a list of the top 25 Reddit Personal Finance Threads, letting you know which ones to check out next time you want to learn more about personal finances.
I created this list because there are very few resources that point to real people with real stories they want to share.
Our site is jammed packed with information on how to succeed with money. You may be looking for more specific personal finance information.
Also, you can find very specific information on r/personalfinance like how to save money when you’re starting off your career or trying to figure out how much it costs for certain things in life like specific college tuition, where rent costs vary, and so forth.
In addition, it includes some of the most popular and insightful posts on this website.
Hopefully, this will help you learn about all aspects of personal finance so that you can start managing money and reach financial independence today!
Why use Reddit Personal Finance?
There are many reasons to use Reddit Personal Finance.
Some people use it as a resource for their own personal finance, while others may be using it in order to plan out what they want to do with their finances.
Reddit Personal Finance is a community of people who share their experiences and tips on personal finance.
Users can post questions, browse the subreddit’s popular posts, or find new content in the “new” tab. Reddit Personal Finance also has a directory of personal finance resources and tools that you can use to better your finances.
The personal finance subreddit is thriving, and it’s only going to get bigger. With over 15 million subscribers in 2022, the community has a lot of content to explore. Plus almost half of users are online at any time to answer questions.
It can be hard enough to find your way around this vast platform but by following these 15 threads you will soon have no problem navigating Reddit Personal Finance with ease!
Positives of Personal Finance Subreddits
The internet is a place to share information and connect with others. One of the best ways to do this is through various social media platforms such as Reddit.
The following are some of the benefits of using personal finance subreddits.
Find out about new financial trends and learn about the best ways to invest your money
Get advice on how to manage your finances and make smart financial decisions
Be a part of the community and have a chance to grow your own knowledge
Learn about new products, services, and companies that could help you with your finances
Get advice on how to invest your money.
Grow your personal finance knowledge to help you reach your goals faster.
If you’re looking for a place to find some personal finance-related content, Reddit offers many subreddits that are all about these topics.
Some of the posts offer objective and helpful information while others can be subjective and relatable in person.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Reddit Basics
Before getting completely lost in Reddit, here are some important things you need to know.
For me, I quit using Reddit because I got overwhelmed and couldn’t find what I needed quickly enough. Thus, here is the lingo that will help you succeed.
Subreddit: A popular place to find information is on the subreddit; for example: “r/personalfinance”.
Upvote / Downvote: Users can upvote or downvote a comment. Reddit gives the comment a “score,” which is the number of upvotes minus the number of downvotes.
Karma: Other users can upvote or downvote your posts and comments; these tally to your “karma.” When providing helpful comments and posts, then they will reflect a higher karma score.
OP: Original Poster.
AMA: Ask Me Anything. An online Q&A session hosted by Reddit’s community in which some guest (normally famous) is or are available for questions
EDIT and ETA: Edit and Edited. A simple way for a user to denote the added to their original comment.
TL;DR: Too Long; Didn’t Read. This is added at the end of long text posts or comments to quickly summarize an article or comment as being too long to read. Sometimes, people use it to summarize the main point in case you don’t want to read the entire thing.
Top 5 Reddits Personal Finance
These are the most popular subreddits for personal finance. They have the most followers and daily interactions.
Does it mean they are the most important? No, there are plenty of subreddits to read regarding personal finances. (Don’t worry… we have a list of them below!)
R/PersonalFinance
R/PersonalFinance is a subreddit that focuses on personal finance.
This is the most popular community related to personal finances.
R/PersonalFinance is a subreddit for personal finance discussions, such as investing, budgeting, and saving money.
The subreddit’s community primarily consists of people who are just starting out with personal finance and those who are struggling to make ends meet as well as plenty of people who are ready to give back and help others.
Followers: 17.6m Members (as of April 2023)
Top Post: You are not “family” to your employer.
r/wallstreetbets
r/wallstreetbets is a subreddit that discusses the world of Wall Street, and how it impacts current events in financial markets. The subreddit’s name is a reference to the popular trading platform Wall Street.
Wall Street bets are financial wagers known for moving so-called “meme” stocks. Also, they are known to move stocks quickly in one direction to force hedge funds to cover their short sales, such as GME or AMC.
