Poll of the Day > Those feels when 60% of your paycheck goes to bills and 15% to credit card debt.

(+) Yeah! (+)

At least cellular phone bill, car insurance, utilities + rent (live with mom and I transfer the money to pay for half of the water and sewer, electricity, gas, internet and home phone, cable, trash collection, and mortgage), the few monthly dings like Netflix and Amazon Prime are all paid-up and expenses that were charged to credit.

10% to my savings account.

And 15% left to be saved for future gas and food purchase (which are tacked to my credit card).

Welp.

you help pay the mortgage huh
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You pay rent and half the mortgage? What?
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HellHole_ posted...

you help pay the mortgage huh

Yup.

AwesomeTurtwig posted...

You pay rent and half the mortgage? What?

Paying rent is paying half the mortgage. It's a way I conditioned myself into preparing for when I move out and start paying rent for my own place.

but getting paid at least twice a month means your next check is all savings, yea?
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Clench281 posted...

but getting paid at least twice a month means your next check is all savings, yea?

Yup yup yup.

It wasn't terribly easy because neither of us makes a ton of money, but I'm very happy to say that my wife's and my only debt is our house. Having credit card debt on top of all of our other expenses would just not be fun. I had worked for some years without spending much, so when we got married I was able to pay off the last of her college debt, which wasn't much because she'd done two years of Americorp.

We put some effort into it, but I have no illusions about this being out own doing. I'm very thankful for the privileges that we've both had in our lives. Not everyone has the chance to even save anything each month.

Bills are carefully tailored by the 1% to make sure no one can invest or have a savings.
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Better not move out anytime soon if your complaining already. Those fells when you are a grown up.
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OneTimeBen posted...

Better not move out anytime soon if your complaining already. Those fells when you are a grown up.

I'm not particularly complaining. Just making an observation that seeing your paycheck disappear quickly is a bummer.

if I had to pay rent there is no way I would live with my parents. hell, I'm moving out even though they don't charge me rent and they buy me food.
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acesxhigh posted...

if I had to pay rent there is no way I would live with my parents. hell, I'm moving out even though they don't charge me rent and they buy me food.

I mostly do it to condition myself into getting into the habit of paying for bills and expenses. I also do it to help my mom out as it's just her and I and she's going through a rough financial situation.

Just did the math, post-tax, I am:
37% Living expenses
42% Investment account
21% Fun money (throw whatever I dont spend into an online "high"-yield saving account every month, which then gets emptied into another investment account when it gets too large)
No debt of any kind.
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Those numbers are monthly though.
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Also, are you carrying a balance on your credit card? It is inefficient to be putting money in a savings acct when you have credit card debt. A savings account makes ~1% max, while credit card balances cost ~20%+
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CountessRolab posted...

Also, are you carrying a balance on your credit card? It is inefficient to be putting money in a savings acct when you have credit card debt. A savings account makes ~1% max, while credit card balances cost ~20%+

I have a credit limit of $5,000 and usually never use more than a $100-$300 a month. I pay everything off every other Friday when I get paid.

I hope you are getting CC rewards.
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CountessRolab posted...

I hope you are getting CC rewards.

Yup yup yup.

I usually just use trade the rewards for cash that I deposit back into my main bank account.

I don't even have a credit card. All I have is debit. If I don't have the money, then I'm not gonna get anything. Easiest way to stay debt free.
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SirPikachu posted...

I don't even have a credit card. All I have is debit. If I don't have the money, then I'm not gonna get anything. Easiest way to stay debt free.

True. I racked up $25k on a credit card at one point, but it's gone now. When it was at about $15k the bank offered me a $50k line of credit a couple of times, which I am VERY glad I declined. Being in debt is the worst feeling once you reach a certain point, especially when it only happened due to stupidity.
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Lokarin posted...

Bills are carefully tailored by the 1% to make sure no one can invest or have a savings.

If you have the correct debt load, that is not true. Most people tend to exceed the debt load by substantial amounts.
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About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.
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Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.
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MaverickXeo posted...

Your debt should be equal to around 40% of your income.

Well, the $1700 mortgage payment is roughly 35% of my income, which I consider an investment.
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Rasmoh posted...

MaverickXeo posted...

Your debt should be equal to around 40% of your income.

Well, the $1700 mortgage payment is roughly 35% of my income, which I consider an investment.

Still far too much.
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MaverickXeo posted...

Still far too much.

The mortgage payment? Or my other bills?

