Personal, retirement savings hard to come by
By Veronica Neff
Most students say they would be satisfied earning a $30,000 salary straight out of college. But is that enough, considering taxes, rent, utilities, transportation and student loan repayment?
A $30,000 salary equals $2,500 per month. After taxes, that would leave you with $2,200.
According to the National Debt Relief website, rent prices across the country average at about $650-$750 each month, leaving you with $1,450.
A website called “My First Apartment” did a 2015 study on the average cost of utilities and other personal bills for someone with their first apartment. The monthly cost for groceries averaged out at $200, with averages of $60 for a cell phone bill, $50 for utilities, $25 for laundry, $120 for public transportation, $15 for renter’s insurance and $50 for Internet. After all of these expenses, you are left with roughly $930.
Owning and operating a car adds additional costs. The average monthly car payment for recent college grads ranges from $160 to $250. Insurance adds another $50 to $125. Add that to maintenance and gasoline ($125,) and the number for owning a car jumps to $335 to $500.
In today’s world, specifically due to student loan debt, it is very difficult for a recent college graduate to live on a $30,000 salary.
According to the Colorado Department of Higher Education, the average student leaves college with about $25,000 in student loan debt. The monthly payment on a $25,000 student loan is approximately $280 (assuming 6.8 percent interest and a 10-year repayment plan).
On this kind of a budget, there is no room for setting money aside for savings, emergencies, clothing, eating out, alcohol, pet care, and other various living expenses.
Many graduates avoid these costs by living with their parents.
According to CNBC, in 2014, the percent of millennials who lived with their parents after graduating was just over 32 percent. About 14 percent shared a space with roommates.
Living with your parents could immediately cut the cost of rent, renter’s insurance, utilities, groceries, laundry, transportation and even car insurance if the graduate remains on their parent’s plan.
Living with roommates could cut the cost of utilities and Internet.. Rent, gas, car payments (if not on parents plan,) groceries, laundry and cellphone bill should be the only expenses they are responsible for, assuming the dependent is under the age of 26 and still on their parent’s health plan.
Another way to cut costs is by couponing. Paul Ritz, a writer for the National Debt Relief website, said, “We have seen cases where people have been able to cut their food bill from $800 a month to less than $400 by couponing.”
Other ways to cut back include switching from going out to movies to a Netflix subscription, shopping at discount clothing stores such as Marshalls or Plato’s Closet. There are also useful apps like “Retail Me Not,” an app strictly for couponing.
Earning a $30,000 salary, which equates to $14.40 an hour, is not a lot of money in today’s economy.