3.05.2018

Money Management Right Out of College

Around this time every year, I get all my paperwork ready to do m
y taxes.  As I was doing this, I chanced upon a stack of six-month budgets I produced right after my college years.  There were seven such documents, perfectly capturing my personal budget from the 3 1/2 year period from July 1995 to December 1998.  Here is the info, averaged to annual and monthly amounts.


Annual Monthly %
Salary $25,000 $2,083 100%
Taxes $7,646 $637 31%
College/Retirement Savings $2,286 $190 9%
Giving/Gifts $6,498 $541 26%
Rent $1,927 $161 8%
Utilities/Phone/Transportation $2,544 $212 10%
Food/Personal/Medical $3,117 $260 12%
Leisure/Discretionary $697 $58 3%
Net Income (Loss) $286 $24 1%






What an interesting window into my life some 20 years ago.  Some random thoughts:

* I earned a $25,000 salary at my first job out of college, at the then West Philadelphia Enterprise Center (now The Enterprise Center).  Depending on how you want to calculate inflation, that works out to about a $40,000-$45,000 salary nowadays.  As you can see, I did not get a raise during this time period; I think my first raise was in or after Year 4 there.

* At the end of 1995, 1996, 1997, and 1998, I funded an Individual Retirement Account at the then-max of $2,000.  Between my dad and my job with two stockbrokers, I'd had the power of compounding interest pounded into me, so there was no way I wasn't maxing out my IRA.  (By my recollection, The Enterprise Center introduced their 403b, the non-profit version of a 401k, after this period, so I didn't get to use that vehicle until after the time period in question.)

* During this time period, I was tithing to my local church (i.e. donating 10% of my gross salary), plus supporting a bunch of ministries on a monthly basis, such as Compassion International (sponsor a kid), Christian Aid Mission (support indigenous missionaries in their home countries), and Opportunity International (fund entrepreneurial ventures in the developing world), as well as spending money on the youth ministry (and its youth) that I was involved in at my church.

* My rent during this period was ridiculously low, partly because University City still hadn't exploded in value and partly because I shared a house with anywhere from five to nine people. 

* I didn't have a phone or a car, so my telecom utilities and transportation costs were pretty low too.  (I did pay house utilities, which we split between housemates so again having lots of them helps keep costs down.)

* Re: other living expenses, I didn't have any other mouths to feed except my own (I've added a few since then), I bought all my personal care supplies when they were on sale and I had a coupon (note: I still do this), and hardly ever had any medical expenditures (oh how I wish that were true today).

* Most of the leisure things I did were free or close to free, like go hiking and biking, rather than things that cost money, like go to the movies or get drinks.  (If avocado toast had existed back then, this might've been different.  OK, that's a boomer/millennial joke, never mind.)  I also didn't buy many clothes, and I didn't have a house to furnish.  (I did have a room, but I did that on the cheap.  For example, my desk at one point was a salvaged door resting on two used bookshelves.)

Importantly, thanks to my parents' saving up for me, I didn't leave college with any debt.  Obviously this is a huge piece of many kids' personal budgets nowadays, which as you can see I essentially broke even during this time period so if I had to write a check for several hundreds of dollars a month, something else has to give. 

Not sure if there is a takeaway here; my situation is different than that of many, and today is not the same as 20+ years ago.  Nevertheless, who knew back then when I was making these spreadsheets that the 40something version of me would one day find them and make them into a blog post?

















































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