Michigan Residents Need to Spend 166 Extra Hours at Work to Hit Annual Savings Goal

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The average Michigan resident needs to put in an extra 13.8 hours at work each month – or 165.6 hours a year – to meet the 50/30/20 savings goal…

• The average person in Michigan needs to work for an additional 13.8 hours monthly to successfully set aside 20% of their income for savings, data shows.
• This is according to the 50/30/20 budgeting rule, which a personal finance expert now says is nearly impossible due to rising expenses.
• Each resident should put $975.30 into their savings, equating to 20% of average monthly earnings – but are more likely to be setting aside $518.47.

A new analysis by personal finance experts Finanzas Justas has found that rising expenses mean it’s now impossible for most people in Michigan to set aside 20% of their income to savings – despite still being encouraged to meet this budgeting goal.

The researchers analyzed average hourly earnings and average hours as reported by the Bureau of Labor Statistics, and subtracted the average essential monthly expenses as documented by the Bureau of Economic Analysis, which encompasses personal expenditures on housing, groceries, healthcare, car costs, personal care, utilities, and insurance.

Half of this residual income was then calculated as the likely amount the typical person is able to dedicate towards savings each month, as the other half goes towards ‘wants’, or non-essential expenses. This was then compared to the ‘ideal’ savings rate (20% of monthly income based on the 50/30/20 budgeting rule), to see where people need to put in the most hours at work to make up the shortfall.

Michigan findings

In Michigan, BLS data shows the average resident makes $33.16 an hour and works for 34.2 hours each week, earning $4,876.50 each month. However, $3,839.57 of this is needed to cover essential expenses or ‘needs’, which covers non-negotiable costs like mortgage/rent payments, utilities, groceries, healthcare, and more.

This leaves $1,036.93 in residual income. If residents put half of their residual income into their savings – which is optimistic for many, they’d be able to set aside $518.47 each month.

Finance expert Olle Pettersson explains why this doesn’t match up to the ideal savings goal: “Many of us are still working towards meeting the 50/30/20 budgeting rule that stipulates 50% of our income goes on ‘needs’, aka essential expenses like rent and groceries, 30% goes on ‘wants’, and 20% goes on savings.

“However, our analysis shows that the typical person in Michigan is actually having to dedicate 78.7% of their monthly income to cover the ‘needs’, leaving less than 15% of earnings to cover both ‘wants’ and savings. In actuality, 20% of the average monthly income and therefore ideal savings amount works out to $975.30 – so the average person is short by $456.83.”

To make up this $456.83, residents would need to put in 13.8 hours extra at work each month, assuming that they’re compensated equally for additional hours or overtime. This means over 165 extra work hours (165.6) are needed each year to save 20% of annual income.

National comparison: Additional work hours needed to offset savings shortfall

The amount of additional work hours needed to make up the missing savings sum differs by state, in line with varying hourly earnings and essential expenses. New Hampshire draws the shortest straw, with workers needing to spend an extra 29.4 hours at work each month to adhere to the 50/30/20 budgeting rule.

The state earns an average of $35.18 an hour and spends 33.3 hours at work each week, equating to $5,037.41 in monthly earnings. However, residents face essential monthly expenses of $5,089.27 for housing, bills, healthcare, transportation and personal care – leaving them overdrawn by $51.86 before considering ‘wants’ or savings.

With 20% of their monthly income working out to $1,007.48, workers would need to put in at least 31 extra hours at work to make this amount and avoid being overdrawn by covering the additional $51.86 – and that doesn’t even start to cover any ‘wants’.

New Jersey residents face the second-highest burden, needing to work an extra 27.1 hours each month to set aside 20% of their income for savings. The typical person makes $5,487.75 a month, leaving $140.59 in residual income after covering essential expenses of $5,347.16 – meaning $70.29 is available for savings.

This means that ‘needs’ equate to 97% of income, and residents are short of their ideal savings amount of $1,097.55 (20% of monthly income).

Third is Hawaii, where residents spend 95.3% of their monthly income on essential expenses like housing, groceries, and utilities. With $5,166.88 of their $5,419.16 income dedicated to these ‘needs’, workers are left with just $252.28 in residual income.

If they’re able to dedicate half of this to savings, they’d set aside $126.14 each month. However, 20% of their income is actually $1,083.83, so they’re $957.69 short, which would take 25.5 extra hours of work each month to reach.

Rounding out the top five states that would need to spend the most time at work to adhere to the 50/30/20 rule are Delaware and New York, at 23.5 and 22.9 hours, respectively. Delaware residents need an additional $770.37 to meet the ideal savings sum of $922.96 after half of their residual income is set aside to the cause, while New York residents face a shortfall of $897.07.

The ten states that need the most work hours to reach 50/30/20 savings goal 

Finanzas Justas’ finance expert Olle Pettersson concludes:

“While this study focuses on averages and assumes Americans would be willing or able to dedicate half of their residual income to savings each month, it’s really shining a light on how unrealistic budgeting advice is in the current climate – and, more importantly, how monthly earnings don’t go far enough.

“It’s not acceptable that people sacrifice the majority of their income to cover unavoidable expenses like housing, food, and bills, and then are still being pressured to set aside a chunk of their earnings into their savings. While many people find budgeting suggestions helpful, many others may feel guilty or embarrassed that they’re unable to set aside enough.

“It also exposes how anxious many Americans are about being hit with an unexpected bill or expense, as this can rapidly deplete whatever savings they do have. It’s vital that budgeting advice is updated to better reflect the financial situation we’re in – especially with many expenses set to rise over the next few months after the effect of the president’s tariffs becomes evident.”

Methodology: 

This study calculates the additional work hours needed for the average American to set aside 20% of their monthly income to savings, as stipulated by the 50/30/20 budgeting rule. The average hourly earnings were multiplied by average hours spent at work to determine weekly earnings, which were then multiplied by 4.3 to determine average monthly hours and earnings.

Essential expenses considered personal consumption expenditures on housing (mortgage/rent), utilities, health insurance/healthcare/pharmaceuticals, groceries/household supplies/personal care, car costs (insurance, gas, repairs, payments), and other essential expenses. This sum was then subtracted from monthly earnings to calculate the residual income.

Half of this residual income was deemed the likely sum put into savings, which was compared to the ideal amount (20% of monthly income) to identify the shortfall. This shortfall was then divided by hourly earnings to calculate the number of hours needed at work to reach the 20% of monthly income benchmark.

Sources:

• Average weekly hours and earnings (Bureau of Labor Statistics) – June 2025
• Personal consumption expenditures (Bureau of Economic Analysis)
• Housing costs (Census Bureau)

Full state ranking: Most to least time needed at work to reach 50/30/20 savings budgeting goal