Because the mortgage payment is part of a killer deal, even if it makes things tight for a bit.
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Rasmoh posted...

MaverickXeo posted...

Still far too much.

The mortgage payment? Or my other bills?

Because the mortgage payment is part of a killer deal, even if it makes things tight for a bit.

Like I said, total debt should equal 40% of your income. That leaves 60% for food, other expenses, and savings.
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MaverickXeo posted...

Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.

Seems to me like bills include more than just debt....
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Magus 10 posted...

MaverickXeo posted...

Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.

Seems to me like bills include more than just debt....

Heat, power, water, rent/mortgage, other debts (loans, credit cards, etc), and insurances should be 40%. I am assuming he is not spending 30% on food.
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MaverickXeo posted...

Rasmoh posted...

MaverickXeo posted...

Your debt should be equal to around 40% of your income.

Well, the $1700 mortgage payment is roughly 35% of my income, which I consider an investment.

Still far too much.

TBH, rent is supposed to be 30% of income. if anything its 5% above plus those other bills he mention is setting him up for the bruising :( no offense to the TC.
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MaverickXeo posted...

Magus 10 posted...

MaverickXeo posted...

Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.

Seems to me like bills include more than just debt....

Heat, power, water, rent/mortgage, other debts (loans, credit cards, etc), and insurances should be 40%. I am assuming he is not spending 30% on food.

Most people don't consider utilities and rent as debts. Those are living expenses. Debt means owing money to a credit company or bank loan.
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my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie
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What_The_Chris posted...

my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie

You must have roommates so as long as that works out stay doing that.
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WastelandCowboy posted...

acesxhigh posted...

if I had to pay rent there is no way I would live with my parents. hell, I'm moving out even though they don't charge me rent and they buy me food.

I mostly do it to condition myself into getting into the habit of paying for bills and expenses. I also do it to help my mom out as it's just her and I and she's going through a rough financial situation.

She's not going to get conditioned on how to live without you if you keep carrying so much of the load

OneTimeBen posted...

What_The_Chris posted...

my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie

You must have roommates so as long as that works out stay doing that.

no, I live by myself
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The old spend 30% or less then your income rule has gone out the window in many parts of the US at least. Even using roomates doesn't make that possible in many areas now.

Take Gilroy where I lived until a year and a half ago. Average price for a tiny 1 bedroom is 1400$ and that is bottom of the barrels. Min wage is still $10 an hour there, so a large percentage of the jobs make 400$ a week/1200$ a month or so (less after taxes, even though you don't have much at that income level).

Even if you pump it up to $15 an hour though and 1800$ a month, after taxes you still can barely afford a 1 bedroom, and even having a roomate for a 2 bedroom is gonna knock you back about $1k each a month (and that is not including utilities and other expenses).

So yeah, you end up with teachers who have a kid having to rent a room from someone because they can't afford their own place.

There are tons of places that are not that bad mind you, but still, the 30% rule is pretty much impossible depending where you live.
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SirPikachu posted...

I don't even have a credit card. All I have is debit. If I don't have the money, then I'm not gonna get anything. Easiest way to stay debt free.

...you can have a credit card and still live by the "don't have the money, don't buy it" mentality.
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wah_wah_wah posted...

WastelandCowboy posted...

acesxhigh posted...

if I had to pay rent there is no way I would live with my parents. hell, I'm moving out even though they don't charge me rent and they buy me food.

I mostly do it to condition myself into getting into the habit of paying for bills and expenses. I also do it to help my mom out as it's just her and I and she's going through a rough financial situation.

She's not going to get conditioned on how to live without you if you keep carrying so much of the load

She can rent out the space he's living in when he leaves, so he is just being responsible. Hopefully he can give her enough advanced warning that she can find someone she knows/trusts to move in when he leaves and it will be an easy transition. Alternatively if it's a largish home she could sell it, and then use the profit to rent/live in a smaller place without the finacial burden of a mortgage etc.
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What_The_Chris posted...

OneTimeBen posted...

What_The_Chris posted...

my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie

You must have roommates so as long as that works out stay doing that.

no, I live by myself

I bet. No such thing as 20% income for rent. Unless you are slumming.
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OneTimeBen posted...

What_The_Chris posted...

OneTimeBen posted...

What_The_Chris posted...

my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie

You must have roommates so as long as that works out stay doing that.

no, I live by myself

I bet. No such thing as 20% income for rent. Unless you are slumming.

Lol, sure there is, in some areas it can be way less then that.


