ummm. Where's the income tax?
Also, $50 a week on food? Most people can't do that with the amount that they eat out.
ummm. Where's the income tax?
Also, $50 a week on food? Most people can't do that with the amount that they eat out.
Always Be Closing wrote:
figure you'll be making more as you get older, and you should save more. your home equity should grow (unless you live in Vancouver), and in 10yrs you should be able to save $1k/month
You are way ahead of most.
I would also say he's doing decent, but there is still a lot of his money unaccounted for, and I included no retirement savings whatsoever. If he is in fact putting that other 600 per month into 401k/ROTH, then kudos, I would say he's doing well. But until we know what he is doing with that $$, there is definitely a little ground to be made up. For instance, if you put 10% income per year into your 401k for 20 years, starting when you're 25, you could gross a good amount of retirement money, not including having a house paid for, etc. You could stand to have $447,422.28 with just 25% employer matching rate, or about $380,000 with no employer matching at all. That's just by 45. You could have $1,094,621.71 by 55 and retire very nicely in my opinion. The earlier the better, don't worry about what people your age are doing, they're mostly idiots.
You only counted the property tax once. He said it was 1200 every 6 months, so there's another 1200.
Income tax is in there, 25% which I rounded to 14,000
Also, good catch on property tax, I already took into account things like I might have missed, but we can still add it in.
That leaves about 14,000 per year instead of 15,000
I'm 23, I have 13k in the bank and 2k in a 401k. No debt or loans. I make 30k a year. I save about 1k a month. I track practically every $ I spend and I live pretty simply. If you write down or use a program to track where your money goes it is much easier to get a handle on where you can save on your monthly budget. What you need to do it first decide how much you need to save (think of expenses like taxes, car repair, travel, or whatever) then add your set expenses like the mortgage, insurance, utilities. After that you can play with whatever is left over for groceries, entertainment, or eating out. Don't make the mistake of writing your budget and then saving whatever is left over. Savings should be marked at a set expense just like a mortgage.
ya..... wrote:
Income tax is in there, 25% which I rounded to 14,000
Also, good catch on property tax, I already took into account things like I might have missed, but we can still add it in.
That leaves about 14,000 per year instead of 15,000
my bad. I wasn't reading carefully
Thanks again for the replies so far.
In canada, i think we pay a little more tax than most. I make 55k, but i take home 35k at the end of the day after taxes.
So, for me it's:
Mortgage = 900*12 = 10800
Property tax = 1200*2 = 2400
Food = 250*12 = 3000
Electric bill = 200*12 = 2400
Cable/internet = 100*12 = 1200
I have my car paid off, but gas is expensive here at the following: 120/month * 12 = 1440 (i only really drive to and from work, so i can get about 2 weeks on a tank in my little car)
Car and home insurance = 140*12 = 1680
I only eat out a couple of times a year, but once a month or so i order a pizza or something, so that's only 200 a year or so.
I go out with my friends once a week, but i don't go to clubs or anything, i sort of just have a few friends over for some drinks, so let's say $30/week = 1560
So the total is: $24680
So, i should have 10k left over, but i guess i give people gifts, etc for birthdays, and there's no misc. expenses in there (toilet paper, cleaning supplies, home maintenance, etc), so let's add in another 2k for that, making the total 26,680.
I guess you could say it costs me about 27k a year to live?
Like i said, i keep about 300 every pay day, or 600/month. So I don't really feel like I am mismanaging money too badly.
It's just i work hard and it's almost like i have nothing to show for it, except a 35 year mortgage debt and like 4k in the bank... it's depressing.
anyone else in a similar situation? for the record, I'm a single male living on my own.. well, i have a dog, too.
Dude, as was already said to you, you are socking away $7200 a year ($600 a month x 12). That's pretty good for a guy your age on the salary you make with that house payment. For what it's worth, I make more than you do and have a family of 4 to support, and my mortgage (not including taxes and insurance) is over a hundred dollars a month lower than yours. Considering that, you're doing VERY well.Math time:If you INVEST that money (and you should AFTER you've set up an emergency fund of about 3 months; 6 months if you were married with kids), here's what your 7200 a year gets you by age 65 at 8% annual return (I'm assuming you started at $0 when you hit 26, so if you had some already, then this number will be greater:$1,182,574.08That's a LONG time away yet, so that's not a ton of money, but that's not bad. As you make more money later on, it would be wise to invest even more. For now though, at age 26, with that income and that mortgage, you're doing pretty well.
