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How do people live on their salary?

bearcatsbearcats Posts: 4,318Registered User Senior Member
I was curious about my future quality of life, so I did some calculations, and started thinking, assuming that the average college grad makes 50k, how the hell do they live a normal life?

Take this as an example. I just accepted an SA offer, assuming that I get a return FT offer, I would be making 10k signing + 70k base + 30-50k bonus, that's around 120k all-in for my first year. It sounds like a lot right? Then let's do some math.

Using a take home pay calculator, with no dependent, filing single, after federal withholding, state withholding, and NYC tax, I make around 6k a month.

Now let's think about living expenses,
Net income 6k
-Rent: 2k (NYC)
-Transportation: 300
-Utilities (phone, heat, electricity, internet): 500
-Food: 1000 (dinner is paid for, gotta pay for lunch every day, and occasionally eat out)
-Insurance: 250
-miscellaneous (toiletry etc that you dont usually pay attention to): 300
-matching 401k up to 8%: 480

That leaves me with around 1k to actually have a little fun or save per month. This is with a 120k all-in income and single with no family to support.. How the hell does the average college grad live on their 50k paycheck? More importantly, NYC's median income is around 40k, how the hell do people pay for their living expenses?

I know a lot of you would say "ROOMATE!".. but you can't live with a roomate forever....
Post edited by bearcats on
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Replies to: How do people live on their salary?

  • liberationn15liberationn15 Posts: 327Registered User Junior Member
    Yikes. Well, my boyfriend makes around 80k/year which, here (in Nebraska), bought him a 120,000 loft, a nice car (and insurance for both of those), with a fair amount left over and he's not a penny in debt. I don't know how people survive in New York and California though.
  • RacinReaverRacinReaver Posts: 6,598Registered User Senior Member
    I'm making under $30k in CA and not doing bad.

    I think a few of your numbers seem a bit high. Are you really paying $3000 in insurance a year? My auto insurance here in CA is around $1000 a year, and renter's insurance is a fraction of that. I don't even have a clue how you're spending $1000 a month on food, that's just crazy. It works out to over $30 a DAY on food. If you cook on your own (with a $2000 apartment I'm sure you have a usable kitchen) and can easily make delicious meals for less than $2 each. Heck, I just made jambalaya the other night and it'll provide me with lunch for the rest of the week. I think the sausage was about $2, three cups of rice is less than a dollar, two peppers was less than a dollar, onion was a few cents, celery was a few cents.

    How would you spend $300 on toiletries a month? Do you throw your toothbrushes away after each use?

    Also, how do utilities cost you $500? Internet should be $50 at most, heat/electricity for an apartment shouldn't be over $100 a month even if you're leaving the heat on with the windows open, and I imagine you don't need five cell phones.

    It seems to me more like you either don't know how to be responsible with money, or you're just trying to make everyone on here think you need to make boatloads to live comfortably.
  • BCEagle91BCEagle91 Posts: 22,762Registered User Senior Member
    > Rent: 2k (NYC)

    Live with roommates.

    > Utilities (phone, heat, electricity, internet): 500

    If you live with roommates, the heat, electricity and internet are shared.

    > Food: 1000 (dinner is paid for, gotta pay for lunch every day, and
    > occasionally eat out)

    Loaf of premium whole wheat bread: $4 gives you 10 sandwhiches. A jar
    of peanut butter or can of tuna fish or other similar fillings along
    with fresh fruits. You should be able to cut lunch expenses to $300
    if you don't have to pay for dinner.

    > but you can't live with a roomate forever....

    Many people do get permanent roommates called spouses.

    > How the hell does the average college grad live on their 50k paycheck?

    Son goes to school in a city where median household income is under
    $40K. You think that you have problems?
  • TortfeasorTortfeasor Posts: 570Registered User Member
    A lot of people don't live in NYC but commute. We have people in Philadelphia that commute every day to NYC. In Philly you can get a house in a safe neighborhood for $1200.

    auto insurance drops once you turn 25 and you have no accidents. I pay about $720 a year in auto

    They're all right about food. You have to learn to plan your meals. Cook your own food. Make your own coffee at home & buy a coffee grinder. It's cheaper to mill your own coffee, it lasts longer, and it tastes better.

    Toiletries and Misc you don't think about. Well, start thinking about them. Everyone else does. Misc means you don't have a budget category for it. It doesn't mean you don't know how much you spend on it. Movies, Beer etc. all have to be budgeted. You know how much your friends bum from you monthly. You either have to budget that in or learn to say no. A reason to say no: Ypou need to build up yoour emergency savings to 6mo salary.

