# \$18.50 an Hour is How Much a Year? Before and After Taxes

With the cost of living rising across the country, workers earning \$18.50 per hour may wonder if this provides enough income to live comfortably. While \$18.50 an hour seems like a reasonable wage, how much does this hourly pay actually convert to annually? And after accounting for taxes and deductions, is \$18.50 still considered adequate compensation?

In this article, we will calculate \$18.50 per hour as a weekly, monthly, and yearly salary before and after typical taxes and deductions. We will evaluate if \$18.50 an hour allows for a decent standard of living in today’s economy and what lifestyle it can support. To do this, we will create sample budgets to see if \$18.50 an hour enables covering basic expenses, purchasing a car, or buying a home. We’ll examine the impact inflation has on \$18.50 an hour and provide tips to increase hourly pay. Understanding precisely what an hourly wage equals annually and after taxes is essential for anyone earning \$18.50 per hour. With smart planning, this hourly rate may be sufficient to live on.

## Convert \$18.50 Per Hour to Weekly, Monthly, and Yearly Salary

Input your wage and hours per week to see how much you’ll make monthly, yearly and more.

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### \$18.50 an Hour is How Much a Year?

If you make \$18.50 an hour, your yearly salary would be \$38,480. We calculate your annual income based on 8 hours per day, 5 days per week and 52 weeks in the year.

Hours worked per week (40) x Hourly wage(\$18.50) x Weeks worked per year(52) = \$38,480

### \$18.50 an Hour is How Much a Month?

If you make \$18.50 an hour, your monthly salary would be \$3,206.67. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage(\$18.50) x Weeks worked per year(52) / Months per Year(12) = \$3,206.67

### \$18.50 an Hour is How Much a Biweekly?

If you make \$18.50 an hour, your biweekly salary would be \$1,480.

Hours worked per week (40) x Hourly wage(\$18.50) x 2 = \$1,480

### \$18.50 an Hour is How Much a Week?

If you make \$18.50 an hour, your weekly salary would be \$740. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage(\$18.50) = \$740

### \$18.50 an Hour is How Much a Day?

If you make \$18.50 an hour, your daily salary would be \$148. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage(\$18.50) = \$148

## \$18.50 an Hour is How Much a Year?

The basic formula to calculate your annual salary from an hourly wage is:

Hourly Rate x Hours Worked per Week x Number of Weeks Worked per Year = Annual Salary

So for a \$20 per hour job:

\$18.50 per hour x 40 hours per week x 52 weeks per year = \$38,480

However, this simple calculation makes some assumptions:

• You will work 40 hours every week of the year
• You will not get any paid time off

Therefore, it represents your earnings if you worked every week of the year, without any vacation, holidays, or sick days.

Accounting for Paid Time Off

The \$38,480 base salary does not yet factor in paid time off (PTO). Let’s assume the job provides:

• 2 weeks (10 days) paid vacation
• 6 paid holidays
• 3 paid sick days

This totals 19 paid days off, or nearly 4 weeks of PTO.

Importantly, this paid time off should not be deducted from the annual salary, since you still get paid for those days.

So with 4 weeks PTO, the annual salary would remain \$38,480 .

## Part time \$18.50 an hour is How Much a Year?

Your annual income changes significantly if you work part-time and not full-time.

For example, let’s say you work 30 hours per week instead of 40. Here’s how you calculate your new yearly total:

\$18.50 per hour x 30 hours per week x 52 weeks per year = \$28,860

By working 10 fewer hours per week (30 instead of 40), your annual earnings at \$19 an hour drop from \$38,480 to \$28,860.

That’s a \$9,620 per year difference just by working part-time!

Here’s a table summarizing how your annual earnings change depending on how many hours you work per week at \$18.50 an hour:

Hours Per Week Earnings Per Week Annual Earnings
40 \$740 \$38,480
35 \$647.50 \$33,670
30 \$555 \$28,860
25 \$462.50 \$24,050
20 \$370 \$19,240
15 \$277.50 \$14,430

The more hours per week, the higher your total yearly earnings. But part-time work allows for more life balance if you don’t need the full salary.

## \$18.50 an Hour With Overtime is How Much a Year?

Now let’s look at how overtime can increase your annual earnings.

