How do people live on their salary?

Colleges and Universities A-Z University of Michigan
1

<p>I was curious about my future quality of life, so I did some calculations, and started thinking, assuming that the average college grad makes 50k, how the hell do they live a normal life?</p>

<p>Take this as an example. I just accepted an SA offer, assuming that I get a return FT offer, I would be making 10k signing + 70k base + 30-50k bonus, that's around 120k all-in for my first year. It sounds like a lot right? Then let's do some math.</p>

<p>Using a take home pay calculator, with no dependent, filing single, after federal withholding, state withholding, and NYC tax, I make around 6k a month.</p>

<p>Now let's think about living expenses,
Net income 6k
-Rent: 2k (NYC)
-Transportation: 300
-Utilities (phone, heat, electricity, internet): 500
-Food: 1000 (dinner is paid for, gotta pay for lunch every day, and occasionally eat out)
-Insurance: 250
-miscellaneous (toiletry etc that you dont usually pay attention to): 300
-matching 401k up to 8%: 480</p>

<p>That leaves me with around 1k to actually have a little fun or save per month. This is with a 120k all-in income and single with no family to support.. How the hell does the average college grad live on their 50k paycheck? More importantly, NYC's median income is around 40k, how the hell do people pay for their living expenses?</p>

2

<p>One word, roommates</p>

3

<p>Lots of people don’t live in NYC. And a grand a month for food sounds like far too much.</p>

4

<p>Wait you lose $4k a month on taxes?! And even if I had to pay for dinner, I’d probably use half as much as you for food.</p>

5

<p>Second job
Mommy and Daddy help out with occasional infusions of cashola or pick up a utility bill or two
Live below your means-scrimping and saving every penny</p>

6

<p>“Wait you lose $4k a month on taxes”</p>

<p>That’s probably a slight over estimation or NYC has really high taxes.</p>

7

<p>“Lots of people don’t live in NYC. And a grand a month for food sounds like far too much.”
Well lunch cost around $15-$20 minimum a meal around the office and I need to pay for all meals on weekends.</p>

<p>“Wait you lose $4k a month on taxes”
Exactly</p>

<p>"That’s probably a slight over estimation or NYC has really high taxes. "
That is not an overestimation. That is btw, how much gets taken away after you get your tax refund! The withheld amount is even more throughout the year!</p>

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<p>yosup- Think the food bill includes the alcohol budget so 1K/month not too far fetched</p>

9

<p>Yeah, I think you’ll be fine. You probably overestimated on the taxes, and I doubt you’d pay $1000 alone for food.</p>

<p>Edit: Wow, how can they have you pay so much in taxes? That’s close to half of your income…</p>

10

<p>2k is too high for rent in this market, even in manhattan. You can get 1.2-1.5k with a roommate. 1k just for lunch is ridiculous, even in new york. you can easily get away with 300 there even if you eat out every day for lunch. add in another 500 for a few nice dinners out per month and you’re still below the 1k mark.</p>

<p>i’ve been doing out some rough budgets for next year based on my average expenditures last summer in ny, and this is roughly what i came up with:</p>

<p>take home (after tax, insurance, 401k): 3200
rent: 1500
metropass:80
food: 650
utilities: 200
cabs: 100
going out: 500
clothes/toiletries/misc shopping: 200</p>

<p>i’m getting free gym through work, so you might also need to add in 80 or so for that as the case may be. Also note that for your first year you’re going to be living off of 70k, not the full 120ish figure.</p>

<p>as to how people live off 50k in new york - cut the rent in half by living in jersey/brooklyn, lower food by cooking for yourself, don’t spend so much on going out, enjoy the benefits of a lower tax bracket, get help from daddy, and so on.</p>

<p>and re: taxes - my signing bonus was 10k. i got 5600. not cool.</p>

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<p>dont you get cabs paid for?</p>

12

<p>Most people are accustomed to a much lower quality of life than you are.</p>

13

<p>not when going out/going to bars & getting around town not for work. My number is still probably too high though. Also i just stuck all excess cash into the “going out” category - you can definitely get away with less (or zero) there.</p>

14

<p>i really question 300 for lunch… just looking at my expense receipts on interview trips and I realize how much food cost in NYC</p>

15

<p>Yea dude, bonuses get wrecked. That’s a big part of the reason. Also, NYC has a city tax that smacks you in the face, something people in NJ/CT don’t have to pay. I was thinking about tax implications on my eventual (hopefully) similar starting salary after graduation. The fact of the matter is it’s all to do with the taxes/cost of living in nyc. By the way bearcats, are you doing IB or S&T?</p>

16

<p>was in S&T. Doing a rotational quant trading and research program this summer</p>

17

<p>Oh k gotcha</p>

18

<p>oh another question. My firm pays overtime, which obviously would happen every day. Is it poor form to fill in over 40 hours for an SA gig?</p>

19

<p>Yea, it is. Search that topic on wallstreetoasis and you’ll get some good info (that’s actually where you should be asking all your questions/searching for answers via already posted topics, infinitely better than UMich CC board). You’re really not supposed to report much overtime from my understanding.</p>

20

<p>It’s ridiculous. 120k in NY is probably equal to 85k in Ann Arbor. 120k seems like a ridiculous amount, and it is for most places. But in NYC, that just isn’t a ton. But you’ll be making more than enough in a few years. </p>

<p>Do people get that same kind of money in Ibanks in, say, Houston? Because that would go a lot further in Houston.</p>