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Expenses on a Level Playing Field?
11-05-2008, 08:06 PM
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#1
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Dryer sheet aficionado
Join Date: Nov 2008
Posts: 37
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Expenses on a Level Playing Field?
I've seen a couple threads on here with people listing expenses in terms of $. I happen to live in California, and so I'm guessing my housing costs are near the highest in the nation compared to a similar house someplace else. Presumably, my income is also on the higher side than a similar job someplace else. I thought it might be interesting to level the playing field on the expenses by looking at them on a % basis and seeing how everyone compares:
My numbers as % of gross income:
Taxes 28%
Mortgage 22%
Savings & IRA 25%
Food 7%
Utilities 3%
Everything else 15%
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11-05-2008, 09:07 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
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My numbers as % of gross income:
Taxes 5%
Mortgage 0%
Savings & IRA 73%
Food 10%
Utilities 7%
Everything else 5%
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11-05-2008, 09:35 PM
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#3
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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My numbers as % of gross income:
Taxes 24%
Mortgage 6.5%
Savings & IRA 38%
Food 4.5%
Utilities 3.5%
Everything else 23.5%
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11-05-2008, 10:01 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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My numbers as % of gross income:
Taxes 21%
Mortgage 16%
Savings & IRA 0%
Food 7%
Utilities 6%
Everything else 50%
Single largest expense = Taxes
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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11-05-2008, 10:24 PM
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#5
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Recycles dryer sheets
Join Date: Apr 2007
Posts: 126
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My numbers as % of gross income:
Taxes/FICA/etc.: 37%
Rent/Mortgage: 8%
Savings/IRA/401k: 40%
Food: 2.5%
Utilities: 0.5%
Everything else: 12%
Well, at least the savings is still slightly outpacing taxes.
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11-06-2008, 07:22 AM
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#6
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Full time employment: Posting here.
Join Date: May 2007
Posts: 984
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My numbers as % of gross income:
Taxes 11.5%
Mortgage 0%
Savings & IRA 0%
Food 9%
Utilities 4.5%
Everything else 75%
Before retiring earlier this year, savings would have been the largest category at around 50%.
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11-06-2008, 08:16 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Quote:
Originally Posted by Dreamweaver
I happen to live in California, and so I'm guessing my housing costs are near the highest in the nation compared to a similar house someplace else.
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Although California does have some pretty outrageous housing prices they do have one great advantage. And that's the way they treat property taxes under proposition 13. For someone who buys their house during the early working years and then holds it for decades and then retires "in-situ" they could have the paid-off house with very low property taxes. For many retirees their income taxes also drop significantly in retirement.
Therefore California, although often overlooked, just could be a great state to work and retire in when measured over many years. when I look at property taxes in other states compared to what I pay it motivates me to stay right where I am.
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11-06-2008, 09:29 AM
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#8
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Recycles dryer sheets
Join Date: Nov 2007
Location: Denver
Posts: 170
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Taxes 31.8%
Mortgage 21.7% (includes insurance and taxes)
Savings and IRA 26.5%
Food 11.8%
Utilities 3.3%
Everything Else 4.9%
Hopefully taxes will go down next year thanks to getting a mortgage in oh 2 weeks and we just recently upped the pre-tax savings so hopefully that will cut it down as well. What's sad though is we tend to owe a little less than $1k every year on top of that...
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11-06-2008, 10:01 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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My numbers as % of gross income:
Taxes ERROR DIVISION BY ZERO
Mortgage ERROR DIVISION BY ZERO
Savings & IRA ERROR DIVISION BY ZERO
Food ERROR DIVISION BY ZERO
Utilities ERROR DIVISION BY ZERO
Everything else ERROR DIVISION BY ZERO
__________________
Al
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11-06-2008, 10:03 AM
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#10
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Recycles dryer sheets
Join Date: Sep 2008
Posts: 169
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Taxes 20%
Mortgage 14%
Savings 10%
Food 15%
Utilities 8%
All Else 33%
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11-06-2008, 11:00 AM
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#11
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Full time employment: Posting here.
Join Date: May 2008
Location: Lexington
Posts: 714
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My numbers as % of gross income:
Taxes 15%
Mortgage 0% (I rent, takes up about 12%)
Savings & IRA 10%
Food 2%
Utilities 1%
Everything else 72% (12% rent, 59% tuition , 1% other)
I essentially save 69% percent of my income, but mostly as short term savings. Kinda hard sticking to the format as a student worker.