Overtime kicks in once you work more than 40 hours in a week. Typically, you earn 1.5x your regular hourly wage for overtime hours.

So if you make \$18.50 per hour normally, you would make \$27.75 per hour for any hours over 40 in a week.

Here’s an example:

• You work 45 hours in a Week
• 40 regular hours paid at \$18.50 per hour = \$740
• 5 overtime hours paid at \$27.75 per hour = \$138.75
• Your total one Week earnings =\$740 + \$138.75 = \$878.75

If you worked 45 hours each week for 52 weeks, here’s how your annual earnings increase thanks to overtime pay:

\$878.75 per week x 52 weeks per year = \$45,695

That’s \$7,215 more than you’d earn working just 40 hours per week at \$18.50 an hour.

Overtime can add up! But also consider taxes and work-life balance when deciding on extra hours.

Here’s a table summarizing how your annual earnings change depending on how many hours you work per week at \$18.50 an hour:

 Overtime hours per work day Hours Per Week Earnings Per Week Annual Earnings 0 40 \$740 \$38,480 1 45 \$878.75 \$45,695 2 50 \$1,017.50 \$52,910 3 55 \$1,156.25 \$60,125 4 60 \$1,295 \$67,340 5 65 \$1,433.75 \$74,555 6 70 \$1,572.50 \$81,770 7 75 \$1,711.25 \$88,985

## How Unpaid Time Off Impacts \$18.50/Hour Yearly Earnings

So far we’ve assumed you work 52 paid weeks per year. Any unpaid time off will reduce your total income.

For example, let’s say you take 2 weeks of unpaid leave. That brings your paid weeks down to 50:

Hours worked per week (40) x Hourly wage(\$18.50) x Weeks worked per year(50) = \$37,000 annual salary

With 2 weeks unpaid time off, your annual earnings at \$18.50/hour would drop by \$1,480.

The table below summarizes how your annual income changes depending on the number of weeks of unpaid leave.

 Weeks of unpaid leave Paid weeks per year Earnings Per Week Annual Earnings 0 52 \$740 \$38,480 1 51 \$740 \$37,740 2 50 \$740 \$37,000 3 49 \$740 \$36,260 4 48 \$740 \$35,520 5 47 \$740 \$34,780 6 46 \$740 \$34,040 7 45 \$740 \$33,300

## Key Takeaways for \$18.50 Hourly Wage

In summary, here are some key points on annual earnings when making \$18.50 per hour:

• At 40 hours per week, you’ll earn \$38,480 per year.
• Part-time of 30 hours/week results in \$28,860 annual salary.
• Overtime pay can boost yearly earnings, e.g. \$7,215 extra at 45 hours/week.
• Unpaid time off reduces your total income, around \$1,480 less per 2 weeks off.
• Your specific situation and location impacts taxes and PTO.

Knowing your approximate annual salary and factors impacting it makes it easier to budget and plan your finances. The next step is calculating take-home pay after deductions like taxes.

## \$18.50 An Hour Is How Much A Year After Taxes

Figuring out your actual annual earnings based on an hourly wage can be complicated once taxes are taken into account. In addition to federal, state, and local income taxes, 7.65% of your gross pay also goes to Social Security and Medicare through FICA payroll taxes. So how much does \$18.50 an hour equal per year after FICA and income taxes are deducted from your gross pay?

Below we’ll walk through the steps to calculate your annual net take home pay if you make \$18.50 per hour. This will factor in estimated federal, FICA, state, and local taxes so you know exactly what to expect.

### Factoring in Federal Income Tax

Your federal income tax will be a big chunk out of your gross pay. Federal tax rates range from 10% to 37%, depending on your tax bracket.

To estimate your federal income tax rate and liability:

Look up your federal income tax bracket based on your gross pay.

2023 tax brackets: single filers

Tax rate Taxable income bracket Tax owed
10% \$0 to \$11,000. 10% of taxable income.
12% \$11,001 to \$44,725. \$1,100 plus 12% of the amount over \$11,000.
22% \$44,726 to \$95,375. \$5,147 plus 22% of the amount over \$44,725.
24% \$95,376 to \$182,100. \$16,290 plus 24% of the amount over \$95,375.
32% \$182,101 to \$231,250. \$37,104 plus 32% of the amount over \$182,100.
35% \$231,251 to \$578,125. \$52,832 plus 35% of the amount over \$231,250.
37% \$578,126 or more. \$174,238.25 plus 37% of the amount over \$578,125.

