Starting out a bit latter than a college grad, choices got made. Jobs, houses, habits are a bit more set in stone.
The average yearly income of $74,664 before taxes, according to the Bureau of Labor Statistics' (BLS) 2016 Consumer Expenditure Survey.
The average credit card Debt is $6,375
After taxes and Social Security that 74,664 gets taken down to 57,344 or 4,778.66 per month.
Housing runs around 1575
$255,968 house at 1200 a month plus some expenses
Food runs around 600
Transportation 755
Health Care 384
Student Loans 110
Credit Card interest 85
Charity: 180
The total expenses are 4,109
This is where average people are starting to get somewhere at a rate of 669.66 dollars a month which is a savings rate of 10.76%. At this point the financial guru's you see on TV are saying that your doing alright, typical plans have households saving 10-15% of their income to hit retirement around 65-67.
It is a LOT harder to turn this ship around at this point, most of the time those mortgage's have already been signed, car's selected and any depreciation hits already accrued. This is also the time when we start waking up and realizing what a rat race work really is.
The low hanging fruit is going to be in entertainment and food. Getting Intentional about those expenses and going out only with friends instead of by yourself. Cutting Food down to 300 and Entertainment and clothes down to 100 will give you 620 extra dollars in savings or 9.96% extra savings rate.
The bigger payoffs are going to be in the house and transportation department, most of the times that ship sailed getting out of them at this point is barely worth it. If your house is FAR away from work, or the car is a gas guzzler than it's time to get real with a calculator and a spread sheet. Otherwise look at carpooling, biking, house hacking as more extreme ways to ratchet that savings rate up.
Really though without a big reason to move - Relation ship change, New Job, Fired up about FIRE/FI, really bad original choice etc. Staying put is what most of us will opt for. We are lazy by nature, but realize if you can't get up to a 40% savings rate it's going to be a long time on that hamster wheel.
No comments:
Post a Comment