How Much Should You
Earn in 2027?
Build your income goal step by step: start with what your life and goals cost, then work backward to a real number. 🤎
Ask most people what their income goal is and you'll hear something like "more." More is a feeling, not a number. And you can't plan a year around a feeling.
This is Part 2 of the 2027 Money Plan series. In Part 1 we looked at the whole picture. Today we build the first real piece: an income goal based on what your life and your goals actually cost. By the end, you'll have a number you can write down, and a plan for closing the gap if you're not there yet. 🤎
Why You Work Backward From Costs
The usual way to set an income goal is to pick a number that sounds impressive and hope. The better way is the opposite: figure out what you need your money to do in 2027, then add it up. Rent, food, insurance, savings, debt payoff, fun. The total is the take-home pay your year requires. Everything else follows from that.
"An income goal isn't about being impressive. It's about being specific enough that you can actually plan around it."
The 5-Step Income Goal Formula
Grab your bank statements from the last three months and a pencil. Here's the formula, with the same example we used in Part 1.
Step 1: living costs. Use real spending, not what you wish you spent. Add up three months and divide by three. Include the irregular costs: car repairs, gifts, annual fees.
Step 2: savings. Include your emergency fund, sinking funds, and any big purchase goal. Part 6 of this series goes deeper on these.
Step 3: extra debt. This is the amount above your minimum payments, since the minimums are already in your living costs.
Step 4: retirement. If you contribute from your paycheck, remember that money comes out before it reaches you. Count it as part of your plan, but know it lowers your take-home.
Estimating Taxes: Take-Home vs. Gross
Your goal is a take-home number, but employers talk in gross pay. To translate between them you need to know what leaves your paycheck. Here's what the math looks like for a single filer earning $58,500, using the official 2027 standard deduction and tax brackets.
Divide one paycheck's take-home by its gross pay. If you take home $1,600 on a $2,000 paycheck, your ratio is 0.80. Then divide your take-home goal by that ratio to get the gross income you need. It's more accurate than any estimate, because it's your real number.
Finding Your Gap
Now compare your goal to what you earn today. If you earn more than you need, you can raise your goals or save the difference. If you earn less, you have a gap, and a gap is just a number you can plan around.
Three Ways to Close the Gap
Annual raises are often modest, so a bigger jump usually comes from a promotion, new responsibilities, or a new job. If you want to ask, do the prep:
1. Document your wins. Keep a running list of results you produced, with numbers where you can: money saved, time saved, projects finished, people trained.
2. Research the market. Look at pay ranges for your role, including ranges listed in job postings, which are public in many states.
3. Pick the right moment. Many companies set budgets near the end of the year or at the start of the next one. Asking before those decisions are final gives you the best shot.
4. Ask with a number. A specific request is easier to say yes to than a vague one.
"I'd like to talk about my compensation. Over the past [time period], I [your top accomplishments, with numbers]. Based on what I'm seeing for this role in the market, I'm asking for [specific number]. What would it take to get there?"
Side income is taxed too, and self-employment income carries extra payroll tax, so you need to earn more than your gap. A common rule of thumb is to set aside 25% to 30% of side income for taxes until you know your real number.
Pick a side income that fits your real life: your skills, your free hours, and how much you want to take on. Then give it a monthly number and track it. The Side Hustle Tracker page in the 2027 planner is made for this.
Sometimes the honest answer is that the goals are bigger than this year's income can carry, and that's okay. Here's a useful rule: every $100 a month you trim from your goals lowers the income you need by about $1,500 a year. That's $1,200 in take-home, divided by 0.80.
You can also stretch the timeline. Finishing a goal in 2027 and 2028 is better than abandoning it in March.
The Other Side: Lower Costs Count Too
Here's the part that makes cost-cutting worth it: because you pay taxes on income, every $1 you save on spending is worth about $1.25 of gross income. ($1 divided by 0.80.) Cutting $100 a month in costs closes the same gap as earning about $125 more per month before taxes.
A few easy places to look first: subscriptions you forgot about, insurance you haven't shopped in years, and groceries and shopping where cashback apps can return a little on spending you were going to do anyway. 🤎
Some links on this page are affiliate links, which means I may earn a small commission at no extra cost to you.
Your Action Steps This Week
1. Add up your last three months of spending and find your monthly average.
2. List your 2027 savings and extra debt goals with a monthly amount for each.
3. Pull a recent pay stub and calculate your take-home ratio.
4. Do the math to find your gross income goal and your gap.
5. Choose your lever or mix of levers, and write your number on the Self Assessment page of the 2027 planner.
I walk through the formula step by step on camera, with the numbers on screen.
Watch on YouTubeNext week: Part 3 is about taxes. We'll use the official 2027 numbers to show how you can lower your taxable income, plus a few year-end moves worth making before December 31. 🤎
A 34-page black and white, color-in printable with a self assessment, monthly goals, a side hustle tracker, savings and debt trackers, net worth statements, and a challenge page for every month of 2027. It's where your income goal lives all year.
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Join the Membership Subscribe on YouTubeI'm building my own 2027 plan right alongside this series, one piece at a time. Follow along and make yours. 🤎