For example, if you are single with \$38,480 gross annual pay, your federal tax bracket is 12%.

Your estimated federal tax would be:

\$1,100 + (\$38,480 – \$11,000) x 12% = \$4,397.60

So at \$18.50/hour with \$38,480 gross pay, you would owe about \$4,397.60 in federal income taxes.

### Considering State Income Tax

In addition to federal tax, most states also charge a state income tax. State income tax rates range from about 1% to 13%, with most falling between 4% and 6%.

Key Takeaways

• California, Hawaii, New York, New Jersey, and Oregon have some of the highest state income tax rates.
• Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t impose an income tax at all.
• Another 10 U.S states have a flat tax rate—everyone pays the same percentage regardless of how much they earn.

A State-by-State Comparison of Income Tax Rates

STATE TAX RATES LOWEST AND HIGHEST INCOME BRACKETS
Florida 0% None
South Dakota 0% None
Tennessee 0% None
Texas 0% None
Washington 0% None
Wyoming 0% None
Colorado 4.55% Flat rate applies to all incomes
Illinois 4.95% Flat rate applies to all incomes
Indiana 3.23% Flat rate applies to all incomes
Kentucky 5% Flat rate applies to all incomes
Massachusetts 5% Flat rate applies to all incomes
New Hampshire 5% Flat rate on interest and dividend income only
North Carolina 4.99% Flat rate applies to all incomes
Pennsylvania 3.07% Flat rate applies to all incomes
Utah 4.95% Flat rate applies to all incomes
Michigan 4.25% Flat rate applies to all incomes
Arizona 2.59% to 4.5% \$27,806 and \$166,843
Arkansas 2% to 5.5% \$4,300 and \$8,501
California 1% to 13.3% \$9,325 and \$1 million
Connecticut 3% to 6.99% \$10,000 and \$500,000
Delaware 0% to 6.6% \$2,000 and \$60,001
Alabama 2% to 5% \$500 and \$3,001
Georgia 1% to 5.75% \$750 and \$7,001
Hawaii 1.4% to 11% \$2,400 and \$200,000
Idaho 1.125% to 6.5% \$1,568 and \$7,939
Iowa 0.33% to 8.53% \$1,743 and \$78,435
Kansas 3.1% to 5.7% \$15,000 and \$30,000
Louisiana 1.85% to 4.25% \$12,500 and \$50,001
Maine 5.8% to 7.15% \$23,000 and \$54,450
Maryland 2% to 5.75%  \$1,000 and \$250,000
Minnesota 5.35% to 9.85% \$28,080 and \$171,221
Mississippi 0% to 5% \$5,000 and \$10,001
Missouri 1.5% to 5.3% \$1,121 and \$8,968
Montana 1% to 6.75% \$2,900and \$17,400
Nebraska 2.46% to 6.84% \$3,340 and \$32,210
New Jersey 1.4% to 10.75% \$20,000 and \$1 million
New Mexico 1.7% to 5.9% \$5,500 and \$210,000
New York 4% to 10.9% \$8,500 and \$25 million
North Dakota 1.1% to 2.9% \$41,775 and \$458,350
Ohio 0% to 3.99% \$25,000 and \$110,650
Oklahoma 0.25% to 4.75% \$1,000 and \$7,200
Oregon 4.75% to 9.9% \$3,750 and \$125,000
Rhode Island 3.75% to 5.99% \$68,200 and \$155,050
South Carolina 0% to 7% \$3,110 and \$15,560
Vermont 3.35% to 8.75% \$42,150 and \$213,150
Virginia 2% to 5.75% \$3,000 and \$17,001
Washington, D.C. 4% to 9.75% \$10,000 and \$1 million
West Virginia 3% to 6.5% \$10,000 and \$60,000
Wisconsin 3.54% to 7.65% \$12,760 and \$280,950

To estimate your state income tax:

Look up your state income tax rate based on your gross pay and filing status.

Multiply your gross annual pay by the state tax rate.

