Yep, I’ve put my credit card on ice, baby. As in permanent ice. If you have a problem with your credit card usage, I highly recommend freezing it as an tool for helping you to not use it.
I’ve been trying to figure out a realistic budget, given the fact that my paychecks differ from pay period to pay period, being an hourly person. (Wow, that’s hard to get used to, let me tell you.) I’m used to being paid every two weeks, and calculating my expenses on that 24 paycheck schedule, with those two lovely bonus months of 3 paychecks occasionally being thrown in. I lived for those months and what I could do with that extra paycheck. Usually it went to paying down debt/student loans.
I know some people get squirrelly when it comes to talking about salary but it’s not secret what the starting pay is at my job. It’s $12/hour. Once November 1 hits, I will have insurance through work, but I believe the amount of my premium will change come January 1, 2016. So I’m basing these numbers on what I know for the rest of 2015.
So I’m just going to put it all out there and to make life easy, I’m going to round numbers to the nearest dollar where I can. We get paid twice per month, on the 1st and the 15th. The 401(k) contribution is always 3% of the paycheck (they have an automatic opt-in plan, which I really like.) So, here are the various amounts that could be subtracted, per paycheck amount.
Gross Pay for 80 Hours Worked = $960 [401(k) deduction would be $28.80]
Gross Pay for 88 Hours Worked = $1,056 [401(k) deduction would be $31.68]
Gross Pay for 96 Hours Worked = $1,152 [401(k) deduction would be $34.56]
Health Insurance = $60.75/paycheck ($131.62/month)
Dental Insurance = $4.12/paycheck ($8.24/month)
Vision Insurance – $.94/paycheck ($1.88/month)
TOTAL insurance premiums = $65.81/paycheck ($131.62/month)
I do get life insurance through work but at no extra charge to me. Since I don’t have any human dependents, I’m fine with this and not getting any additional coverage. Based on past paychecks, it looks like I get taxed at about 21%. (Ridiculous, right? Considering how little I make. I need to move to Europe, I tell ya. At least there I could get something out of all the taxes I pay.)
So, possible net paychecks for a single pay period could be (after deducting insurance premiums, 401(k) contributions and taxes):
80 Hours Worked = $683.66
88 Hours Worked = $757.22
96 Hours Worked = $830.79
Now, when it comes to budgeting, or planning out how much extra i can put toward paying down my RV and car loans, you can imagine I want to plan for the worst case scenario, so I’m going to try to calculate based on having two of the smaller, 80 Hour paychecks. If I were to budget at the lowest amount, my net take home pay per month would be $1,367.32. Yep, that would be a very lean month. At the middle amount, my net take home pay would be $1,514.44. At the high end, my net take home pay would be $1,661.58.
- Rent = $215
- RV Loan (minimum) = $82
- Car Loan (minimum) = $142
- Cell Phone = $60
- Netflix = $8
- Recycling = $15
- LAL Student Loan = $167
- Navient Federal Loans = $91
TOTAL fixed expenses = $780
Expenses (variable – these are my best estimates):
- Electric = $80 (keep in mind, the base rate is $22, and the lowest bill you can get is $35, before you even turn anything on. It’s ridiculous.)
- Propane = $10 (I hope to use little to none with all of my other electric options. I’ve also already paid for them to fill up my residential tank with 80 gallons.)
- Food/Groceries = $250 (this is a very hard expense for me to keep in check but I’m trying my best as of now.)
- Gas = $120 (from one of my prior posts, you know this is also kind of like an entertainment type of expense as it allows me to go check out various national parks)
- Pet Food = $125 (this was based on when I had Sebastian, so 5 cats and 1 dog. I expect it to go down about $25 now with just the 4 cats and Osito.)
Estimated Variable Expenses Total = $585
Hm, that makes my total between just those two categories = $1,365. That gives me a whopping $2.32 left over. Let’s hope a month never sees two of the smaller types of paychecks, since I hadn’t even figured out the expenses below into that tally.
Annual Expenses I Need to Budget for:
- RV Insurance = $272 ($23/month)
- Auto Insurance = $840 ($70/month)
- Contact Lenses and Exam ($550) ($45/month) [I plan on using flexible spending account funds for this.]
