Living Alone.

[dragon8]

Originally Posted by Macto

Lol. I'd have to make around $1,800 to $2000 a month just for rent and stuff. I'd need to make more obviously.

After taxes? You would have no furniture and no life.

 

[Pilot]

I've recently moved out on my own. I could have spent about 50% of my take home on rent but decided to keep it under 25%. I'm comfortable living in a decent apt, dont need too many frills. I have a nice view. Plus right now I'm still broke, because moving is expensive as ****. It's going to be pretty lean the first 2-3 months, until I get settled it.

 

[Valproate]

The old rule of thumb is to spend 1/4 to 1/5 of your income on housing/rent. At 1/3 of income, it's a bit too tight.

 

[changy]

Originally Posted by patrickBOOTH

I kind of feel that if you are making 250k per year and you are renting then you are kind of an idiot.

Since NYC rent to property value ratio is damned to eternal hell, it might not be as stupid as you make it out to be.

 

[yjeezle]

Originally Posted by Valproate

The old rule of thumb is to spend 1/4 to 1/5 of your income on housing/rent. At 1/3 of income, it's a bit too tight.
not really. i'm a percentage point above 33% and i live very comfortably. on topic: recent grad here too. $1.6K is astronomical in terms of rent. esp at that wage. consider finding a roommate.

 

[SamPepys]

I'm out of college on my own for about two years now. $1600 a month in rent!? I guess in a really cosmopolitan area, but that is a pretty high amount. I agree with those that say rent, don't buy. Renting comes with the benefit of being able to walk away when you need to, also you don't have to pay any maintenance , which is a big plus starting out. If you get married, have a kid, then think about buying, but right now you'd be giving up too much freedom by locking yourself into a place.

As for expenditures, that depends entirely on you. You can live on less than a hundred bucks a week easily. You just have to cook a lot, shop at discount groceries, and not go out on the weekends. Thankfully I live in an area that has a low cost of living, so I budget myself 100-200 dollars per week. I walk to work and most nightlife so gas isn't a cost for me. I eat lunch out everyday, but usually cook dinner. I also go out on the weekend, but try to keep my spending in my budget (but not look like a cheapskate, nobody likes a poor friend).

The things to remember are: only buy what you need, buy things that are durable, and buy things that are discounted if you can. Also, clip coupons, they'll save you a ton in long run.

 

[Valproate]

I should have specified that he 1/4 and 1/5 numbers were supposed to be pre-tax numbers for a family to live comfortably. So if someone made $100K and lived in Cali, you would pay $19,000 federal tax, $7,600 social security, and $9,500 state tax. That leaves take-home pay of about $64K a year.

So 1/3 of $100K would be $33K, or half the disposable income. For a single person, this would be very comfortable. Of the remaining $33K, you could spend $10K for a high-end car, and still have plenty of walking-around money.

Originally Posted by yjeezle

not really.

i'm a percentage point above 33% and i live very comfortably.

on topic: recent grad here too. $1.6K is astronomical in terms of rent. esp at that wage. consider finding a roommate.

 

[dtmt]

Also keep in mind that contributing to a 401k reduces your taxable income. So on $100k income, if you max out your 401k your taxable amount would only be $83,500. And since your tax bracket is likely to be lower in retirement, you effectively get an instant return of the difference.

 

[L.R.]

Originally Posted by dtmt

Also keep in mind that contributing to a 401k reduces your taxable income. So on $100k income, if you max out your 401k your taxable amount would only be $83,500. And since your tax bracket is likely to be lower in retirement, you effectively get an instant return of the difference.

Off Topic: DTMT, solid avatar. Too few know the awesomeness of Mitchell and Webb.



OT: If your just moving out, get a couple roomates, and spend as little as you can comfortable abide on a place to rent. You'll thank yourself.

