Living costs for single person

[MichaelvdBerg]

Hi there,

I have been doing some research on whether I will be able to live on the salary that I will probably be earning in Aus and was hoping to get your opinion on whether I'm accurate or not. I based these calculations on average prices I got from online shopping etc. I'm going to be in Oz alone without family so I'm planning this to be as accurate as possible.

(please note that I'm a noob with things such as tax etc)

A software engineer with my experience, which I gathered from all of the job search websites such as SEEK, averages about $90000pa. Using the tax calculator on http://www.ato.gov.au/scripts/taxcalc/calc_standard_hire.asp

leaves about $5,459.00 after tax

Now for the estimated expenses in Sydney per month:

Food $500

Rent $1200

Electricity $70

petrol $200

medical $100

car loan $500 - - not too sure on this one

Internet $90

Insurance $100

Telecoms $50

play money $400

TOTAL $3160

and leaves about $2000 saving money??? this is like twice as much as i can save in SA!..

There must be something wrong since this is too good to be true

What did I miss? I'm sure there is something big

Regards

Michael

Edited September 26, 2007 by MichaelvdBerg

[Cindylou]

Hi Michael

I'm not in Aus yet, but I would suggest that you read through some of the other threads, in particular this one. If you browse through the Money forum you should find some other helpful posts. Sorry I can't be of more help!

C'Lou

(PS happy saving)

[Springbok]

Rather use the individual tax tables at www.ato.gov.au

For a Gross Employment Cost of A$90,000 p/a (assuming super is excluded), your tax works out to $23,100 p/a which means you take home A$66,900 p/a or A$2573 every fortnight (2 weeks). Which is roughly equal to the A$5,459 p/m you calculated. But it's common here in Australia to be paid every 2nd week.

I am also single and live in Sydney, however our spending patterns and material needs may be different, we may earn different incomes and live in different types of accomodation. However for a gross income of A$90k p/a, the average expenditure for you could be as follows for a net income of A$2573 on a fortnightly basis:

Food $200 (should be enough for 2 weeks)

Rent $800 (could be A$600 - A$1000, depends where you live)

Electricity $20 (A$40 p/m)

Internet $27 (A$55 p/m for 2gig through unwired.com.au)

Telecoms $20 (just buy a prepaid card for A$40 p/m)

play money $200 (depends how much you play)

The following I am not sure about, as I use public transport. It's a waste to buy a car except if you really need it and use your car every day. The public transport should suffice:

petrol $200

car loan $500 - - not too sure on this one

medical $100

Insurance $100

TOTAL roughly $2200 per fortnight for the above

and your net income is A$2573 p/fn, so savings of A$373, or roughly A$746 p/m.

Don't get too excited though, it's only when you actually start living and spending here, that you will get the real picture.

On average, Sydney is 2x more expensive than Joburg. e.g. you'll pay about A$8 for a burger and chips, which is R48. In South Africa you'll pay roughly HALF that, i.e. R24.

[MichaelvdBerg]

Hi,

Thanks for your reply. Is the rent you estimated to be $800 on a weekly basis or 2 weeks?

hehe, just by the way, fast food prices in Joburg have shot through the roof big time..those buggers cant wait for an excuse such as petrol etc to put up their prices and we just keep on paying for it.

Luckily I dont eat fast food easily and love to cook instead. I've heard that the living costs are twice as much as in Joburg but so are salaries. It seeems that I will be somehow be able to save more there than here and I blame our rising living costs here for it.

It's weird but I can barely afford all the stuff I mentioned in that list currently in SA and dont have much playing money either. We pay through our noses for the basics here...(telkom, vodacom etc etc comes to mind).

Regards

Michael

[Springbok]

the rent is usually quoted on a weekly basis over here, so look at A$300 - A$500 p/w. Therefore A$400 p/w = A$800 p/fn

Inflation here is 2.1%, in South Africa it's above 6%.

the salaries in Sydney are not necessarily 2x that in Joburg. In the longrun I think you'll be able to earn much more over here, but temper your expectations when starting out here. So don't think if you earn for example R300,000 in Joburg, that you will earn R600,000 = A$100,000 in Sydney. It all depends on the type of work you do, how much experience you've got, who you work for in Sydney, etc., etc.

[MichaelvdBerg]

Yeah, I know that one should actually not work it back into rands all the time since life is completely different financially over there.

It comes back to what you can afford for your 8 hours a day over there vs over here.

I think established people over here take a much bigger knock than someone like me who's got no assets (except for a car).

Living costs in SA is concerning me a lot since its been on a stern incline as of late and its getting very difficult for me to get established. If I take a home loan for a small place, I can kiss half of my take-home good bye. It's a little better over there for people who are getting established from what I've seen so far.

It boils down to what one can save at the end of the day and it looks a bit better over there because of a more stable inflation pattern.