- RV Registration = $62 (roughly $5/month)
- Amazon Prime Membership = $99 (roughly $9/month)
Loans That Need to Be Paid Off (READ: sooner rather than later):
LAL Loan = $11,802.12 (2.665% rate, but it’s variable so it can go as high as 9%)
RV Loan = $7,472.09 (4.5% rate)
Car Loan = $7,611.23 (3.19% rate)
TOTAL = $26,885.44
Wow, that’s scary. That is the first time I’ve added up those three loans and looked at them square in the face. I feel like that student loan has been around long enough to be a child of mine, and really, it is. So the RV loan and car loan are my first priorities, unless I see signs pointing to the interest rates starting to creep back up again. I believe my LAL Loan rate goes up and down based on the LIBOR Rate.
Long time readers of the blog will notice I’ve not included the Big Daddy Loan in that list of loans that have to be repayed. That’s because under the new Income Based Repayment Plan, whatever is unpaid after 25 years (groan), will be forgiven. I don’t expect to make enough money going forward to ever pay that loan off in total (but believe me, I’ve already paid back the balance and then some….don’t even get me started on the topic of student loans). So I’m just treating it as a utility payment of about $91/month. (For those of you not familiar with my Big Daddy Loan, read this.)
If you’re not a longtime reader, and you think I’m a deadbeat for going with the IBR plan, well, just know this. I have paid at least $500-700/month on these loans for as long as I can remember. I’ve been paying them back for about 17 years now. The balance of the loan is still around $97,000. It’s more than what it was to start, trust me. The interest capitalized when I couldn’t afford to pay it, and just know that for the past few years, all I paid was interest on the loan to the tune of $538/month. That’s over $6K in interest per year, just to keep it from growing. Would you like to live like that?? I think not. Ok, rant over….
This is something which I think I’m ok with, based on how much I have saved in the past at my higher income. I know the worry these days is that so many people haven’t saved enough. I’ve got about $140K (it goes up and down with the market so I try to not constantly be monitoring it) in my retirement accounts, and luckily, I can’t reach any of it!!
I’m at the lowest amount I want to go to, regarding emergency funds. At the advice of a reader to a recent post of mine, I changed the nickname of my big online savings account to DO NOT TOUCH (and yes, I did put it all in caps, too.) I’ve been trying to put about 65/paycheck into about three online savings accounts, by having it directly deposited into them.
I’m sure I am forgetting some kind of details but this is as much as I can think of right now.
So Where Do I Go From Here, or what does all of this mean?
If you’ve actually made it this far into this post, (1) congrats and (2), you can see that if I were to have two lower amount paychecks, it’s a very thin tightrope I will have to walk. Luckily, I don’t expect that to be the case since we get paid on the 1st and the 15th. Just based on days included in a month, the check for the 1st should usually be the bigger one of the two. And so far, I’ve not had an 80 Hour Paycheck – they have either been for 88 or 96 hours.
I do plan on perusing my auto insurance policy to see if my coverage can be reduced in areas – I basically had them apply the same limits as I originally had in MA, which I have found to be one of the most restrictive states when it comes to auto policies. (Oh wait, imagine my *shocked face.* Please, note sarcasm in my voice.) So my guess is that my premium doesn’t have to be as high as it is, even though my car is a 2013 model.
I clearly need to make some cutbacks in the areas of food or gas. I would love to grow some of my own food but it’s too late in the year to try now, and I don’t have a ton of room to do something like that either. But I can definitely keep a tighter lid on myself when I hit the grocery store. Pet stuff — I might be able to cut back on if I’m smart about how I order it (from Chewy.com, a company I can’t say enough good things about). Please don’t ask me to cancel my Netflix account – it’s already ridiculously a cheap form of entertainment for me, and the Amazon Prime membership really comes in handy as well when you are living in a very small town.
So I think I might need to come up with another way to produce income. Writing might be one way. Becoming an Amazon affiliate might be another. Getting a part-time job is yet a third option. These are just some of the things I think about, daily. And yes, in October, I’ve been trying to keep track of what I’m spending, whether it’s with cash or a debit card, etc.
Have you ever had to live on a really tight budget? If so, how did you do it? And even if you haven’t, but reading through my post, you sensed you could give some good advice, by all minds, advise/suggest away!!
Thank you, as always, for reading, and if you’ve liked it, please hit like or subscribe!