Help me plan out a general budget!

[Fox5]

Alright, so I'll soon be in the real world, employed full-time and all, and wondering what I have to watch out for budgeting wise.

What kind of taxes? Various fees? Essential items (housing, food, etc) do I need to plan into my budget, about how much should I allocate?

I'm trying to figure out how much free money I'll actually have, and how much of a penny pincher I should be.

For instance, I'm strongly considering going with a prepaid plan for my cell phone, but I'm not sure if saving a few hundred dollars a year is worth the hassle of a prepaid plan. (not a big cell phone user, and could get by with skype and google voice for most things) Most people whom I tell that I'll probably get a prepaid plan look at me like I'm crazy, others say good idea on saving money but they could never deal with just using a prepaid plan.

I've mostly been a mooch on my parents up to this point, so I don't want to be blind-sided by poor financial planning. My parents are pretty bad at planning, and most of my friends are even worse.

 

[Modular]

Erm...where will you be living? What's the cost of said housing? What's your salary; net per month?

 

[Bignate603]

One of my coworkers lived with a prepaid plan for years. Depending on what you want it can work out quite well but make sure you find a good plan. If you don't use it much and only want a basic phone you should be able to save money.

My general advice is to live like you're completely broke for a few months. Spend as little money as possible and that will give you an idea of how much you'll actually be bringing home. After you figure that out you can start adding in expenses slowly.

Build up some savings in case you run into an emergency, stick it in a special account that's separate from the money you're living off of and pretend like it doesn't exist. This isn't 'my TV broke so I'm going to buy another one' money. This is only for things that are extremely bad, like if you got hurt and needed to pay for your healthcare. Don't touch it unless there is no other way to get by. Keep on adding to this money as time goes on.

Credit cards can be helpful IF (very big if) you use them correctly. I personally charge everything on my credit card and pay it off each month. Because I pay it off each month I don't pay any interest. However, some people find it way too easy to overspend their credit cards and they get stuck with massive interest payments. If you have any doubt about it I'd recommend either not getting a card or specifically requesting a very low limit that you could afford to pay each month.

If you want something you can't pay for with the extra money you get in one month you should save up for it. Don't buy it on credit. I've only bought things using a store's 0% financing once before and I'm not sure I'd do it again. There's quite a few things that can happen that will cause that 0% financing go away like making a late payment or not paying it all off inside the time frame they give you. When that happens you can end up losing a huge amount of money due to fees and and interest.

 

[Fox5]

Erm...where will you be living? What's the cost of said housing? What's your salary; net per month?

Not entirely sure yet, but ballpark figures.
Cost of housing, probably $1000/month.
Salary, $4.7K a month

I don't own a credit card, just a debit card.

 

[lxskllr]

I spend $15 a month on my Net10 phone, and have many minutes left over. That'll give me a buffer when I inevitably have to call some bureaucracy and get put on perpetual hold. They aren't for everyone, but if you don't joy call, they can be a great bargain.

Edit:
Google voice, and maybe MagicJack can help a lot. Google voice is nice because you can easily abandon a prepaid phone, but keep your number.

Edit2:
I'd suggest getting a credit card so you can start building a credit history. Do get out of hand with it, but it can be useful for consolidating bills. Pay miscellaneous bills online with the credit card, then pay the credit card when it's due.

 

[Patranus]

Not entirely sure yet, but ballpark figures.
Cost of housing, probably $1000/month.
Salary, $4.7K a month

I don't own a credit card, just a debit card.

You should have a credit card, use it, and pay it off each month. Otherwise you will not be building credit.

(And you also can get points!)

 

[Fox5]

I spend $15 a month on my Net10 phone, and have many minutes left over. That'll give me a buffer when I inevitably have to call some bureaucracy and get put on perpetual hold. They aren't for everyone, but if you don't joy call, they can be a great bargain.

Edit:
Google voice, and maybe MagicJack can help a lot. Google voice is nice because you can easily abandon a prepaid phone, but keep your number.

Edit2:
I'd suggest getting a credit card so you can start building a credit history. Do get out of hand with it, but it can be useful for consolidating bills. Pay miscellaneous bills online with the credit card, then pay the credit card when it's due.

My phone has both google voice and skype built in (and GV is rumored to get skype like capabilities soon, negating the need for skype entirely). The idea would be use the GV number, forward to skype, skype forwards to prepaid if not answered.

You should have a credit card, use it, and pay it off each month. Otherwise you will not be building credit.

Not a big fan of credit cards, but I suppose I could get one just so I have some account safety. At the moment, I have a savings account and a checking account, and just transfer a few hundred bucks to the checking account when I need money.

