# Personal Living Expenses



## carolinahandyma (Jan 6, 2006)

For health insurance, find yourself a local independent insurance broker and ask them to get rates for you. Remember if you get insurance through your business it is a business expense.


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## skillman (Sep 23, 2011)

Did you try to add up what your being payed now and what's put into your health and retirement plan . To use as base model for you . I would even go 6 months of bank expense for safe net when you make jump . 

New York market would not help you knowing what expense's I have . Cost of living is high .


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## BamBamm5144 (Jul 12, 2008)

80k a year.


Oh wait I mean XX a year.


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## Jaws (Dec 20, 2010)

BamBamm5144 said:


> 80k a year.
> 
> 
> Oh wait I mean XX a year.


Wow. Still tripping , huh?


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## BamBamm5144 (Jul 12, 2008)

Jaws said:


> Wow. Still tripping , huh?


Yup. When things aren't fair across the board someone needs to speak out

It's the American way.


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## WarnerConstInc. (Jan 30, 2008)

I make sure I have enough for top shelf smoke, screw that Big Lots quality crap. 

Also, I have to account for my internet subscriptions too.


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## ArtisanRemod (Dec 25, 2012)

This is such an open ended question that it can't be answered. No two examples will ever be the same. My advice would be to search out a good accountant. Free advice on the internet is not what you need here. Begin planning with a professional, get a plan, and stop short of nothing to make your business succeed.


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## Fishhook (Feb 1, 2013)

Spencer,if You're covering costs of living on Your current wage,then You should know what cost of living expenses are...to calculate what You should be billing out at is kinda simple...take Your current hourly pay rate and add 10 bucks...that's the labor cost for Your company.Mark it up 10-30% and that's Your billing rate. That's assuming that You're keeping Yourself busy 40 hours per week.I found that tracking My living costs were super easy.Keeping Myself going 40+(billable hours) was the tricky part. Make sure You can keep Yourself busy,first!!


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## world llc (Dec 9, 2008)

depends where you live! 

i'm in Jersey in a somewhat modest house... mort+taxes over 50k a year...


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## jamestrd (Oct 26, 2008)

world llc said:


> depends where you live!
> 
> i'm in Jersey in a somewhat modest house... mort+taxes over 50k a year...


I cant quote my living expense to earnings ratio..i may get audited


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## world llc (Dec 9, 2008)

i got a great accountant for you!!


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## griz (Nov 26, 2009)

Pick up cans twice a week & hit the soup kitchen for a sandwich...:whistling

It's tough....but I get by...:thumbup::laughing::laughing:


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## Warren (Feb 19, 2005)

The tax man will want his cut also. Fed, State, local, FICA.


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## J L (Nov 16, 2009)

Spencer said:


> Sorry, I'll try and be more pointed in my questions...
> 
> I am curious how much more I need to make especially in regards to health insurance.
> 
> ...




High deductible health insurance for the wife and I is around $500/month.

I didn't borrow money to start the company. I had already acquired a base set of tools and a truck. Purchased various other trucks/trailers/equipment for cash over the next few years. I just took out my first loan to purchase my own shop. :thumbsup:

Mistakes I made when I started - not charging enough. Simple as that. I thought a 10% markup was crazy and people wouldn't pay it. I couldn't have been more wrong.

Make sure you have enough cash cushion for the company to where you can give yourself a regular paycheck. This can be tough to do at times but it makes personal finances so much easier.

Best of luck to you.


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## Spencer (Jul 6, 2005)

Fishhook said:


> Spencer,if You're covering costs of living on Your current wage,then You should know what cost of living expenses are...to calculate what You should be billing out at is kinda simple...take Your current hourly pay rate and add 10 bucks...that's the labor cost for Your company.Mark it up 10-30% and that's Your billing rate. That's assuming that You're keeping Yourself busy 40 hours per week.I found that tracking My living costs were super easy.Keeping Myself going 40+(billable hours) was the tricky part. Make sure You can keep Yourself busy,first!!


Thanks for all the good advice to everyone. 

I keep a sharp pencil with my personal finances but we just moved about 10 miles so everything has changed. New house should be very cheap to operate (geothermal/wood with 2x6 walls 1"foam and wet cellulose) but we have a lot bigger mortgage payment because we were renting a place for 350/mo before.

I have been thinking through exactly what you said. I work as the mill man for a lumber yard. Do a lot of custom woodworking but also a lot of more mundane cutting as well.

So I take those numbers and compare them to what I think I can make starting out and I know it would be very tough the first few years, especially considering the fact I'd be giving up over 2 weeks paid vacation+paid holidays+health insurance+the fact that I go to work everyday no matter what the weather is or if there is work in the shop or not.

I'll quit rambling. Tough decisions.


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## J L (Nov 16, 2009)

Do you currently do side work?


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## BamBamm5144 (Jul 12, 2008)

$350 a month? 

Can't even rent a garage here for that.


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## Spencer (Jul 6, 2005)

BamBamm5144 said:


> $350 a month?
> 
> Can't even rent a garage here for that.


I know, we were very fortunate. It was even a pretty large house with a detached garage. My wife and I got married a little over 3 years ago, at the same time there was a couple from our church who were unable to get what they wanted for their house because of the bad market so they rented it to us. They gave it to us that cheap simply because they knew we would take care of it vs other renters who pretty much destroy everything. Now we moved and they were able to sell it. Worked out great for both of us.


