Salaries

[Bevmac]

@ Robbie_P

[Annelie Siemens]

hey,

is there anyone here that can comment on whether 80k will be ok if you live if perth? Of course keeping in mind, that we know we will have to start at the bottom and work our way up again, but it will be interesting to see if we can survive on 80k in perth or not, judging from your experience.

Annelie

[Willem en Luzelle JvR]

Hi Annelie

We live South of Perth in Mandurah. My wife, 9 month old son and me. We live a modest life. I earn about $70K/year. We have money left every week to spend as we please. My wife receive about $200/forthnite from Centrelink. We rent a 3 bedroom, 2 bathroom property. We have 2 small cars and an old 4x4. No monthly repayments. We live a lot better than we expected and eat very well. I love meat, have regular barbeques and don't stinge on food.

Your situation will depend on the size of your family, whether you smoke/drink and how much, since that can be a big chunk of your salary.

Best of luck

Willem

[Mike Schultz]

Hi, just wondering - are the numbers being discussed before or after deductions?

Thanks, Mike

[Robbie_P]

I would assume before deductions

[HansaPlease]

Yep, I'd say most people quote annual figures to be before deductions. Other thing to remember when looking at job ads is whether the annual figure quoted is including or excluding super. $80k package is not the same as $80k plus super...

[Short&Tall]

Some salaries are advertised on the internet including the employers contribution to superannuation (9% or more) some are advertised without.

It is worth checking so that you compare like with like.

[zetman]

is there anyone here that can comment on whether 80k will be ok if you live if perth?

I'd say in Perth you could make things work with $80k more than in Sydney. It really comes down to circumstances and budget. If you earn $80k plus super (i.e. a package of about $88k) your take-home pay after tax will be around $5,000 per month. The basic expenses for a family to survive is obviously accommodation, transport, food and basic telecommunications (as a minimum). Below are indications of monthly costs for Perth:

Accommodation = $1,800 - $2,400 (renting a 4 bed, 2 bath house in suburbs; living in a 15km to 40km radius outside CBD and less than 30 minutes drive from beach)

Public transport (15 to 25km train trip daily to CBD and back) = $160 to $200

Mobile phone = $100 (2x phones at $50 each)

Own car = $650 for $25,000 car (i.e. new Mazda 3, Corolla or low mileage second hand Camry, Falcon)

Car insurance (if applicable) = $70 per car

Food = $800 - $1,200 (depends on size of family, and how savvy you are at shopping)

That adds to between $3,580 and $4,620 without any luxuries or schooling (and of course without any government assistance payments). So in Perth it's possible to come through in the black. The problem with Sydney is that the rental housing is probably about 20% to 30% (if not more) pricier for something the same size and distance from the city and beach. That can easily add an extra $1,000 a month to live in the same kind of house and proximity to city and beach in Sydney. You also have other costs factors between say Perth and Sydney. In Sydney our car insurance was almost double to what we pay in Perth, Sydney has loads of toll roads which Perth doesn't (at $5 - $8 a go that quickly adds to a couple of hundred a month if you drive through them often), you pay parking to go to the beach in Sydney which places like Perth still don't have. All those things together can easily add to another $200+ a month in a place like Sydney.

So, in summary, key things to look at in my view are.

1.) No matter where you live, accommodation will be your number one expense. Comparing a like for like house between a place like Sydney and other cities will show a fairly big difference in price (and yes, you can get a house in Sydney for $1,800 but it will be much smaller and/or much further outside the city and away from the beach than a $1,800 house in cheaper cities like Perth, Brisbane or Adelaide.)

2.) Most of your your other costs like phones, car, transport and even food is roughly the same everywhere; but...

3.) Large cities like Sydney and Melbourne come with extra 'lifestyle costs' in the form of things like dearer insurance, toll costs, parking fees etc. They are awesome places to live and on average their salaries are higher to reflect the higher living costs, but if you're on the bottom end of the salary scale it does add to some extra pressure.

