Topic: a fun little economics thing to try (Read 145 times)

frank1y nice try to get a dialog.

to all in what every place you live.

put your yearly income down one number one line
put your yearly spending down one total number but many lines.


I am usa  all yearly below

yearly income  is.     100 x

yearly total expenses  90 x
extra money.              10x

house tax        10 x
power                7x
gas heat cooking 2x
car.                    7x
insurance.         12x
food.                 15x
water.                  1x
sewer.                  1x
restaurant.            3x
repairs                   2x
taxes.                   20x
misc.                     10x

on my list i could work on

food
misc
restaurant


it is obviously the same method for all of us.

the difference is x value .

understand and completely agree on all points. which is why i wanted other people to post their numbers based on their situations IF they were min wage earners

usually i get 90% of interactions from americans on this forum which is why even as a brit i default my economics to "US speak"

the percentages/scenario math i used are not my design/suggestion, im from UK living way way more then min wage standards, so even my personal numbers differ from it. and yea its been years since i was on minimum wage so i dont economise the same way as a min wage person would in the UK/US.
the percentages are based on the US financial economics of things like the "golden ratio" 50:30:20
where the 50 is housing and bills(30:20)
then the 30 is the groceries and transport(20:10) and the 20 is luxuries or savings
i did tweak things a lil

anyways i travel alot and see many different cultures and economics. but not yet been to the region that use the rial
but i now have become interested as 1-2% for bills compared to min wage, which seems like micro percentages compared to my bitcoin life, far better then us/uk/euro economics (i also like the regions like thailand, so not sure where i wanna settle down to later in life)

(using google conversion rate)
UK min wage is 95m rial a month
landline phone/internet is MINIMUM 1m-2m rial
electric even used conservatively is 1.5m-3m rial
gas even used conservatively is 1.5m-3m rial
water (not metered but 'estimated') charge 2m rial
cell phone contracts can be 3m rial per person

so 13%+ for a single person but can be more for families(cell phone per person soon adds up)

Interesting topic but the numbers and ratio would drastically change if we consider different regions especially if we draw contrast between the east and west. I think there are two problems the first one being people usually don't plan there expenses in certain regions or it's more to do with the stage of life they are into, as youngsters don't give much importance to this sort of planning and by the time they have a kids they are on tight budget to make the end needs meet, second sort of issue is the underpaid employees who barely survive on salary without even leisure or entertainment or new clothing hence they don't have a way to invest.

First one can be resolved with better planning and the but the later issue requires a larger fix.

This will would work if we can keep to it on a daily basis. And life may not go so easy that every day there wont be any problems or other issues that could suck out our finances. I would try fixing this strategy to mine but the problem is i dont receive that kind of amount a mo9ht so ill adjust in percentage of how much of my income and see if it is something i can cope with. Thanks for the tips tho

This must be from the countries where minimum wages are settled to the per hour income however there are countries where the minimum wage is even lower. Unfortunately, when we walk through the store they do not differentiate between the 15/hour and 150/hour earners, both pay the same rate for everything. This void is what is disturbing all the time. Many price tags can come from the above-average wagering requirement, meaning they are a bit high for the low or minimum-wage guy.

In my country, it is even worse. You get based on what skills you have. We have the labor categories, blue collar, and white collar categories. Everybody earns a different income. The issue is even the white-collar guys are not earning enough, so just imagine what might be the condition of blue-collar to labor zone earners?

I think this is a very detailed discussion topic. That is why we ended up making long economic books to understand it thoroughly. The OP maths is correct but it doesn't apply equally everywhere.

It is quite dependent on how a person can make money every day from the work he does, the work conditions that are difficult to get will force people to think many things to start. Undergoing investment, expenditure and savings is a choice that must be run because when entering old age our lives will be better.

Usually I make a permanent expenditure list for each month, children's school fees and the cost of daily living needs, after the fulfillment is achieved, the rest will be invested in several places and also allocate for savings as much as possible. Of course it is not an easy problem with maintaining consistency to do that but if we want to enjoy older good age, this must be prioritized, while the amount of investment, savings and expenses can still be adjusted to the monthly income.

Really good to suggest but I think that’s as we are trying to maximize our salary and use them wisely, we need to consider some other options like improving our skills so we can apply for a better job that will pay better for even easier and less complicated calculations/management. We should also consider starting a business and could even be saving towards it. Remember, at the end what we’re all looking for is financial freedom and nothing else.

If someone adopt frugal living, they can save more money by not spend it for clothing, entertainment, luxuries and hobbies. So they can save 18% instead of 10%.

The thing is first world country still give you a chance to save money even everything are expensive on there, unlike third world country where many people keep complaining about their low incomes.

They almost have no chance to save their money since their incomes aren't enough to fulfill their basic needs: housing, bills, transport and groceries.

Well I used to be. But I believe in planning ahead so for example 10-15 years ago when I was a university student I saved up most of the income I had and invested wisely. Most importantly was my plan to eliminate the biggest cost in life which is "rent" in my country. Eliminating that was the biggest reason why I could end up with extra money to invest and move ahead in life.