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## KAP (Feb 19, 2011)

If you are putting together a business plan, you put in the salary you want to draw for the year, plus bonus, benefits, retirement, SS, etc... You define the income you want to make and the load that comes with it...

You don't put in your minimum expenses... it usually never works out that way... 

If you do not have someone to help you with your business plan (check with a local S.C.O.R.E. rep in your area) and bounce off these numbers, whatever number you come up with, multiply it by a factor of 1.25 until you have a handle on the numbers...


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## Spencer (Jul 6, 2005)

RemodelGA said:


> Do you currently do side work?


Yes, I can usually stay as busy as I want on the side and charge well. If I went into business the greatest advantage I would have would be through the lumber yard that I currently work at. I would get a lot of work thrown my way as there is a huge void in the market for an exceptional remodeler.


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## cabinetsnj (Jun 10, 2012)

Spencer said:


> It would not be possible for me to gross 100k the first year much less live off that.
> 
> I was told by someone successful, "You can get by being a one man show but that is all you will ever do, if you want to make any money you need manpower." I am operating under that premise as a general rule.


Yes, you make money when other people work for you. There are limits on what you can achieve on your own.


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## MSLiechty (Sep 13, 2010)

Our expenses are about $2K more than we make each month.

ML


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## MSLiechty (Sep 13, 2010)

Spencer said:


> We are savers also.
> 
> I am a gun guy. I have cut back since I started looking at stepping out on my own business again and built a house.
> 
> We grow/can a lot of food.



Ahh like minded people... My wifes a saver I Keep prying it from here hands for new custom rifles.

ML


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## Spencer (Jul 6, 2005)

> Our expenses are about $2K more than we make each month.


That's never good.  Thankfully our income is about 2k over our expenses each month.



> Ahh like minded people... My wifes a saver I Keep prying it from here hands for new custom rifles.


I know we would be better off if I handed over out personal finances to her, but what would the fun be in that.


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## mk5065 (May 25, 2009)

Sounds like your playing it right. Maybe take a better look at your expenses by looking at previous years bills. We have everything on simple spreadsheets so we know what we need to make to maintain our lifestyle that is pretty modest in my eyes. This year looks like the most profitable in our 9 years of buisness. I have 2 kids and a wife that cooks all the time and we spend about $1000/ month on groceries! And my wife uses coupons and is very conservative. Maybe she has a huge savings I don't know about and it's really $500/ month?!!


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## mk5065 (May 25, 2009)

The reality is you need to figure out what you need to make and be realistic. I have never heard of a contractor that actually puts away for retirement in the beginning of the business. You will be lucky enough to make ends meet. Alot contractors have wives with great jobs and like to think they are doing good. When in reality they are making next to nothing and their business survives because the spouse is holding down the fort. 
When I went on my own my wife and I made sure for a few years before hand that we could survive on one income. "Hers" in case the co. failed. It worked for us!! The co. didn't make money for quite a few years and is now after 9 years really starting to be profitable. It was just a paycheck. It is not going to be easy but keep trucking and TRACK YOUR JOB COSTS during and after each job!! Know your numbers. 
Another mistake I made was I was so busy trying to keep up with the current jobs and not taking the time to be prepared for what was coming up. So take a day here and there to place your orders, go through receipts, pump out the 4 estimates, etc. It will help you in the long run. I have had people say to me " no work today??" And I just laugh. Best of luck to you with your new venture.


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## Metro M & L (Jun 3, 2009)

A hungry man goes down to the river hoping to catch a fish. He calls his friend and asks how big a fish he should catch? They talk at length about what can be done with a one pound fish, a ten pound fish, a 100 pound fish. They finish their conversation and its late in the day. Still hungry, the fisherman realizes he doesn't have a hook in the water and he forgot to bring bait. That night as he laid in bed hungry he decided he would ask his friend how to catch fish in the morning.


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## maxwage (Nov 25, 2012)

You're not from Spencer are you?! I live 45 minutes south of Indy. 

I just got back in the trades 2 years ago roughly from a job with full benefits. 

Although I net significantly more annually, the loss of health insurance and paid vacays, holidays, steady, consistent work, almost doesn't make up for the wage increase. 

Fortunately, I'm almost 30 and in good health. I'm divorced with a 5 year old, so in addition to my own expenses, I have child support plus a Daddy's girl to provide for. My father taught me to live considerably below your means. Factor in what you need to live on each year, plus x% for savings and retirement.

I know many contractors here that will have to work until they die to maintain their lifestyle, and are decrepit and miserable. I don't want to be in the field everyday when I'm 60...


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## Spencer (Jul 6, 2005)

maxwage said:


> You're not from Spencer are you?! I live 45 minutes south of Indy.
> 
> I just got back in the trades 2 years ago roughly from a job with full benefits.
> 
> ...


Thanks for being realistic. Now I'm really not sure what to do as now I got a good sized raise. There is something to be said for going to work everyday no matter what, health insurance, paid vacation and holidays etc etc. Tough choices. 

I know a lot of older self employed carpenters that would kill to have my job. They are getting worn out and would love the work environment I've got, my problem is I'm 25 and still love getting dirty and going home beat at the end of the day. As long as I can keep doing side work it helps keep the craving down.


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