Like I am confused as to how one spends their $12/hr over the period of a year. Does anyone have some kind of Sankeymatic graph where they detail their spendings at this rate of earnings? Let’s say $12/hr equals 24k a year (roughly) how would you go about spending this? How much goes for rent, services, leisure, etc. in an average american town (nothing too fancy)
Thanks everyone.
I’d like to know how one is supposed to spend their earnings over the period of a year in the US
byu/Gooosetav inFrugal
Posted by Gooosetav
6 Comments
Check out r/dataisbeautiful people do it all the time
I mean look up a basic ideal budget with percentages and do the math.
The likely thing is that $12 hr is very little and most cities its not a feasible living wage without additional assistance.
They’re not. 24k you’re probably pretty fucked most of the country. Say you’re real diligent, 1k/month rent (pretty damn low) is already 12k before whatever crazy fees they tack on. Say 500/month on food, another 6k, could go 250 if you’re real thrifty. Leaves you with maybe 6k for transport, savings, and fun. End of the day, unless you live like a true spartan, you’re pretty fucked until you earn more. Might be able to lower your rent and food a tad, but more money is really the only fix.
Is really hard with that money, I always check r/povertyfinance for tips
Using your example the easiest is 50/30/20 (or 50/40/10 for a lower income like the example you gave)
50 – Needs: Bills, mortgage, food, healthcare, car costs, insurance
30 – Wants: Amazon, coffees, movies, hobbies, etc
20 – Save: 401k contributions pre tax, Roth contributions post tax, emergency fund, brokerage account, 529s, etc.
50% means your monthly expenses should be $12k ($1k monthly)
30% means you should keep your wants under $7200 ($600/month)
20% means you should save $4800 ($400/month)
If your required bills falls above 50% you need to remove from wants first to cover the difference. If your required bills are more than 80% you need to remove from saving to cover the difference starting with any post tax contributions. Your 401k and company match always goes last.
Someone making 12 dollars an hour is unlikely to be living alone, so this is going to depend a lot on circumstances. A 20 year old community college student living with parents is not going to have the same experience or expenses as a 30 year old with roommates.