For example, if you live in Pennsylvania which has a flat 3.07% tax rate, your estimated state tax would be:

\$38,480 gross pay x 3.07% PA tax rate = \$1,181.34 estimated state income tax

So with \$38,480 gross annual income, you would owe around in \$1,181.34 Pennsylvania state income tax. Verify your specific state’s income tax rates.

### Factoring in Local Taxes

Some cities and counties levy local income taxes ranging from 1-3% of taxable income.

To estimate potential local taxes you may owe:

• Check if your city or county charges a local income tax.
• If yes, look up the local income tax rate.
• Multiply your gross annual pay by the local tax rate.

For example, say you live in Columbus, OH which has a 2.5% local income tax. Your estimated local tax would be:

\$38,480 gross pay x 2.5% local tax rate = \$962 estimated local tax

So with \$38,480 in gross earnings, you may owe around \$962 in Columbus local income taxes. Verify rates for your own city/county.

### Accounting for FICA Taxes (Social Security & Medicare)

FICA taxes are a combination of Social Security and Medicare taxes that equal 15.3% of your earnings. You are responsible for half of the total bill (7.65%), which includes a 6.2% Social Security tax and 1.45% Medicare tax on your earnings.

In 2023, only the first \$160,200 of your earnings are subject to the Social Security tax

There is an additional 0.9% surtax on top of the standard 1.45% Medicare tax for those who earn over \$200,000 (single filers) or \$250,000 (joint filers).

To estimate your FICA tax payment:

\$38,480 x 6.2% + \$38,480 x 1.45% = \$2,943.72

So you can expect to pay about \$2,943.72 in Social Security and Medicare taxes out of your gross \$38,480 in earnings.

### Total Estimated Tax Payments

Based on the examples above, your total estimated tax payments would be:

Federal tax: \$4,397.60

State tax: \$1,181.34

Local tax: \$962

FICA tax: \$2,943.72

Total Estimated Tax: \$9,484.66

### Calculating Your Take Home Pay

To calculate your annual take home pay at \$18.50 /hour:

2. Subtract your estimated total tax payments

\$38,480 gross pay – \$9,484.66 Total Estimated Tax = \$28,995.34 Your Take Home Pay

n summary, if you make \$18.50 per hour and work full-time, you would take home around \$28,995.34 per year after federal, state, local , FICA taxes.

Your actual net income may vary depending on your specific tax situation. But this gives you a general idea of what to expect.

## Convert \$18.50 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make \$18.50 an hour and work full-time (40 hours per week), your estimated yearly salary would be \$38,480 .

The \$38,480 per year salary does not account for taxes. Federal, state, and local taxes will reduce your take-home pay. The amount withheld depends on your location, filing status, dependents, and other factors.

Just now during our calculation of \$18.50 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

• You are single with \$38,480 gross annual pay, your federal tax bracket is 12 %.
• You live in Pennsylvania which has a flat 3.07% tax rate
• You live in Columbus, OH which has a 2.5% local income tax.

In the end, we calculated your Total Estimated Tax is \$9,484.66 , Your Take Home Pay is \$28,995.34 , Total tax rate is 24.65%.

So next we’ll use 24.65% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

### \$18.50 Per Hour to Yearly, Monthly, Biweekly, Weekly,and Week Salary After Taxes Table

 Income before taxes Estimated Tax Rate Income Taxes After Tax Income Yearly Salary \$38,480 24.65% \$9,484.66 \$28,995.34 Monthly Salary \$3,206.67 24.65% \$790.39 \$2,416.28 BiWeekly Salary \$1,480 24.65% \$364.79 \$1,115.21 Weekly Salary \$740 24.65% \$182.40 \$557.60

### \$18.50  an hour is how much a year after taxes

Here is the adjusted yearly salary after a 24.65% tax reduction:

• Yearly salary before taxes: \$38,480
• Estimated tax rate: 24.65%
• Taxes owed (24.65% * \$38,480 )= \$9,484.66
• Yearly salary after taxes: \$28,995.34
Hourly Wage Hours Worked Per Week Weeks Worked Per Year Total Yearly Salary Estimated Tax Rate Taxes Owed After-Tax Yearly Salary
\$18.50 40 52 \$38,480 24.65% \$9,484.66 \$28,995.34

### \$18.50 an hour is how much a month after taxes

To calculate the monthly salary based on an hourly wage, you first need the yearly salary amount. Then divide by 12 months.

