The Mint: Spending Money: Where Your Paycheck Goes

You get your first job, and you're ready to move into an apartment and live on your own. How do you know what kind of life you can afford? Will you have enough money to make it in between paychecks? Let's see.

Here's a chance for you to see for yourself how to figure it out. And it's easy! You enter your choices, and The Mint will do the math for you. You'll see how well you did at the end of this "financial work-out."

P.S. And the good thing is that you can always go back and improve your choices after you've been through the experience once. Play around with the numbers until you get the budget where you want it.

Part 1 Calculating a monthly salary

1. Choose an income
Before you can begin to work out a budget, you need to determine your yearly income.

If you would like information on various occupations and their starting salaries, go to Starting Salaries. Then enter it on the income line below.
If you have a career in mind, and you already know the average starting salary, enter it below.
If you just want to work with numbers, choose any of the positions listed below to compare how lifestyles change according to the salary you earn.

Profession	Average Annual Income	Education
Travel Agent	$13,770	High School Degree Required
Flight Attendant	$13,700	High School Degree Required
Accountant	$34,500	4-Year College Degree Required
FBI Agent	$34,400	4-Year College Degree Required
Optometrist	$55,000	Requires More Than 4-Year College Degree

Enter your income

Enter the annual salary of the job you selected:

However, you won't get to take home that entire salary. You will have to pay federal income taxes, perhaps state income tax, and for sure, Social Security taxes. Then there are other costs deducted from your check, like health insurance, dental insurance, and contributions to worthy causes. Right now, you won't calculate all of these costs, but here's a short explanation of each:

Your federal income tax and any state income tax will vary, depending on your salary and your state.
How does Social Security tax work? As a company's employee, you are taxed at a rate of 7.65% for the first $84,900 of taxable income (as of 2001). Each year, this cut-off point rises slightly, but it should give you an idea of how much you must earn before you are taxed at a lower rate. Any taxable income over that amount is taxed at 1.45%.
Then there's health insurance — how much you pay depends on the terms of the particular health care plan you choose and whether you are insuring just yourself or a whole family.

Right now, however, let's keep it simple and just work with subtracting your federal income tax from your chosen salary. To figure out how much tax you owe, click here.

Monthly salary after taxes: $

Enter the amount you wish to save
What amount would you like to start with in your savings account? $

Select your savings option:
[Computer will calculate the interest from savings and add it to the budget.]

So now you divide the remainder of your salary by 12, and you're ready to begin making your own budget by deducting expenses from your monthly take-home amount. Want to see a budget first? Sample Budget.


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