The current national average student loan debt that folks graduate with in 2015 is $35,000, with 69% of graduates holding debt. In 2014 the average was $28,950, with 65% of graduates having debt.

How could recent graduates pay off this debt, if they get a salaried job? Where might their money work for or against them?

So, lets do my favorite thing: crunch the numbers and make them into sizes we can actually comprehend. I’ll use medians where possible and the help of an online calculator.

Students who graduated from college in the class of 2014 earned median starting salaries of $45,478 across all industries (like Engineers to English teachers).

BUT — before you with your $45k start buying rounds or donating to everyone you know’s kickstarter: First, subtract TAXES!

STATE TAXES (here’s NYS for an example)! Our example pays $2,598 annually or 99.92/26 weeks — and if you’re in NYC, don’t forget CITY TAXES (here’s the tax table for those.)

2016 Bi-weekly Pay of Annual Income of $45,478.00

• Gross Pay $1,749.15
• Federal Income Tax $177.73
• Social Security Tax $108.45
• Medicare Tax $25.36
• State Income Tax $99.92
• City Income Tax $63.81
• Final bi-weekly Pay Check $1,273.88 after $475.27 goes to taxes

Great, you get $33,120.88 take home pay, or $2760.07/month.

Then subtract your HARD EXPENSES:

• Rent – $1000 (look you get a “nice” room in a shared apartment!)
• Utilities – $150
• Health Insurance/Costs – $150
• Food – $250
• Emergency Savings – $100
• Transportation – $100

$1750 spent so far, and you’ve got a grand left. Ok….on to DEBT:
Say you had that 35,000 in loans and you wanted to pay it off in 10 years, and you had a 4% interest rate on your loan:

• Payment Every Month: $354.36
• Total of 120 Payments $42,522.96
• Total Interest $7,522.96

$2105 spent so far …hey shit, you’re not even saving for retirement or leaving the house yet! Ok, you have $655.71 left a month, and now you can deal with your MUTABLE COSTS, eg what you do with what’s left over:

• $100 – travel savings cuz, hey maybe you’d like to go somewhere, sometime
• $250 – entertainment
• $100 – clothes/self-care/haircuts
• $100 – other: postage, gadgets/a new phone, netflix…everything else.
• $100 – ?? YOU DECIDE BUT I SUGGEST SAVING FOR RETIREMENT OK?

And THAT’s it friends. So, if you’re making $45k a year and have $35k in loans, while you might not be balling, you can still save for retirement, pay your loans, save for emergencies, and travel modestly.

But, say you – like me – had a liberal arts or humanities bachelors degree.

Now your median 2014 out of college salary is $36,237. (Words don’t pay, friends.) Your annual NYS Tax is $2,001, or $76.96/paycheck, + I’m calculating in NYC tax which is by the way: $25,000 – $50,000 3.591%, $50,000 – $500,000,  3.648%, $500,000+ 3.876%.

2016 Bi-weekly Pay of Annual Income of $36,237.00

• Gross Pay $1,393.73
• Federal Income Tax $93.88
• Social Security Tax $86.41
• Medicare Tax $20.21
• State Income Tax $76.96
• City Income Tax $50.84
  Final Pay Check $1015.07 after $378.66 goest to taxes

Giving you 26,303 take home a year, or 2192.81 a month. (BTW If you do save the recommended $500/mo for retirement, you have $230.77 less biweekly, or $20393.80 annually, or $1692.81/month. ouch.)

Then subtract your HARD EXPENSES:

• Rent – $850 (you’re ballin a lil less so this is lower)
• Utilities – $150
• Health Insurance/Costs – $150
• Food – $250
• Emergency Savings – $100
• Transportation – $100

$1600 spent so far, and you’ve got $592 left. Ok…. back to your LOAN DEBT:
Say again you had that $35,000 in loans, and you wanted to pay it off in 10 years, and you had a 4% interest rate on your loan:

• Payment Every Month $354.36
• Total of 120 Payments $42,522.96
• Total Interest $7,522.96

$1954 spent so far …hey shit, you’re not even saving for retirement or leaving the house yet!

Ok, you have ~$240 left a month, and now you can deal with your MUTABLE COSTS, eg what you do with what’s left over:

• $? – travel savings cuz, hey maybe you’d like to go somewhere, sometime
• $? – entertainment
• $? – clothes/self-care/haircuts
• $? – other: postage, gadgets/a new phone, netflix…everything else.

xx