Half your pay?
October 9, 2008
Savvy at $ out of 15 cents posed an interesting question: Could you survive on half your pay?
I’m almost always up for a challenge, but that one gave me pause, and made me sit back a little.
Do you think you could do it? What would you have to do to make that happen? Have you already done it (like FB)?
Single Ma’s discussion of unemployment and this question are right up my alley. Just this morning, I was wondering how much unemployment I might draw if politics go badly and our entire office is laid off/closed. This is a possibility and a colleague and I have been preparing for the worst for a few months now. (Hence my major push to beef up the defenses.)
If I were laid off? Apply for unemployment, devote myself to applying for jobs full-time, try taking on freelance work to supplement the emergency fund. I’ve already cut out just about all splurges so that option is constantly exercised.
If nothing else, being aware of the possibility/employment environment is highly critical. I know someone who didn’t read the signs in her place of employ and bought herself a new car when her old one died recently. She’s been struggling with her mortgage, and was suddenly let go last week. Really rough.
Honey I can tell you that I have DONE IT on a $66,000 salary (which is $33,000) and I survived.
It was tough, I went into super-frugal-mode and was pretty scary at times.
But I made it through. And I’m the better for now. Now all I need is $1500/month x 12 months or $18,000 AFTER tax and I am good to go. That is, if I cleared my $13k debt and was totally debt free.
Even if I wasn’t totally debt free, I can still put payments of $200/month towards it, no savings, but it’d be a tight squeeeeeeeeeze.
But then again, $66k is not an average paycheque for someone
$33k may be. and I am half pondering if I COULD survive on $15k~….
Nope, I couldn’t. My rent is more than 1/4 my current take home pay.
FB: š I just caught that typo, I meant to say “like FB,” not to call you out. You’ve made some fantastic progress! And you’re right, we’ve worked our way up to higher-than-average wages which is a blessing.
I remember how hard it was to make ends meet on half this salary when I was in school. I guarantee I wasn’t saving anything. I’m still going to think about how to do this though …
karen: Mine too! And rent is such a baseline expense that you can almost tell right away what lengths you’d have to go through to meet the challenge.
that is my goal: save half, spend half. My salary since moving to NZ has decreased, PLUS taxes here are a bi-otch and take up more of my salary.
I’m trying really hard, but as I refuse to give up certain things (not having the slowest internet available, charity donations, and healthy food) it’s just *barely* NOT do-able on my salary comfortably. I figure as long as i get within 10% I’m doing ok, though. So…save 40%, spend 60% is my new motto. As I get raises, those percentages will even out. I hope.
(sorry to write a book, but: this is also timely ’cause we’re moving households soon and I’ve been arguing w/ BF about not spending more than 30% of your salary on housing. he seems to think it’s worth it to have an ocean view and taking an hour long (expensive) ferry ride to and from work every day, whereas I do not…I don’t really understand, because he makes even LESS than I do! he does have a rather large inheritance to fall back on but if he’s dipping into that then he’s spending more than he’s making…but not really my business at this point. sigh.)
sense: You’re doing really well from my perspective, I don’t think I’ve ever been able to save more than 30% before. I’d LOVE to reach saving 50%. Must get more creative!
Are you and BF splitting the rent evenly? I can’t imagine wanting to lock in a more expensive rent AND hour-long commute. I do that now, the commute, I mean, and it gets to be a royal PITA. Perhaps if you point out that it’s a fixed cost that only ever goes up? That’s how I convinced BF to keep looking at apartments when he wanted one that was $1200/month. Happily, two years later, he’s still only paying $1000 after a rent increase. That extra hundred or two can really make a difference in cash flow.