Budgeting $1000 Discretionary/Month

I live out in the midwest, so living expenses are relatively low. Here's my current budget

After tax pay: 2300
Rent: 1000
Utilities and Other fixed Expenses: 100
Cleaning lady: 150
Gym: 100

I have ~$1000 left for food, entertainment, shopping, and travel. How would you spend it?

The reason my fixed costs seem proportionally high is because the pay above is biweekly; my take home/month is actually ~4500. However, that other paycheck is saved, invested, and used to service debt.

Hedge Fund Interview Course

  • 814 questions across 165 hedge funds. Crowdsourced from over 500,000 members.
  • 11 Detailed Sample Pitches and 10+ hours of video.
  • Trusted by over 1,000 aspiring hedge fund professionals just like you.

Comments (22)

Jan 31, 2018

How old are you and and where do you work

    • 1
Jan 31, 2018

I'm 25 and I work in a flyover state. I'd like to remain vague about the details of what I do because I'm just looking for budgeting advice.

Best Response
Jan 31, 2018

so you save 50% of your after tax pay and you're asking us how to spend the remainder?

bro, do whatever you want with it, you're ahead of your peers.

if you're looking for "hacks" on how to minimize costs, here are a couple:

  1. eat eggs for every meal
  2. eat cat food
  3. eat ramen
  4. quit drinking
  5. never go to the movies
  6. never go on dates
  7. never leave the house

in all seriousness, just do whatever you want, $1k/mo isn't a ton if you want to have a social life. I'm married so food for me is more important than entertainment, travel is what savings accounts are for (build it up, then book the trip and pay with cash), so I think about it a little differently than you.

I had a buddy years ago that was the opposite. single bro, looking for women all the time so he basically just bought lots of chicken breast and veggies, ate the same thing for lunch & dinner (eggs for breakfast), then spent the rest of his cash on women (dates, tequila shots, plan B, etc.).

hope this helps

    • 12
Feb 1, 2018

Thanks man - appreciate your comments.

Not looking to benchmark myself against peers or anything - just wanting to make sure my money is spent on things I actually care about (should care about?). First job out of college was IB, and I bought so much random shit I didn't need to try to be happy.

I get out more now, so I think I'll probably be spending more on tequila shots and plan B.

    • 1
    • 1
Feb 3, 2018

How did it work out for your buddy?

Learn More

Side-by-side comparison of top modeling training courses + exclusive discount through WSO here.

Feb 5, 2018

I'm like 70% sure he's not a dad, and he still pulls quite often.

    • 2
Learn More

Side-by-side comparison of top modeling training courses + exclusive discount through WSO here.

Feb 2, 2018

strippers and cocaine or models and bottles

/thread

    • 1
Feb 2, 2018

Guessing you live alone? I used to live in a low COL area as well until a few years ago - only other thing I could tell you would be if you wanted to make it easier to maintain a social life and still save money, wouldn't be a bad idea to get a roommate. If that is in fact a studio apartment, I couldn't imagine that a nice 2BR for the market would be more than 1700-1800, which would still mean you're saving more money in rent and you have a built in social life with your roommates friends and someone to go to out with/be a wing(person). The tradeoff of having your own place is more important for some than others, but it sounds like you're still young enough where sharing common areas with someone won't be a burden for you yet.

    • 1
Feb 3, 2018

Given the state of the economy, I would strongly advice trying to save up at least 1 year of your salary. A few friends of mine (target, ex-bb bankers), had a few times in their lives where they can't really find a job for a period of time (i.e. 6-12 months) and had to live off their savings.

Feb 3, 2018

Is this a serious question??? You have a whole other paycheck saved for investments and you are asking how spend the remaining 1000 from a your first bi-weekly paycheck?

Dude, your 25 do whatever you want with it. Have fun and enjoy life. You are only in your 20s once. What's with this generation of kids not knowing how to have fun so they ask random people on a message board...

Feb 3, 2018
WanderingWanchai:

Dude, your 25

Dude, you're...

...

...

.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

    • 1
Feb 3, 2018

You need to elaborate on some important details such as:
- Age
- marital status
- kids
- How much do you actually spend of the $1000 on these items? Have you taken the time to actually track expenses for a couple of weeks, writing down in a small tablet every charge you make for the day, then tally the amount up at the end of the week?

It sounds as though you must be young and unencumbered, coupled with a pretty nice salary. I have learned there are essentially 2 types of people: savers and spenders. Try to be a saver. Pay yourself before anyone else.

