How much money do Americans need to make to feel financially independent?

Empower’s research shows that two-thirds (67%) of Americans want to be financially independent, which most commonly means not having to rely on family or friends for financial support. But what does it take to get there? The average American says they need an annual salary of more than $94,000.

It may not be easy, but it is possible. The median income in 2022 was $74,580. To get from that number to $94,000 would require an increase of more than 25%. If you want to improve your financial situation and become financially independent, here’s how you can make it happen.

how to make more money

Whether you feel financially independent or not, increasing your income is generally a good move. Eventually, if your income stays the same, it gradually becomes less valuable due to inflation. Earning more money and investing it in stocks can help you stay ahead of inflation.

There are several ways to earn more.

• Get a raise or promotion at your current job. Ask your manager what kind of performance is needed to earn a raise. Ideally, you should do this once a year to ensure your salary increases consistently. Don’t miss your opportunity for promotion. Many companies have internal job boards. If so, check this regularly to see what information is available.
• Find a new job. If you want to maximize your earning potential, it’s a good idea to look for jobs regularly. Keep your resume up to date and review your job listings at least once a month.
• Start a side hustle. If you have some spare time, starting a side job is an easy way to increase your income. Appropriate activities will depend on your skills and interests, but popular options include driving for ride-hailing services, delivering, and pet sitting.

What if you’re a freelancer? Here’s a recommended method that worked for me:

• Find better, higher paying clients. This is often the most effective way to increase your freelance income.
• Improve your efficiency. Finding ways to make the most of your time and get more done can help you earn more.
• Find your specialty. Typically, you can charge more as an expert in a particular niche than as a jack of all trades.

Improve your earning potential

How much you earn will largely depend on the value you provide to your employer or clients. The highest paying jobs require highly specialized skills. For example, cardiologists, surgeons, and professional athletes are all in the top 10 for average income. Jobs that require minimal training usually don’t pay much.

This doesn’t mean you have to enroll in medical school or pay attention to the NBA. But it’s important to have something that you specialize in and that no one else can learn with just a few hours of training.

If your current salary seems stagnant, your best bet is to focus on developing profitable skills that you can leverage to make more money. There are many skills that can increase your income, many of which you can learn online for free. Examples include:

• graphic design
• video production
• Writing/Copywriting
• project management
• web development

There’s more to financial success than income

Everyone defines financial independence differently. The most common definition is that you no longer need money from friends or family. From that perspective, as long as you pay all your bills, you are financially independent.

But most people want more than just living. Ultimately, you can become financially independent while living as a salaried worker. Not enough security or not prepared for the future.

That’s why it’s important to set aside money for savings and investments. A good goal is to save 10% of your income and invest an additional 10%. For example, if you make $80,000 per year, save $8,000 and invest an additional $8,000. These amounts are just suggestions and can be adjusted to fit your income and expenses as needed.

Income is important, but being financially stable and independent is also important. Even if you earn over $94,000, things won’t work out if you don’t manage your money well. And it’s definitely possible to become financially independent if your salary isn’t that high. Do your best to maximize your income, but save and invest no matter how much you earn.

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