People in this community may win big and lose big since they are gambling on the information. You need to learn the meaning of YOLO.
Followers: 13.8m Members (as of April 2023)
Top Post: Times Square right now
r/bitcoin
The subreddit r/bitcoin is a popular Bitcoin news, discussion, and information site. The subreddit is one of the most active on Reddit with over 3 million subscribers.
As it is a digital means of payment, Bitcoin can resist wild rises in inflation and unfair banking practices because people are the ones who control their power and money. That is the belief of this community.
Followers: 4.9m Members (as of April 2023)
Top Post: It’s official! 1 Bitcoin = $10,000 USD
r/stocks
r/stocks is a subreddit in which people discuss the stock market, share trading strategies, and ask questions related to the stock market. There are no rules on r/stocks; users can post links to articles, ask questions, or share their own thoughts on the stock market.
Posts related to reddit stocks are welcome on /r/stocks, but read the rules first. Feel free to share a ticker everyone should know about.
Followers: 5.3m Members (as of April 2023)
Top Post: Companies try to prevent people from trading GME and AMCDiscussion
As you can tell, most of the popular Reddit topics are related to making money through stocks or cryptocurrency.
Is that a bad thing? No.
Just remember… You can learn to fish or you can be fed by others. Personally, I think it is best to learn how to fish and find your own way to make money with stocks and cryptocurrency.
Must Read:
The Next Best 21 Personal Finance Subreddits
The purpose of any of these subreddits is to provide an online community where people can discuss their finances in a respectful, non-judgmental, and anonymous environment.
We will cover the best personal finance Reddit forums that offer advice that can help people at all levels of their finances with tips ranging from simple ones such as grocery shopping without checking receipts and getting discounts by using apps to more complicated ones like how to save up for a vacation.
This list is not limited to just Reddit threads.
Here is a collection of the top 22 personal finance subreddits on Reddit:
R/Frugal
R/Frugal is a subreddit on Reddit.com that focuses on frugality and the concept of living life with less money. Also, the community is made up of individuals who are interested in living a lifestyle of less spending and more saving.
Frugality takes mental preparation of all your resources including time, money, convenience, and any other desired things.
Followers: 2.9m Members (as of April 2023)
Top Post: I got bids from tile setters to do a backsplash for $2000. I ended up doing it myself for under $200.
R/investing
Reddit’s r/investing is a subreddit dedicated to the stock market. It has more than 2.0 million subscribers and provides information on stocks, investing strategies, and other related topics.
Investing is the process of putting money into assets in the hope that they will increase in value. Sometimes investments are made by professionals, but most often, people invest for themselves and their families.
If you are looking for advice on investing, r/investing is the place to go. With nearly 2 million readers and growing, there is a lot of information here that can help people make better financial decisions.
Followers: 2.2m Members (as of April 2023)
Top Post: Robinhood and other brokers literally blocking purchase of $GME, $NOK, $BB, $AMC; allow sells
R/Shoestring
A discussion community focusing on travel and cheap options for traveling, whether through couchsurfing, camping, staying in hotels or hostels.
Discuss topics such as booking last-minute plane tickets, cheap destinations, budget transportation like hitchhiking or staying in Airbnbs. Learn the benefits of these different methods of travel.
Wanting to travel on a shoestring budget is a real gig!
Followers: 2.0m Members (as of April 2023)
Top Post: I worked roughly 10 hours a week at an Airbnb in exchange for housing and amenities.
R/realestateinvesting
Real estate investing is the process of buying a property with the intention of renting it out or flipping it for profit. The term applies to any real estate investment but typically refers to residential properties that are bought and sold.
Real Estate Investing is a popular topic on Reddit. It covers the types of investments, such as flipping houses to investing in commercial real estate, or even wholesaling.
Followers: 1.7m Members (as of April 2023)
Top Post: Today, at the age of 28, I became a millionaire
R/Financialindependence
The r/financialindependence subreddit is a good place to find people who are working towards financial independence.
This is a place where people who are or want to become financially independent, which means not working for money can meet one another.
Having money affirmations are a huge part of the motivation for those in the FI movement.
