A popular budgeting plan recommended by financial advisors is "50 / 30 / 20", where you spend:
This is for retiring at a normal retirement age. If you want to retire earlier, you should save more.
The 50/30/20 is based on after-tax income, so first we need to first figure that. We base it on full-time income because you should be working full time.
Gross Income: $20/hr. x 2000 hrs/year = $40,000
Social Security / Medicare taxes: $40,000 x 7.625% = $3050.
Income taxes: $40,000 - $14,600 not taxable =
$25,400
10% on first $11,600k = $1160
12% on remaining $13,800k = $1656
Total income taxes: $1160 + $1656 = $2816
Total taxes: $3050 + 2816 = $5866
After-tax income: $40,000 - 5,866 = $34,134, รท 12 months = $2845
50 / 30 / 20