That's just my views and some basic calcs, but everybody's exact budget will differ.

z

[Robbie_P]

Zetman, I have replicated your estimates to my situation in Sydney for a family of 4:

Accommodation = $2000 (renting a 4 bed, 1 bath house in suburbs; living in 40km radius outside CBD and a 35 minute drive from beach)

Public transport = $140

Mobile phone = $50 (1x phone for my wife, I have a company phone)

Own car = $350 for $15,000 car (2008 Holden Station Wagan)

Car insurance (if applicable) = $90

Food = $650 (about $150 per week, for a family of 4)

That adds to $3280 without any luxuries or schooling (and of course without any government assistance payments), so with a take home salary of $5000, it still leaves you with about $1700 per month to spend on luxuries or to save.

Based on the above, you can live very comfortably on $80k in Sydney, which is why I find it strange that some people say you cant or life will be a struggle.

[Tracey Walker]

Zetman, I have replicated your estimates to my situation in Sydney for a family of 4:

Accommodation = $2000 (renting a 4 bed, 1 bath house in suburbs; living in 40km radius outside CBD and a 35 minute drive from beach)

Public transport = $140

Mobile phone = $50 (1x phone for my wife, I have a company phone)

Own car = $350 for $15,000 car (2008 Holden Station Wagan)

Car insurance (if applicable) = $90

Food = $650 (about $150 per week, for a family of 4)

That adds to $3280 without any luxuries or schooling (and of course without any government assistance payments), so with a take home salary of $5000, it still leaves you with about $1700 per month to spend on luxuries or to save.

Based on the above, you can live very comfortably on $80k in Sydney, which is why I find it strange that some people say you cant or life will be a struggle.

[Tracey Walker]

Zetman, I have replicated your estimates to my situation in Sydney for a family of 4:

Accommodation = $2000 (renting a 4 bed, 1 bath house in suburbs; living in 40km radius outside CBD and a 35 minute drive from beach)

Public transport = $140

Mobile phone = $50 (1x phone for my wife, I have a company phone)

Own car = $350 for $15,000 car (2008 Holden Station Wagan)

Car insurance (if applicable) = $90

Food = $650 (about $150 per week, for a family of 4)

That adds to $3280 without any luxuries or schooling (and of course without any government assistance payments), so with a take home salary of $5000, it still leaves you with about $1700 per month to spend on luxuries or to save.

Based on the above, you can live very comfortably on $80k in Sydney, which is why I find it strange that some people say you cant or life will be a struggle.

This is our budget every month - we also live in sydney - and as you can tell we require roughly between 6000 to 7000 dollars to meet our expenses each month before we can even think about having fun!

Accommodation = 700 pw = 3040 per month

Health Ins = 400 per month

Car and Ins = 770 per month

Orthodontist = 300 per month

Food = 1600 per month

Public trans = 140 per month

Petrol = 120 per month

Optus = 200 per month

Mobile = 90 per month

Electric 900 every quarter300 per month

Gas 200 every quarter 65 per month

Water minimal

School fs 1000 every quart330 per month

Kids pocket money 100 per month

The above excludes visits to doctors which you pay up front and then claim back later, school uniforms, car service, car rego etc!

[zetman]

Hi guys,

Thanks for that. What's interesting comparing the two additional sets of numbers, are:

1.) The impact of accommodation as previously stated - a difference of $1,000 per month between Tracey and Robbie's numbers. At $5000 a month net salary that's a 20% impact on your money.

2.) Buying older versus newer cars will off course reduce the car cost - but then again not all families will be able to live with just one car in which case you'll save public transport but need to pay for a second car.

3.) As expected food is also big variable because all families eat differently - budgets can vary by as much as $1,000

4.) There are costs that are easy to forget about(as I did ). Such as health insurance, water, gas, electricity and unexpected medical incidentals. You'd need a bit of fat to cover these if an when they come up.

I guess it confirms with some real numbers why some people say you can and some people say you can't live on $80k. Differences in circumstances quickly add to an annual difference of $20,000 per year (without even trying too hard I'd say) - which if you're only taking home $60k after taxes is a lot. When we lived in Sydney our budget came in closer to Tracey's than to Robbie's - no offense meant Robbie, I'm just saying you're doing very well in stretching your dollars

So coming back to the original question, as others have said it's hard to definitively say whether you can on can't live on a certain salary - it has been debated many times. The best you can do is be realistic to the fact that some places are more expensive to live and try to, as accurately as possible, estimate what you're personal budget is going to be based on the lifestyle you plan to live, and then to try and work backwards against any salary offer to see if you can make the books balance (I'm saying this mainly for the benefit of those in SA who may be trying to answer that little chestnut).