Followers: 1.9m Members (as of April 2023)
Top Post: Just Crossed 100K Net Worth Living in NY
r/PersonalFinanceCanada
r/PersonalFinanceCanada is a subreddit that is dedicated to Canadian personal finance and investing topics. The Reddit personal finance Canada community has over 600,000 subscribers who share questions, experiences, advice, and more.
This is great for country-specific financial issues.
Followers: 1.2m Members (as of April 2023)
Top Post: Bullet Dodged- First Time Home Buyers Be Ware.
r/UKPersonalFinance
The subreddit r/UKPersonalFinance is a place for people to share their personal finance experiences with others. The subreddit was created by two UK-based users in 2013 and originally had about 200 subscribers. It now has more than 500,000 subscribers and is one of the most popular finance-related subreddits on Reddit.
Learn, discuss, and request help on how to get access to, budget for, protect your money from, save and invest your money in the UK.
Followers: 1.0m Members (as of April 2023)
Top Post: Financial Reality Check
R/CreditCards
R/CreditCards is a subreddit dedicated to the discussion of credit cards, credit and debit cards, prepaid cards, banks, loans, etc.
In addition to the standard trading of information on pricing and terms, Reddit users can also post links to other websites that offer credit card offers.
Followers: 1.2m Members (as of April 2023)
Top Post: Do not do this, if you want your credit card to remain open
r/finance
R/Finance is a subreddit on Reddit that focuses on personal finance. The sub has more than 20,000 subscribers and receives more than 100,000 views per day.
All questions must be asked in the Monday Morning catch-all threads.
Followers: 1.8m Members (as of April 2023)
Top Post: Bipartisan bill would ban lawmakers from buying, selling stocks
r/budgetfood
The subreddit r/budgetfood is dedicated to discussing and sharing the best cheap food ideas. It has a strong focus on coming up with recipes that are both nutritious and easy to make.
Find great tips to stretch your grocery budget.
Followers: 1.2m Members (as of April 2023)
Top Post: Sesame “chicken,” but with cauliflower
r/FinancialPlanning
A subreddit to discuss and ask questions about personal finances, budgeting, investments, and insurance of people’s portfolios.
Followers: 581k Members (as of April 2023)
Top Post: Dad Level – Expert
R/leanfire
R/leanfire is a subreddit for posts about lean startup, business, and marketing. The name of the subreddit comes from the lean startup methodology philosophy which has been popularized by Eric Ries and Steve Blank, who are both cited as the founders of the lean startup movement.
R/Leanfire is a subreddit for those who are trying to achieve the type of success that qualifies you as financially independent. It’s not an easy task, but it can be done with hard work and determination.
Followers: 260k Members (as of April 2023)
Top Post: Just paid off my house
R/passive_income
Reddit has a subreddit that is dedicated to the topic of passive income. This includes things like side-hustles and other ways to make money without having to work for it.
The passive income community on Reddit discusses how they can make money. They post their experiences and give advice to other members of the community about making passive income. This is great for finding more ways to make money.
Followers: 322k Members (as of April 2023)
Top Post: I’m sure this means passive income. But can someone explain it. I don’t get it.
R/FIRE
R/FIRE is a subreddit that focuses on the topic of financial independence retire early.
For financial independence retire early movement has become popular over the past 5-10 years.
This is not just a community, but a place to discuss Financial Independence Retiring Early (FIRE) by fighting for financial freedom and controlling your destiny.
Followers: 263k Members (as of April 2023)
Top Post: Don’t be discouraged by young people who seem to be doing way better than you.
R/StudentLoans
R/StudentLoans is a subreddit dedicated to financial aid advice and discussion.
Some people are having trouble with student loans and they may be asking for advice. Here is some information on how to pay off your loan, as well as make mistakes that could lead to fees or interest added onto the balance of a loan.
Followers: 281k Members (as of April 2023)
Top Post: Biden to extend waivers another nine months
R/Bogleheads
The subreddit R/Bogleheads is a community for people who follow Jack Bogle’s simple investing methods to diversify and let compounding grow wealth. They share common interests and discuss topics such as the US financial system, taxation, Social Security, and retirement.
Perfect community for the passive investor.
