How to Estimate Your Salary Needs
Underestimating your salary needs puts you in a position where you may end up making much less than you require to live. To properly calculate your required salary, you must take a realistic look at your needs. You will need to determine your necessary expenses, your general cost of living and what you want to save for retirement. Once you have compiled this information, you will be able to determine the salary level you require.
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Instructions
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Compile a list of your monthly bills. Break them into necessary expenditures -- such as mortgage or rent, utilities, insurance and auto payments -- and luxury expenses, such as cable, phone and Internet extras. Add up the sum of the necessities to get your total monthly expenses
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Budget necessary monthly expenses such as gas, groceries and any applicable medical expenses. Allocate enough to cover what you need without going into unnecessary expenditures, such as premium gas or expensive foods that you can easily replace with more affordable versions.
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Include a portion of your monthly salary to be put aside for savings. The closer you are to your desired retirement, the more money you will need to put aside now. If you intend to retire in 25 years, you may want to put aside 15 to 20 percent of your salary. If you plant to work an additional 35 years, put aside five to 10 percent.
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Estimate five to 10 percent of your desired monthly salary for emergencies and other unforeseen circumstances.
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Add up the figures. Multiply the result by 12. This is an estimate of a yearly salary suited to your individual needs.
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