debt
1.something that is owed or that one is bound to pay to or perform for another: a debt of $50.2.
a liability or obligation to pay or render something: My debt to her for advice is not to be discharged easily.
3.
the condition of being under such an obligation: His gambling losses put him deeply in debt.
These days we do hear a lot about debt, Country debt, States debt, County debt, City debt… personal debt, I think it’s the American way, be in debt?
It doesn’t matter where we live, but living in Silicon Valley, the costly area, if we fail to plan to live here, we’re plan to live always in debt.
Good Morning San Mateo- San Mateo is an OK area to live, it’s not too far from many big Silicon Valley’s companies. I’m going to live here and work for a high tech company on this great stretch of free way 101. The reason I chose this city because my mom just rented a 1bd apartment with my little sister for $1550 a month. Am I going to be in debt this morning or already in debt as soon as I woke up?
1. Place to live:
A. Rent: $1550.00/month.
B. Trash: 0.
C. Cables TV: $45 basic.
D. Electricity and gas: $50.
E. Phone: $27.
F: Water: 0.
G: Insurance: 0.
H: Property tax: 0.
I. Internet : $30(dsl)-65(comcast)
2. Going to work: 20 miles average 1 way = 40 miles round trip x20 days/month = 800 miles + 200 miles (weekend) = 1000 miles/mo.
I have a car that’s paid for, but I like to get or have a new one soon when this car dies.
Car payment: $0.
My car average 25Mpg, but stop and go on 101 = 20 mpg- Gas cost to work: $4.23 x 2 = $8.46 x 20 + weekend = $211.
Car insurance-full coverage- good driving records: $900/year-$75/month.
Car tires: 30000 miles (stop-go)/1000 miles/mo = 30 mos = $400 (average for 4)/30 = $13.3.
Car maintenance (what’s made to fail, will fail): Oil change (7500 miles/1000 = 7.5 mos) = $39 (average per oil change)/7.5 = $5.2.
Car Services (brakes – tuneup 30k miles) $600/37.5 = $16.
3. Nutrition (I got to eat-cook my own meals-bring my own lunch to work) – Not much- $15/day x 30 = $450.
4. Personal Hygiene:
A. Health insurance (good company with good health plan HMO): $100/paycheck x 2 = $200/mo.
A. Yearly Check up-Dental (good health insurance from my company-co-pay $35 each visit) = $105 (2 dental + 1 checkup)/year = $8.75/mo.
B. Fitness club: $15 mo.
5. Silicon Valley Living.
Starbucks: $2.5/day x 30 = $70.
Smart phone-iPhone: $75.
New phone – 2 years: $200/24 = $8.4.
Laptop (Windows not Apple): $500 every 3 years = $13.9 mo.
Clothes-Shoes (I don’t shop much-just look presentable at work and date-): $30.
401k (for my retirement) = $5000/year = $416.
Dating: 0. (cost too much?).
How much do I need to take home (AFTER TAX) to break EVEN (NOT to be in debt this morning) when I wake up every morning?
$3350.00
This is called fixed cost of living without any accidental expenses. Yes, if I don’t care about my future, no savings, I can take away the $416 a month 401k. If I don’t need to exercise, take off $15. month for health club.
Why do people get into debt? Because they don’t list all the minimum real cost of living. Yes, the tires, the car breaking down, the renewal phones, the laptop, iPads, iPhones are just on the credit card.
So, the next questions are: Should I buy a house? Get married, have kids? What’s foreclosure? What’s divorce (caused mostly by financial difficulty)? What’s child supports? Do our children ask to be born? Why do I choose to live in the costly Silicon Valley without any special skills, education, technical training?