Followers: 241k Members (as of April 2023)
Top Post: I started investing in my 401k 25 years ago this week. Hit a milestone today.
R/sidehustle
The term, “side hustle”, is a movement in recent years. Side Hustlers are people who would like to supplement their income by doing activities that they enjoy outside of work or school. In this community, start a small business or non-professional activity that you do in your spare time to supplement your income.
Followers: 412k Members (as of April 2023)
Top Post: Strange Side Hustle – I resell Bras full time on Amazon. AMA
R/money
r/money is primarily composed of people discussing personal finance topics such as stocks, investing, taxes, and personal finance.
Consequently, this smaller subreddit will help you get real advice and not lots of random opinions.
Followers: 89.9k Members (as of April 2023)
Top Post: New r/money subreddit icon?
Reddit Personal Finance Flowchart
The flowchart below describes the general process of saving for a goal. The user has to consider how much money they can allocate each month, and then determine how long it will take them to save for their goal.
This is a very similar concept to a personal financial statement.
You must consider how much you want to save each month, as well.
Find the Reddit personal finance flowchart.
In addition, the simplicity of the flowchart will be surprising.
Must Read: Money Bliss Steps to Financial Freedom
Reddit Personal Finance FAQ
Avoiding Reddit may be hard, but it is possible to avoid the more toxic parts of this site. There are a few key things to keep in mind that will help you avoid the worst of Reddit.
Avoid #1 – Posting Personal Information
The best practice is to avoid posting personal information. As such, your information may be used against you. Reddit is a social media website with different spheres of interest.
In order to avoid appearing disingenuous, it is best not to ask for upvotes or downvotes on posts.
Avoid #2 – Breaking the Thread Rules
The website has its own set of rules which every user should be familiar with before posting anything on the website. Reddit is known for its open dialogue, where members are encouraged to discuss a variety of topics from politics to technology.
However, people frown upon breaking the community rules.
Getting kicked out of many Reddit forums for not following the community rules is a possibility.
Avoid #3 – Be Careful on Opinions
The popular, winning opinions on Reddit are often biased and not based on facts. One example is the “What’s your favorite type of cheese” thread. In the end, it was a wildly popular opinion and later debunked by science.
One way to avoid these posts is by following an established Redditor with a solid reputation who has shown their ability to discuss topics like investing or personal finance without being judgmental or overly emotional about it.
Always do your own research to back up anything you may have learned on a r/personalfinance thread.
Reddit Personal Finance Windfall of Information
It is difficult to save money and track your finances because there is so much information coming at you.
There is no one likable than a hero in the story of personal finance, but what if you could be that hero?
These Reddit Personal Finance Threads are a great way for beginner investors or people just starting out on their own journey to learn about the different aspects of personal finance.
Also, there are helpful for veterans trying to keep up with all those new financial technologies over the years.
The best 25 Reddit Personal Finance Threads include some interesting posts on the topic from different perspectives like stocks, earning more money through certain professions, making your first million dollars, etc.
Thus, giving you plenty of insightful tips for success in life and finances!
After reading this Reddit personal finance article, make sure to subscribe for more Money Bliss tips.
One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.
As an Amazon Associate and member of other affiliate programs, I earn from qualifying purchases.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
Are you passionate about words and reading?
If so, proofreading could be a perfect fit for you, just like it’s been for countless of readers! Learn how you can create a freelance business as a proofreader.
Check out this free workshop!
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
Bookkeeping is the most stable, reliable & simple business to own. This is how to make a realistic income -either part-time or full-time.
Find out TODAY if this is THE business you’ve been looking for.
You can make money as a freelance writer. Learn techniques to find those jobs and earn the kind of money you deserve! Plus get tips to land your first freelance writing gig!
Learn how to buy and resell items from flea markets, thrift stores and yard sales. They will teach you how to create a profitable reselling business quickly
…no matter how much or how little experience you have.
Learn how to supplement your daily, weekly, or monthly income with trading so that you can live your best life! This is a lifestyle trading style you need to learn.
Honestly, this course is a must for anyone who invests. You will lose more in the market than you will spend this quality education – guaranteed.
Read my Invest with Teri Review.