Nah. As I said even with minimum wage, bills would barely reach 2.5% and that is in extreme cases of an extremely low income and a wasteful household. You see these things are really ultra cheap here. Let me do a quick calculation here with some numbers:
- Minimum wage is like 60 mil Rial per month.
- Electricity is ~600 Rial/kwh which with all the discounts it would be like 200k-300k per 2 months (or free for those who decrease their consumption compared to previous year LOL)
- Gas is 414 rial per cubic meter in cold seasons and 1350 in warm seasons and according to the gas company 90% of all the bills are less than 1000k rials and the bill is every 2 months too.
- Water is 1860 per cubic meter, that's less than 500k bill every two months.
(300k+500k+500k)/2 = 650k Rial per month which is 1.08% of minimum wage

The bills I paid last month were 460k gas + 300k water + 160k electric = 920k rial for 2 months or 460k per month which is like 0.1%-0.3% of my monthly salary (even less of my total income).
The gas bill a couple of months ago when it was warmer was about half that.

I excluded phone bill because I have no idea what the average is and what I pay is only data/internet cost.

ok so your not part of the "many people talk about their low incomes and their expenses"
i still think if your eating through 15% of groceries.. your electric, gas, water, telephone might of been higher then 1%
but good for you if your combined bills are only 1% high income.

sorry for assuming you were on low income and not having to pay any costs, though this topic was more for the low income earners struggling to find ways to economise and budget enough to invest

i too am on the wealthy side, i was looking for opinions from those in the low income side about how they budget their finances

I own a house! Bought it years ago with cash and with no loans hence the zero extra costs such as rent or loan payment (only repairs and stuff).

It's pretty simple, energy is ultra cheap in my country.

i was at first going to question your 1% bill assumption. but then i seen your housing is 0%
lucky for you to live with relatives.
and yes with that much excess funds, investing a high percentage would work for you.
(if only i was 20 years younger when i started investing)
make the most of it while you can

20% for bills (gas, water, electric, phone)? That's huge! Here it's more like 2.5% of minimum wage.
Although housing (if it means rent) could eat up a lot of the income considering how crazy it has gone up in certain neighborhoods in the past couple of years but it can be eliminated if you own a house.
For me it would be something like this:

         invest[60%]
          bills[ 1%]     transport[10%]
      groceries[15%]      clothing[ 1%]
        repairs[ 3%]       housing[ 0%]
  entertainment[10%]      

the great thing about economics.. is math
if your getting paid 11 a day. assuming a 8 hour work day. thus 1 hour = 1.375
if you look at YOUR native expenses and multiply your expenses by 10.9 you get topic post equivalent of 15/h
if you look at the numbers in the topic post and / 10.9 you get your native equivalent of 1.375/h

math is great, right

how about i do one better:
             your pay after tax [100%]
            invest[10%]        housing[30%]      
               bills[20%]      transport[10%]
        groceries[20%]        clothing[5% ]
             repairs[2%]         hobbies[1%]
  entertainment[1%]         luxuries[1%]

now you can work out some numbers

That only works for US based employees or those that have a really high paying jobs in countries that don't get paid in USD, 15 USD an hour is a dream come true for so many people here in my country because most of us get paid in minimum 11 USD a day so I don't know how are we going to do that? Even at your lowest, that's already a big dream for many people here. Maybe if this equation can be translated to a local currency for each country, we could be discussing something big because I feel like if we're to follow this, there's a possibility that a little relaxation in finances will be the reward. I still wish to get paid this way though maybe in the near future.

15/h is 120 a day

if you earn 14 a day in your local currency multiply your expenses by 8.5 to equal the sums equivalent in the title post
if you earn 13 a day in your local currency multiply your expenses by 9.25 to equal the sums equivalent in the title post
if you earn 12 a day in your local currency multiply your expenses by 10 to equal the sums equivalent in the title post

this is hard to do because first of all some people don’t even earn 15 usd in one hour in my country our minimum wage is literally less than 15 usd per day another factor is if they are paying for education as well overall it is not the way we budget that is making it hard for us to pay all our bills while still being able to live a luxurious life but the system that we work for

if i would tweak this format, it will be extremely different

so i see many people talk about their low incomes and their expenses and how to economise to either support a nice lifestyle or to maximise investments..

and so here is 2 scenarios of people on $15/hour and $20/hour and a basic breakdown of expected expense..
things like putting 15% into pension before tax.
then after tax putting ~10% into savings/personal choice investments
30% into housing. and so on



so lets see people views on how they would tweak the numbers of expenses to their personal preference to still cover essentials but maximise either a nicer lifestyle or more investing

its not a marked exam, its a fun experiment

to make it easy you can copy below to then adjust in your own post

                $15/h         total 1990                 ||                      $20/h       total 2514
                                                                 ||
            invest[$200]        housing[$600]      ||             invest[$250]        housing[$755]            
               bills[$400]      transport[$200]      ||                bills[$505]      transport[$250]
        groceries[$400]        clothing[$90 ]      ||         groceries[$504]        clothing[$125]
           repairs[$40]          hobbies[$20]       ||            repairs[$50]          hobbies[$25]
entertainment[$20]         luxuries[$20]        ||  entertainment[$25]         luxuries[$25]

maybe explain your choices too