I think you're paying a lot for your house plus $200 a month on electricity seems like a lot of waste for a person living alone. I would seriously consider getting roommates. That'll be the easiest way to add savings. You could probably have two renters and that may cover your entire mortgage. It'll suck having roommates, but maybe it'll be worth it.
Yeah, I am trying to keep the electric bill down as much as I can. Keep in mind though it's pretty cold here in the winter. I checked my bill, and i pay 10.5 cents per KWH, not sure how that compares to others.
For what it's worth i dry clothes around the house or outside as much as i can, because i know the drier uses a lot of electricity.
Dude you're doing very well. Better than many many many people. Basically your only debt right now is your house, which is awesome. A ton of people have car payments and other debt and loans, which you do not. If you stay away from the credit cards you'll be just fine. Saving takes time. I agree with the above posters - save up an emergency fund, start investing as much as is feasible. Also, if you foresee big expenses down the road (new car for example), start saving for it well in advance and you'll be good to go
Flagpole wrote:
... For what it's worth, I make more than you do and...
Is there any topic? any post? any reply? that you cannot turn around and make it about you?
Well, I give you one for consistency.
Go to ur nearby uni and talk to a grad stud to see how they live. Copy that and u can double ur savings.
Flagpole wrote:If you INVEST that money (and you should AFTER you've set up an emergency fund of about 3 months; 6 months if you were married with kids), here's what your 7200 a year gets you by age 65 at 8% annual return (I'm assuming you started at $0 when you hit 26, so if you had some already, then this number will be greater:
$1,182,574.08
Flagpole, that's very misleading. Telling someone they will have 1.2m in around 40 years isn't helpful at all. 1.2m is worth what in 40 years? No where near that amount.
He said that later on in his post, which you for some reason cut out.
I make $13,000 a year and have $100,000 saved up. I swear I don't understand what people do with all their money.
Flagpole wrote:
Dude, as was already said to you, you are socking away $7200 a year ($600 a month x 12). That's pretty good for a guy your age on the salary you make with that house payment. For what it's worth, I make more than you do and have a family of 4 to support, and my mortgage (not including taxes and insurance) is over a hundred dollars a month lower than yours. Considering that, you're doing VERY well.
Math time:
If you INVEST that money (and you should AFTER you've set up an emergency fund of about 3 months; 6 months if you were married with kids), here's what your 7200 a year gets you by age 65 at 8% annual return (I'm assuming you started at $0 when you hit 26, so if you had some already, then this number will be greater:
$1,182,574.08
quote]
two things worth pointing out that show you know f#ck all about this subject:
1) Name somewhere - ANYWHERE where you can get 8% compound growth for 40 years. Ridiculous
2) In the wildly unlikely event you could actually get 8% for 40 years, what sort of inflationary backdrop do you think that would be against? That's right -rampant inflation, making your $1.18M worth bugger all.
Twitched wrote:
Blathering Blatherskyte wrote:Not necessarily - I only make 29K/year, and qualify for up to 150K in mortgage at a reputable credit union.
Omg I would never in my life take a mortgage that large at that little salary (especially a salary so low that it indicates that my job is always in jeopardy). Is this really normal practice?
A grad student I work with took out a 150k mortgage on a stipend of 28k/year, despite having to support a wife that doesn't work. As a result, he's stuck working from home to avoid buying gas, eats ultra-cheap, and hasn't hung out with anyone in our program outside the lab in about 2 years because he can't afford to go out. Pretty crappy life IMO, but at least his income is stable...
Raptured wrote:
Twitched wrote:Omg I would never in my life take a mortgage that large at that little salary (especially a salary so low that it indicates that my job is always in jeopardy). Is this really normal practice?
A grad student I work with took out a 150k mortgage on a stipend of 28k/year, despite having to support a wife that doesn't work. As a result, he's stuck working from home to avoid buying gas, eats ultra-cheap, and hasn't hung out with anyone in our program outside the lab in about 2 years because he can't afford to go out. Pretty crappy life IMO, but at least his income is stable...
That's what's so messed up with the USA - people buying shit they just can't afford - then, when it all comes crashing down, expecting someone else to save their ass. Your grad student friend is an irresponsible fool
With respect to an emergency fund, how much should be in there? I want to get to that point ASAP. Enough to pay my bills for 3 months? 6 months? (6 months will take a very long time to save..)
Someone said to talk to grad students about how they live, and take their example. I'm also a grad student (part time). Luckily, my work is paying the tuition, otherwise there's no way I'd be in that program.
Flagpole - i thought your advice was helpful, but I also wonder what 1.2 million would be worth in 40 years. I guess inflation is usually at about 3-4% per year?