Annual Income/Gross Income (before taxes), http://www.payscale.com/research/US/State=North_Carolina/Salary#by_Job 200003800088000
Less income taxes, Social Security&Medicare4435,59462,528480,5
Net Annual Income (take - home pay)15564,528537,559519,5
Annual Spending (Living expenses)
Housing 54001200024000
Utilities and Cable TV; Resource: http://www.payscale.com/research/US/State=North_Carolina/Salary#by_Job 3769,923769,923769,92
Cell Phone3606001200
Groceries, Laundry, incidentals 150036004500
Car payment, http://www.onlineloancalculator.org/105520003500
Car insurance, http://www.rmiia.org/auto/steering_through_your_auto_policy/Cost_of_Auto _Insurance.asp610610610
Gasoline, Car maintenance, Registration100014002000
Clothing 84018003600
Restaurants, travel & enternainment 78018004800
Gifts&Other expenses 2005003500
Annual Living expenses 15514,928079,951479,9
Money left over for Savings: Net Annual Income - Annual Living Expenses = 49,58457,588039,58
Calculation of take – home pay:
Job 1Job 2 Job 3
Federal Withholding2242,54992,517498,5
Social Security84015963696
Medicare2905511276
North Carolina106323236010
Total Expenses 4435,59462,528480,5
In case a person does not have any education, the average annual salary is approximately $20,000; Bachelor’s degree job can provide $38,000 and dream job - $88,000 per year. However, every person has to pay income tax, social security and health insurance. These expenses are subtracted from annual salary. Therefore, the take – home pay is the difference between annual salary and social expenses.
The first budget allows only covering the expenses necessary for living – housing, utilities, cell phone, and car expenses. Such salary is also not enough for renting apartment and as the result, the person has to share the apartment with friend in order to cover expenses or find cheap flat in the suburb. Having paid all the bills, the person can spend only $70 for clothing and $65 for restaurants per month. The person cannot afford any traveling or additional expenses for vocation, clothing and expensive gifts. The second job allows renting apartment for $1000 per month and spending much more money on clothing and entertainments. The dream job allows gratifying all the needs and even saving money for the future.
However, to save more money for purchasing a house, for instance, the person can sacrifice the clothing and entertainment expenses. In addition, the car payments also depend on the car make and as the result, the person can buy a cheaper car. Housing expenses can also be decreased in case person can share the apartment with a friend for a while or rent a cheaper apartment, for instance in the suburb.
Creating budget is essential for allocating earned money effectively. For instance, the first budget represents that a person has to sacrifice clothing, housing and entertainment expenses in order to cover all the bills and food expenses. A good job allows person to improve the quality of life and increase expenses for traveling and entertainments.
Part 2
I have not opened the saving account yet, as I do not have savings. However, as I understand the importance of saving money for the future, for instance, for purchasing a better car, traveling or purchasing my own apartment, I can give up entertainments in order to save money. In addition, planning accurately the expenses allows saving money.
Smoking is an unhealthy habit, which may lead to severe health problems in the future. Rather than spending money for cigarettes, one can buy a healthy …