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Saturday, September 1, 2007

Fargo, ND - Josh Miller is a 31-year-old computer programmer who pulls in a respectable $52,000 a year from a local technology company. An annual salary well over the median household income of North Dakota’s $39,233. Josh is single, has federal and state taxes taken out of his check, as well as social security. Josh currently pays for his own medical coverage and treats dental and vision as √† la cart√®.

Josh currently owns a home in Fargo valued by the county at $144,000. He purchased the home for $150,000, putting $10,000 down. Josh received a favorable rate of 5.75% and since he was only able to put $10K down, he pays PMI insurance.
We also looked at his transportation costs along with professional amenities and utitlies. Professional amenities include cell phone, Internet service, heat, water and other basic residential utilities. Josh, like many other young professionals, has opted to only carry a cell phone and not a land line.

Josh is an educated professional, he has student loan obligations which he is repaying on a monthly basis. He is also average in terms of credit card debt. Josh has roughly $8,000 balancing over two cards. For the purpose of this article we will be applying his minimum payments.

Other monthly expenses we have itemized are a 401K and gasoline.

Josh should have no problem having an above average quality of life in North Dakota. Or can he?

For the purpose of this exercise, The Business Journal used a budgetary worksheet provided by the American Consumer Credit Counseling Center to assist Josh with his personal budget. Next, we prioritized what a modern-day professional needs to stay competitive in the work place. Then we itemized according to ACCC’s budgetary structure, using Josh’s monthly payments.

The Brass Tax

Gross Check

Net Check

Housing Expenses

Transportation Expenses

Utilities & Professional Expenses

Other Loans & Liabilities

Additional Expenses

Total Monthly Expenses: $3,176
Net Monthly Income: $3,132

-$44 Monthly Shortfall

A Modern Day Employee’s $52,000 Salary and Expenses

Monthly Salary $4,333
Federal Withholding $685
State Income Tax $246
Social Security $270
Net Paycheck $3132

Housing Principal $817
Monthly Escrow Payment $343
Total monthly housing bill $1160

Transportation Expenses
Auto Lease $250
Auto Insurance $110
Gasoline/Repair $150
Total transportation $510

Utilities & Professional Amenities
CableOne/Internet $140
Verizon Phone $85
City of Fargo $36
Xcel $120
Total Utilities $381

Additional liabilities
Credit Card 1 $300
Credit Card 2 $150
Student Loans $225
Total additional $675

Medical Coverage $300
Monthly 401K $150 (Five percent of total check)
Total Other $450

Josh’s total Monthly Expenses before food, clothing, entertainment or charitable giving are $3176

Next Month: How far does 80K a year go for a family of four?

07/31/2007 | 1:18 AM | By: MikeRG

I can see how his credit card debt got to be 8K. Can't wait for next month's article.

08/02/2007 | 1:10 AM | By: AtHomeCEO

52K is a just enough money to give you a false sense of security. Not too much to trim there with his career - maybe buy the lesser expensive package from CableOne, I think it is like $20 less. Take that money and buy some food. No PPV Movies, that would be too much. All kidding aside, good topic and article. This is a problem that is on the rise. $225 for student loans is cheap and I thought a few other expenses were on the low end.

08/02/2007 | 1:16 PM | By: mrbizplan

Funny thing...I am a 30 something in the FM area making about the same amount of money. I am married, have three kids and up until last year my wife has not held a full time job (and for some years was a stay at home mom). I would say that a lot of the "struggle" for the person in this article has to do with lifestyle and, some of the numbers are out of whack (cable one bill?!? – there are other providers that bundle for about $50-$60 less). For example, in 2002 the four of us (before our youngest was born) we lived a modest but comfortable life in Grand Forks on about $36,000 a year total household income. We had an $800/mortgage, one car payment of $300 a month, about $4000-$6000 on a credit card, $30,000 in student loan debt, and household bills. But, we made it and even had some discretionary income for a movie every once in a while. Now we make about $90K a year combined, we have a larger house and all of the modern "necessities" and it seems like we struggle to stay ahead. Most of this is due to a relaxed spending policy once we finally "made it". Once we realize that "wants" are different than "needs" $52K goes a long way in ND.

08/11/2007 | 1:36 PM | By: grateful281

I would love to make 52K a year and when I do, I will make sure to prioritize my expenses. The problem is, I wasn't too sure what to cut out of your list. Health Care? 401K? Housing? Those look like the first to go and it opens up $450/month. I thought about the Cable and Internet, but I would probably spent more money by leaving the house because of boredom. Forgo the future to pay for your school loans, car, house and tons of insurance costs.

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