Yahoo…my rent just went up which raises the possibility of me moving again, or taking up a second job. I’m wondering what kind of boat I’m in here. Perspective is a good thing. My upcoming rent will be a little less than a third of my paycheque. Factor in the other living expenses (food, phone, internet, NO TV, gas) and it will add up to a little less then half my paycheque. Factor in some debt too and for the next few months it will be approaching 75% of my paycheque. I make about 2400$ CAN a month after taxes. Maybe I’m overeacting but lately I feel like I’m not really keeping up with my friends in terms of monetary gain. I know my situation isn’t terrible in the grand scheme, but a friend of mine told me “Always find the better deal” Maybe I can do better. Thoughts?
Are you really going to be able to get a better deal rent-wise? And what if the new landlord also decides to up the rent in 12 months time? What must also be factored in is the costs of moving: it’s not just hiring a removalist (or buying beer and pizza for your mate with a van). There’s so bloody MANY miscellaneous expenses when you move house that it can negate the savings on rent for many months afterwards.
Now for some general thoughts on income/outgoings etc. From your calculations, you still spend less than you earn, right? Therefore, you are already a squillion miles ahead of most average joes in most western capitalist countries. According to those alarming stats that get trotted out every couple of months, many households spend >100% of their net weekly/monthly income and use credit facilities to keep upping the ante.
If you’ve got $600 ‘funny money’ a month, you’re doing pretty well I think.
I make approximately $1,000 per month after taxes. My living expenses, including food, are about $850 per month.
So I’m up about $150 per month, until I splurge and buy a new board game or something.
I’d say I make about $1,600 a month, and probably spend 900-1100 on mandatory expenses.
I have a credit card, but don’t use it to spend beyond my means- When times are lean, it helps me with unexpected expenses. When times are flush, I use the excess to pay down the debt. So it makes my budget more flexible.
One thing you can try that has been working for me is finding ways to cut down expenses. Even little savings can add up if you find enough. Moving might be an option but really look at the bottom line.
I used to rent a room for 500/month plus utilities (75-150 more). When I moved, I found a place for 475/month, utilities included. this saves me 100-125 a month which doesn’t sound like much, but combined with my insurance going down, pressing for a lower interest rate on my credit card, and dining out less/cooking more I’ve steadily built more surplus without even increasing my income.
Ironically enough, I think one reason it took me so long to find a serious full-time job is that I was a little lazy due to having a part-time job with a nice schedule, another part time job I could work any weekday I wanted to (substitute teaching) and enough base income to ensure I was fed and clothed. However, even still I wasn’t making enough extra to be able to handle a catastrophe, which is why I’m glad I just got a new job.
Roughly 25% of my monthly after-tax pay, maybe 15% of my annual pay.
About one third of my after tax pay goes to my half of the mortgage and utilities each month for our house in the US. Recently, my wife had a period of unemployment after an illness and I have been paying all the household expenses for the past few months, but it will average out.
I was taught that a rule of thumb for rent or mortgage should be no more than 25% of your gross income.
My rent is paid out of my gross salary and is about 14%. Though if you count my wife’s income it’s around 12%. We have other expenses that gobble our funds. Air-conditioning over the wet season, food, child-care, and a personal loan.
I bring home around $1400 a month, but do some other work on the side. I need about $880 a month just to stay alive.
All of my “living expenses” combined for the month is just shy of 60% of my net-income, 39% of my gross. This includes mortgage (including taxes & insurance) and all utilities and miscellaneous bills (gym, recycling, home security system, auto insurance, car payment, etc.) I do not have credit card debt, except for the business expenses I put on my personal card and am reimbursed for and I am not including those in the percentages.
Probably a bit higher than I would prefer but my mortgage is 27% of my net, 18% of my gross.
MeanJoe
Our newspapers have been reporting a lot about “mortgage/rent stress” recently, and apparently if your rent or mortgage is 30% of your pre-tax income you are in stress. But then again someone earning 30k a year and spending 10k on housing has a lot less wriggle room than someone earning 300k a year and spending 100k on housing.
