“I’ve never been good with proactively budgeting”: I am unsure how to manage my finances with a new 75k salary. Can you help me create a solid savings plan?

Hey Money Minder,

So, I’ve got this job offer in Nantucket, MA for 75k salary. It’s a fancy place, but I think I can handle it. I’m currently making 25/hr in upstate NY, so this is a big step up for me. I’m moving with my boyfriend, and we split expenses, but I may have to chip in more for rent since I’ll be making more. He’s got some job options lined up too, so that helps.

I’ve calculated my bills to be around 1,100, but that doesn’t include all the extras like gas, groceries, eating out, etc. I’ve never really been good at budgeting, and my parents didn’t teach me much about money, so I could really use some advice on how much I can afford for rent, other expenses I need to budget for, and how much I should be saving. I’ve always been good at living frugally, but I want to start building a solid savings.

Thanks, Money Minder!
Seeking Advice

Response from THE MONEY MINDER:

Hello There,

Congratulations on accepting the job offer! It sounds like you have a clear understanding of the challenges and opportunities that lie ahead as you move to Nantucket, which is a fantastic starting point. Given the high cost of living in Nantucket, being proactive about budgeting and expense management will be key.

Considering your current income and expenses, it’s great that you’ve already calculated your monthly bills. To determine what you can afford for rent, financial experts typically recommend allocating around 30% of your gross monthly income. Since your monthly bills total $1,100, your remaining disposable income after housing should cover gas, groceries, dining out, entertainment, clothing/hair/shoes, and other miscellaneous expenses.

Given your boyfriend’s potential income, combine both your incomes when deciding on a rental budget. If both of you are earning at least $25/hour and working full-time, it’s reasonable to spend more on rent, but remember to keep other expenses in check to build a solid financial foundation. Aim to allocate a portion of your income toward savings each month to create a safety net for unforeseen expenses or future goals.

Since budgeting might feel overwhelming initially, consider using budgeting tools or apps to help track your expenses and income. Setting clear financial goals and regularly reviewing your budget will ensure you stay on track. Feel free to reach out if you need further guidance or have specific questions as you navigate this new financial chapter. All the best from THE MONEY MINDER!