Is the Typical Salary For Recent College Graduates Enough? It Depends On Where They Live

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The typical starting salary for the college class of 2026 can cover their basic needs. However, if they want extra money to put toward extra purchases or savings, they'll need to cut costs.

According to a recent analysis from Clever, a real estate company, the average college student expects to make $80,000 in their first job. Even so, a third worry is that their pay won't cover basic needs, and 36% doubt it will cover discretionary spending.1

In reality, the median starting salary for a recent college graduate in 2026 is about $59,700, according to an Investopedia analysis using wage data from the Federal Reserve Bank of New York and the Bureau of Labor Statistics (BLS).23

After federal income and payroll taxes, the take-home pay for a median recent college graduate drops to almost $50,200 a year, according to a calculator from ADP.4 That doesn't include state and local taxes. While some graduates may not have state taxes, many others will pay an additional 2.5% to 8.75% of their paychecks.5

The typical American under 25 spends about $40,700 on basic expenses each year, according to an Investopedia analysis of federal data.6 That figure includes the average basic expenses for that age group from the BLS, the typical rent and utilities for a one-bedroom apartment in 2026 dollars from the Census Bureau, and the average student loan payment from the Education Data Initiative.78

With a median take-home pay of $50,200, recent college graduates can afford basic necessities in all 50 states—though costs vary widely. California, Hawaii, and New Jersey are the most expensive; in California, a graduate would have about $5,100 left after a year of paying for the basics.9

College grad salaries also vary greatly, with the $50,200 figure being the midpoint; those at the 25th percentile are unable to cover the full cost of basic necessities in about 25 states after federal and payroll taxes.

The most affordable states for young adults include Arkansas, Mississippi, and Iowa. In the most affordable state, Arkansas, a recent college graduate with an average income would have almost $14,800 left each year to put toward savings or discretionary expenses.

Some places offer better jobs, pay, and affordability, so graduates should weigh offers against local living costs to see how far their pay stretches.

But the math changes once savings and extras enter the picture.

The average worker under 25 years old spends about $9,200 on restaurants, alcohol, entertainment, and clothing each year. Advisers also suggest saving 20% of after-tax income, almost $10,040 a year for the median graduate.

All in—basic needs, extras, and savings—the typical recent graduate would need close to $60,900. Even in the cheapest states, no graduate can cover everything on a $50,200 take-home.

Many young adults are moving back home with their parents to save thousands of dollars a year. A young adult renting a one-bedroom pays about $16,600 a year, based on the Census Bureau's median rent.7

The second-highest cost is transportation. This expense has grown as the price of gas has risen rapidly since the start of the Iran war. More consumers are choosing public transit or carpooling to save money on commuting. BLS data show that those who opt for public transit spend almost $810 a year on transportation, saving nearly $8,200 over those who drive.6

The third-most-expensive basic necessity is student loan repayment. More than 60% of recent bachelor's degree graduates borrowed student loans, according to the Education Data Initiative.10

Graduates with borrowed federal student loans have several repayment options, such as income-driven repayment plans, that can lower monthly payments by as much as half. Borrowers can compare plans using the Department of Education's Loan Simulator.

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