[I’m traveling for work this week, so this post is pre-scheduled. Responses to comments might be a bit slow. Hopefully by the time you read this, I will be enjoying good weather and not inventing new ways to spend money.]
I got oddly fascinated by the breakdown of my paystub the other day. Sometimes I feel like no sooner do I get paid, than it’s all gone, you know? So, I decided to do a little math. In a standard half-month period (I get paid twice a month), here’s what happens to my paycheck:
- 10% goes to income taxes (6.6% federal, 2.3% state, and 1.2% county — state/local taxes are way lower here than they were in my previous two jobs)
- 7.4% goes to FICA (6% Social Security and 1.4% Medicare — interesting, I would have guessed Medicare ate up more of my paycheck than that.)
- 2.6% goes to health insurance premiums (medical, dental, eyesight).
- 25% goes to retirement savings
At this point we are up to 45% that disappears from my paycheck before I ever see it! No wonder I feel like it all goes so fast!
The other 55% gets direct-deposited, and that’s what I work with for my actual budget, so at this point I moved away from the paystub and looked at my budget and did more math.
- 22% goes to various savings accounts (emergency, travel, down payment) — now I’m down to only 33%.
- 10.7% goes to rent and utilities
- 7.5% goes to cash for groceries and so on
- 2.5% goes to transportation (car insurance, gas)
That’s a total of 20.7% for essential monthly expenses, so after all’s said and done I have just 12.3% of my paycheck for spending money and things like medical care, car repairs, clothing and so on. I usually put 2.5% in my slush/free spending account, so there’s just under 10% available for the other stuff.
I actually can’t tell whether that’s a lot, or a little. If anyone feels like doing some similar math, I’d love to know where you’re at.