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- I counted in $150 a month for car, plus another $100 commuting cost.
- . . . which was enough to cover about $50 a month age differential.
- Student loans can be deferred, and also minimized by going to an in-state public college.
- People in higher COL areas earn higher wages.
- Young adults who think they need to eat with the appetite of a growing teenager is a main cause of the obesity epidemic
- So by including those taxes, that even further erodes the income from a second job.
I'm saying it can be done on $15K a year, and you are saying it CAN'T be done on $32K a year. I think I'm closer to the truth, no matter how much you nickel and dime my figures.
I'll chime in here with my experience.
I'm in my 30s, and lived on $1000 net per month for two years in a high-cost city.
I had my own apartment and a car. Granted, they weren't nice, but were functional. It's not that difficult. However, I also have no debt, but even if there is a massive student loan, it can be paid back based on income.
Even now that I make more than that, I still live on not much more and save the rest, and still spend money on fun things. I keep a spreadsheet of everything.
It depends on what you want in life, vs. what you need.
The reason people are better off is because we live in a two income society and you are getting entry level wages. If you have two people earning $40K each, then you will be able to afford a very luxerious life style.
But really, you don't have a problem. You can find a decent place for $500 per month in Erie (I checked). You need about $400 for food, $550 in taxes, car expenses will probably be around $300 a year. And maybe $200 for other stuff.
You presumbly get health insurance through your employer. Hence your total expenses will be about $1400 per month, meaning you can save about $9000 a year.
You will be fine, you don't have to have roommates, and you don't need to be working two jobs. I rather share a 20 square meter room, have no heating, and bike to work than to work two jobs. I am tired enough already from my first job, and I want some free time.
Where I live people can get by with $1000/month if you're willing to rent a room in someone's house/condo. Basically a room with utilities/laundry on average is more or less than $450/month ($300 for a mobile home), food $200, car insurance & gas $150, prepaid phone $10, personal spending $190. I know many singles/couples who live like this for years to save money until they can purchase a home. A single person who makes $32k/year will have an annual take-home income of $25k and if his personal expenses are about $12k/year like I state above, he can save $13k/year or $130k after 10 years. Imagine if he has a partner who makes the same and save the same like him, they can have $260k saved for a down payment of a house. It's possible to accumulate a sizable savings amount with a low salary; it's all comes down to one's discipline and determination.
Some people keep talking about weekend job, is there such a thing as weekend job in 2013?
I'm in my 30s, and lived on $1000 net per month for two years in a high-cost city.
I had my own apartment and a car. Granted, they weren't nice, but were functional. It's not that difficult. However, I also have no debt, but even if there is a massive student loan, it can be paid back based on income.
Even now that I make more than that, I still live on not much more and save the rest, and still spend money on fun things. I keep a spreadsheet of everything.
It depends on what you want in life, vs. what you need.
How much was the rent in the high cost city that you could live off $1000 with a car?
I consider high cost rent being at least $700 mo for an apt.
I can say that I derive pleasure from economizing. I have always lived on about 40% of my pay. When I first started out my salary was 30k, less than the OP.
I cook for most of the month. I only eat out on special nights out with friends. I love eating at home.
I also have slowly learned about investing and I'm so glad I have learned all this as a single young person. One day when I marry I won't be a financial burden.
I also believe in only one major expense at a time. I drove my college car for 4 years after graduation and saved each month for a car. And I bought a new car and paid it off in 2.5 years while I stayed in a modest apartment. I paid double payments each month on my car. I will keep my car at least 10 years.
I also still pay half of my former car note into an account for future repairs or future car purchase after i have driven it 10 years. The car savings came in handy when I needed to replace a two tire blowout.
Now I'm looking to purchase a modest home. I've been saving for that since I paid off my car.
Basically plan and save on a regular basis. It does all add up. I'm so thankful I enjoy economizing.
Congrats on your job OP. You will do well!
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This post hit the nail on the head... this is what I learned in my early 20's....
Pay yourself... save money... buy used cars first and drive them to dirt, then purchase new car and drive them to dirt (I'm on my second Honda accord since '98).
Point is when you have money, you save money...
And keep your mouth shut about how much money you have or save.... don't let people borrow money... don't feel like you have to "save" everyone when you have money... think of something else.
