How much salary is decent these days?

[krycor]

Depends on life stage(not age directly!). I did this 2 years ago as an exercise when i relocated to jhb on a tight budget so that i could see if i could manage on the insanely low salaries offered for interns etc

3 basic life stages:
1. Single, 2. Married (no other dependants/kid/s), 3. Married with kid/s

I don't know the costs of stage 2 & 3 but can only speculate. Lets look at 1 as its the basis for it all(assumes staying on own):
Assumptions:
- You already have a 2nd hand car('nice' parents),
- live close to work as you should(<10km, reflected in rent higher, reduces risk of accidents and roadrage),
- clothes are assumed to be sufficient/nonreplaced (non-ideal, but lets look at this later)
- Excludes necessary start up costs like basic assets: washing machine, bed, microwave, fridge ~=7-8k
- you can cook healthy food, don't over eat

1. Static living expenses(basic non-variable monthly)
- Rent in a good/safe area(single): +/- 4.5-6k (3-4k if sharing)
- Medical aid (basic hospital/emergency): +/- 1k
- Life/disability cover(accidents happen): +/- R550
- Gym(luxury.. no, u need to be healthy as this affects longer term costs): R100

2. Living expense (variable)
- Food (typical if home cooked): +/- R350-550
- Misc(toiletries, household): +/- 150-250
-

3. Telecoms, Energy & Transit
- Electricity: +/- R300-350
- Petrol(1 tank): +/- R500-750
- Telecoms Cellular: +/- R350-450
- *Telecoms Fixed: +/- R 185
- *Telecoms Data(2GB): +/- R 100

*potentially luxury pending industry

I think total worked out to about: +/- 8.75k ~ 9k. This means that if u earning 12k pre tax(typical for developer roles with zero experience at national company), you have a margin of about R1.75k for saving, rainy day or getting in more assets(couch, tv, clothes, gf, bar etc). There are variances to this, such as cheaper accommodation(when i was in somerset west it was cheap, compared to jhb) or sharing.. but i'd not remove medical, life & gym!

This is why i reckon minimum for entry level grads need to be 14k due to increases in transit, energy costs etc, gives a better margin of safety, i've been in positions where my margin was as low as 250 or less. Those where hectic times wherein credit card saved me by delaying payments. Discovery PNP healthy foods helps you as i get about 70-150 bucks back monthly

Going further.. you can add more assets or savings when your salary increases, med aid.. well unless u over 35 with a chronic condition basic is fine. so add assets like house(remember you will need the total to be within 25% contrib of disposable to be viable.. rental agencies sometimes force this too.. i.e. if rental costs 5k, u need to earn pretax 20k), retirement savings, investments, gf or car etc

 

[Other Pineapple Smurf]

If one has to support a spouse, and a kid, as I do as well, 25k is scraping the breadline for Johannesburg. Sounds incredible but its true.

I worked out that a "comfortable" income for us is R35K per month and we rent. We need to push it up to R45K if we wanted to buy a house, else R40K to buy a townhouse.

At this amount one can cover public school fees, have a full time nanny, have hospital plan, two cars, etc but still no luxuries like pay television, air-con, swimming pool, etc, but one would not need to make debt or live uncomfortably either.

 

[krycor]

I work as a financial adviser, and it seems to me that if you are approaching 30 and not clearing at least 20k after tax, life is stressful. You need enough to cover your monthly consumables, as well as rent, retirement savings, car payments, insurance premiums, medical aid etc and still have some to save afterwards. Personally, I think you can only really start living, with less stress, and the freedom to make choices and the possibility of owning a home once you're earning about 30k - and that's assuming you don't have any financial dependents.

Lets face it.. life is expensive, and if you're only just getting by every month then you don't get to 'live' you just work.

This is EXACTLY the conclusion I came up with! Kinda nice seeing i wasn't far off from a financial adviser's conclusion.

 

[SauRoNZA]

Nah.
There's no way that you're saving enough for retirement at 10% RA on R15k net. And that's not to mention rainy day / emergency savings.
R25k net gets you closer, but still not feasible if you want something like a private school education for your kids (I view this as necessary, others may see it as luxury).
I reckon to have a house in the 'burbs, 2 kids at private school, an annual vacation and still live well during the year, then you need to be netting R40k (and hopefully get good annual bonuses)

You didn't quite listen to what I was saying.

I said with 25K, living on the budget of 15K you could live a happy enough life and retire early.

Thus meaning you would put away your 15% and overpay your home loan so it's paid off double quick and therefore you'd generate more money over the same period.

Now Private school education and the like changes the game completely and goes firmly into luxury territory.

 

[syntax]

When you guys say clear 20k - 25k, do you take that as having paid medical and pension (IE, what comes off in most companies pay slips?)

If so, clearing 25k is quite high. You are looking at 45k a month then gross.