 

[OILFIELDTRASH]

Check out the place you're going to live thoroughly. It might be nice and quiet durin the day but at night it could be a different story. My wife and I rented a place before we knew any better and when we looked at it during the day it was nice and peaceful. Night was a different story. There were gang bangers coming out of the woodworks. They'd be sitting on their cars, drinking, speakers bumping, selling dope, etc.. I worked nights at the time and she had some pervert knocking on the window. It was at that point we said fuck it and moved.

Credit cards are not bad. Just cause someone misused them and fucked themselves over doesn't mean you will.

 

[MrMatt]

Here's a screen shot of mine.

 

[her209]

I would just start with writing all your expenses down. It helps to categorize, .e.g. groceries, gas, etc., so you know how much you're spending in each category each month.

 

[MrMatt]

I update it year to year, by averaging what I spent the previous year on each item, that's why there's not round figures under things like play money & food.

 

[Fox5]

I would just start with writing all your expenses down. It helps to categorize, .e.g. groceries, gas, etc., so you know how much you're spending in each category each month.

My bank provides a service that automatically monitors my purchases and such (probably offered through many different venues, including the credit card companies themselves), I could just use that to monitor my expenses?

 

[wiredspider]

Here's a screen shot of mine.

Tuna Grinder?

 

[Powermoloch]

Credit helps, I have 'em but i don't pay any interests because i end up paying them off on time (especially those with no interests for a amount of time deals )


btw, where do you get that spreadsheet Mr Matt?

 

[xeemzor]

Here's a screen shot of mine.

Some of those items seems really low.

$17/month for internet access? Where do I sign up?

$180 for clothes/year? Do you never replace your clothes? Heck, most cheap shoes cost $50-80/pair.

 

[Schfifty Five]

My phone has both google voice and skype built in (and GV is rumored to get skype like capabilities soon, negating the need for skype entirely). The idea would be use the GV number, forward to skype, skype forwards to prepaid if not answered.



Not a big fan of credit cards, but I suppose I could get one just so I have some account safety. At the moment, I have a savings account and a checking account, and just transfer a few hundred bucks to the checking account when I need money.

Why aren't you a fan of CCs?

It's not like you are paying more by using a CC for things you normally would have purchased as long as you pay off the CC bill every statement. On top of that, you get a small, but nice bonus through any rewards/points system.

Oh yeah, it builds credit, very important as well.

So get 1 or 2 CC's if you can, but make sure there are no annual fees with them.

 

[Red Squirrel]

What I did when I bought my house is I took all my monthly expenses as well as income and put them together, then it gave me a general understanding of what money I have left over per month. If the house is biweekly just double it. I try to always keep at least 1k in my bank after my pay check and mortgage, that way it leaves enough money for any given bill to come out.

Also if you have any debts like loans, pay those off before you buy anything else you don't need. You can still buy small items here and there but don't go buying a huge TV when you still owe a couple grand to some loan. Once all debts are paid off and you are left with only basic living expenses, then you can start saving up and buy whatever you want or what not. Good to keep an emergency fund too, enough to live for a few months.

 

[Patranus]

No more than 28% of your monthly income should go towards housing related costs (rent/mortgage/insurance/ect)

 

[MrMatt]

Some of those items seems really low.

$17/month for internet access? Where do I sign up?

$180 for clothes/year? Do you never replace your clothes? Heck, most cheap shoes cost $50-80/pair.

I have 2 roommates


And yeah, I'm pretty much set for clothing. I have my suits, tux, dress pants that I rarely wear. Really the only thing I need is an occasional new pair of jeans.

 

[MrMatt]

Tuna Grinder?

Tuna sub. I have one every saturday

 

[Patranus]

I have 2 roommates

This.

If you really want to be smart with your money get a roommate.

 

[nerp]

Tuna sub. I have one every saturday

Grinder? You in RI?

 

[Matthiasa]

Learn to use a spreadsheet as already pointed out.
Make sure income after taxes greater then expenditures.
Not really that hard, unless you are like the average american.
In which case spend 2x-10x your income and hope it works out.

 

[Red Squirrel]

No more than 28% of your monthly income should go towards housing related costs (rent/mortgage/insurance/ect)

While most people here do like 200k per year, not everybody does, so that's not always possible. As long as you have SOME extra cash after, and that you pay all high interest debts before you buy things you don't need.

 

[Patranus]

While most people here do like 200k per year, not everybody does, so that's not always possible. As long as you have SOME extra cash after, and that you pay all high interest debts before you buy things you don't need.

And that is the reason the US economy is in the tank.

You might be able to make payments (now) but you cannot afford it. There is a big difference.

If you cannot afford to live somewhere move somewhere else. You are not entitled to live where ever you want. If you want to live somewhere but cannot afford it, get a roommate.

Let me guess, you also support "interest only" loans to get people into houses....