Just for the kicks, I want to give an example of the time I worked as a student at a Pizza Perfect. Their 'perfect' pizza cost R25.90 in 2000. Now its R48 for the same pizza, a 56% increase. This increasing is not stopping as they looking to put it up again. This is what's making me queezy about our long term future cos at some stage the salaries won't be enough to buy the basic things for even professionals.

Michael

[kangaroo]

Just for the kicks, I want to give an example of the time I worked as a student at a Pizza Perfect. Their 'perfect' pizza cost R25.90 in 2000. Now its R48 for the same pizza, a 56% increase. This increasing is not stopping as they looking to put it up again. This is what's making me queezy about our long term future cos at some stage the salaries won't be enough to buy the basic things for even professionals.

Hi Michael, yes you've got a point.

I work in the advertising, marketing and communications industry and one of our clients is a well-known national pizza chain in South Africa who had to reprint their menus for the second time this year due to significant food inflation. We sourced various statistics and figures to inform customers of the situation and also to give them background as to WHY a second menu increase was necessary.

One such article (with relevant figures) was recently published in The Sunday Times on 26 Aug 2007: Food prices erode spending power

Some of the statistics and facts highlighted by this article:

“Food prices rose by 9.5% in the year to June, well above the general inflation rate and the targeted 6% rate set by the Reserve Bank, and are expected to continue to rise in the current quarter, according to the National Agricultural Marketing Council.”

“Retail beef prices have increased by 34c a kilogram each month since January 2006.”

“Macroeconomic factors such as the oil price, interest rates, exchange rates and inflation will be the main factors influencing food prices in the next three months, said the National Agricultural Marketing Council.”

“Rising prices of feed grain products, as well as dairy products, will result in higher prices of beef, chicken and pork. Global dairy products have risen by 46% since November last year, with milk powder increasing the most.”

“Of all the food items monitored by the National Agricultural Marketing Council (and not only those that make up the CPI food basket) prices rose by 13.7% in the year to June.”

An additional fact (from Can you still afford to braai? on Independent Online on 4 Aug 2007): “Wheat, the major component of bread, has increased [in price] by 100 percent in the past year.”

[Springbok]

Inflation - the tool which welfare governments use to gradually confiscate your wealth and hence erode your spending power. And how do they create inflation? By dropping interest rates too low, so that people spend more than what they normally would've. And when there is too much money in circulation, the prices of goods and services will be inflated. So the central bank raises interest rates again to "fight inflation". Then those with debt, find themselves paying more interest to the banks and consequently their spending power is eroded.

I'm not going to ramble on too much about this, just note that the gold price has risen from US$252/oz in 2001 to its current level of US$730/oz. It may very well continue its upward trajectory and break through US$1000/oz within the next 5 years. Why? Many reasons, but one is that it is a safe store of value. It preserves wealth. A more academic discussion was written by Alan Greenspan himself in Gold and economic freedom in 1966.

As for paper currencies, they can be utterly destroyed through the games central banks and governments play. Just look at the Zim$ and the resulting hyperinflation of a few THOUSAND %! Even the once mighty US$ has become very shaky against currencies like the British pound, euro and Canadian dollar. For an interesting case study, have a look at the Weimar Republic (1919 - 1933) liquidity driven currency collapse. Hyperinflation pushed the price of a loaf of bread from 163 marks in 1922 to 200 MILLION marks in November 1923!! The result was the following:

People were paid by the hour and spent the money before its value was worthless;

People had to shop with wheel barrows full of money;

Bartering became common;

Pensioners on fixed incomes suffered as pensions became worthless;

Restaurants did not print menus as by the time food arrive…the price had gone up;

The very rich suffered least because they had sufficient contacts to get food;

The group that suffered a lot was the middle class, as their hard earned savings disappeared overnight.

Sounds familiar? Zimbabwe yes. Will this happen in South Africa? I don't know, but the odds are certainly higher for it to happen in South Africa than in Australia.

[MichaelvdBerg]

Springbok, your words are so true,

I've always thought that this whole interest rates movement is stir that moves the money away from the consumer and into large corporations such as our lovely banks..

I'm actually sickened by the fact that SA banks, with the exception of the Swiss Banks, have the whole policy of the consumer having to PAY to have their money banked. In virtually the whole world the banks dont have such extravagant rates and dont charge for everything. They've got the attitude that they know how to invest your money and that they need you to bank with them while here they have the attitude that you are privileged if they serve you.

I just feel that in SA the consumer always comes last and its like they just willingly bend over for another lashing.

Sure one would get this everywhere but I'm sure that Aussies will speak up against unethical businesses and boycott the services and products of those organizations....doesn't Telkom come to mind with it's R5,6 Billion profit and we all know they dont have competition.

Edited September 26, 2007 by MichaelvdBerg

[DesV]

Your sums look good yes a lot of people support themselves and their family on such a salary, even buy houses

Suprised you are not on the plane yet.

Des