Designed as a 101-level course on freight brokerage, you’ll learn the basics of freight brokering in this online course.
This course is designed for freight brokers in any setting, regardless of their employment status.
If you want to start your brokerage, we’ll show you exactly how to do it. If you are an agent or employee of a brokerage, we’ll take you through sales and operations modules designed to help you source more leads and move more freight.
The Empowered Business Lab teaches you how to sell your digital products naturally with strategies that just make sense.
Monica helps thousands find momentum and create revenue streams in their businesses.
After taking a second job as a driver for Amazon to make ends meet, this former teacher pivoted to be a successful stock trader.
Leaving behind the stress of teaching, now he sets his own schedule and makes more money than he ever imagined. He grew his account from $500 to $38000 in 8 months.
Check out this interview.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Do you want to learn how to move out at 18 with no credit, little money, or even no money? Here’s what you need to know. There are many reasons for why you may want to move out at a young age – perhaps you have a difficult home life, you want to move somewhere…
Do you want to learn how to move out at 18 with no credit, little money, or even no money? Here’s what you need to know.
There are many reasons for why you may want to move out at a young age – perhaps you have a difficult home life, you want to move somewhere new, or you just want your own space.
I moved out shortly after turning 18 (about a week or so after my 18th birthday) into a rental home, and while I was not prepared at all, I do think being prepared to move out at a young age is extremely helpful. I made many mistakes that led to many, many tears, money wasted, stress, and more.
Today, I want to help you avoid as many problems as you can.
After all, moving out at 18 years old (or any other young age) is already really hard, and there is such a huge learning curve.
Moving out when you turn 18 is a big step into becoming an adult. Even though it can be exciting, moving out for the first time needs to be planned carefully. Before you leave, it’s important to make a plan to make sure you can afford it and stay on your own.
This means finding a job, making a budget you can stick to, and saving money for unexpected costs.
How To Move Out at 18
Below are ways to move out at 18.
Recommended reading: Buying a House at 20 (How I did it)
Make a plan to move out at 18
I highly recommend having a plan if you want to move out at 18 years old.
Moving out at 18 is a big step, and making a plan will help everything go a little more smoothly.
You will want to think about things such as:
Where you will work
How you will pay your bills
If you will live with a roommate or on your own
What your budget will be like
What you’ll do if things get tough, such as if you can’t afford your rent
What you will do for health insurance and medical bills
And so much more.
I will be going further in-depth on many of these below.
Find ways to make money
If you are 18 and want to move out, then you will need to have a stable source of income, of course. There are many options for earning money, from traditional jobs to more flexible side hustles.
A full-time job typically gives you more hours and benefits like health insurance, which are helpful when you’re living on your own. If you have other things going on, a part-time job might be better because it offers more flexibility while still giving you money (but, you may not earn as much money). You can find job openings online, at job fairs, or on community bulletin boards. Jobs like delivering food can be either full-time or part-time, and companies tend to need people.
If you want to make more money, you can side hustle to make extra income – a way to make extra cash that you do alongside your main job. You could freelance by doing things like writing, teaching tutoring lessons, or designing graphics. Or, you could babysit for families nearby, walk dogs, or help people with tasks or errands. These little jobs can add up to a lot of money and give you the flexibility to work when you want.
When I was young and first moved out, I worked full-time at a retail store. I also eventually started a few side hustles (like blogging, freelance writing, and selling stuff online) so that I could pay off my student loans quickly. Living on your own is not easy, especially when you are young and your income is not that high – so side hustles may be needed so that you can make enough money to pay your bills.
Some helpful articles to read include:
Create a budget
When you’re ready to step out into the world at 18, you need a budget. I can’t think of any young adult who would not need a budget.
Budgets are great because they help you keep track of your money coming in and going out. With a monthly budget, you’ll know exactly how much you can spend on different things each month as it helps you see how much money you have and where you might need to cut back on spending.
A budget will help you to figure out if you can afford to live on your own, if you need to have roommates, or if you need to find a cheaper living arrangement.