For example, I build computers for kids in grades 2-12 and give them laptops when they go to college. It is something I can budget for and manage. You do have to give back, but be careful, people can drain you. That includes sisters, brothers and parents...
You are asking at the right time... in your 20s (I guess).
Oh, and get smart... get your graduate degree.... start a business (helps you stay out of trouble and save money).
And remember to simply work hard... volunteer for things at work... be the "go to", happy, do everything person.
I just landed a "good" job finally in which I can apply the skills I've learned in school and contribute to society. This job that is in very much a in-demand position in an area that will be greatly needed in the future is paying a mere 32k/year. What's deceiving is that the statistics that I saw prior to getting into the field was that the average salary for this job was much higher (45k/year to be exact). Thinking that this might be an outlier of sorts, another job in a same area doing the same thing is paying just about the same amount of money.
So I am looking into housing and purchasing a vehicle. INCREDIBLY EXPENSIVE!
My entire PAYCHECK is going to be going to be paying to simply live.
AND I'M A relatively young, SINGLE MAN with no family, animals, medical bills, etc!
I have NO idea how families are doing it. I see all these huge trucks / SUVs (I see at over 30k at the dealerships) on the road (no doubt they are gas hogs as well). I with my great job am looking at some 2001 vehicle so I can pay cash and not dig another $15k or so of debt to my tally. I could get into food, utilities, cable, internet, Iphones, etc.. I have a little used phone I got off Amazon with just about the cheapest plan available (no smart phone). Eating out? forget that.. can barely afford to eat in.
So a little rant. What's kind of funny (got to laugh about it) is that this job is a promotion from a "good pay" of $9.75/hr.. a mere $750 check give or take for a two-week pay period. For those with one of these Dodge Ram's, probably that entire paycheck is paying for the payment and gas.. not including Rent, Food, Taxes, etc..
I am amazed.. I don't know how people are doing it.. I guess the welfare system is keeping this economy a float.
All the hard work finally paid off.. as I push my rusty bucket on wheels down the road hoping to get to work.
The people that you see living in these 3,000 square foot tract homes and driving brand new SUV's ARE NOT RICH. NOT EVEN CLOSE! They are buried in debt to these items so that they can impress YOU into thinking they've got money. A lot of the younger people who are choosing to destroy themselves with debt are also doing it to impress their baby boomer parents.
My boomer father (born in 1950) retired and moved to Florida. He purchased our family home up north back in 1986 for approximately $55,000. At the time he made around 80k / year. I don't think he ever made six figures in any given year in his life, however my parents (while they were still together) always had the best of everything. New cars, newest style clothes, jewelry, etc. They were the quintessential baby boomers. Excess everything. They'd also whine about everything as well. It's only with the help of time and my own personal experience as an adult that I now realize what utter spoiled brats my parents were. My father is now trying to sell that same house he paid $55,000 for in 1986.....For $300,000.
My father wouldn't have gone to college if it wasn't for his fear of being drafted to fight in the Vietnam war. Judging from his reputation in high school, he wouldn't have been someone I would have wanted to be friends with. He was both a jock and a bully. Those were the glory days of his life, and he continues to live vicariously through the memory of his old self well into his 60's. It is pathetic. In college, he conveniently transformed himself into an anti-war hippie. He and his friends wore Viet Cong armbands, staged "sit-ins", and burned the American flag that his father fought to protect two and a half decades earlier in France, Germany, and Belgium. That was the sacrifice that my grandfather made so that my father could be born into a booming economy and more opportunity than any generation before (and none after) has ever known. My Grandfather spent his 60's and 70's living a modest, quiet life. The only unhappiness I'd ever known him to have was from the awful, awful nightmares that would cause him to wake up screaming and soaked in sweat. The nightmares were the memories of the two and a half years of death and horror that he witnessed in Europe. Aside from that however, he never spoke about the war. My father on the other hand is enjoying his golden years complaining about everything. The end of the world is occurring to him if a pizza isn't delivered on time.
