Gentlemen, I’m soon reaching the point where I can afford to move out of my parents house. Having never lived alone before, I’m quite ignorant of how much I’ll be spending on food, transportation, utilities, entertainment, etc.
I’m only aware of what I’ll be spending on rent. Everything else seems somewhat fuzzy.
However, a lot of us here share a similar lifestyle. We lift and eat accordingly lol, go to clubs, bars, spend money on fashion, dates, etc. and generally live a non-reclusive lifestyle.
As a result, I was hoping someone could provide guidance on where I’ll be spending my money and how much should I expect to spend?
If you want to just refer your own monthly breakdown, I can probably use that too to clarify my own expected expenses.
Thank you.
[deleted] 2y ago
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lurkerhasarisen 1 2y ago
What do I spend money on? Let's look at 2023 so far...
1) 65% on Hookers
2) 30% on Blow
The rest I wasted.
EurasianChad 1 2y ago
I classify expenses in 2 categories: Sustenance Leisure
Sustenance: utilities, food expenses, clothing, transport, gym membership
Leisure: Anything not considered living expenses (travel/vacation, drinks, vices)
Then extrapolate from there depending on what your 5 year/10 year plan is.
Redpillray 2y ago
Thank you. I like the bifurcation between needs and wants. Quick question, would you classify new clothes as sustenance? It feels more like a want
EurasianChad 1 2y ago
Depends on you man.
If it's office clothes, probably more on needs as it helps your career to look good. Higher priority.
Or if you're in sales, your image is a big deal. I'd prioritize it for the benefits of looking damn good
Lone_Ranger 3 2y ago
How soon can you buy a property? What is your pathway to owning a home?
That should be your focus.
Goingthedistance 2y ago
I second this. I am living at home and close to 29 years old, and even though I've been the target of jokes for years, all my "rent money" went into my savings account which allowed me to invest in property. I don't have my own home yet, but I own land, my car, my motorcycle and I have a savings account I can rely on. Most importantly, I have ZERO debts and a 8 magnitude earthquake could come and I would be fine.
Invest your money and save up as much as you can, there's a time and a place for useless buying of items you don't need, and this time ain't it.
Intrepid_Place53900 1 2y ago
buying a home only makes sense if it's cheaper than renting. Sometimes it is, sometimes it isn't, greatly depends on the interest rates and price of housing/rent. Take the emotions out of that and do the math. Having a house also costs money to fix/upkeep, you don't have that with rent, or property taxes, add it all up.
Try to live on the 50/30/20 principal.
50 % Needs
rent/food/utilities/car,/debt/etc
30 % wants
vacations, concerts, toys,etc
20 % savings
401k, IRA,
Lone_Ranger 3 2y ago
"buying a home only makes sense if it's cheaper than renting."
Not true. You seem to be making the mistake of comparing rent to mortgage payments. That's not even half the story dude. You're forgetting capital appreciation and you're ignoring the fact that a true comparison would be INTEREST COST vs rent. To get that figure you need to subtract CAPITAL REPAYMENTS from your INTEREST COST from your monthly mortgage.
Considering that we are in an age of inflation - cash savings make very little sense. The only game in town is a credit leveraged hedge securitised on a hard asset - like a house.
I bought my first house at 25. A 4 bed in the suburbs. My friends thought I was mad, they all rented apartments in the city centre. What was I doing, a single guy, with one suitcase to his name, in a 4 bed house? 10 years later, I sold that house for 3x what I paid for it. This meant I could buy a much bigger house.
Intrepid_Place53900 1 2y ago
I know the math quite well Lone_Ranger. the house appreciations in the next 5 years will be very small, if not negative. You and myself were lucky to get those types of appreciations, but definitely don't count on that if you buy today.
Not a big fan of young people buying houses today. The price is high, the interest is high and they will be stuck in that house for years before they make any money. Realtor costs, taxes,etc they'll come out negative or a wash if luck within 5 years, especially with a 30yr mortgage which doesn't pay any principal off for 7 years.
As you know, real estate is VERY local. In my area, it's much better to rent today. I'm sure there's some areas where it may be good to buy and the market is always changing.
For young people, renting gives them the option of moving location easily, yearly. Provides an advantage for young professionals who don't mind changing jobs, moving to new locations.
nicknack 2y ago
I've heard from multiple of these real estate gurus to rent out the place you own and rent yourself the place you live. Which gives you flexibility to be where you have to be and pay the monthly cost that makes most sense at that moment. Not sure how accurate that advice is, but it seems to make sense.
Lone_Ranger 3 2y ago
That will never makes sense from a tax point of view.
Because you will be taxed on your rental income at your marginal rate (in most cases over 50%) and you will pay your rent from your post tax earnings (ie. you need to $4k be paid $4k to be able to afford $2k of rent).
So if you buy a big house and rent it out at $5k a month, you will only get $2.5k of that.
Tax changes everything - these real estate 'gurus' are likely bs artists with a youtube channel.
A far better play for a young man is to buy a much bigger house than he needs, like a 4 bedder, then rent out 3 of the bedrooms for cash to buddies. In a decent house in a decent crime free suburb, you can get $1k a room, and the mortgage is likely less than $3k. So...you get free housing plus a capital asset that appreciates by about 10% a year.
This is what I did.
Most people cannot understand that 'paper returns' are actual returns. If you have a $400k house, and 10% capital appreciation, your house is earning you $40k a year, in tax free gains. The returns are real. And if you're on a marginal rate of 50% tax, that is the same as earning an additional $80k a year. Because in every country that I know of, your PPR (principle private residence) doesn't attract capital gains tax.
Seriously, if you're young and want to make some money, you're better off not watching real estate influencers, and instead watch some videos about taxation.
Tax is boring. Rich people are obsessed with tax, because understanding tax is how they get rich and stay rich.
Intrepid_Place53900 1 2y ago
so, it can make sense, you can make money at it.
But, there's always a but.
It still comes down to money/math. How much you pay for the property, the interest rate, the amount of money for repairs, taxes,etc. You also have to typically own the property for 5+ years to make any money on it , after taxes, realtor fees,etc. If getting into this, I'd recommend you get your realtor license and cut out the middleman.
I know guys who have a few rental propertys', they make money on it, the only way they do is they take care of the property and don't pay a manager for it. So, I'm out with one of these guys at a weekend event with our kids, a fun time, was important to the kids. He's on a phone the whole night because one of his renters had plumbing issues. He ends up having to take off to fix the issue.
I never want to be a landlord. But, that's just me.
lurkerhasarisen 1 2y ago
I've been a landlord.
2/10 WNB.
I own the house I'm in. Paid off nine years into a 30-year mortgage.
10/10, even with the hassles of ownership.
AsianDude 2y ago
Mid-30s and living in a large city (>5 Million population) with a small family. Figures are approximate, based on after tax income.
When I was single in my 20's, my expenses were similar except that I rented (~10% of income) and had fewer other expenses, so my savings rate was closer to 60% - 70%.
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