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Hello everyone! I finally received a job offer after 7 months of post-graduation unemployment. Being brand new to the "real world", I'm trying to plan my budget and finances. I'm lucky enough to have $0 student debt thanks to an amazing scholarship.
I'm currently looking for a place to rent in the Northern Virginia area and the rent to me is absurd (I come from Wisconsin!). Just out of curiosity, how much of your monthly income goes towards rent & car payment? With those percentages, how are you managing?
I was told that rent can be up to 30% of your monthly income and a car payment can be up to 10% of your monthly income to still live well with money leftover. What is it like for you?
Sorry if this is in the wrong board, didn't know where else to put it. Thanks everyone
Our total housing cost including utilities, taxes, maintenance, etc. is 10% of our annual gross income. We have one car loan, it will be paid off in four months, that's about 2%. (It was a zero finance deal so we went that way and kept our cash in savings.)
Our biggest monthly "expense" is savings.
We put 30% of our gross income into long-term and emergency savings--we max out our 401K's and IRA's every year, and the rest goes into regular savings. We also have separate savings for shorter term things like vacations and home improvements we want to do but don't need to do--we put 10-20% of our net into those things.
That said, we are well into our careers and we had a large down payment on our current home. When we were younger we were spending about 25% of our gross income on housing, and 10% on car payments. Add in daycare and there wasn't much left, however no matter what we saved every week, even if it was only $10.
Don't forget to budget your savings--have that money taken right from your check so you never "see" it. Even if you can only afford 5% into your 401K and $20 a week into emergency savings, it's critical that you save.
Ugh! People who are married live in a different world from people who are single.
I pay less than 30% of my income for rent/utilities, and less than 10% for my car payment. But I still barely make ends meet. I pay for my cell phone, other expenses. I never go out, always pack my lunch, have not bought new clothes forever.
I do save 15% of my gross salary in a 401K, and $50 a pay period in a savings account.
You will find it is different for everyone. Currently I spend 50% on living expenses (rent, utilities). No car--can't afford one. $20 for cell phone per month and $350 for food (2 people). New clothes have not been seen in 7 years but new Lego sets manage to come into the apartment. If I am lucky I can put 10% of my pay into savings.
But this is probably why I am looking for a new job.
I just did the math. I am four years out of college and my mortgage, car payment, insurance (home and car) and student loan payments total to 21% of my total income. I saved aggressively upon graduation so I could buy a house, and I also put a good amount into investments.
For the first two years after graduating, I lived in an apartment that was so bad that you could actually feel a breeze through holes in the wall. I lived in a complete s**t apartment and saved as much money I could, then bought a house two years out of school. Don't take the advice of friends who want to live like kings as soon as they graduate. Live in a crappy studio, save money, and in five years everyone you know who is actually spending 30% of their income on housing will see what you have and wish they did the same.
I pay 30% of my NET income into housing. I emphasize net because that is what you'll actually be bringing home. If you base it on gross you'll be fooling yourself.
I also have 10% of my net on a car payment that will be paid off next month. As an accountant I'm advising you to base your budget on net and not gross income.
There are paycheck calculators online that will help you figure out some different scenarios based on different pay rates and federal withholding allowances. Here's one I like: Texas Salary Paycheck Calculator | Payroll Calculator | Paycheck City
(make sure to change the state to your state)
Good luck and your asking some good questions
Well I haven't found a job yet, but when I do, I assume I'll only make about $9000 a year, or about $800 a month. The cheapest apartments I've seen advertised go for about $500 per month, so I would spend about 63% on rent! I don't plan to get my own place for a while though. Gas would probably be about $20 per week and my insurance is about $900 per year.
Ugh! People who are married live in a different world from people who are single.
I pay less than 30% of my income for rent/utilities, and less than 10% for my car payment. But I still barely make ends meet. I pay for my cell phone, other expenses. I never go out, always pack my lunch, have not bought new clothes forever.
I do save 15% of my gross salary in a 401K, and $50 a pay period in a savings account.
We get penalized by the IRS in ways that singles do not.
Where I live, it's rare to see a job advertised that pays more than $15 an hour, and that includes jobs that require advanced degrees and years upon years of experience. That said, rent for a studio is usually in the $800 range, no utilities included. Want to rent a room? Knock that down to $500. This was before the economic downturn as well... Things have only gotten worse.
I used to spend around 60% of my rather high income (for my area, not in general) on rent and my car. I've knocked it down to 30% by renting a room in a run down mobile home for $400 a month.
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