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Hubby and I were doing about that when we first moved to the state and I was staying home with our son. As long as you're renting you'll be fine But if you buy a house and have a kid you'll fell very tight between property taxes, daycare/diaper/formula etc.
$2K can swing you a pretty swanky 1 bedroom so it's up to you if you go for the uber swanky and go some place a little cheaper and save the remaining $300-400 to put down on a house. $1600 will still get you a pretty nice 1 bedroom.
You will make about 58K net, after factoring in Social Security, Medicare, Health Insurance, Fed and State Taxes. Maybe a little less if you max out a 401k. That said, you should still be able to save some money - it just won't be 4K a month. It really all depends on your lifestyle - if you are a Whole Foods type of person, it will be expensive to live - I mean, come on, who pays $4.50 a pound for organic romaine lettuce?
If you buy a house - the property taxes will make a significant dent in your saving ability. Have kids - and any potential savings will go right out the window.
Of course you can save on that amount of money. But a lot of people don't tend to have self control. They have some money so they go on vacation. Or they buy a new big screen TV. Or eat out every night. Or pay $2,000 for rent for 2 people.
pay yourself first, then live off the rest. that's the way to save, whether you make $50,000/yr or $500,000/yr. people struggle to save money with various incomes.
if you set up an account and pick an amount you want to save and have it go from your paycheck directly there, then you'll be able to live off the rest. budget in an emergency fund that you tap in cases where you go slightly beyond your means (medical bills or other unexpected expenses) and use that instead of your savings to get you through a tough time.
we make less than that, and are almost able to max out a 401k. it is tough and we drive a small economical car, no cable, 1 cell phone, no house phone, cheapest internet (40 a month) etc. We do OWN a house (or at least pay a mortgage) though which is a lot more than 2000 a month (especially including maintenance which you obviously do not necessarily see each month but then get hit with a new AC coil and a new roof for 6k in 1 year), one car, no car payment, cheap insurance. need to set priorities. we spend a ridiculous amount on food at Whole foods.
I like this response. The key (for us) to saving money is to remove/reduce any recurring monthly expense. Anything that you have to pay regularly should be minimized.
Some tips on what I do to save $$:
Don't get cable or Tivo or netflix, they are expensive and you probably don't have a lot of time to watch TV between work/kids. You can watch many shows on the internet for free (all the major networks let you do that), so you can hook up a computer to HDTV and watch some of your favorite shows.
Cell phone, get the cheapest plan possible based on your usage and don't ever go over minutes/texting.
Magazine subscriptions, get rid of them. Read them at library or browse at bookstore.
Make your own coffee in the morning, you will be amazed how much $$ you save by not going to Starbucks/DD. On similar vein, bring lunch to work. By doing these 2 things alone, you can probably save $10-15 a day, which translate to $250 or so per month.
If you smoke, quit for your wallet and health. I don't know how people can smoke and save any $$ in the city! Isn't it like $10 a pack now?
By reducing your recurring expense, you will have more money each month and once you learn to live without these things, you will be fine as before. I am sure there are many more ways to make your budget stretch (coupons, etc).
Another thing I do is never buy the top of the line of anything, be it car, computers, phones, whatever. If it is something I want, I buy the basic or middle of the road model which usually have the basic functionality that I want, but don't have to pay premium for all the bells and whistles.
I've seen some "My husband makes approximately $100k and we are struggling." statements on this forum and I am (actually, my wife is :-) wondering if we ourselves will be struggling or not when we move to NJ next year:
- 100k USD/year
- expect to be renting for max. 2k/month
- 2 person household, no kids
- would like to have to two (cheap/small/etc.) cars
I was thinking 100k would be ~ 70k after taxes. After 24k rent this would leave 46k or ~ 3800/month. We don't have an extravagant lifestyle.
Please tell me it should be possible to safe money with such an income, even in NJ :-).
Thanks,
paul.
It's not hard to save money at that lvl. It's matter of setting lifestyle expectations and sticking with it. Biggest item that'll save you money is your rent and car.
First. Rent you can manage from 800-1200 a month. Although depending on town it could be pretty crappy and crampy unit but hey that's what it takes to save. If you pay bit more, you could find units in older coop that include all utils (in places like Ft. Lee & Edgewater). I can think of at least three old coop in this area that has all util. Rent is higher 1400-1700ish but it includes util so in essence it's much cheaper than 2k rent + util.
