Originally Posted by fosters
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...
where is the other 15%?
As someone pointed out above, I accidentally left the other 15% of the formula out, which is for bills, such as cell phone, etc. On the $30,000 FO salary, that is nearly $300 for bills, which nearly covers your bills you mentioned. On the $65,000 captain salary, that is over $600 for bills. Again, the formula can be adjusted as needed. If you have higher rent, take away from transportation, and add to rent. If you need more for bills, take away from one, and add to bills. I think the formula really does work. The point is to live within the means of the formula, and not above those numbers, if at all possible. This goes for all people, in all professions, regardless of salary; not just pilots.
I am with you 100% with the saving. I have always been a big saver. I'm not one to get a larger salary, and go buy a very expensive car. I'd take the extra and save it.
As far as commuting, I think at least for your first couple of years as an FO, it makes better sense to live at your base. Commute after you become captain, if you'd like to move. Then you have more money to spend toward crash pads, etc.