Originally Posted by ChrisH
35% of monthly salary for housing (rent, mortgage)
25% of monthly salary for transportion (gas, train, etc.)
15% of monthly salary for yourself (food, fun, etc.)
10% of monthly salary you save.
Even on $30,000 per year FO salary, with taxes taken out, that gives you about $650+ for rent. You can find a nice one bedroom apt. on that. It gives you $460+ for transportation. $280+ for yourself, and allows you to save $180+ per month, which is over $2,000 for the year. Of course, you can adjust those as needed, by adding and subtracting from one or the other. For example, going 20% for transportaion, and 20% for yourself, and so on.
Ok, so where is the electric bill, cell phone, water, cable, internet, medical benefits, etc. figured in? Those bills alone for me come in at a little over $300/month. Now I'm done to $350/month for rent. Don't forget the crashpad or hotels if you're a commuter, $150+ per month. How about student loans? Even at a light $14k of loan debt, I pay $110/month.
The budget thing is nice sounding in theory but is totally unrealistic. The only way I've made it is by having a GF live with me since college, having a car that I own outright and isn't a mx hog (go Volvos) and never going out to eat or spending my per diem. I use about $14/trip in food that I take with me on trips.
As a first year F/O -
85 hours x $23.86/hr = $2028.10 (after tax $1520, minus medical, dental, uniform, Flica access = $1425 AFTER deductions)
320 hours of per diem @ $1.40 = $448.00 (non tax)
Bottom Line
First year ~ $1873.00 take home
Second year ~ $2371.00 take home
I aggressively save for my 401(k) and Roth IRA's, to the tune of $400/month as a first year FO and I will increase that to $1000/month as a second year FO. IMO,
it's MUCH more important to save for your retirement EARLY ON then get a better apartment, new car, etc. etc as you get a better pay scale. With compound interest I'll have $50k by 30 and $2.0mil @ 60 with a modest 8% return, assuming I only invest $12000/year after 30 (split between 401k and Roth IRA, including 4% company match). When I turn 30 I can live a killer life style. Getting that $$ in the bank NOW is worth it.
I'm even thinking about getting a second job part time 12 days a month - after tax it'll come in around $700/month extra. That'll be the house fund.
Now let's talk about investing - anyone think Japan is gonna go nuts here soon? I'm hoping...