    The more you control your budget the more savings you can achieve. You'll notice that suddenly you feel better off because you count your penny's. Save that money for luxury purchases like a better TV or premium beer.
  • Lil_Wayne_FanLil_Wayne_Fan Posts: 461Registered User Member
    Why does 120k salary become just 72k after taxes?
  • BCEagle91BCEagle91 Posts: 22,762Registered User Senior Member
    > Why does 120k salary become just 72k after taxes?

    Sit down with the 1040 and New York State tax forms.
  • LongPrimeLongPrime Posts: 5,208- Senior Member
    I think OP has forgotten payments for student loans and a loan to be taken for purchasing household items/funiture/clothing/other durables.
  • llazarllazar Posts: 241Registered User Junior Member
    Alright man, stopping pulling numbers out of who knows where.

    $1000 a month on food? Do you eat Steak Sirloin 3 times a day?

    $3000 for insurance...im 14 and i can tell that's a little OUT there.

    Also, not everyone lives in NY...u get payed higher there because of the cost of living. A person earning ur salary in North Dakota or something could probably buy a town. No offense, just saying the cost of living is a lot less out west and even in the mid-west...
  • PeaPea Posts: 2,384Registered User Senior Member
    It's about priorities and living within your means.

    People live on 50K per year because they don't spend $2000 per month on rent and $1000 per month on food.

    People can't make ends meet on 120K per year because they spend $2000 per month on rent and $1000 per month on food.
  • rpictonrpicton Posts: 707Registered User Member
    Buy a house and deduct your mortgage interest. Eventually buy a second house, rent it out to someone (at a price greater than the mortgage and upkeep costs), and depreciate it. Get married, have kids, look for any other kind of deductions possible.

    My dad made $125,000 in 2008 and paid less than $10,000 in taxes (California + Federal) combined. (Not including his pension money which is tax deferred)
  • TheDadTheDad Posts: 10,213Registered User, ! Senior Member
    You don't *have* to pay $1000/month for food. You don't *have* to be putting in the $480/K into your 401K. Is it desirable? Yes. Is it necessary? No.

    You don't even have to pay $2,000/month for rent. You live further out and take the train in, trading time for money. Let me introduce you to New Jersey.

    Only $1K a month for fun/savings? Poor baby.

    The OP's post reeks with uninformed entitlement.

    My D is living in another high expense city on approx $40K and managing to pay off a good chunk of her undergrad student loans while doing so. She shares a 2 bed, 1 bath apartment and takes public transportation requiring a transfer in the middle. $1,000/month for food? Not by a factor of three.
  • akbaby21akbaby21 Posts: 209Registered User Junior Member
    my parents make less than you combined and we live an amazing life with a few cars and a nice 2 story house in a great neighborhood. i don't see what you have to complain about.
  • greenvisongreenvison Posts: 491Registered User Member
    He has a high rent to begin with ( especially if he is single).

    But I believe 100k is not enough for a big family. My father brags about it often times.
  • LongPrimeLongPrime Posts: 5,208- Senior Member
    Actually I think you are doing fairly well.
    You're putting away 8% to 401k (most people=$0, assuming they even have a 401k or match)
    You can easily put away another 8% (from the $1k, leftover money) for e-savings, IRA, medical flexplan, -16% for Retirement/savings is pretty good, but should be 20%.
    Which leaves you with about $500 to play with per month.
    You oughta be able to squeeze your budget for another $150-500/mn for splurging on a big ticket item per year.

    but I think that you left out the college loans
  • tenebrousfiretenebrousfire Posts: 2,531Registered User Senior Member
    hmm let's see

    (fyi, i live on the same block as the empire state building)

    -Rent: 2k (NYC)

    all depends on neighborhood, you could get something much less expensive in upper east, for example - look at craigslist to get an idea for where you want to be

    -Transportation: 300

    based on... lots of cab rides? 3 subway rides every day for a 30-day month is only 200

    -Utilities (phone, heat, electricity, internet): 500

    as a guide, my coned heating / electric bill is only 75/month (for 3 guys), cable internet and tv is 100, and my cell phone isn't much (also corp-subsidized, but w/e)

    -Food: 1000 (dinner is paid for, gotta pay for lunch every day, and occasionally eat out)

    seamlessweb is your friend, plus cooking

    -Insurance: 250

    is this renters, or what type

    -miscellaneous (toiletry etc that you dont usually pay attention to): 300

    doubt you'd need this much for toiletries, though groceries will increase this figure

    -matching 401k up to 8%: 480

    yep contribute lots

    remember, your company might cover a good deal of this stuff too - like mine covers insurance, allows fsa contributions for transportation, etc.
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