I would make certain I had at least 9 - 12 months of expenses stashed in an interest-bearing savings account in the event you lose your job, they go out of biz, etc. Next, I would max out any employer-sponsored retirement account where they match your contributions. Afterwards, I would consider maxing our a ROTH for you (currently $5500/yr after tax dollars you may put in this year), make sure you have enough insurance to cover any unforeseen accidents that could reduce your pay for a period of time.

If you are younger than 50, you may put aside up to $24,000/year into retirement accounts ($18500 in a 401k and 5500 in a ROTH). That is in addition to any funds you may place into a brokerage account, which I would do last.

If you still have money to spend, I might consider a brokerage account, depending on your comfort level with the markets. It not comfortable, there is never any harm in stashing more money into an interest-bearing savings account for large purchases down the road (down-payment on a home, new auto, marriage, etc.).

Your budget seems a little sparse. Perhaps that truly is the extent of your expenses. I might consider getting a little more granular for a period of time to really understand precisely where all of your money goes. It may surprise you if you're not diligent about keeping up with the small stuff.

Great job on landing a well-paying position. Great job on getting onto a board and asking for ideas about budgeting. There are myriad sites out there for helping you learn to budget. One isn't superior over the other. Depending on your age, I would simply say that you're doing the right thing. Learning how to budget is literally one of the bedrocks upon which a sound financial future is built. And without one, a lot of people are dead in the water.

Your budget doesn't have to be perfect starting out. You just need to start one. You will refine it over the years and get better at it as you go. The biggest mistake you could make is to give up on the process. Good luck. You're doing the right thing.

Feb 3, 2018
savorsaver:

I have ~$1000 left for food, entertainment, shopping, and travel. How would you spend it?

All on food. Ax the maid and $1150 on food actually.

I'm not talking restaurants every night. I mean high quality fruits, vegetables, seeds, nuts, berries and the like. And then as much good protein as you can afford (seafood etc.).

Optimal brain function comes with good nutrition.

"When health is absent, wisdom cannot reveal itself, art cannot manifest, strength cannot fight, wealth becomes useless, and intelligence cannot be applied." - Herophilus

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

    • 1
Feb 3, 2018

How much money do you currently put aside for retirement? How much do you have in an Emergency fund? Do you max out your retirement accounts?

If the answer to these questions is yes, then it becomes a matter of what is important to you. You're asking the boards how to spend the money, but you haven't said anything about your interests. If you like going out every weekend, spending time with friends doing things around town, I'd budget the lions share of your mad money to food/entertainment.

If your preference is to travel to exotic locales, I'd take the lions share and stuff it into a savings account, all the while, planning for my next excursion.

There is not right or wrong answer to your question. It is you and you alone who can say what is most important.

Good luck. Biggest hurdle for most people with regards to budgeting is to actually begin doing it, an to stay on track. Again, I would suggest you have a pen and small pad of paper with you for a couple of months, tracking literally every penny you spend. I went through this exercise about 10 years ago and I was a little surprised at myself. And I am what most people would consider an extreme saver.

Feb 5, 2018

Numbers are after I maxed out what I need to take advantage of employer match for retirement accounts. Emergency fund is sitting at 9 months expenses. I'm not looking to max out retirement accounts beyond what my employer is matching.

Historically, I've felt most fulfilled after I get through a good gym session after a productive day at work. Outside of work, I like to catch up with friends and family over a nice lunch or dinner, but that usually involves flying back to my hometown for weekend/holiday.

I've been trying to make friends in the area, but there seems to be little going on outside of bars and clubs. I went out this weekend and met some locals, but the time wasn't very enjoyable or productive. I got some contact info from both men and women, but no one that I'd want to really get to know any better. I felt like all I got for my money was some empty calories, some empty conversations, a missed workout and a hangover the next day. At least I tried?

I'm 25 and single, and I feel dull as fuck. I guess that's not a money/budgeting problem though. It's probably because I'm a huge nerd that's been raised to be super uptight about what's good and responsible and what's not. While that doesn't preclude me from participating in bacchanalian activities or pretending that I'm enjoying myself, booze with strangers is probably not the best use of my time or money. That said, maybe I'm just not going out enough or doing it properly?

Thanks for the advice on tracking expenses. I'll sign up for something and make sure I do stay under that 1000/month.

    • 1
Feb 6, 2018

Savor, Good for you! I mean that. Just because you choose not to partake in the Bacchanalian activities, as you put it, doesn't mean you're a dullard. Have you ever considered that perhaps you just haven't found your niche? You sound very similar to my youngest son. Never drank, never smoked, doesn't usually curse (sometimes, but he comes by it honestly), he's getting ready to graduate HS and go to college.

