86 Percent of My Income Is Already Spoken For

So this is what I’ve been thinking about, since I posted that story about Girl Scout cookie prices going from $4 to $5 a box:

The cost of Girl Scout cookies is going up by 25 percent (in some areas of the country).

The cost of my Bronze healthcare plan is going up by 12 percent (for the monthly premium) and 16 percent (for the out-of-pocket maximum).

My rent can legally be increased up to 10 percent every year, and it can be increased over 10 percent if the landlord gives me 60 days’ notice.

If my rent increases by 10 percent at the end of 2016, and my income stays the same, my rent goes from 20 percent of my (pre-tax) income to 22 percent of my income.

My healthcare premiums, meanwhile, are already going from 4 percent of my income to 5 percent.

So I did the math. When you put all my expenses together, the percents come out like this:

20 percent of my income goes towards freelance taxes.

20 percent goes towards debt repayment.

10 percent goes towards savings.

20 percent goes towards rent (potentially 22 percent by October 2016).

5 percent goes towards healthcare premiums.

4 percent goes towards my other bills (electricity, smartphone, internet, renters insurance).

Roughly 7 percent goes towards grocery shopping (including both food and hygiene).

That’s 86 percent of my income gone — and since we’re estimating my pre-tax income at $60,000, that leaves me with about $8,400 in discretionary income for the entire year, or $700 per month.

That monthly allowance needs to cover clothing, shoes, haircuts, entertainment, social activities, restaurants, and any expense I have that isn’t directly related to basic overhead.

It needs to cover my two annual breaks: the holiday trip to see my family and the JoCo Cruise (both of which cost way more than the monthly allotted $700).

It also needs to cover professional development expenses, which may be tax-deductible but still have to be budgeted for from the $700/month left over.

If something happens to me, health-wise, my insurance would want me to spend $6,100 of that $8,400 on health care.

I find this kind of math fascinating because it reveals how very little wiggle room I have, even though I am by all accounts a successful person earning a middle-class income. The only way out is to pay off my debt and earn more.

And then wait for the percentages to catch up with me, because it’s not like health insurance and rent aren’t going to rise again in 2017.

What’s your math? I’m very curious to know if other people are spending similar percentages of their income on basic expenses — and how much other Billfold readers have, every month, left over.


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