The Q2 2025 weekly earnings data from the U.S. Bureau of Labor Statistics noted that full-time workers earned a median weekly income of $1,196, which is $62,192 per year. Since making $25,000 per year puts you below half that amount, you might be unsure whether investing money is realistic (or even recommended) in your tight financial situation.
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However, personal finance guru and author Ramit Sethi believes that investing is the best way to build wealth, regardless of your income. In a YouTube video, he discussed the financial challenges that low earners face, and recommended four strategies to make investing work for those earning $25,000.
If you use the MIT Living Wage Calculator to determine your state’s annual living wage, you’ll find that the figure is far higher than $25,000 (roughly $2,083 per month), even if you’re single without children. This low income may barely even cover your needs, leaving you with little margin for building wealth.
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Having earned a low income after finishing college, Sethi explained, “When you are truly living paycheck to paycheck, saving anything feels impossible, but this is actually exactly where smart money habits begin.”
Since you’re especially financially vulnerable to unexpected expenses, you should take an initial step for some financial security. Sethi recommended saving leftover cash each month until you have three to six months’ worth of your essential expenses. He added that slow progress is fine as you build this emergency fund.
When you earn $25,000, it’s essential to monitor your spending and reduce expenses where possible. Rather than having you aggressively cut out the things you like, however, Sethi’s suggested spending plan focuses on your different priorities and leaves room to enjoy life.
He explained, “Here’s how the conscious spending plan works: 50% to 60% of your take-home pay goes to fixed costs, like rent, utilities and debt payments; 5% to 10% goes toward your savings goals, which includes your emergency fund; 10% or more to investments; and 20% to 35% goes to guilt-free spending on the things that truly make you happy.”
Sethi added that perfection is unnecessary, so adjustments based on your financial situation are OK. Maybe you have high housing costs or can’t invest money just yet. In such cases, you might lower certain targets (such as guilt-free spending) and adjust them again later.