 

[patrickBOOTH]

Originally Posted by SamPepys

I'm out of college on my own for about two years now. $1600 a month in rent!? I guess in a really cosmopolitan area, but that is a pretty high amount. I agree with those that say rent, don't buy. Renting comes with the benefit of being able to walk away when you need to, also you don't have to pay any maintenance , which is a big plus starting out. If you get married, have a kid, then think about buying, but right now you'd be giving up too much freedom by locking yourself into a place.

As for expenditures, that depends entirely on you. You can live on less than a hundred bucks a week easily. You just have to cook a lot, shop at discount groceries, and not go out on the weekends. Thankfully I live in an area that has a low cost of living, so I budget myself 100-200 dollars per week. I walk to work and most nightlife so gas isn't a cost for me. I eat lunch out everyday, but usually cook dinner. I also go out on the weekend, but try to keep my spending in my budget (but not look like a cheapskate, nobody likes a poor friend).

The things to remember are: only buy what you need, buy things that are durable, and buy things that are discounted if you can. Also, clip coupons, they'll save you a ton in long run.

I don't really understand the whole renting so you are not tied down and can walk away thing. Granted it takes a lot more time, especially these days to sell a home, but when I rented I was always bound by a lease. If I were to up and walk out I could have been sued for the remainder of the month's rent, or for at least the months where it was not occupied up until it was rented to somebody else. Landlords that I have encountered were total assholes like that.

 

[dtmt]

Originally Posted by patrickBOOTH

I don't really understand the whole renting so you are not tied down and can walk away thing. Granted it takes a lot more time, especially these days to sell a home, but when I rented I was always bound by a lease. If I were to up and walk out I could have been sued for the remainder of the month's rent, or for at least the months where it was not occupied up until it was rented to somebody else. Landlords that I have encountered were total assholes like that.
Compare a couple months' rent to the cost of paying the mortgage, property tax, any maintenance/repair costs until the house sells, then paying realtor fees, excise taxes, title fees, etc. (in addition to the expenses of buying in the first place) In a normal housing market (with slow steady price increases), it typically takes something like 6-8 years to break even buying vs renting. In the current market however, where rents and prices are flat or declining, renting wins out vs buying indefinitely until the trend reverses. Someone buying a home today could easily take 15 years to break even. Of course this doesn't take into account the intangibles like the pride of ownership etc, but from a purely financial perspective buying doesn't make sense for most young, single, mobile people to buy right now.

 

[patrickBOOTH]

Originally Posted by dtmt

Compare a couple months' rent to the cost of paying the mortgage, property tax, any maintenance/repair costs until the house sells, then paying realtor fees, excise taxes, title fees, etc. (in addition to the expenses of buying in the first place)

In a normal housing market (with slow steady price increases), it typically takes something like 6-8 years to break even buying vs renting. In the current market however, where rents and prices are flat or declining, renting wins out vs buying indefinitely until the trend reverses. Someone buying a home today could easily take 15 years to break even. Of course this doesn't take into account the intangibles like the pride of ownership etc, but from a purely financial perspective buying doesn't make sense for most young, single, mobile people to buy right now.

I understand what you are saying as far as a "break even point", but I think if you have money, right now is a great time to buy especially since prices are down and rates are so low. Let's say I buy something today with a 15 year mortgage. In 15 years I won't have to pay anything to have a place to live (minus taxes and maintenance), whereas a person renting will have to save and invest to cover his or her own renting expense, which is a loaded cost including taxes and maintenance.

 

[yjeezle]

so, i have enough money to put down a downpayment on a mortgage.

here's what i can get (in the state of texas):

no mortgage: $1300 tax refund (+)
property: pay $2,000 in property taxes (-)

just sayin.

 

[patrickBOOTH]

Originally Posted by yjeezle

so, i have enough money to put down a downpayment on a mortgage.

here's what i can get (in the state of texas):

no mortgage: $1300 tax refund (+)
property: pay $2,000 in property taxes (-)

just sayin.

In New York City real estate taxes are insignificant. They are extremely low compared to any surrounding suburbs. Plus do you know how much money you can write off of your income with a mortgage?