Income + Financial Stability in America

Has saving for the future become a thing of the past?

Squeezed between the rising cost of living and stagnant wages, Americans struggle to save money and achieve financial stability. On the most basic level, having money left over at the end of the month allows people handle unexpected expenses, and prepare for the future.

Scroll to see whether it's possible to budget and save as an American today.

The 50/30/20 Financial Guideline

Created by Elizabeth Warren, this rule helps people achieve greater financial stability by spending their monthly income in 3 categories:

50% on things they need, mandatory expenses like:

  • mortgage or rent
  • utilities
  • health care
  • basic groceries
  • transportation
  • childcare

30% on things they want, expenses like:

  • cable/internet/phone
  • dining out
  • entertainment
  • personal care
  • shopping
  • travel

20% on building their savings and paying down debt:

  • student loans
  • credit card debit
  • savings
  • retirement

Can people manage to save with today's income and expenses?

Take a look at a typical American:

Married couple with two children

Boise, ID

Median Income:


$4,482/month after taxes

Single adult male

Chicago, IL

Median Income:


$2,253/month after taxes

Single mother with one child

Philadelphia, PA

Median Income:


$1,423/month after taxes

Choose a typical American's situation:





$4,577/month after taxes

Following 50/30/20 isn't possible in this situation. The average needs of this household exceed 50% of the income by 38%, which reduces the ability for this household to save for the future.

How does this add up?

Totaling the cost of necessities:

Based on a two-bedroom apartment for families with children or a studio apartment for a single adult.Source.

Includes insurance premiums and out-of-pocket expenditures. Source.

The minimum budget, based on the USDA's “low-cost plan” that assumes almost all food is bought at the grocery store and prepared at home. Source.

The cost of a monthly transportation pass in that location for each adult. Car ownership and expenses would be at least $450 a month.

Based on center-based child care and family-based care for four-year-olds and school-age children. Source.

Click to go back to cost of groceries

So now what?

The bottom line

This looks at median household income, which suggests that a growing cost of necessities and lack of savings is the rule rather than the exception. In fact, 46% of Americans could not cover an unexpected expense of $400 and 31% do not have any retirement or pension (source). The 50/30/20 guideline doesn't add-up for most Americans where many people live paycheck to paycheck. There's a growing lack of financial stability and security across the country and different family situations. It's hard to build a nest egg when you can barely afford the nest.

Explore more situations   or   50/30/20 budgeting worksheet