Making a budget is easy. First, write down how much money you make each month from your job or other places. Then, write down what you need to spend money on each month, like:
monthly rent
food
phone bill
internet
car
fuel
utilities like electrical, water, trash, sewer, gas/propane
car insurance
medical/health
pet care
restaurants
cable, satellite, or any TV monthly subscriptions
household essential items, like toilet paper, trash bags, etc.
and some money for fun stuff too
Knowing your monthly expenses will help you to better manage your money so that you won’t go into credit card debt.
Recommended reading: The Complete Budgeting Guide: How To Create A Budget That Works
Save for the move (and open a bank account)
When you’re getting ready to move out at 18, saving money is obviously very important. If you can help it, I do not recommend moving out with no money saved.
Think about all the costs you’ll face – like rent, your first security deposit, food, and any unexpected things that pop up. You’ll want to tuck away money for this.
How much should you save to move out? A good rule is to save at least three to six months of living expenses. For example, if you spend $1,500 a month, aim to save between $4,500 and $9,000 before you head out on your own.
This will be your emergency fund. An emergency fund is money you save up for unexpected things that might happen. This could be paying bills if you lose your job or if your hours or pay get reduced. It could also cover unexpected expenses like a car repair, medical bill, or fixing a broken window.
An emergency isn’t something like buying a birthday present, a new TV, or going on vacation.
Having an emergency fund is smart because it can stop you from getting into debt you don’t need. Some people rely on their credit cards for emergencies, but that’s not a good plan.
I also recommend getting your own bank account for all of the money you save. It’s a safe place for your money, and it helps you track what you earn and spend. Plus, you’ll need it for things like direct deposit from jobs or paying bills online.
I personally use Marcus by Goldman Sachs for my savings account as they have a very high rate. You can get up to 5.50% at the time of this writing through a referral link bonus. According to this high-yield savings account calculator, if you have $10,000 saved, you could earn $550 with a high-yield savings account in a year. Whereas with normal banks, your earnings would only be $46.
Improve your credit score and history
When you’re moving out of your parents’ home, having a good credit score is super helpful. This is because your credit score and credit history may be used for things like getting approved for an apartment and getting signed up for utility bills.
If your credit score is low, then you may be denied an apartment and even have to pay large deposits to get signed up for utilities (like water and electric).
Here are some important things to know:
Understand credit utilization – This is all about how much credit you’re using compared to how much you have. Try to use less than 30% of your credit limit. Say your card has a $1,000 limit. Aim to spend no more than $300.
Always pay on time – You should pay every bill on time, every time. Even being a little late can hurt your credit score a LOT!
There are other ways to improve your credit, such as by getting a secured credit card or becoming an authorized user on a family member’s credit card.
Here are two really helpful articles I recommend reading:
I also recommend keeping an eye on your credit by checking your score and report. Sites offer free checks, and it’s good to know where you stand. That way, you can fix any mistakes fast.
Think about where you’ll live
When planning to move out at 18, picking where you’ll live is a huge step.
Here are some things to think about:
Think about who you’ll live with. Living by yourself can be expensive so sharing rent and other bills with roommates can save you money, but make sure you choose your roommates wisely. You’ll be sharing your space with them, so it’s important to pick people who are responsible and trustworthy (and will actually pay the bills!).
Try using online tools to compare different areas. You can check things like crime rates, public transportation options, and how close they are to places you need, like grocery stores.
Think about the cost. Can you pay the rent and utility bills every month? Make sure to include these costs in your budget. Sometimes, living a bit farther from popular areas can be cheaper.
For my first home, I rented a very small 400-square-foot home with no real bedroom. But, it was within my budget and next to my college (I lived a few miles away), and surprisingly affordable.
Talk to your parents
When you’re getting ready to move out at 18, it’s important to have a conversation with your parents. This might feel hard or even impossible, but remember that clear communication is important.
I recommend choosing a time to tell them when your parents aren’t too busy or stressed as having this conversation when everyone is relaxed can make it easier for everyone to talk openly.
I think it is also helpful to think about how your parents might feel. If you’re the first to leave the home, they might find it tough. Try to understand their perspective and mention that you’ll stay in touch and visit.
And, be ready to show them your plan. Your parents will want to know you’ve thought things through. If you’ve been saving money, let them know. Talk about your job and how you’re managing to support yourself. It’s good to tell them about the place you’re planning to move into and how you chose it.