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11-06-2008, 11:14 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Mine % of Gross Income:
Taxes 13.8%
Mortgage (HELOC) 3.4%
Condo Fee 3.4%
All other Expenses less than 1% each (total 12.4%)
Savings (Income - Expenses): 67%
__________________
Vietnam Veteran, CW4 USA, Retired 1979
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11-06-2008, 12:45 PM
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#13
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Recycles dryer sheets
Join Date: Mar 2008
Posts: 413
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taxes 32%
mortgage 0
food 2%
utilities 2%
frivilous spending 10%
401k's 20%
savings/investing (after tax) 35%
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Also in SoCal, relative to expenses
11-06-2008, 01:28 PM
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#14
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Recycles dryer sheets
Join Date: Apr 2007
Posts: 275
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Also in SoCal, relative to expenses
Taxes 26%
Mortgage 0%
Savings 0%
Food 14%
Util 7%
Else 46%
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11-06-2008, 04:19 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Location: North of Montana
Posts: 2,769
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What year's income?
2007, income was 7 digits due to cap gains on ESOP (I've framed that tax return). Now RE'd and income from interest & dividends ~50K. This doesn't include the capital losses of 7 digits.
How do I calculate?
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
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11-08-2008, 11:46 AM
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#16
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Dryer sheet aficionado
Join Date: Nov 2008
Posts: 37
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Here's a summary of the results:
For those on the way to FIRE:
Avg Med High Low
Taxes 23% 24% 37% 5%
Mortgage 10% 8% 22% 0%
Savings & IRA 38% 38% 73% 10%
Food 6% 5% 15% 1%
Utilities 3% 3% 8% 1%
Everything Else 20% 14% 60% 5%
More successful savers tended to get savings predominantly by having lower mortgages (perhaps not surprisingly). To their credit, they also tended to shave off expenses across the board, meaning that as the mortgage became cheaper relative to income, they didn't tend to bloat expenses in other areas. This data really demonstrates the concept of setting your lifestyle at a particular level and then, as income grows, sock that extra away towards savings rather than upgrading the lifestyle.
One person managed to pay incredibly low taxes (only 5%?). This may demonstrate the rewards of an incredible tax accountant, or really giving that TurboTax manual a good read.
Less successful savers tended to go big on the "everthing else" category and also tended to bump up their expenses on food.
For those who already are FIRE:
Avg Med High Low
Taxes 20% 21% 26% 12%
Mortgage 5% 0% 16% 0%
Savings & IRA 0% 0% 0% 0%
Food 10% 9% 14% 7%
Utilities 6% 6% 7% 5%
Everything Else 59% 53% 75% 50%
A note on the analysis for those of you who notice these things: percentages are rounded to the nearest whole number. If someone submitted percentages that did not add up to 100%, the "everything else" category was adjusted accordingly.
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11-08-2008, 11:50 AM
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#17
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Dryer sheet aficionado
Join Date: Nov 2008
Posts: 37
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Quote:
Originally Posted by kumquat
What year's income?
2007, income was 7 digits due to cap gains on ESOP (I've framed that tax return). Now RE'd and income from interest & dividends ~50K. This doesn't include the capital losses of 7 digits.
How do I calculate?
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I don't think it'd be fair to pick and choose the year of income, as much as 7 digits is incredibly impressive in 2007 (congratulations!). To stick to the idea of level playing field, I (hope) everyone is using current year income. For those like you who have already reached FIRE, I'd list as % of current expenses.
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11-08-2008, 11:53 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
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One person managed to pay incredibly low taxes (only 5%?). This may demonstrate the rewards of an incredible tax accountant, or really giving that TurboTax manual a good read.
Well we have a low income spread between two people, so two deductions and two exemptions eats up the most of it.
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11-08-2008, 12:21 PM
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#19
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Full time employment: Posting here.
Join Date: Feb 2008
Posts: 748
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I suck, I don't keep that close of tabs on expenses. What does everyone use? Excel? Some budgeting program?
__________________
I don't want to spend my entire life at work. I deserve more. - Want2retire aka W2R
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11-08-2008, 12:22 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Quote:
Originally Posted by TromboneAl
My numbers as % of gross income:
Taxes ERROR DIVISION BY ZERO
. . .
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Yup, that's the problem with high income / high cost of living areas for a retiree. You still have to pay those prices even when your income goes to zero.
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