His biggest concern is that he wants to stay at home the first couple of year b/c he isn't interested in going out to parties or drinking. Literally. I found it a foreign concept at first, as my older son and I were much more the typical college guy.

Anyway, I would submit to you that you don't have to go out with fair-weather friends, who only want to drink and use you as a designated driver, all while you're miserable being in that social situation. Seek out activities in your area. Look at sites like Meetup.com and Eventbrite.com. These are not hookup sites for singles, these are sites where you can go and find activities in your community that isn't centered around getting smashed out of your mind, or taking some illicit drug whose origin you have no idea about.

Good luck out there. I suspect you will find your place, and I can almost assure you that once you do, you will find life much more fulfilling than those of us who have myriad regrets over some of the dumb things we did while young and DUMB.

Lastly, I do think you're right about the budgeting. Nothing wrong with being a little anal-retentive when it comes to your finances. I was considered the same by my bride nearly 30 years ago. We've been completely debt free for nearly 10 years and she's been a stay-at-home for 18, so you choose what's important in life and be damned with anyone who gives you shit for being a responsible adult at the age of 25.

Believe it or not, it was not so uncommon 30 years ago to be responsible at your age. You're doing just fine. Don't allow yourself to view who you are based on who you think other people think you are. Be unique. Well done!

Feb 9, 2018

I have never been any debt for anything except student loans which are destroying my life. Was it dumb to go into debt for college? Maybe. Should I be denied bankruptcy protections and forced to repay until I'm dead? I think not.

Feb 9, 2018

dsch,

First, I want to say that I apologize for my belligerent response the other day on a different thread. That is not who I am, but I was in a bad place and the post caught me the wrong way. Regardless, not excusable.

That said, onto the topic at hand. I absolutely agree that the student loan debt situation in this country is ridiculous. I understand firsthand. I graduated in '98 w/ $60k in debt. I attacked the debt voraciously, yet it still took me 10 years to pay it off.

The fact that there is no real loan forgiveness/reprieve for the vast majority of the student loan recipients in this country is a travesty. And yes, the fact that even bankruptcy doesn't absolve you of your responsibility to repay the debt is damned near a crime. Only the government could get away with this BS.

Have you consolidated your loans? Have you looked at moving them to a private institution, reducing the APR, and extending the term? I know you will pay more long-term in interest, but it could free up some cash.

Sorry to hear about your situation. I have heard of people who have literally had to walk away from their mortgage b/c they couldn't pay both the student loan note and their mortgage note. Absolutely absurd! I've also heard of people who send in less than their minimum payment, but enough to keep the wolves at bay, so to speak. Perhaps that would be an option.

Wish I had more suggestions for you. I understand. My first loan note came 6 months after I started my job, and it was $499.00. That was in '99. I was paying child support on top of that, and just starting a job as a staff electrical engineer. It was stifling.

You will dig out. It looks insurmountable now, but just keep chipping away at it. 15 years ago, I would NEVER had guessed I would be where I am financially now. It just takes time, delayed gratification and dedication.

Last question: Do you work in a field where you could find a company willing to pay off your debt in payment for x-number of years of guaranteed service on your part? Had a classmate in engineering school work out a deal like that with a local utility company.

Sorry for the long msg and again, sorry for being a belligerent a$$-hole the other day. I wish you well. Good luck.

Feb 5, 2018

You pay $1,000 in rent and $100 for the gym? Wow. A 1BR in my area is $1,900 and the gym membership is $17.99!

Feb 5, 2018

Since we're all just throwing our thoughts in here, I'll add mine.

It sounds like where you live sucks. I moved from a small shit town to a big expensive one. Back in the cheap one I was about a year from buying a house, living in it and renting it out to some homies. After the move, I find myself struggling a lot more money-wise. I've got a sweet deal renting, but all the houses around me go for 4+mil.

It's crazy how much CoL goes up when you move, I got a 20% bump in salary, but after the move my fun money went down by about $800/mo. Rent, taxes, going out more (bars and other misc trips) now that I met cool people hit pretty hard, though it's not like I'd give it back for a second.

Looking back, I realize I just had a more myopic view of what expenses I'd face. Set your sights higher up, being king of flyover state where you have to work to spend money isn't a good reflection of what you're going to have to deal with later. You might lose your job just before the car breaks down etc, and it hurts when you have to open that piggy bank and watch the numbers go the wrong way. You may meet the girl of your dreams and want to move into a new house, then a million dollar kid will be on the way soon after- you don't want money to be the problem.

It may seem wasteful with the crazy ratio of your cashflow now, but it's really not. Your costs just haven't caught up yet.

Feb 9, 2018
Feb 9, 2018