I cant seem to paste into notes here? So I am going to use this space for a note: These are guidelines from a bank for budgeting your net (repeat: NET) income: Housing 20 to 35% Utilities 4 to 7 % (try to get on a level payment plan) Food (away and at home) 15 to 30 % Family necessities (laundry, toiletries, hair care) 2 to 4 % Medical (insurance, prescriptions and bills) 2 to 8% Clothing 3 to 10 % Transportation (car payment, gas, insurance, repairs or bus fare) 6 to 30% Entertainment 2 to 6% Savings 10 to 15 % Note: limit all installment debt (car loans, credit card bills and other loans) to less than 10 to 20% of your monthly budget. Now, I ask anyone, do you see any unrealistic figures here? Do you base your budget off what you have? Or do you base your income for what you need? For example if you make CA minimum wage, that’ll be about $1620/ monthly gross income, that’ll be about $19,440 annual gross income. Subtract 20% about $3888 will leave you with $15552 for the year in Net Income. However, I mean HOWEVER, our Federal Government requires about 10% of your Gross income to pay for Obama Care if you make above the FPL (Federal Poverty Level). So RIGHT AWAY, I know the Medical portion of this budget is off! And, worse, if you make above $45k gross per year and are not covered by your employer, expect to pay 100% of your medical which will be over $700 per month not the counting $2,500 to $7,000 deductible. 2% of the minimum wage net is only $311/year. 8% of the $15K+ net is $1244. So really, can you expect to only pay that divided by 12 for each month? Really, REALLY, I wish these banks were real with us. Or, are they basically saying our medical for minimum wage should not be less than $25.92 per month and not more than $103.68. Please challenge you banks to get real with you! Please shove this in the face of your legislatures. Don’t let this financial fantasy continue. A real budget is in order! Don’t even get me started on housing cost. If $1620/month is the gross income of a minimum wage earner, minus 15% for taxes, the net is only about $1377. So do you want to plan on renting a room for 28% of that? Only the blessed can find a room for $385/month. Now you have $992/month. Better budget the lowest you can go: Rent a room or a sweet deal mortgage payment = $385 4% of $1377 for utilities = 55.08 15% of this net for food = 206.55 2% for personal needs = 27.54 3% for clothing care = 41.31 6% for transporation = 82.62 (REALITY, this only covers gas/month 2% to keep your sanity = 27.54 10% of gross/ medical =$162.00 (minimum Premium if you stay healthy doesn’t count *If you are anything like me, you will draw the line and see if there is anything left over to save hopefully for emergencies (not to mention retirement). Meds, doctor visits or deductibles) Heres where I draw *________ the line to see what is left to save. Monthly Expenses = $ 987.64 So if you stick to this budget you will have $1377- 987.64 = about $389 to save ideally. HOWEVER, and this budget did not include car insurance and life insurance. So subtract and additional $69/month for car insurance and $20/month for life insurance. You might be able to save $300/month. The reality of keeping this budget is rare. The reality is you’ll Need brakes, tires, car registration, your tooth breaks, your eye glasses don’t work, you get pregnant and buy a crib, your refrigerator breaks, you go in debt to get student loans etc. God forbid, you get sick. So reality is fluid. Budgets need to be adjustable or have cushion. Sh—happens. Where is your wiggle room? Most people don’t have it because rents and mortgages are a lot higher. So their debts keep rising. Truly stuff catches us off guard. Looking back, I do wish I could have saved more for rainy days. Part of the human experience is living on the edge or learning the hard way. The way I would rather experience budgets is to plan to make the income that is needed to maintain a good life style. If rents/mortgages for two bedroom housing runs $1500/month, I know the qualifying income requirement is 3 times that expense. So the minimum monthly salary I would want and expect to earn is $4500/month. Then I would be able to budget $1500 toward living and $1500 toward savings (medical, college, down payments and retirement). That, to me, should be the reality. Am I off? Or is the world all wrong?
Posted on: Sat, 29 Nov 2014 03:29:59 +0000
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