How to move out of your parents if it isn’t safe
So, after reading the above, I know that some of you may not have a good home life. You may not feel safe telling your parents that you are moving out.
If that’s the case, then I recommend reading this section.
Sometimes, home isn’t the safe place that it’s supposed to be. If you’re in a tough situation and need to leave at 18 but can’t talk to your parents about it, you’re not alone.
Here’s what you can do:
Find an adult you trust – Look for someone you trust, like a teacher, counselor, or family friend. They can maybe give you support and help you figure out your options.
Plan ahead – Start thinking about where you’ll go and how you’ll support yourself. Look into shelters, transitional housing programs, or staying with a trusted friend or relative.
Know your rights – As you turn 18, you have rights. Learn about your options for housing, education, and employment because there may be resources available to help you.
Stay safe – If you’re in danger at home, prioritize your safety. Contact local authorities or organizations that can help you leave safely.
Take care of yourself – Moving out can be tough, but remember to take care of yourself emotionally and physically, such as by talking to friends, finding support groups, or talking to a counselor if you need to.
Leaving home at 18 without being able to talk to your parents is hard, but it’s not impossible. Reach out for help, make a plan, and remember that you deserve to live in a safe and supportive environment.
Get free stuff for your new home
One of the big challenges of moving out on your own is affording all of the different things that you need.
Luckily, there are ways to get things for free or really cheap.
Some of the top ways include:
Facebook Buy Nothing groups – This is my favorite place to start if you want to get things for free. These groups promote recycling and reusing items instead of throwing them away when you’re done with them. To begin, look for and join a local Buy Nothing group on Facebook. You can search for groups for your city. People list their free stuff all the time, such as furniture, electronics, clothes, and more. You can even make a post asking if anyone has something that you need.
Ask family and friends – Your family and friends might have extra stuff they’re willing to part with. They might even be happy to see it go to a good home – your new home!
Check online platforms – Websites like Craigslist, Freecycle, and Facebook Marketplace can be goldmines for free furniture. People often list items they want to get rid of quickly.
Visit thrift stores and yard sales – Thrift stores and yard sales sometimes offer “free bins” or low-cost items they want to get rid of fast.
Attend college move-out days – If you live near a university, go there on move-out day. Students tend to leave behind perfectly good furniture that’s yours for the taking.
Community centers and churches – These places often have bulletin boards with listings for free items.
Always be safe when arranging pickups, especially with strangers. Always bring a friend or let someone know where you’re going.
Helpful articles:
Handling utilities and bills
Dealing with utilities and bills is a big step in moving out. Utilities are services you need like water, electricity, gas, and the internet.
Before you move, call or visit the websites of local utility companies. You’ll need to set up accounts in your name. This might include a deposit fee, so be ready for that.
I recommend making a list of all your expected bills. Rent, electricity, water, internet, and maybe gas are usually the basics. Add them up to see how much you’ll spend each month.
After you move in, you will want to find out when each bill is due. It’s your job to pay them on time as paying late can lead to extra fees or even getting your services turned off. Some companies let you set up automatic payments, and this means the money comes out of your bank account on its own each month. This can make sure you’re always on time.
You will want to hold onto your bills and receipts. This way, if there’s ever a mistake with a bill, your records will help fix it.
You can save money by being smart about using your services. Turn off lights when you leave a room and unplug electronics that you’re not using. You might also shop around for better deals on services like the internet.
After you get your first set of bills, you will understand why your parents wanted to keep the air conditioning off or why they always asked you to turn the lights off – things can be expensive!
Also, remember that different times of the year will impact your bills. For example, your electric bill will most likely be a lot more expensive in the summer than it will be in the spring or fall.
Maintain your home (housekeeping)
Moving out at 18 means taking on the responsibility of housekeeping. You might be surprised how quickly your new home can become cluttered and get dirty.
Keeping your home nice starts with regular cleaning, and I recommend setting aside some time each day for tasks like washing dishes, making your bed, and tidying up the living area. This way, messes won’t pile up and become overwhelming.
Then, once a week, dedicate your time to deeper cleaning such as vacuuming, mopping floors, cleaning the bathroom, dusting, and doing laundry.