• Yearly salary before taxes at \$18.50 per hour: \$38,480
• Divided by 12 months per year: \$38,480 / 12 = \$3,206.67 per month

The monthly salary based on a 40 hour work week at \$18.50 per hour is \$3,206.67 before taxes.

After applying the estimated 24.65% tax rate, the monthly after-tax salary would be:

• Monthly before-tax salary: \$3,206.67
• Estimated tax rate: 24.65%
• Taxes owed (24.65% * \$3,206.67 )= \$790.39
• Monthly after-tax salary: \$2,416.28

Monthly Salary Based on \$18.50 Per Hour

Hourly Wage Yearly Salary Months Per Year Before-Tax Monthly Salary Estimated Tax Rate Taxes Owed After-Tax Monthly Salary
\$18.50 \$38,480 12 \$3,206.67 24.65% \$790.39 \$2,416.28

### \$18.50 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at \$18.50 per hour:

• Hourly wage: \$18.50
• Hours worked per week: 40
• Weeks per biweekly pay period: 2
• \$18.50 * 40 hours * 2 weeks = \$1,480 biweekly

Applying the 24.65%estimated tax rate:

• Biweekly before-tax salary: \$1,480
• Estimated tax rate: 24.65%
• Taxes owed (24.65% * \$1,480 )= \$364.79
• Biweekly after-tax salary: \$1,115.21

Biweekly Salary at \$18.50 Per Hour

Hourly Wage Hours Worked Per Week Weeks Per Pay Period Before-Tax Biweekly Salary Estimated Tax Rate Taxes Owed After-Tax Biweekly Salary
\$18.50 40 2 \$1,480 24.65% \$364.79 \$1,115.21

### \$18.50 an hour is how much weekly after taxes

To find the weekly salary based on an hourly wage, you need to know the number of hours worked per week. At 40 hours per week, the calculation is:

• Hourly wage: \$18.50
• Hours worked per week: 40
• \$18.50 * 40 hours = \$740 per week

Accounting for the estimated 24.65% tax rate:

• Weekly before-tax salary: \$740
• Estimated tax rate: 24.65%
• Taxes owed (24.65% * \$740 )= \$182.40
• Weekly after-tax salary: \$557.60

Weekly Salary at \$18.50 Per Hour

Hourly Wage Hours Worked Per Week Before-Tax Weekly Salary Estimated Tax Rate Taxes Owed After-Tax Weekly Salary
\$18.50 40 \$740 24.65% \$182.40 \$557.60

### Key Takeaways

• An hourly wage of \$18.50 per hour equals a yearly salary of \$38,480 before taxes, assuming a 40 hour work week.
• After accounting for an estimated 24.65% tax rate, the yearly after-tax salary is approximately \$28,995.34 .
• On a monthly basis before taxes, \$18.50 per hour equals \$3,206.67 per month. After estimated taxes, the monthly take-home pay is about \$2,416.28 .
• The before-tax weekly salary at \$18.50 per hour is \$740 . After taxes, the weekly take-home pay is approximately \$557.60 .
• For biweekly pay, the pre-tax salary at \$18.50 per hour is \$1,480 . After estimated taxes, the biweekly take-home pay is around \$1,115.21 .

Understanding annual, monthly, weekly, and biweekly salary equivalents based on an hourly wage is useful when budgeting and financial planning. Taxes make a significant difference in take-home pay, so be sure to account for them when making income conversions. Use this guide as a reference when making salary calculations.

## What Is the Average Hourly Wage in the US?

Last Updated: Sep 1 2023

US Average Hourly Earnings is at a current level of \$33.82, up from 33.74 last month and up from 32.43 one year ago. This is a change of 0.24% from last month and 4.29% from one year ago.

Average Hourly Earnings is the average dollars that a private employee makes per hour in the US. This metric is a part of one of the most important releases every month which includes unemployment numbers as well. This is normally released on the first Friday of every month. This metric is released by the Bureau of Labor Statistics (BLS).