 

[SauRoNZA]

I work as a financial adviser, and it seems to me that if you are approaching 30 and not clearing at least 20k after tax, life is stressful. You need enough to cover your monthly consumables, as well as rent, retirement savings, car payments, insurance premiums, medical aid etc and still have some to save afterwards. Personally, I think you can only really start living, with less stress, and the freedom to make choices and the possibility of owning a home once you're earning about 30k - and that's assuming you don't have any financial dependents.

Lets face it.. life is expensive, and if you're only just getting by every month then you don't get to 'live' you just work.

Don't you think it's got more to do with people living beyond their means and taking credit for exactly what the banks allow them to afford?

20k after tax means what 25k before Tax? That means they'll go buy a car with a R7500 monthly instalment because the bank says they can.

Is that financially sound? Certainly not.

Does it mean they are earning too little to make a comfortable living? Absolutely not.

They *could* be driving a car with an instalment of R3500 instead, or even drive the same one they've had for the past five years and continue prioritising other areas instead....however very few people do.


And this is where I feel financial advisers often fail people. They (you) will be quick to say you need to put this much away to save X when you turn 65 etc...but you won't step in and say where they should be cutting down on expenses or what is ridiculous according to the money they are earning.

 

[Pho3nix]

Don't you think it's got more to do with people living beyond their means and taking credit for exactly what the banks allow them to afford?

20k after tax means what 25k before Tax? That means they'll go buy a car with a R7500 monthly instalment because the bank says they can.

Is that financially sound? Certainly not.

Does it mean they are earning too little to make a comfortable living? Absolutely not.

They *could* be driving a car with an instalment of R3500 instead, or even drive the same one they've had for the past five years and continue prioritising other areas instead....however very few people do.


And this is where I feel financial advisers often fail people. They (you) will be quick to say you need to put this much away to save X when you turn 65 etc...but you won't step in and say where they should be cutting down on expenses or what is ridiculous according to the money they are earning.

Kinda the realization I've come too. Having the best and latest is nice but having to buy on credit to afford them is a dangerous game. Won't be buying a new car this year and closed all my credit accounts. Didn't get advice on this but had too as I'm working as a contractor :\

 

[Paperweight]

The perceptions in this thread are very interesting. My mother takes home 25k pm after tax and I'm no longer dependent on her plus she doesn't have a husband to worry about. She believes she is dead broke! Just the thought of buying clothes from Edgars makes her go . She never spends more than R500 a month on groceries because she thinks it's outrageous. She always says once she earns 40k pm she can start enjoying her money. I should send her this thread to make her feel better.

 

[syntax]

The perceptions in this thread are very interesting. My mother takes home 25k pm after tax and I'm no longer dependent on her plus she doesn't have a husband to worry about. She believes she is dead broke! Just the thought of buying clothes from Edgars makes her go . She never spends more than R500 a month on groceries because she thinks it's outrageous. She always says once she earns 40k pm she can start enjoying her money. I should send her this thread to make her feel better.

R500 on groceries? i seriously doubt that

 

[azbob]

The perceptions in this thread are very interesting. My mother takes home 25k pm after tax and I'm no longer dependent on her plus she doesn't have a husband to worry about. She believes she is dead broke! Just the thought of buying clothes from Edgars makes her go . She never spends more than R500 a month on groceries because she thinks it's outrageous. She always says once she earns 40k pm she can start enjoying her money. I should send her this thread to make her feel better.

Smart woman. Hope she's saving wisely. Too many people spend unnecessarily.

 

[CrazYmonkeY159]

2. Living expense (variable)
- Food (typical if home cooked): +/- R350-550
- Misc(toiletries, household): +/- 15

This is crazy. I struggle to get by with R1200 p/m. I am not a fussy eater at all but if you want a healthy home cooked meal every night (this is not a luxury since in your assesment health considerations is not a luxury) then I dont see how R350-R550pm on food is doable. I eat the normal 8000-1000kJ daily RDA (1900-2000 calories)

I spend tha amount on Fruits and veg alone.. I only eat red meat on the occasional monthly braai, I mostly eat chicken and ground beef because it's cheaper.

As a student I would like to know what your secret is.

Otherwise I agree with your end price of approx 10-12k pm post tax. You will be living in a not-so-dangerous area eating ok food driving an ok hatchback doing ok things on the weekend for entertainment. Better than being on the streets

 

[rorz0r]

I agree with the "life stages" perspective. When you are living with your parents and getting 5k a month it's awesome as you can go out drinking with your buddies and buy a new gadget almost every month. You earn a bit more, settle down, buy a house, etc and you've got retirement savings/planning/investing making a dent, tax is more of a percentage, medical aid, life insurance, buildings insurance, household contents insurance, car insurance, car repayments, fuel, food, home maintenance stuff, etc etc now you can only spend 5k on yourself every few months.

