Have you ever had to fill out a form that asked for information of which you did not know exactly what it refers to: such as Household Income vs. Family Income vs. Per Capita Income.
Household income is an indicator of financial security, poverty, and inequality.
Household income is an important risk factor used by lenders in loan underwriting and a helpful economic indicator of a region's standard of living.
Household income depicts the standard of living of different households. It is also an excellent indicator of the local and national economies. This figure can also assist lenders in determining the risk of financing to a potential borrower.
Household income influences eligibility for Health Insurance Marketplace insurance, financial assistance programs, and some tax breaks.
What Is Household Income?
Household income is defined as the total gross income before taxes, received within a 12-month period by all members of a household above a specified age.The Census Bureau notes this threshold as 15 and older.
It includes (but is not limited to) wages, salaries, self-employment earnings, Social Security benefits, pensions, retirement income, investment income, welfare payments, and income from other sources.
Household income comprises everyone who lives in the home, even if they are not related. Every member that lives under the same roof, including spouses and dependents, and every income earner contributes to household income. Everyone's earnings are considered, even if they aren't all used to maintain the home.
Household income includes any source of income from anyone who's living in your home, including:
Wages
Salaries
Payments from freelance work
Rental income
Social Security payments
Retirement account income
Interest income
Dividend income
Gain on sale of assets
Pension and annuities payments
Unemployment compensation
Food stamps
Canceled or forgiven debt
Alimony payments received
Welfare payments
Source
How to Calculate Household Income
- Determine each person's gross income.
Identify the gross income for each person over 15 who lives in the home. This is the income before taxes, and not net income. In addition to earnings or salaries, it is critical to include other kinds of income, including self-employment revenue, tips, and rental income. - Calculate the annual gross income per individual.
To calculate annual income by multiplying the monthly gross income by 12. For instance, you know you make $800 per month in alimony payments. To get the annual gross income, multiply $800 by 12 which is the number of months in the year. Your yearly gross income in alimony is $9,600 per year. If you receive portion of your income in tips each month, estimate how much you earn in tips each month and multiply that amount by 12. - Total all gross income
The final step is to combine all annual income together. This will give you the total annual household income.
Household Income vs. Family Income vs. Per Capita Income
Only households occupied by two or more people related by birth, marriage, or adoption are considered for family income.
When calculating per capita income, two-income earners in the same family or household are considered individually. It is the income earned by each person.
The Difference Between Average and Median Household Income
The Difference Between Average and Median Household Income
The average household income is calculated at by dividing the total earnings of all members of a household aged 15 years by the total number of people living in that house.
The median household income is the figure in the midpoint of all earnings. To illustrate this, let us say that five people earns $100K, $80K, $60K, $40K, and $20K. The midpoint of all earnings is $60K, therefore the median household income is $60,000.
Median Household Income by State 2023
Here are the 10 states with the highest median household income:
District of Columbia - $90,842
Maryland - $87,063
New Jersey - $85,245
Massachusetts - $84,385
Hawaii - $83,173
Connecticut - $79,855
California - $78,672
New Hampshire - $77,923
Alaska - $77,790
Washington - $77,006
10 Countries with the Highest Median Income, March 2021 (PPP, Current Int$):
Luxembourg - 26,321
United Arab Emirates - 24,292
Norway - 22,684
Switzerland - 21,490
United States - 19,306
Canada - 18,652
Austria - 18,405
Sweden - 17,625
Denmark - 17,432
Netherlands - 17,154
How does your household income compare to the above?
Lenders frequently utilize statistics such as household income to determine how hazardous an applicant would be as a homeowner. It is also used by financial professionals in the housing business to analyze whether a typical property in a certain area is affordable to the average household.
You can determine your own household income and that will help you evaluate if your income is more or lower than the median. It will help you determine whether a lender would consider you a viable applicant for a loan.
Knowing what your household income is can help you with the financial planning for your family.
I will leave you with a quote:
"Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows." — Jim Rogers
While 10- to 15-year lows are not common, they do happen. During these times, don't be shy about going against the trend and investing; you could make a fortune by making a bold move or lose your shirt. Remember the first quote in this article and invest in an industry you've researched thoroughly. Then, be prepared to see your investment sink lower before it turns around and starts to pay off.
