Starting Out on $50K
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What is the main topic discussed in this episode?
Here's your Money Briefing. I'm J.R. Whalen at The Wall Street Journal in New York.
How does the Wall Street Journal frame the question — can you live on $50,000 a year?
How easy is it to live on $50,000 a year? The Journal asked five recent graduates not living with their parents if and how they get by. We'll have details in a moment. First, some money in market news you should know. So who's to blame for the nation's $1.6 trillion student loan debt crisis? Well, that depends on who you ask. A survey from creditreport.com shows that 40% of people age 18 to 44 blame the government, while 27% say fault lies with students. Just 5% blame students' parents. Now, people over age 45 are asked the same question. A third blame students, and about a quarter blame the government. Both groups agree that free public college and lower interest rates are viable solutions. Seniors over 65, however, were a little more direct.
Nearly a quarter of them said the debt crisis could be solved if students worked harder. And all the talk of trade battles and a global economic slowdown did not deter Americans from buying cars, sales of which rose 1.8 percent in August. The Commerce Department says the consumers were also in a buying mood when it came to spending online, as well as buying things like building materials and sporting goods. But they pulled back on food, dining out, and spending at furniture and department stores.
Could you live on $50,000 a year? The Korn Ferry Recruiting Company says that recent graduates and entry-level jobs will make an average of $51,347 in 2019. Is that enough to live on?
What do recent grads actually earn and how much is taken out for taxes and benefits?
Let's bring in Wall Street Journal reporter Francesca Fontana. She spoke with recent grads in five U.S. cities to find out, and she joins us here in our studio. So, Francesca, just to start, $50,000 sounds like a decent starting salary, but that's before taxes, right?
Yes, it is. And the millennials that we talked to, their salaries ranged from 45 to around 55. That was sort of the net we cast because we understand not everyone's going to make exactly that $50,000.
And you take about 30% out of that, I would imagine, for taxes during the year.
Yeah. And then obviously, you know, they have health care costs and things like that that might come out. Quite a few of them are contributing to their 401k. So they were pretty honest with me about how tight things were after all of those things were taken out.
You know, after expenses and leisure time, a few of them don't have much left over, but saving is pretty significant to them.
Yeah, I think that's something that people were surprised by. You know, there's this sort of stereotype that millennials and Gen Z might not know how to manage their money. But it seems like despite the fact that things might be tight, they found ways to save, which was really interesting to see. You know, one woman said that she will split a checked bag
How are graduates prioritizing saving versus spending on leisure and retirement?
with a friend if they're going on vacation, if they're going on a girl's trip.
I like that idea.
Yeah, and find the cheapest flight.
And that way you don't overpack.
Right, exactly. It's useful in a lot of ways. And another guy in Oklahoma City, he hunts, so he actually hasn't bought anything. red meat in months. And so he's saving money that way. So it's interesting to see all of these different ways that they're finding ways to save on this salary.
You go out and catch your dinner for the night. You spoke with people in five U.S. cities, Houston, Minneapolis, Oklahoma City, Charlotte, and Tucson. And how far $50,000 goes really does come down to where you live.
Absolutely. There were a lot of variables like, you know, some folks were living closer to the city and living alone and others were sharing an apartment with a fiance or with roommates.
What specific cost-cutting habits did interviewees use to stretch a $50K salary?
Transportation was also an interesting one. I talked to a girl in Houston who spends a pretty significant amount of her paycheck each week on driving because she has to drive everywhere from home to work. nothing's close enough for public transportation. So she ends up filling her tank a little more than once a week. And she says that eats up quite a bit of her budget.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:05–0:09
2
How does the Wall Street Journal frame the question — can you live on $50,000 a year?
0:09–1:44
3
What do recent grads actually earn and how much is taken out for taxes and benefits?
1:44–3:06
4
How are graduates prioritizing saving versus spending on leisure and retirement?
3:06–3:57
5
What specific cost-cutting habits did interviewees use to stretch a $50K salary?
3:57–5:56
6
How does city choice affect how far $50,000 goes for recent graduates?
5:56–6:55
7
What role do transportation and commuting costs play in budgets across the five cities?
6:55–7:06
Speakers
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