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23 year old, moving out for the first time - help with budget?

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  • Jun 28th, 2011 11:26 pm
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Newbie
Aug 16, 2010
36 posts
4 upvotes

23 year old, moving out for the first time - help with budget?

I make $4,050 after taxes per month.

I'm still living at home and commuting all the way to Yonge & Eglinton. I pay for parking $200/month right now, and I spend 1.5 hrs commuting each way, so it's pretty brutal.

I have a BMW 335i which is paid off and I'd like to keep it because it's a really nice car...

Insurance: $310
Gas: $100
Phone + internet: $100
Groceries: $500
Clothes: $300
Entertainment: $300
Total: $1610

So after these expenses: $2440

How much can I afford to spend on a place + parking?
48 replies
Newbie
Jul 4, 2007
99 posts
6 upvotes
Toronto
CommerceGuy wrote:
Jun 7th, 2011 7:49 pm
I make $4,050 after taxes per month.

I'm still living at home and commuting all the way to Yonge & Eglinton. I pay for parking $200/month right now, and I spend 1.5 hrs commuting each way, so it's pretty brutal.

I have a BMW 335i which is paid off and I'd like to keep it because it's a really nice car...

Insurance: $310
Gas: $100
Phone + internet: $100
Groceries: $500
Clothes: $300
Entertainment: $300
Total: $1610

So after these expenses: $2440

How much can I afford to spend on a place + parking?

What about a line in your budget for savings? (RRSP, cash savings...)
[OP]
Newbie
Aug 16, 2010
36 posts
4 upvotes
That's what I meant. How much should I be saving & how much should I be spending on rent?
Deal Addict
Aug 13, 2008
2870 posts
202 upvotes
Mississauga
easy....

save (by which i mean invest in a low risk investment) 1000 a month (just because you are in a position to) and spend the rest on rent.
Deal Fanatic
User avatar
Oct 23, 2003
5613 posts
274 upvotes
you're over-spending on a buncha stuff. how important is saving for a place to buy for yourself? if its highly important and next on your list:

food - 300 a month, max 350
outings and entertainment - 150 to max 200
clothes - 300 per month? are you kidding me? try 30 to 50 max unless its an extremely special occasion (wedding,etc)

rent will be 1 to 1.2k

Your monthly savings will be a minimum of 1.5k -2k while living quite comfortably with your other 2 grand.

thing that will deter a lot of savings is the car insurance, but if you quit your $200 parking and leave it at "home" parking which will be 50 to 80 bucks, thats another cost cutting method.

Without the car you'd be looking to save over 2k a month, probably around 2.3 or 2.4k . With the car you're effectively eating up 500 or more depending on your choices on top of other costs.

If you're only saving 1k a month at your income level, you're wasting your money.
Deal Fanatic
User avatar
Mar 24, 2004
8656 posts
553 upvotes
Toronto
Nice car.

Personally, I'd feel comfortable with no more than 30% of my take-home income spent on rent.

You need to figure out your financial goals, and when you'd like to achieve them by. It doesn't need to be an exact figure/date, but it's a good practise to have a general idea.

For example, if you want to save for a vacation in a year ... and the vacation costs $1200, then you need to put away $100/mo.

You should open your mind and think longer term too. Maybe a downpayment in 5 years? Retirement in 30 years?

This is a great tool to figure out how much you'll need to put away:

http://www.calculator.net/interest-calc ... 0&x=91&y=4

Anything short term, you should put the annualized return at 1.5-2% for an HISA.
Anything long term, you can estimate a 5-6% return for a decent diversified index portfolio.
Jr. Member
Mar 25, 2006
149 posts
31 upvotes
Buggy166 wrote:
Jun 7th, 2011 8:59 pm
you're over-spending on a buncha stuff. how important is saving for a place to buy for yourself? if its highly important and next on your list:

food - 300 a month, max 350
outings and entertainment - 150 to max 200
clothes - 300 per month? are you kidding me? try 30 to 50 max unless its an extremely special occasion (wedding,etc)

With over 4000$ after tax a month would you eat crap for 10$ a day? Sure I wouldn't. In fact, I don't.
[OP]
Newbie
Aug 16, 2010
36 posts
4 upvotes
I agree, I'd like to save $1000 a month.

The issue is the places available for ~$1200-1300 in the yonge/eglinton area are pretty old and quite hideous. I guess I'll have to deal with it at least for a year or two..

Unfortunately I do spend $300/month on clothes. I don't have a very big wardrobe quite yet.