Second. Car cost is expensive. Even if gas is cheap, insurance in NJ is not and so is maintenance. If both of you must have a car for say commute to work...well there is no way around that. But if not, make the big sacrifice and share one car or plan an option to have rental car nearby or use car service. As surprising as it sounds, renting a car or using car service infrequently is much cheaper than owning a car. If you don't believe me, do the math and you'll see (unless you plan to own the car for 5+ years and put lot of miles on it). Cost for rental gets lower if you are able to use car rental services like zipcar which can charge by hour or day and without gas/mileage fee attached.
Third. As another poster said already. Pay yourself first by setting up automatic deposits and leveraging 401ks. If no 401k, you still have traditinoal or roth IRA. I recommend you max it out. Since you are making 100k, it's probably going to be like 15.5% unless your employers match and in that case you'll need to revisit if match counts as part of your max contribution or something else.
Fourth. Cut out expenses from entertainment, eating out, and electronic toys. Movies? Go watch matinee or wait till it comes out on DVD. When it does come out on DVD, go rent it from library instead of netflix, blockbuster, or dvd rental box. Music? Stream it instead of buying. Electronic toys like smartphones and ipad? Don't spend money on getting the latest and wait.
Fifth. If you plan to spend a good chunk of cash. Always hold off for a week or two and think about if you really need it before you do.
Sixth. Pay credit for earning points only if you can pay the whole balance off monthly. This is big, it's hard to keep track but once you get hang of it you can save good 2-5% off your monthly totals in form of cash back, gift card (you can use or sell), etc.
Lastly. My wife and I were making it in 80k salary when she lost her job. We were still able to save by making a lot of sacrifices. Now that she was able to get another, we still stick with old and save even more. The 'new economy' the 'new normal' just means we need larger cash cushion to fallback on and much less debt.
Actually, now I am thinking more about this - Why are you saving if you are not having any kids? Who are you saving this money for? It would be yourself without kids. Why save then?!?!? Spend!!
Actually, now I am thinking more about this - Why are you saving if you are not having any kids? Who are you saving this money for? It would be yourself without kids. Why save then?!?!? Spend!!
I've seen some "My husband makes approximately $100k and we are struggling." statements on this forum and I am (actually, my wife is :-) wondering if we ourselves will be struggling or not when we move to NJ next year:
- 100k USD/year
- expect to be renting for max. 2k/month
- 2 person household, no kids
- would like to have to two (cheap/small/etc.) cars
I was thinking 100k would be ~ 70k after taxes. After 24k rent this would leave 46k or ~ 3800/month. We don't have an extravagant lifestyle.
Please tell me it should be possible to safe money with such an income, even in NJ :-).
Thanks,
paul.
Yes, on that income, you should be able to max out a 401k. After you max out your 401k, and pay taxes, you have more like 50k or so in take home pay. About half of that goes to rent. That leaves you with 24k.
Alternatively, if you're saving for a deposit on a house or want to save outside the tax shelter for some other reason, you can do that too, but your savings will be hit with your marginal tax rate.
Two cars could hit your budget hard. See edmunds.com for overviews of how much it costs to own a car (about 5k/year for a new "economy" car) . You'll need to be attentive to keeping those costs down (e.g. make one of them a reliable second hand car so you're not getting soaked on depreciation)
You will make about 58K net, after factoring in Social Security, Medicare, Health Insurance, Fed and State Taxes. Maybe a little less if you max out a 401k. That said, you should still be able to save some money - it just won't be 4K a month. It really all depends on your lifestyle - if you are a Whole Foods type of person, it will be expensive to live - I mean, come on, who pays $4.50 a pound for organic romaine lettuce?
If you buy a house - the property taxes will make a significant dent in your saving ability. Have kids - and any potential savings will go right out the window.
Other than that - welcome to NJ.
crap. i just paid 7 dollars for a pound of organic baby greens
but it lasts us 4-5 days .
and i just harvested about 5 pounds of organic tomatoes from the backyard.
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But if you buy a house and have a kid you'll fell very tight between property taxes, daycare/diaper/formula etc.
