Household income is basically the amount of money made by any member of a family. Sources of household income can be wages, alimony, investment returns, pensions, social security, and other government programs. Normally, it’s thought of as being rounded up to the total number of people in a household, even if there are only two earners. People tend to divide household income into three categories: how much income does each person make on their own; how much income does each person get along with their spouse; and how much income is included in the household total for taxes and social security reasons.
Average household income in the United States is what many of us think of when we hear about the standard definition of what a family consists of. It’s the average amount of all the household income of a community or town. The household income in a country, suburb, or city usually varies from one area to another. This is because some areas have more affluent residents who earn more than others. Also, the average household income in bigger towns or cities tends to be higher than in the suburbs, although there are isolated pockets where it dips.
If you’re looking at how to earn more in the future, household income can be an important factor to consider. You don’t want to live in a community with an affluent but lonely people. Likewise, you don’t want to be a part of a society where people are financially secure but have no personal enjoyment. Your financial future will largely depend on your lifestyle choices and how you handle your resources (such as salary, assets, and savings) as you grow older. There are several aspects that should be taken into account when planning for a more secure future:
Age. People continue earning money into their senior years, but as they age, they tend to live on a tighter budget and save less. If you think you’ll eventually move into the upper-income bracket, you should ask yourself if you’ve already maximized your earning potential by the time you reach middle age. It’s possible that you’ll still be living on a tight budget as you age; it’s also possible that you’ll have extra spending cash to spend even after reaching your adult financial goals. In this case, making less isn’t necessarily better.
Middle-class income. Living in a middle-class household is not the same as living in a wealthy household. There are differences in the quality of life and earnings of those who earn in different brackets. For example, a typical middle-class American household has both a job and a weekly paycheck. A typical upper-class American household has only a job and maybe a little bit of savings.
Annual household income. Most Americans live in a two-income household, which means they earn enough money to support themselves and their family without relying on a large source of income such as a traditional employment. About half of American families live from paycheck to paycheck. About a fifth of American families live from annual household income, which means that they earn enough money to support themselves and their families without relying on one major source of income. This is what we call a single-home household.
Middle-class households have a much higher median household income than lower-class households. The median household income is about $60,000. One reason why the median income is so high is that all households contain at least one wage earner. Another reason why the median household income is so high is because there are more employed people than unemployed people in the United States.
Real property. When someone mentions household income, they probably mean household income from wages or salaries. Someone who makes their money on stock investments or dividends is not considered to be living in a household. A person who lives in rented property has no way of calculating their gross income from rent, unless they have some sort of supplemental retirement account such as an IRA.