I am also into bodybuilding & I'm a pretty big guy so I do spend $400-450 a month on groceries, maybe $500 sometimes.
[OP]
Newbie
Aug 16, 2010
36 posts
4 upvotes
Ive been thinking about bunking up with a room mate in a 2 bedroom, where we maybe pay $900 rent each or so, but I've never lived with someone else..

I don't know how it is privacy wise and comfort wise... I do date quite a bit and I like to invite friends over... so I don't know how that would work..
Sr. Member
May 5, 2006
585 posts
70 upvotes
300/month for groceries is ample... I have a similar income, fewer expenses and I spend about $225/month, eating pretty much whatever I want, though I do prioritize sales - it's a good way to eat seasonally and get variety in your diet. Good groceries, by which I mean raw meat, veg and carbs, are cheap. Sure you won't be eating steak every day, but then, you SHOULDN'T eat steak every day... a couple times a week is plenty for most folk.
---

In general, though, a budget is to ensure that money gets spent where you WANT to spend it. So you need to figure out your needs and wants, including some that you might not think about:

-security: maybe you want to be ok for a few months or more if you lose your job? or maybe you can move back in with the parents. Determine what kind of emergency fund you want and start saving. After that, consider how much you want for retirement - will you be ok with CPP and an inheritance?

-mid term goals: a house? a car? a vacation? Start saving for them.

-needs: what is the bare minimum you can get by on in each category? this isn't about being cheap, it's about spending as freely as you want on

-wants: clothes beyond the basics, food beyond the norm... the idea here is that you can be as flexible with as much money as possible, once your other basics are covered. Personally, I split this into 2 categories: Fun and BigTicket. Fun is for everyday enjoyment while BigTicket is for expensive cool **** that I wanna grab whenever it's on sale. Any unspent Fun or unspent expenses get accumulated into the BigTicket bucket.

ETA: If you have extra eating needs then that's fine... supplements and optional related stuff should probably be under 'Fun' though.
Deal Fanatic
User avatar
Oct 23, 2003
5613 posts
274 upvotes
schlouf wrote:
Jun 7th, 2011 9:42 pm
With over 4000$ after tax a month would you eat crap for 10$ a day? Sure I wouldn't. In fact, I don't.

if you cant cook for **** then yes by all means, you'll dish out not to eat crap.
Deal Fanatic
User avatar
Oct 23, 2003
5613 posts
274 upvotes
CommerceGuy wrote:
Jun 7th, 2011 10:27 pm
I agree, I'd like to save $1000 a month.

The issue is the places available for ~$1200-1300 in the yonge/eglinton area are pretty old and quite hideous. I guess I'll have to deal with it at least for a year or two..

Unfortunately I do spend $300/month on clothes. I don't have a very big wardrobe quite yet.

I am also into bodybuilding & I'm a pretty big guy so I do spend $400-450 a month on groceries, maybe $500 sometimes.

if you get the bodybuilding stuff on the side, thats extra, though yes even your basic food bill would increase. if you eat regularly a normal diet and you can actually cook, i never had to spend more than around $350 a month and i still throw some food out sometimes. I had some clowns at work complain how their food bills were almost $600 a month (no gym excuse). Well, if you wanna eat organic everything, you gotta pay or live on the farm. I only buy organic when im dealing with meats and eggs but i do it for taste, nothing else.

edit: about the clothes. Buy stuff until you're satisfied and then cycle through your stuff till it properly wears out, the relegate it to in-house wearing only and throw it out only when you see its destroyed. One thing ive seen some people do is spend money on new things, semi expensive, to wear in-house. No one sees you and if you have company you can always switch. I personally have enough stuff to last me 2 weeks of not doing laundry (from boxers to t-shirts and anything else in between). The reason i shot for that clothing-free time is because i dislike the ****** rent building cleaning machines with a passion and if i HAVE to do laundry, ill do it once and do it to last.

Just make sure $300 a month for clothing isnt a full time year in and year out thing.
Sr. Member
Jul 13, 2009
921 posts
57 upvotes
Yeah, for active people, $500 on food really isn't extreme, I home-cook all my meals and spend about that. My milk budget alone is around $80/m.
Deal Fanatic
User avatar
Oct 23, 2003
5613 posts
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Zelig wrote:
Jun 7th, 2011 11:31 pm
Yeah, for active people, $500 on food really isn't extreme, I home-cook all my meals and spend about that. My milk budget alone is around $80/m.

thats insane hah, milk for 6 months for me is $5 lol
Member
Jan 17, 2010
406 posts
50 upvotes
Not to get away from your main topic. But what is making you want to move out? ever thought of staying home and saving all that money to put 20% down on a condo?
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