In the beginning of this project, I wasn't concerned on how much money I made per month. I made $12 per hour and worked 40 hours a week, making my total income $23,040 per year. That income seemed like a ton of money for a 19 year old, but I then realized it really wasn't that much after I budgeted my entire balance for a month. If you divide $23,040 by 12, I would only have $1, 920 for my monthly gross income. However, then you also have to subtract your taxes. After paying my Social Security Tax, Medicare Tax, Federal Income Tax, and State Income Tax, my Net Monthly Income is $1,574.24. Again, this amount seemed like a lot of money for a 19 year old who wasn't going to school, but it amazed me how much it really wasn’t.
First, I decided to invest only 10% of my Net Monthly Income for retirement and emergencies. By having it at 10% my monthly savings will be $157.42. Before I had 13%, but that was too much. So I figured why not keep it low for now, and then when I make more money as I get older, I can increase the percent later.
Next was to pay for my housing. I found a two bedroom apartment in Minneapolis near the University of Minnesota. I would share the apartment with a roommate, cutting my rent in half and making my total rent $425.00 per month. Even though the rent seemed high, living in the Metro Park Apartments gave the renters awesome benefits. You don’t have to pay for any utilities such as water, electric, sewer, trash, recycling or gas. Standard cable is provided and they have free internet and wi-fi connection. I would just have to pay for my supplies to live there, which is about $30 and I would have my own cell phone. For my cell phone, I would go from Verizon Wireless and have a basic plan. With the basic plan I could get a cheap smartphone that has unlimited text and call all for $45.00. I would like to have a fancier phone, but sometimes you need to make sacrifices to have a more sufficient budget.
Next is paying for my transportation. Depending on how far away my job was, I needed a decent vehicle to get me from point A to point B. Typically, I’m the type of person that doesn't like to drive around a lot if I don’t need to. I like to keep it at a minimum considering how high gas prices are getting. I picked out a used, 2006 Volkswagen Beetle. It was a two-door car, yellow and seemed to be in pretty nice shape. It had 61,050 miles on it and costed $9,995. My monthly car loan payment would be $299.56 and to pay for maintenance it would $30 a month. Then lastly my gas would cost about $134 a month. I choose the lowest amount for miles driven because I would rather walk or ride bike if it were possible. However, you can’t walk and ride bike everywhere so I needed a vehicle.
Next, was budgeting for food, clothes and personal care. Normally, I don’t eat that much and could probably get by with only paying $100 a month on standard groceries, but I don’t want...