Need a car to get work? The average monthly payment on a used vehicle is $526, according to Experian, plus, you can expect to pay $150 to $200 per month on gas, per J.D. Plus, the average single-family home spends about $172 per month on utilities, according to. That $1,643 will scarcely cover the national average rent - $1,495 - on a one-bedroom apartment, according to rental platform Zumper. You don't have to look very hard to realize some of those numbers look unrealistic. Living expenses (50%): $1,643 per month.State and local tax obligation: -$6,635Īfter everything is taken out of their paycheck, someone earning a median salary is left with an annual income of $39,442, which equates to $3,286 per month.Among workers who face an annual deductible for single coverage, the average is $1,763, according to the Kaiser Family Foundation. Plus, if you receive medical coverage through your employer, you'll owe insurance premiums. Your share is 6.2% for Social Security and 1.45% for Medicare. On a median salary, you're paying $6,635.Īssuming you're not self-employed, you and your firm split the bill on Social Security and Medicare tax. All told, state and local taxes amount to 11.6% on average, according to the Tax Foundation. If you live in one of 41 states or the District of Columbia, you'll also owe state income tax. A single filer earning a $57,200 salary and claiming the standard deduction would owe an obligation of $4,985, according to the IRS's Tax Withholding Estimator tool.
But as anyone who has ever collected a paycheck knows, a few line items are removed before that money makes its way to you.įirst, federal taxes. For a single American, the median annual income is $57,200, according to the Bureau of Labor Statistics. If you live in Canada’s far north or in a city where homes are very expensive, you may have to cut back more than an average Canadian would in the “Food” or “Housing” categories in order to afford your higher living costs.Let's crunch some numbers. Spending more in one category may mean that you’ll have to cut back in another category to make your budget balance. Life is all about choices, but you can’t choose the maximum amount in all spending categories. These guidelines are only recommended ranges. You may also notice that if you spend the maximum amount in every category, you’ll exceed 100% of your income. It’s important to know there is nothing wrong with exceeding this limit as long as your budget balances (your expenses don’t exceed your income). However, if you happen to have young children in daycare, have high education costs, take nice vacations, tithe, or have hobbies or recreational interests that aren’t cheap, you’ll quickly exceed the suggested maximum for this category. The guidelines suggest you spend 5 – 10% of your income in this category. The category in these guidelines that people will most commonly exceed is the “Personal & Discretionary” expense category. Don’t rely on credit for these unexpected expenses. You’re allocating some money towards savings (savings are absolutely necessary for life’s many unexpected expenses.You’re not spending more than you earn, and.If finances aren’t strained in your household, you can choose to be more relaxed and go beyond the guidelines in areas as long as you’re careful to do two things:
These guidelines have been created for someone who really needs to put together a tight budget. How to View These Budgeting Guidelines to Get a Hold of Your Spending Habits