## What is the average salary in the U.S.?

Last Updated: July 18, 2023

The U.S. Bureau of Labor Statistics uses median salary data rather than averages to avoid skewed numbers from outlying high and low numbers. Median weekly earnings of the nation's 121.5 million full-time wage and salary workers were \$1,100 in the second quarter of 2023, the U.S.

If a person works 52 weeks in the year, then this represents a national annual salary of \$57,200.

## Is \$18.5 an Hour a Good Salary?

Whether or not \$18.50 an hour is considered a good salary really depends on where you live and your family size. According to the Massachusetts Institute of Technology living wage calculator, \$18.50 per hour provides a living wage for a single adult with no children in most areas of the country. However, for households with one or more dependents, this wage often falls short of meeting basic needs in higher cost-of-living places.

For example, in a moderate cost-of-living area like Dayton, Ohio, \$18.50 per hour provides a living wage for single adults and couples without children. But for a family of four with two working adults, each parent would need to earn at least \$21.86 per hour for the household to achieve economic stability. In a high cost metro like San Francisco, a single adult would require \$22.02 per hour and a single parent with one child would need \$43.12.

So while \$18.50 per hour may allow a single person to scrape by in cheaper parts of the country, supporting families in major metropolitan areas at this wage poses significant challenges.

## Jobs that pay \$18.5 an hour

Certain occupations are more likely than others to pay in the \$18-19 per hour range:

• Administrative assistants – These office professionals perform clerical duties like scheduling, data entry, and customer service. The average admin assistant makes \$18.23 per hour.
• Pharmacy technicians – Pharmacy techs help pharmacists fill prescriptions. Average hourly wages are around \$18.50.
• Bank tellers – Bank tellers handle basic financial transactions with customers. Average pay comes in at \$17.87 per hour.
• Bus drivers – Public transit and school bus drivers average approximately \$19 per hour.
• Bookkeepers – Bookkeepers maintain financial records and do general accounting. The average hourly wage is \$19.17.
• Medical assistants – Medical assistants provide both administrative and clinical help in healthcare facilities. Average pay is \$18.39 per hour.
• Preschool teachers – Early education teachers care for and teach preschool aged children. Average hourly earnings are \$18.29.

So fields like healthcare services, education, finance, and transportation offer the best opportunities for jobs in the \$18-19 per hour range. Experience, specialized certifications, and cost of living in the area can impact pay rates.

## Can You Live Off \$18.5 An Hour?

Living off of \$18.50 an hour is possible depending on your location, whether you have roommates, family size, and lifestyle expectations. For a single person or childless couple splitting rent and utilities in an average cost-of-living area, covering basic necessities on this wage is feasible. However, it requires carefully budgeting and likely little room for saving or extras. Those supporting children or living in high cost cities at \$18.50 per hour will struggle more significantly.

Monthly net income after taxes on \$18.50 per hour is approximately \$2,400, or \$29,000 annually. While rents vary widely, the national median is around \$1,097 according to ApartmentList. This would account for over 45% of take-home pay at \$18.50 per hour. Saving for retirement, healthcare costs, childcare, transportation, groceries, and other bills must be covered by the remaining amount. Even with prudent money management, unexpected expenses could force tough financial decisions.

While covering basics alone is possible at this wage in lower cost regions, achieving true financial stability, buying a home, or raising a family is unlikely without additional income. Overall, \$18.50 per hour provides a living wage for single adults but supports a pretty minimalist lifestyle.

## The impact of inflation on the value of \$18.5 an hour

With inflation currently rising at the fastest rate in decades, the real spending power of \$18.50 per hour continues to decline significantly. In June 2022, the consumer price index jumped by 9.1% – the largest 12-month increase since 1981. Consequently, wage growth is having trouble keeping up.

Someone earning \$18.50 per hour today has over 9% less purchasing power compared to a year ago. Goods like gas, food, vehicles, and housing have been especially impacted. What \$18.50 could buy reasonably comfortably in 2021 requires more hours of work and financial sacrifices in 2022. And real wages will continue dropping if inflation remains high.

Unless hourly pay rates can increase consistently with inflation or it begins to slow, the value of \$18.50 per hour will keep eroding. This will make achieving financial stability and discretionary spending at this wage rate even more difficult. Saving, investing, budgeting, and embracing frugality become critical. So in today’s economy, \$18.50 understandably doesn’t go nearly as far.