When you start working and get a few raises etc you figure you've got 10k a month disposable income then you figure you should buy a house etc so basically your expenses will always rise to meet your salary. Even if your house is paid off etc you will find investments and whatnot. I don't know of anyone that actually just has a bank balance getting bigger. Even savings are generally saving up towards something then you buy that something (whether it's a car, house, holiday or whatever) and it's all gone.

 

[SauRoNZA]

The perceptions in this thread are very interesting. My mother takes home 25k pm after tax and I'm no longer dependent on her plus she doesn't have a husband to worry about. She believes she is dead broke! Just the thought of buying clothes from Edgars makes her go . She never spends more than R500 a month on groceries because she thinks it's outrageous. She always says once she earns 40k pm she can start enjoying her money. I should send her this thread to make her feel better.

If your mother let's herself "think" that she is broke and is putting all the spare change away then that's a good mentality to have.

If she genuinely is broke with that kind of income, then she's doing somewhere wrong.

 

[Paperweight]

If your mother let's herself "think" that she is broke and is putting all the spare change away then that's a good mentality to have.

If she genuinely is broke with that kind of income, then she's doing somewhere wrong.

No she's not broke just cheap lol.

 

[SauRoNZA]

No she's not broke just cheap lol.

Nothing at all wrong with that then.

 

[Paperweight]

R500 on groceries? i seriously doubt that

I know right it doesn't make sense. I myself spend R1000 on groceries. When I'm home for the holidays I finish her groceries so quickly. She buys veggies and fruit, 2kg of rice, yoghurt for work, a couple trays of chicken and pork, coffee and milk and that's it. Don't even mention going out to eat she'll have a heart attack. Hilarious woman she is.

 

[Paul_S]

Assuming that one's medical aid and pension have already been deducted, a combined household nett income of R30K per month should be able to buy you :
- R800K house R7500 pm
- One financed R200K vehicle over 72 months R4000 pm
- Fuel for two vehicles R2500 pm
- Insurance R1500 pm
- Food and general household goods for two adults R4000 pm
- Water/electricity/rates, etc. R2500 pm
- Diapers, wet wipes, formula for one baby R1500 pm
- Full time domestic worker or childcare R2500
- Entertainment R1000 pm
- Savings/emergency fund R1000 pm
- DSTV R695 pm
- Security R400 pm

Total: R29695
Spare: R405

That would mean a household gross income of around R55K once you take medical aid, pension and tax into account.
I would consider this an average middle class lifestyle in an affordable residential area.
This is certainly not an up market lifestyle and will exclude you from owning a house above R1 million while still paying off a new Audi A4, 3 series BMW or C-Class Merc.

 

[purpleonlineadmin]

Smell? No. Just read. The dude has internet and is thinking about medical aid and a bond for property. I had assumed that its clear to everyone that a property bond puts OP well clear of the mieliepap bracket. I assume too much apparently...

My average wasn't targeted at the "mielepap" audience, whatever that means:wtf:. I read very well so don't be condescending, unless you knew the user then you should know something I, and many others in here also stated, don't know. We gave averages because, as many also pointed out, it depends on various VARIOUS points, which you quick to shoot down because we said "average". We will use averages because for all we know, the user could be earning 15k-20k, unless he stated his current finances.

BTW someone who earns an "average" salary can also get a bond and medical aid, it's all about disposable income and how each and every individual spends for necessities, so your point becomes moot if you under the impression this is something, whatever your miele pap audience is, can't afford!

 

[Zewp]

The perceptions in this thread are very interesting. My mother takes home 25k pm after tax and I'm no longer dependent on her plus she doesn't have a husband to worry about. She believes she is dead broke! Just the thought of buying clothes from Edgars makes her go . She never spends more than R500 a month on groceries because she thinks it's outrageous. She always says once she earns 40k pm she can start enjoying her money. I should send her this thread to make her feel better.

I honestly don't see how she can survive on R500 groceries a month. I'm a student with an incredibly limited budget and I wouldn't even be able to do it unless the only thing I bought was 2minute noodles. And even that would probably cost me around R15 a day.

 

[purpleonlineadmin]

Pretty much agree with that viewpoint.

Everyone's looking at "average" but the thing is most people look at "average" in their social circles and not the city or country they live in etc. In my social circles generally most people have some tertiary education and then the usual things that go along with that like a house, nice car, hobby or two, etc. My wife, being a CA, happens to know more CA's and generally they have a taste for the better things in life. Generally a house with more shiny tiles and new cars being either SUV's or BMW's/Golfs etc.

In short there is probably not salary short of several hundred k a month that will not leave you "wanting". Most people if earning 100k a month would end up with a house costing 40k a month and then everyone that lives in the same neighbourhood where houses cost 40k a month is going to be driving a car that's 15k+ a month and then you put another 10k a month towards retirement and suddenly the salary is gone in pretty much the same proportions. Maybe shopping at woolies doesn't make as huge a dent as it would to the rest of us but then spending 1k+ on dinner wouldn't be an issue either.

Exactly rorz0r, great way to put it!