Housekeeping also requires tools and supplies, so you will want to plan your budget to include items like sponges, cleaners, and trash bags.
Make friends in your new community
Moving out at 18 is a big step, and making friends in your new community is important. It can make your new place feel like home. When you move, you might not know many people, but there are fun and simple ways to meet people.
Here are some tips:
Get to know your neighbors – Start with a smile and say hi to your neighbors.
Join local groups or classes – Look for groups that interest you. Love to paint? Find an art class. Enjoy cooking? Maybe there’s a cooking group nearby. Like rock climbing? Go to the local climbing gym. This way, you meet people who like what you like.
Visit community centers – Many towns have a community center. They have activities like sports, games, and events.
Making friends might take time, but it’s totally possible! Just be yourself and be open to talking to new people.
Balancing work and personal life
I’m guessing you will have a lot going on, between trying to work full-time and enjoying your life, and even possibly furthering your education.
I recommend trying to schedule your time so you don’t get too busy. Use a calendar or app to make sure you’ve got time for work, taking care of your place, and doing fun things too.
It’s okay to say no if you’re too busy. If you’re working a full-time job, you might not be able to hang out with your friends all the time. It’s all about finding a healthy balance between earning money and enjoying life. I had to say no to my friends many times because I was simply too busy. If your friends still live at home, it may be hard for them to understand this unless you explain your situation.
Plus, remember to take breaks. When you’re planning your week, set aside some time just for relaxing. Watching a movie, reading, or hanging out in the park are all great ways to unwind and give your mind a break.
Frequently Asked Questions
Below are common questions about how to move out at 18 years old with little money.
How can I move out fast at 18?
To move out quickly, focus on making a steady income and finding affordable housing. Create a budget to manage your expenses and look for immediate job openings or housing options. Saving as much money as you can right now is also super helpful.
How much money should I have saved by 18 to move out?
Aim to save at least 3 to 6 months of living expenses before moving out. This safety net can cover rent, groceries, and unexpected costs, giving you financial stability as you start on your own.
Can you move out at 18 while still in high school?
Yes, you can move out at 18 while in high school, but make sure you have a support system in place. Balancing school responsibilities with living independently can be very hard.
How to move out at 18 with strict parents?
When moving out at 18 with strict parents, communicate your plans clearly and respectfully. Prepare a well-thought-out plan to show them you’re serious and capable of managing your own life.
Can your parents not let you move out at 18?
When you turn 18, you’re legally an adult in most places, and you can decide to move out even if your parents don’t agree. However, it’s important to respect their opinion and explain your reasons. There are some places where you have to be older, so make sure you do your research.
Do I have to tell my parents I’m moving out?
While you’re not legally required to inform your parents in most places, it’s nice to talk about your decision with them, as transparent communication helps maintain a positive relationship after you leave.
Can I move out at 18 without parental consent?
Yes, in most places, at 18 you’re legally permitted to move out without parental consent. You will want to make sure this applies to your local area.
What things do you need when moving out of your parents’ house?
There are many things that you will need to move out of your parents’ house such as a bed, blanket, pillow, kitchen supplies, towels, a place to eat, a dresser, cleaning supplies, groceries, and more.
Is it realistic to move out at 18?
It is realistic to move out at 18 if you have a reliable income, a budget, and a plan for handling responsibilities. You will want to be as prepared as possible to move out at a young age because there will be many hurdles thrown your way, most likely.
How To Move Out At 18 – Summary
I hope you enjoyed this article on how to move out at 18 years old.
It’s really important to have a plan for a successful move when you are just 18 years old.
You’ll need to find ways to earn money regularly, like getting a job and even doing extra work on the side.
Having savings in the bank and an emergency fund will help you handle unexpected expenses without ruining your plans.
There are also many other things to think about, such as the cost of living, utility bills, your credit score, and more.
I moved out when I was just 18 years old, so I completely understand where you are coming from. I had no financial help from my parents and found and did everything on my own – from making money to finding a place to live, making all of my own meals, and more. It was hard, but it was what needed to be done.
Do you plan on moving out soon? Do you have any questions for me on how to move out at 18?
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