~55k/yr good in Rockville/Montgomery County for a single person? (apartment, to rent)

[aajohnny]

Hey.
I'll be making ~55k a year in Rockville and will be living there. I calculated my expenses (as best I could, could be lower could be higher) and I may have ~$1,000 left over after all bills (including gad, groceries, etc) are paid. Is that an reasonable/decent entry level salary for Rockville? Will I be okay? I never really spend anything besides a few things here and there or food.

[MrRational]

For a single right out of school just getting started? It's fine.
Not wonderful... but fine.

As half of a working couple you might even have a chance to stay in the DC area.
If you're careful to save and invest well.

[shadowbethesda]

It will be hard for you to find a home to buy. You may able to rent a room or small apartment (bigger if you get a roommate).

[bufflove]

Plenty of singles make less than that and live in more expensive submarkets than Rockville. It just comes down to whether you want to share the space (e.g. split a 2br with a roommate or rent a room in a group house), how much debt you're carrying, what your age is (how much you NEED to be saving), how much of your income you're willing to spend on housing, etc.

If you're saying your budget is $1K then that's quite low (roughly 28% of your take-home pay, which is very conservative compared to most entry-level young folks in this region). I don't expect you'll be able to live in a place alone at that price (unless you manage to find a separate basement somewhere). You'll either need to be more aggressive about how much money you spend on housing or you'll need to find a roommate or rent in a group home. Most people in your situation split a 2br w/another yuppie until they either move in with a sig. other or climb the ladder enough to get their own place.

[aajohnny]

Originally Posted by bufflove

Plenty of singles make less than that and live in more expensive submarkets than Rockville. It just comes down to whether you want to share the space (e.g. split a 2br with a roommate or rent a room in a group house), how much debt you're carrying, what your age is (how much you NEED to be saving), how much of your income you're willing to spend on housing, etc.

If you're saying your budget is $1K then that's quite low (roughly 28% of your take-home pay, which is very conservative compared to most entry-level young folks in this region). I don't expect you'll be able to live in a place alone at that price (unless you manage to find a separate basement somewhere). You'll either need to be more aggressive about how much money you spend on housing or you'll need to find a roommate or rent in a group home. Most people in your situation split a 2br w/another yuppie until they either move in with a sig. other or climb the ladder enough to get their own place.

1k as in leftover money after paying all my rent and utilities and other things like groceries, internet, etc. 1k left over money that is. Unless that's still what you mean?

[bufflove]

Originally Posted by aajohnny

1k as in leftover money after paying all my rent and utilities and other things like groceries, internet, etc. 1k left over money that is. Unless that's still what you mean?

Oh, so you're basically asking if that's an adequate savings rate? I'd say so, though without knowing your age it's hard to say for sure. There are financial calculators out there which can give you an idea of what $1K a month adds up to over the longer term. Sounds like $55K is - as I'd expect - very comfortable for your situation. Of course you'll have to continuously reevaluate as your life changes (salary, marriage, kids, assets/investments change, etc.), but definitely sounds like you're in a good place, currently.

[aajohnny]

Originally Posted by bufflove

Oh, so you're basically asking if that's an adequate savings rate? I'd say so, though without knowing your age it's hard to say for sure. There are financial calculators out there which can give you an idea of what $1K a month adds up to over the longer term. Sounds like $55K is - as I'd expect - very comfortable for your situation. Of course you'll have to continuously reevaluate as your life changes (salary, marriage, kids, assets/investments change, etc.), but definitely sounds like you're in a good place, currently.

Thanks and I'm 21 if that helps (22 soon)

[WhoDatInMD]

$1000 leftover after bills is very good. Assuming you saved that each month, that's $12k a year and a savings rate of about 22% of your salary, which is more than the 20% that die hard financial planners say you should save. Most planners say to aim for the more realistic 10% figure. So either way, you're definitely doing well, especially at 21.

Just make sure you're investing some of that salary in investment/retirement accounts to take advantage of compounding interest. That's something that I really wish I was taught to do when I got my first job out of college. I learned a few years later but those missed years really add up over the long haul. I was more focused on how much I was saving and not how much I was putting away for retirement.

[aajohnny]

Thanks everyone for the advice and comments. I didnt realize car insurace was so much there! I guess Id have maybe ~$930-1000 but I'm assuming that'll still be fine. I think my company does matching 401k. Is that something I should think about?

[macroy]

Originally Posted by aajohnny

Thanks everyone for the advice and comments. I didnt realize car insurace was so much there! I guess Id have maybe ~$930-1000 but I'm assuming that'll still be fine. I think my company does matching 401k. Is that something I should think about?

Yes. It's basically free money. So at least contribute the matching amount (e.g. if they match 5%, allocate at least 5%). Just keep in mind that its usually vested over time. So you'll only get a portion of the match if you leave the company early. The vesting schedule differ by company. But in my experience, it's usually 5 years to be fully vested.