Your paycheck is just like real estate; there is one important thing that you must consider before, during, and after the big events in your life. No, it’s not the size of your paycheck – it’s all about location.
Recent statistics and data from the Bureau of Labor Statistics and the Bureau of Economic Analysis have revealed that since every occupation has payment variables and that average salaries get adjusted depending on cost of living in a particular state – each state’s cost of living reflects their buying power.
So who gets the most out of their paychecks? According to their data, those who work in Washington DC do in each case: before and after cost of living adjustments. Alaska comes in at a distant second.
However, with each person, comes interesting and significant factors. While these generalities can be handy in finding a general number or statistic, it doesn’t specifically show you how YOUR paycheck gets spent. It is important for you to figure out how you spend your check. After all, this is the basis of any budget. So what factors do you need to take into consideration?
#1) Find Out The Cost of Living in Your Area
When it comes to finding out how far your paycheck actually goes, you should take into consideration the cost of living in your state, region, and city. Check out this great Cost of Living Map that was put out by Numbeo.com.
If you want to get even more specific, Rasmussen University offers this handy chart that breaks it down by both state and occupation. You can even compare one occupation to five different states and their cost of living adjustments.
#2) Your Family Situation
Kids can be such a joy but they are also expensive. As of last year, the cost of raising a child to the age of 18 costs a middle-income family over $245,000. That number was up over $4,000 than the previous year and inflation, the cost of education, technology, and other factors only makes that number increase.
Also take into consideration your past relationships. Do you have to pay child support and other family expenses? Nursing home or live-in care for elderly family members? Hospital and or health care expenses?
#3) What Jobs Are Available In Your Field?
Take a look at your career. Are there advancement opportunities in your current path? Would you consider a change in career if the opportunity were to arise? While these factors may not affect your current situation, they are considerations that you might make for the future.
#4) Utilities and Bills
When it comes to being comfortable in your own home, the cost of utilities can start to add up. If you’re moving out on your own for the first time, you may pay around $300 for utilities each month (without any extra add-ons). However, if you have a family to support, each individual adds even more to that base amount. On average, a three bedroom, two bath household can expect to spend around $50 on electricity and $100 a month for both cable and internet (some bundle their phone bills as well). Other bills are harder to configure though.
For example, the cost of heating (or A/C) can vary depending on where you live and the type of energy that you use. It can effectively raise your budget by over $100 each month in the winter (or A/C in the summer in hot climates). Most gas companies will send out graphs and estimates of the amount that you use each season and the average amount for that district (per household and total) for each season as well. Utilize those graphs.
#5) Tools At Your Fingertips
Check out this Expense Calculator. This handy little tool can be used to help you calculate all of the factors above.
These estimates and figures can help you calculate how much of your paycheck you have left over to save and to splurge. Being responsible with your money doesn’t necessarily mean that you can’t have fun with what’s left over. It just means that you know how to spend your money on fun.
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