My mortgage/interest/property taxes are about 1/3 of my after-tax income ($1000 biweekly). Car payment and utilities are another $400/mo. Credit card payments $400/mo (I haven’t charged anything in a year or more, but had a long period of unemployment I’m still paying for). Feed for 11 animals (and myself). It’s tight, but I still have enough to make repairs and upgrades to the house.
StG
He did mention that he is servicing some debt, so at some point he was living beyond his means.
Anyway, I pay about 25% of my take-home pay on mortgage. That’s lower than most people. It was a bigger percentage than that when I opened my mortgage. Mortgage stays the same. Pay goes up.
I probably pay about another 35% of take-home pay on a car payment, student loan, utilities.
I invest about 10% of take-home pay each month.
Food and drink must be about 10% of take-home.
The rest just evaporates.
After tax and other deductions (pension, at-source deduction for a share-save scheme) I bring home £2100 a month. Rent is £350 (my parents own my house!), travel costs about the same again, council tax and utilities maybe add up to another £300 (I take care of the bills, my girlfriend buys the food). So I really ought to have over a grand a month to save and spend on other stuff. Sadly, though, I have waaay overspent in the past and am throwing a big old chunk at debts, and will be for (I estimate) at least another 18 months. Basically I was living beyond my means, had an expensive car which I really didn’t need, too many holidays, and so on. At the beginning of this year I got rid of the car and started commuting by bike. So far my finances haven’t really felt the benefit, but they will in time I hope.
Plus I’m getting married next year, so I think savings will be out of the question for a little while.
My rent is 35.25% of my take-home.
Food, gas, internet, clothes, pets, cell phone, and ‘Target’ (which is my column for everything else) averages at 60% of my take-home.
Sometimes it’s higher, like when car insurance is due. Sometimes it is lower, when I behave myself. But it’s scary when I see how close I am cutting it.
I don’t have a car payment, but I plan to get a new car in a year or two. I’m sure my landlord will raise the rent another $50 or so next year.
I’m sure I will get a raise, but I have no idea how much.
I really need to buckle down more.
Back when I was renting in NYC, my first few years saw me using one of my two monthly paychecks to pay for rent and the other to cover other living expenses. And I knew a lot of people who couldn’t cover their rent expenses with half their monthly take-home pay. Hey - that’s New York for ya.
Now that I’m on Long Island, our mortgage is a little less than a quarter of my household monthly take-home. Much more manageable, but I’d still like it to be a lower percentage.
I spend about 40% of my take-home pay on my mortgage, insurance, & taxes. Take-home is after taxes, health insurance, and 10% to my 401K. If I include utilities, gas, pets, and food, I’m at around 60%.
I always think the rules of thumb are a little iffy. As a single person without kids, my situation is very different from a married guy with a SAH wife and two kids. Obviously the married guy will need a lot more money after paying the rent/mortgage than I will.
A quick expense graph for us shows:
Insurance - 18.4% (this is life and auto)
Utilities - 12.1 %
Medical - 11.2% (this includes medical ins. premiums)
Groceries - 7.2 %
Mortgage - 5.6 %
That’s year-to-date. Our data is skewed because Hubby has been paying on the house for 20-odd years and the mortgage payment is small compared to our combined income. Mortgage payments in the surrounding neighborhoods are likely four to five times as much. Also, since I have ‘self-employed’ medical insurance, my insurance costs are high (and taxes too!)
Currently: living expenses cost me about 860/mo, avg monthly salary? 660. I pull out student loans to pay the rest.
About 41% of my after-tax income goes to my rent; 6% goes to my car payment; another 6% goes to utilities (cable, internet, power, cell phone); less than 3% goes to auto and renter’s insurance; and 0.3% goes to my water bill.
So, approximately 56% of my income goes to what I consider my living expenses – I don’t count credit card payments and groceries and the like. Just a few years ago I was spending more than 50% of my income on rent alone, so I’m feeling pretty good these days. 