My parents both raised me on the idea that I'd follow in their footsteps. I'd go to college just like them. After college, I'd immediately land a job in the booming job market, just like my dad did. I'd buy a house just as easily as they did. There was one fallacy to their logic however: The late 90's and early 2000's (my "coming of age" years) were completely different from theirs. I started to realize this at a very young age. My dad went to college to avoid a war. Until that point in American history, college enrollments were much lower. White collared jobs paid more, as per the whole "supply and demand" notion of capitalism (something my father must've forgotten when he became a communist in college before he became a capitalist once he entered the work force). I knew that my road wouldn't be nearly as smooth as my dad's if I decided to follow the same path as he did. In fact, I realized early on that the road might not only be bumpy, but it might end up leading to a cliff.
In the end I decided not to go to college, and to start a small business instead. This of course infuriated my father as much then as it continues to today. I'm 35 now, and I've made more than twice as much as my dad did by the time he was my age. And yes, I've adjusted those numbers for inflation. It still doesn't matter to him, even though I would have had to pay for my college education had I decided I wanted to go. He wasn't paying a dime for it. To this day, our relationship pretty much sucks. As more time passes, we speak less and less. My mother and I are quite close however.
There are throngs and throngs of people in their 20's and 30's out there today who are barely scraping by just to maintain a likeness of the image that their boomer parents projected back in the 80's and 90's. My dad paid off cars in two years back when I was a kid. His mortgage payment was $400, and the house was paid off in a decade and a half. In 1986, an $80,000 salary had the same buying power as $170,000 has today. That's a little over twice as much. Have prices generally only doubled since 1986? The answer is no. Simply put, my father never, ever, ever could have maintained that same lifestyle today on what he made back then, even if the numbers were adjusted for inflation. Period. He could have carried the debt that his lifestyle would have incurred over the course of about five to ten years, however eventually he would have hit a financial brick wall sooner or later. Most of these 20 and 30 somethings that are visibly living the "high life" are doing virtually all of it on credit. Their houses, their cars, and damn near everything down to the clothes they wear, the food they eat, and the gas they put into their brand new vehicles. After one or two over-extended / "minimum payment" months per year over the course of five to ten years, and their overall debt compounds and reaches astronomical levels. Combine that with the ever exorbitant costs of the debt incurred by a college education, and most of these young people are in such a financial hole that they're not going to earn a dollar that's not owed to someone until they're well into their 50's. Many of them will won't ever truly earn a real dime that they can keep. They'll die in debt because they bought into a lie. It's very, very sad.
I buy both my business and personal vehicles used. I own them outright, meaning I hold the titles for them and owe nothing. I take care of them, and they are not jalopies. I own one suit. I buy things on sale. I do not have a credit card, nor do I have any loan payments of any kind. I rent a small, efficient house. I am starting a family, and my wife will never have to work. Our son will never know the inside of a daycare facility. I have begun to actually save for retirement. By the time I'm fifty years old, my investment portfolio will look good enough to even give my father a nocturnal emission....Provided our entire economy hasn't completely collapsed by then. Regardless, in my heart of hearts I know I'm doing things the right way. If my grandfather were alive today, I know he'd be proud of my choice to make the best of what I've got vs. live the "ghetto rich" lifestyle that so many of my contemporaries have chosen. I have zero shame in driving 5-10 year old vehicles and living in six rooms vs. losing sleep at night because I've got $1500 worth of car payments, a $3,000 mortgage....and $200 in cash in the bank at the end of every single month.
As for my own father, I really couldn't care less about his opinion of me. I've heard through the grapevine that he's actually been having some financial difficulties due to the "new economy" (in his words, according to a mutual acquaintance). Guess his boomer bucks from the 80's and 90's are starting to run out. Or maybe it's Obama's (or Bush's) fault.....Certainly isn't his. Oh well. Maybe if things hit really start to hit the skids for him financially, he'll trade in his 80's Reganite capitalism persona for his old late 60's college communist one, and go burn some more American flags that his father fought to defend.
The people that you see living in these 3,000 square foot tract homes and driving brand new SUV's ARE NOT RICH. NOT EVEN CLOSE! They are buried in debt to these items so that they can impress YOU into thinking they've got money. A lot of the younger people who are choosing to destroy themselves with debt are also doing it to impress their baby boomer parents.
Pretty bold statement and a sweeping generalization you got there.
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