By the way Robbie, I remember way back when you were still in SA you did do a lot of estimating and analysis. Just out of interest, how did your estimates compare to what you've ended on now that you're here? Is there anything in hindsight that you over or under estimated?

z

[rozellem]

Yes, its very much down to how you live and spend your money. And like others have said before, I would much rather be tight on money in Aus than in RSA. Rent/mortgage is definitely your biggest expense in Australia. That is why we "newcomers" might struggle on the same salary as a local born and bred Australian. Most Aussies I know got some help from their parents towards their house deposits. Because you have to remember, the parents probably paid peanuts for their now million dollar houses. Around our area we have a lot of old people who have been in their houses for 50+ years. When they pass away, their children sell these and split the money. One such house in our street is going to auction today, they expect $1.1mil and above. Then you still have to sink a good $100k into the renovation. Will be a stunner in the end. But my point is, we are not in line for a windfall from our parents estates like my Aussie friends are. Most likely my parents will need my financial assistance.

We live in a Federation semi. Google it if you dont know what it is, but we are are attached to one neighbour. Solid brick built, over a hundred years old, 3 bed, one bath, small court yard, no parking. The identical house next door recently sold for $856 000. He has been renovating it for the last 3 months and will probably spend $80k on that. For interest sake (and what will blow your RSA mind) he is a single, 50 year old, postman! If he paid the 20% deposit ($172 000), his monthly repayments (over the next 25years) will be $4 926. True, there are much more affordable areas in Sydney, but unfortunately this is where I would love to settle. So, hoping for either a Lotto win or a drastic correction in the market. Sigh.

[thehulls]

Zetman, I have replicated your estimates to my situation in Sydney for a family of 4:

Accommodation = $2000 (renting a 4 bed, 1 bath house in suburbs; living in 40km radius outside CBD and a 35 minute drive from beach)

Public transport = $140

Mobile phone = $50 (1x phone for my wife, I have a company phone)

Own car = $350 for $15,000 car (2008 Holden Station Wagan)

Car insurance (if applicable) = $90

Food = $650 (about $150 per week, for a family of 4)

That adds to $3280 without any luxuries or schooling (and of course without any government assistance payments), so with a take home salary of $5000, it still leaves you with about $1700 per month to spend on luxuries or to save.

Based on the above, you can live very comfortably on $80k in Sydney, which is why I find it strange that some people say you cant or life will be a struggle.

Wow - I live on the Gold Coast, family of 5 and there is no way we could survive on a grocery bill of $150 per week. My kids are not even teenagers so I can't use that as an excuse for the food....we spend around $250- $300 per week on groceries including toiletries and cleaning products.....and that is on a good week!

[Riekie]

Also, where it applies, make provision for school uniforms, school excursions, p&c levies, subject fees, etc. Car services & rego's, clothing, birthday & Christmas gifts, birthday parties, family bbq's, movies, take-out/eat out, holidays, after school care/daycare, haircuts, foxtel/austar, council rates, membership/club fees, gym, extra-mural activites/sports for the kids, etc.

[Robbie_P]

zetman, my estimates were pretty spot on i think in terms of our standard living costs, however, the expenses which did catch me out one month was renewing my rego ($350), greenslip ($600) and repairs which were needed on my car ($750). All these expenses came within a few days.

I think for people who have been living here for a while quite easily start increasing their monthly expenses by getting a 2nd car ($500pm), foxtel ($100pm), private health cover ($350pm), gym ($100).. just to name a few. As you can see, your monthly expenses can grow quite quickly.

I think the trick here is to live within your means, in terms of your income. There is no reason why a family with an income of $60 000 cant live comfortable.. if they live within their means. On the flip side, I'm sure you get families who have an income of +$250 000 still complaining that its not enough.