References:
https://www.census.gov/
https://www.hhs.gov/answers/health-insurance-reform/what-is-the-health-insurance-marketplace/index.html
https://www.investopedia.com/terms/n/netincome.asp
https://webtribunal.net/blog/how-to-calculate-household-income/
https://worldpopulationreview.com/state-rankings/median-household-income-by-state
https://www.investopedia.com/terms/h/household_income.asp
https://www.thebalancemoney.com/what-is-household-income-5188180
https://cc-seas.financialaid.columbia.edu/ask/faq/question/4612
https://www.jimrogers.com/breakfast-of-champions/
https://ecency.com/post/@leoglossary/leoglossary-main-menu
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I am not a financial adviser. This article is not meant to be financial advice. My articles on cryptos, precious metals, and money share my personal opinion, experiences, and general information on cryptos, precious metals, and money.Thank you for stopping by to view this article.
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Thank you for an informative post about household income and how it differs from family or per capita income. After reading your blog, I agree that it is a vital subject to grasp.
You're welcome. Thank you for your comment!
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Thanks @poshthreads .
That's Great. Household income also based on your expenses and the state, country where you live. Somewhere its greater and somewhere it gets lower.
I wish there was more equity, but there is so much of financial insecurity worldwide.
Thank you for your comment.
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Thank you @ssg-community .
Thanks, pix!
It’s amazing how “ household income” can change based on your State or town @silversaver888!😲
When we lived in Colorado Liz was management at the local Walmart store. They implemented what was called “Gap pay” that adjusted pay based on your location.
Looks like California and Washington are on the higher end …..🤔
Gap pay... was Liz paid more?
Yup, Washington and California!!!
But look at Hawaii an Alaska!
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Yes Liz was paid more because we lived in the Mountain town of Gunnison Co.
Our town was just down valley from Crested Butte a major skiing town.
This town was on the other side of the pass from Aspen……. Everything was expensive!😮
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Keep up the fantastic work @silversaver888! Your dedication and hard work will pay off when you reach your target.
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Long time no sea.
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they’re so full of themselves.
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It's a very interesting and useful infographic with the regions and they're different median incomes, thanks for sharing
You're welcome, @bitcoinman !
I wrote this as part of a quest, in case you are wondering.
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But I've lived here for last 216 years, and haven't heard anything unusual.
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Liechtenstein is on top of that list, by far.
It seems they don't want us to know about that. I have been looking for such a list, in which Liechtenstein takes its rightful spot at number one, but nowhere on internet could I find such a list.
We'll try to look for it!
Maybe I should phrase that differently...
In the timeline I experienced originally, Liechtenstein was on top of that list, by far.
Whatever happened to reality, I don't know. I would guess the timelines are converging. Realities are merging. Or something like that. It used to be no secret that Liechtenstein led that list, by far, once upon a timeline.
Interesting information, sis! Thanks for sharing; much love to you!!!🤗😘💕🌸 !LADY
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Another quest has been completed. Two more to go. It is so draining!!!
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You go girl!🤗😘💕🌸
all in all, that was intresting reading. with a surprising end quote. thanks! and a !PIZZA
Household incomes are stressed right now! The quote will make sense to someone who is saving for investments, and has money in investments.
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I still can't figure out y.
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Excellent Posting dear
Thank you, @tahirazam !
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Too survive in Cali you really almost have to have six figure income. Things here have gotten so expensive.... Great information in your post today! It's amazing to see so many countries with such low median income but people manage to survive. Luxembourg has almost always been on top as long as I can remember.
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Six figure income is average here, and it can be challenging for me even without any dependents!
We are blessed to live in this country.
I think it all averages out across our country at least. While some states make more the cost of living is much higher in those states. You won’t see $5 a dozen eggs in Mississippi, but that’s the norm here.
That's because of winter and spring, and egg production is down. Egg prices should come down soon. But yes, all other prices and costs are higher ... like gas at the pump, which is terrible!
Doggie food—how much is it there?
I don't see any mention of Crypto income, or does that fall under 'Other'?
Always, with love 🤗🌺❤️
It would fall under "Gain on sale of assets", sis.
I've been away the entire day. I'm sure I missed some wonderful post.
xoxo🤗
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As we all know that as many of us in the world, everyone has their own currency.The way the dollar has become 290 rupees in Pakistan.