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What % take-home are your fixed expenses?

December 27th, 2006 at 01:12 pm

Was reading an interesting article:

http://articles.moneycentral.msn.com/SavingandDebt/LearnToBu...

& saw this blurb:

"Warren recommends people's "must have" expenses total no more than 50% of their after-tax income. (Your after-tax income is basically your take-home pay, with any non-tax deductions like 401(k) contributions and health insurance premiums added back in.)

"Must haves" typically include:

Mortgage or rent
Utilities (including phone and television)
Transportation (gas, car payment, car insurance)
Other insurance (life, health, property, disability)
Groceries
Child care
Minimum loan payments
Child support or other court-mandated payments"

So I wonder how many people actually can fit into this mold? Looking at the people I know??? Few and far between! Granted we live in a very high COL area. But still.

When dh and I both worked we both pulled in the same and we saved his check and used mine for bills. We did tend to use his for extras sometimes, but my check covered the fixed expenses. So overall we were in the rule, and I think at the rate we were saving money, if we didn't stop to have kids sure we could retire by 45 or something. Living on 50% of your income is pretty darn good if you ask me. I would fathom few people do. Kind of curious what fellow bloggers think where they are.

For now we are at a dismal 85% or so. No wonder why I feel so behind sometimes. Even if dh got a job we would still be pushing 60% or so. To some extent I don't fret too much because I have a 2nd potential source of income, and plenty of insurance in place should something happen where one of us couldn't work (Death or disability, etc.). But at the same time going through the calcs, dh would have to bring home $3k/month to get us to that 50% mark. YIkes. Then again, we live so below our means beyond the fixed expenses I guess it is not so bad. The reason we can forge ahead with 85% of our income spoken for every month.

Mortgage - 1300
Property Tax - 350
Home Insurance - 150
Utilities - 400 (water, phones, cable, electric, sewer, garbage)
Car Payment - 215 (gone soon enough!)
Car repairs/maint.-50
Gas - 300
Auto Insurance 150
Groceries 500
Health Insurance 675
Life & Dis. Insur. 60
Dental Checkups 85 (no insurance)
Loans (Other) 0
Child Care 0
-------------------------
TOTAL $4,235
OR 85%!!

The other 15% goes to gardener and preschool. LEaves $350/month for everything else, mostly living expenses not included up above.

Oh my!

Our practically brand new van will be paid off soon and our % will be 81%. That is something I guess.

& yet our house with our homeowners fees (which I probably should have added up there), tax, insurance is 32% of my gross pay, which is within the general guidelines.

As you see insurance is literally eating us out of house and home.

You can argue how fixed some of those expenses are though, that is for sure. (cable? cell phones?)

I am sitting on pins and needles waiting for my RAISE. We'll see where it puts us I guess. What it does to our %.

Right now we are saving maybe 1% of our income. But we save everything above and beyond, that comes in outside my salaried income. & it is not like there is nothing else, the little things build our savings and build us a cushion. But anyway, any % raise I get to take home will all go to saving. So that will feel good. If we could save 10% between paid-off van and a raise, I would be estatic!!!!! Boss is matching me 10%. IT is the kind of thing that would make me back off dh finding a job for another year or 2, or 3, 4, 5. IF we were putting away 20% between my profit sharing and our savings. & we are close...

Oh yeah, and I was feeling bummed how fast the christmas money went, but my short-term savings now has $1800 today - just about a full property tax installment, though it is not due until April. !!!! oh my! That feels good. We have been relying on savings for this the last few years. We really are forging ahead...

PS. I just recalculated the above based on all of our extra money for the year (gifts, bonuses from work, selling things, dh and I Side jobs - we are operating at 73% which isn't 1/2 bad. IF we did not have all these extras believe me I would not have preschool and a gardener - I Can just see the comments pouring in - LOL. But as a % of my fixed take-home pay every month, yeah 85% is a bit crazy. THat is why we do what we can to pull in a little more... & the little more apparently make sa big difference! But still curious to see how the % changes based on my income for 2007, which is yet to be determined...).





7 Responses to “What % take-home are your fixed expenses?”

  1. tinapbeana Says:

    right now our monthly expenses are %50.36 of our take-home. this includes the amount i save every month for non-monthly bills but doesn't include either of our allowances or money i save for short term items. i don't include them because they would pretty much be eliminated for the short term if finances dictated.

  2. living_in_oz Says:

    We're not quite there, but close. This summer we'll be in that range when the house and van are both paid off.

  3. frugalmomof1 Says:

    From my brand new 2007 budget, our monthly expenses will be 60.24% of our take home pay. Take home pay is decreasing as of the first of the year because of increased 401k contributions, DH adding me to his medical insurance and Aflac deduction. I am *expecting* a raise in March, so hopefully that percentage will go down a bit.

  4. LdyFaile Says:

    I'm at about 82% if I look at absolutely must pay vs what I actually budget for. I budget for every penny that comes through the door just about. If I get a raise in Jan it won't alter the percentage that much. But I'd be curious to see what it's like in a year if I can keep up with debt reduction like I'm planning on doing.

  5. Lez Save $ Says:

    my total expense is around 40% of my monthly income, which means I am saving 60% of my monthly paycheck. However, I do rent a place instead of own a place, and I dont have any extra health insurance stacked away. So....I guess I am only able to do this because I am still quite young and have no kiddie obligations.

  6. jersey jen Says:

    let's say your bring home pay is 70% of pre-tax income, and limiting it to 50%, that means the must-have should be 35% of of pre-tax income. oh my, i need to ask for a big pay raise!

    yeah, i'm using these few vacation days to come up with expense-reduction for 2007. i'll keep you posted!

  7. monkeymama Says:

    Hey I am IMPRESSED everyone. Granted when we only spent 1/2 we were both making 50k/year. That was A LOT to save!!!!! Kids through a wrench in that lovely lifestyle - but I know we'll be back there agian someday. But only spending 50% of 30k or 60k is maybe not so impressive. Though overall sounds like you are doing quite well.

    I actually keep most of my gross pay - with the endless deductions - so not so bad for me...

    I don't know - I am still used to the days we had no money and we live a lot about the same in some ways. Nothing like putting it in this format making me see we have issues though. I do expect a raise to help Jan. 1. If not, well something else may have to give - I don't know. In the meantime it is quite clear why I don't buy much "stuff." There is not much left after the "basics."

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