Disposable Income

[raging moderate]

So, I was paying my bills the other day, and I realized something. Only about 15% of my paycheck is actually flexible income/disposable. The rest goes to student loans, cc bills (again, largely from school and requisite irresponsibility), car payment, rent/utilities, etc. (And yes, I realize that rent is not supposed to take up more than "x" percent of your monthly gross, and it doesn't (I don't think) because for me, rent + utilities only take up about 30% of my monthly income. ) And for this point I am counting groceries and gas in that "flexible" category, which in and of itself is debatable, but that's not really the point.

(one caveat: I am not counting the 10% of my income that goes straight into a savings account that I use exclusively for lump-sum payoffs of my consumer debt ie car payment.)

Anyway, question is, how much of your regular income is flexible, percentage-wise? Am I the only one stuck in this irritating situation?

[Willravel]

I suspect most people are stuck in that situation right after college, I sure as hell was. With a bit of luck and some work, before too long you'll have more. Just remember, once you've paid off your tuition and other school bills, you don't have to change your spending habits. If you can survive at your current level now, you can probably be just fine later. In other words, always try to live below your means.

[SSJTWIZTA]

when i had a job about 90% went to my personal use. the rest was left out due to retirement and taxes.

...i've always lived cheaply, money has never been a concern of mine.

[Xerxys]

If you want money for emergencies then your better off getting a second job and not spending any of that paycheck. It's what i did for a while. I lived rent free and I started spending all my paycheck on stupid things. So second job went straight to savings.

Now that I am back rent free again, I only have enough for gas money, car insurance and cell phone bill in the checking account. So more than 80% is flexible.

[Baraka_Guru]

The only way I get disposable income is if I do freelance work. And even then I tend to use that money to pay down debt I accumulated between contracts (and then some).

[GreyWolf]

Originally Posted by raging moderate

(one caveat: I am not counting the 10% of my income that goes straight into a savings account that I use exclusively for lump-sum payoffs of my consumer debt ie car payment.)

Anyway, question is, how much of your regular income is flexible, percentage-wise? Am I the only one stuck in this irritating situation?

As an older member, I have a lot more disposable income than the younger crowd who are dealing with school costs (either current or student loans), mortgages/car loans, young children, and trying to establish a good life. I won't give you a percentage because it varies from time to time.

I used to do financial counseling of people with real money problems. So, unsolicited, I'm going to offer some advice (worth what you pay for it, of course). In all the time I did that, I only found one book that was really worth buying. I really suggest everyone buy and read The Wealthy Barber, by David Chilton. Not because Chilton is right about everything, but he gets most things right, and it's readable. It's funny. And it's a novel, not a textbook.

The other thing is that there are really only 2 times in your life when you shouldn't be accumulating wealth (ideally)... when you are a student, and when you are retired. I personally think that your situation is very much on the edge, and it's not uncommon. I read a recent article that 70% of Canadians would be very hard pressed if they missed a single paycheck. That amazed me because it's so high, and in general Canadians have traditionally been better savers than Americans.

Other than unsolicited advice, the only comfort I can offer is the assurance you're FAR from alone, and it's not unusual for a younger, single person to feel this pressure. It usually does get better with age (one of our few advantages over you).

[Xerxys]

^^ Whenever anyone tells me "Your not alone" I always want to yell, "Really, No shit! I'll start a club so we can all talk about our feelings!". But then I don't.

[GreyWolf]

Originally Posted by Xerxys

^^ Whenever anyone tells me "Your not alone" I always want to yell, "Really, No shit! I'll start a club so we can all talk about our feelings!". But then I don't.

Damn!! I guess I touched a nerve. But point taken... it's of no real help and can sound very condescending.

One thing I did learn in my counseling period was that I was as often a cheerleader as a guide. Many (probably most) know what to do. They just need some comfort and affirmation that they are doing it.

Lack of money or concern about it is one of the greatest stressors in our society, and we don't do anything about teaching our young people how to deal with it. I've long advocated for more life-skills training in our education system. Every kid should be taught some basic financial skills in middle school or sooner. Again, of no use to RagingM or anyone else having difficulty now, but just a suggestion that might help others avoid getting there.