For instance here in olympia you can easily get a 60k job from the gov (tons of them since it's the capital), but rooms are rented for under 400 all the time and you can get a nice one for $400 (and decent ones for that much that includes utilities and internet!).

60k even after taxes is still 4k a month or so.........so 400$ a month is 10% or less of your income.

So there are plenty of places where you spend 20% or less, just there are also plenty where 80% isn't enough for most jobs.

It DRASTICALLY matters where you live, and of course how you live.
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wolfy42 posted...

OneTimeBen posted...

What_The_Chris posted...

OneTimeBen posted...

What_The_Chris posted...

my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie

You must have roommates so as long as that works out stay doing that.

no, I live by myself

I bet. No such thing as 20% income for rent. Unless you are slumming.

Lol, sure there is, in some areas it can be way less then that.


For instance here in olympia you can easily get a 60k job from the gov (tons of them since it's the capital), but rooms are rented for under 400 all the time and you can get a nice one for $400 (and decent ones for that much that includes utilities and internet!).

60k even after taxes is still 4k a month or so.........so 400$ a month is 10% or less of your income.

So there are plenty of places where you spend 20% or less, just there are also plenty where 80% isn't enough for most jobs.

It DRASTICALLY matters where you live, and of course how you live.

Like I said 400 bucks rent with no roommates?. You are slumming. Anywhere in the country.
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OneTimeBen posted...

Like I said 400 bucks rent with no roommates?. You are slumming. Anywhere in the country.

i rented a decent studio for $425 a month in Phoenix. The neighborhood wasn't ritzy but it wasn't a "slum."
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I thought I had posted this topic at first... I'm in the same boat TC. My fiancé just started working again so her extra paycheck has already made a big dent to our CC debt. Now I just gotta figure out how to lower my car insurance bill and cell phone bill and we should be debt free by end of August.
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OneTimeBen posted...

What_The_Chris posted...

OneTimeBen posted...

What_The_Chris posted...

my rent is about 20% of my income, bills are maybe another 10-ish, food and external expenses are another 20-ish so the rest is straight cash homie

You must have roommates so as long as that works out stay doing that.

no, I live by myself

I bet. No such thing as 20% income for rent. Unless you are slumming.

nah, I'm simply an engineer and not a waiter
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OneTimeBen posted...

MaverickXeo posted...

Magus 10 posted...

MaverickXeo posted...

Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.

Seems to me like bills include more than just debt....

Heat, power, water, rent/mortgage, other debts (loans, credit cards, etc), and insurances should be 40%. I am assuming he is not spending 30% on food.

Most people don't consider utilities and rent as debts. Those are living expenses. Debt means owing money to a credit company or bank loan.

Banks and lenders consider them to be debt.
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MaverickXeo posted...

OneTimeBen posted...

MaverickXeo posted...

Magus 10 posted...

MaverickXeo posted...

Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.

Seems to me like bills include more than just debt....

Heat, power, water, rent/mortgage, other debts (loans, credit cards, etc), and insurances should be 40%. I am assuming he is not spending 30% on food.

Most people don't consider utilities and rent as debts. Those are living expenses. Debt means owing money to a credit company or bank loan.

Banks and lenders consider them to be debt.

Rent maybe, but not utilities.

https://www.biggerpockets.com/renewsblog/what-is-a-debt-to-income-ratio/

What is a Debt-to-Income Ratio?

Your debt-to-income ratio, or DTI, expresses in percentage form how much of your gross monthly income is spent on servicing liabilities such as auto loans, credit cards, mortgage payments (including homeowners insurance, property taxes, mortgage insurance, and HOA fees), rent, credit lines, etc.

Living expenses such as cable, gas, electricity, groceries, etc., are not considered part of your DTI.

And the reason why rent is usually considered debt is because you enter a long-term contract with your landlord.
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MaverickXeo posted...

OneTimeBen posted...

MaverickXeo posted...

Magus 10 posted...

MaverickXeo posted...

Rasmoh posted...

About 70% of our household income goes to bills including food, it's a little rough. The $1700 mortgage payment is the toughest.

70% is almost twice as much debt as what you should have.

Your debt should be equal to around 40% of your income.

Seems to me like bills include more than just debt....

Heat, power, water, rent/mortgage, other debts (loans, credit cards, etc), and insurances should be 40%. I am assuming he is not spending 30% on food.

Most people don't consider utilities and rent as debts. Those are living expenses. Debt means owing money to a credit company or bank loan.

Banks and lenders consider them to be debt.

?
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