What’s considered a “good” salary in Texas depends on your household size and lifestyle, but most Texans make between $45K and $100K annually.
Texas cities have differing costs of living, of course — Austin is much pricier than Amarillo — so where you live in the Lone Star State also matters. Let’s break it down further.
Check your score with SoFi Insights
Track your credit score for free. Sign up and get $10.*
Recommended: What Credit Score is Needed to Buy a Car?
What Is a Good Salary for Texas?
A good salary, in many people’s minds, is one that allows an earner to save, take vacations, eat out, and so on. But before we can calculate that amount, we need to look at the average income required to cover basic needs in Texas.
Each year, MIT releases living wage figures — the income that one or two working adults, with or without children, must earn to pay for necessities. Living wage numbers are expressed as an hourly rate, and it’s assumed that the person will work full time.
Wages needed to cover basic needs are as follows:
Recommended: What is The Difference Between Transunion and Equifax?
| Living Wage for 1 Adult | |
|---|---|
| No children | $16.41 |
| 1 child | $31.63 |
| 2 children | $38.97 |
| 3 children | $51.02 |
| Living Wage for 2 Adults, 1 Working | |
|---|---|
| No children | $25.12 |
| 1 child | $30.64 |
| 2 children | $35.75 |
| 3 children | $39.24 |
| 2 Adults, Both Working | |
|---|---|
| No children | $12.56 |
| 1 child | $17.44 |
| 2 children | $22.10 |
| 3 children | $25.96 |
If you multiply the hourly figure by 40 hours a week and 52 weeks, you’ll get the living wage as an annual salary. For an individual with no kids, that comes out to just over $34K.
That income would pay for rent and utilities, minimal food, healthcare, child care, and other basics. But it’s not enough to cover DoorDash deliveries, restaurant meals, a deluxe apartment, vacations, or savings for retirement or a house.
Average Annual Salary in Texas
So what is a good yearly salary in Texas? According to MIT, the top three professions in Texas pay around $100K, while the three lowest paying fields average out to $45K. Most Texans then make somewhere in the middle. However, statewide figures can’t tell you what constitutes a good salary in Austin, where the cost of living is much higher.
Another measure of what constitutes a good salary: one that allows you to purchase an average priced home. The average home price in the Woodlands, one of the most popular suburbs in the country, is $500K. A buyer would need to make over $100K to qualify for a mortgage. In the Panhandle or Dallas, however, home prices are considerably lower.
Recommended: Does Net Worth Include Home Equity?
Average Annual Expenses in Texas
When determining a living wage, MIT considers these expenses: food, child care, medical, rental housing, transportation, civic, and annual taxes (including individual income tax, payroll tax, corporate income tax, and excise tax, but not property tax). By the way, “civic” is a catchall category that includes cultural attractions, hobbies, and pets, while “other” groups together clothing and personal care items.
As noted above, one adult with no children requires a gross income of $34K on average. This is how that income might allocated:
• Food: $3,351
• Child Care: $0
• Medical: $2,549
• Housing: $10,823
• Transportation: $5,509
• Civic: $2,503
• Other: $4,508
• Taxes: $4,761
Supporting a family of two working adults and three children requires an income of about $108K, which breaks down as follows:
• Food: $11,999
• Child Care: $22,710
• Medical: $8,805
• Housing: $19,195
• Transportation: $16,304
• Civic: $5,153
• Other: $8,655
• Taxes: $15,067
To compare your spending to these figures, sign up for a free money tracker app.
How Much Money Do You Need to Live Comfortably in Texas?
Comfort is in the eye of the beholder. Some people want luxuries while others embrace financial minimalism. This is a “less is more” attitude to spending. People who follow this philosophy focus on purchases that will add meaning to their lives.
When determining the income you need to live comfortably, factor in where you fall on the minimalism to luxury spectrum. There’s no “bad” answer; it’s just important to be honest when budgeting. Also, what changes are you willing to make in order to save more? For instance, would you downsize your home?
Texans with a financial minimalist philosophy will be comfortable with less money than someone who strives for luxury. Minimalists often reap the benefits of living below their means, which can make room for having an emergency fund, spending in ways that are better for the planet, and stressing out less about finances.
If you’d like a more structured approach to saving and spending, the 50/30/20 budget can help. The three numbers represent the percentage of income that will be allocated to needs, wants, and savings, respectively.
Which City in Texas Has the Lowest Cost of Living?
Harlingen (pop. 72,00) has a cost of living that’s 24% lower than the national average, according to recent data from the Council for Community and Economic Research. Harlingen is in the Rio Grande Valley about 30 miles from the Gulf of Mexico. Its median home sale price was $250,000 in December 2022.
Recommended: Should I Sell My House Now or Wait?
The Takeaway
What is a good salary in Texas? It depends on your family size, location, and spending habits. Most individuals make between $45K and $100K. You’ll need an income on the higher end of that range if you’re living in Austin, with its high cost of living. In Harlingen, on the other hand, where the cost of living is 24% lower than the national average, you can get by on much less. With that in mind, a good salary in Texas is between $55K and $73K.
To live comfortably anywhere, it helps to track your spending and saving with SoFi Insights. The free budget app also provides credit score monitoring. Set your budget, categorize your spending, spot upcoming bills, and gain insights into your finances.
Stay on top of your money — where it comes from and where it goes — with SoFi Insights.
FAQ
What is a livable salary in Texas?
The answer depends on your spending habits, locale, and how many people live in your household. The living wage for a single worker with no children is $34K before taxes, which is just enough to cover necessities. Two working adults with two children need a gross income of $91,949, to cover basic needs
What is considered rich in Texas?
This will depend on the city where you live. In general, you’ll need to earn between $110,000 and $125,000 annually to be in the top 20% in Texas’ big cities, such as San Antonio, Houston, and Dallas.
What is the top 1% income in Texas?
You need to earn nearly $600,000 per year to be in the top 1% in Texas. This is similar to the national average.
Photo credit: iStock/gustavofrazao
SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
*Terms and conditions apply. (Must click on the link to be eligible.) This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the Rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed into SoFi accounts such as cash in SoFi Checking and Savings or loan balances, Stock Bits, fractional shares and cryptocurrency subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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.
SORL0123005