## 5 Ways To Increase Your Hourly Wage

For those struggling to cover costs on \$18.50 per hour, here are some potential ways to boost earnings:

• Ask for a raise – If you’ve been a strong performer, build a case for higher pay to your boss.
• Seek promotion – Taking on more responsibility often comes with better pay.
• Develop new skills – Gain expertise to qualify for higher paying jobs.
• Negotiate pay – Research to benchmark competitive wages when hired.
• Find a higher paying job – Explore options at other companies potentially valuing your skillset more.

Sometimes, small increases of even \$1-2 per hour can make a difference in quality of life. Being proactive, making your value known, and aggressively seeking better opportunities are key. Also consider supplementing full-time work with side gigs delivering meals or driving for rideshare services in your spare time. Every extra dollar earned helps counteract inflation and ease financial burdens.

## Buying a car on \$18.5 an hour

Buying a car while earning \$18.50 an hour can be manageable depending on your monthly budget and existing debts. The first step is saving up enough cash for a solid down payment, ideally no less than 20% of the vehicle’s price. This will keep your monthly car loan payments affordable relative to your take-home income.

Focus your search primarily on a lightly used, reliable model around 5 years old. Let’s say you locate a 2018 Toyota Camry for \$18,000. Putting 20% down would equal \$3,600, requiring financing of only \$14,400. At a 5% interest rate over 5 years, the monthly payment stays under \$270. While not insignificant, this accounts for about 15% of monthly take-home income from \$18.50 per hour. That remains a reasonable housing expense ratio.

Prioritize buying well within your budget. Seeking an expensive new car that requires hefty monthly payments could dramatically limit your cash flow for other necessities. Always get preapproved for financing too so hidden fees or excessive rates don’t sabotage affordability. Overall, buying a modest used car prudently with substantial down payment is feasible on \$18.50 per hour. Just focus on value and budget minimally.

## Can You Buy a House on \$18.5 An Hour?

Home ownership is challenging on \$18.50 per hour, but possible with discipline and some luck. The median home price nationally is around \$320,000. With a standard 20% down payment, you would need \$64,000 upfront and a mortgage of \$256,000.

On a 30-year loan at 6% interest, the principal and interest payment equates to \$1,531 monthly. Taxes, insurance and PMI will add several hundred dollars more. Hence, total housing costs approach \$2,000 per month. That sums to over 80% of take-home income at \$18.50 per hour, well above the recommended 30-40% range.

Succeeding would require a very cheap property (perhaps a fixer-upper), additional income sources, or a hefty down payment exceeding 20%.moving to a lower cost of living area can significantly improve affordability. While far from easy, home ownership isn’t totally impossible if all circumstances align favorably. But more reasonably, renting makes better financial sense on \$18.50 per hour. Saving aggressively for a larger down payment over several years can setup future home buying in a better position too.

## Example Budget For \$18.5 Per Hour

Here is one example of a monthly budget for someone earning \$18.50 per hour full-time:

• Take Home Pay (after taxes): \$2,400
• Rent for 1 Bedroom Apartment: -\$975
• Groceries/Dining Out: -\$400
• Car Payment: -\$275
• Car Insurance: -\$100
• Gas: -\$150
• Health Insurance: -\$250
• Entertainment: -\$100
• Clothes: -\$75
• Internet/Phone: -\$80
• Miscellaneous: -\$100

Total Expenses: -\$2,505

Remaining: -\$105

This illustrates the financial challenge of potentially running a slight deficit each month. Careful monitoring of costs and cutting discretionary expenses becomes critical. Any emergency costs or spikes in inflation could quickly derail the budget. But with prudent frugality, this example at least meets basic necessities like housing and transportation.

## In Summary

While covering the basics is feasible in lower cost areas, living comfortably on \$18.50 per hour remains difficult, especially for larger families. In high expense cities, it provides a very minimal standard of living. Boosting income via raises, promotions, better jobs, or side work can ease pressures significantly. But inflation continues to undermine purchasing power at this wage rate. With careful budgeting, smart trade-offs, and reasonable expectations, however, achieving a basic but modest lifestyle on \$18.50 an hour in some parts of America still remains viable today.