Quote:
Originally Posted by qba335i
It's not what you make - it's what you save.
300k - total salary
-37k - max 401k contribution for 2 people
- 80k tax (30% tax rate)
= 183k
Now expenses (annual):
- 50k mortgage (600-700k home)
- 15k property tax
- 10k car payments
- 10k vacations (family of 4)
- 12k groceries
- 20k school/activities for 2 kids
- 10k clothes
- 10k miscellaneous home items
- 20k student loans (graduate school?)
A few other expenses and you basically live paycheck to paycheck.
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I agree it is not what you make, but what you save.
Another scenario:
150k - total salary for 2
-18k - 401k contribution
-6.5k - Roth IRA
-26k - automatic additional savings deductions (1k/paycheck)
-6.5k - health savings account
-10k - 2 kids college savings plan
-33k - fed & state taxes
= 50k after taxes and automatic savings deductions
Now expenses (annual):
- 0k mortgage (250k home in the country built and payed for with cash)
- 2k property tax
- 0k car payments (used car/truck/suv/motorcycle payed for with cash)
- 4k vacations (family of 4)
- 15k groceries & eating out
- 8k school/activities for 2 kids
- 2k clothes
- 2k miscellaneous home items (insurance, water & electric bills, etc.)
- 0k student loans (work + scholarships - it pays to get good grades in HS)
- 3k gasoline
- 2k internet, tv, movies, entertainment
= 38k expenses
50k - 38k = 12k leftover = ~$1000/mo extra to blow, buy motorcycles, 4 wheelers, guns, boats, fishing gear, car & truck parts, or put into more savings.