I have been meaning to blog for the last few days; I’ve been feeling inspired to write. But I’ve also been extremely motivated to work on a side project, doing legal transcription. There is a time deadline to it, and it’s something that I find quite interesting, so most of my free time has gone to that in the last week and a half. Listening to lawyers talk, well, it reminds me why I walked away from that career field, and I’m SO GLAD I did, even though it was a choice that has stuck around with me for my financial life ever since. I used to beat myself up over that and the financial choices I made, but now I just try to move forward.
I promised you a post on my budget, and I think I’ve got my new payroll stuff calculated pretty well. I’ve received a few paychecks and have determined that I am losing about 18% of my pay to taxes. (Pisses me off that I make so little and pay such a percentage while people like Trump make billions and then pay nothing, but that’s a topic I won’t go further on in this post because I’ll just end up jumping up and down on my soapbox.)
I have figured out what my fixed expenses are every month, so I’ll write those down first. Some things, like my renter’s and car insurance, I pay on a semi-annual and annual basis, so the amounts you see below are what I need to save every month (and have taken out of my paycheck via direct deposit) to have that payment ready.
- Auto loan: $141.42 (let’s call it $142)
- Rent (includes utilities): $525
- Tower Garden (only until April 2017, unless paid off earlier): $81.54 (or $82)
- Cell phone (unlimited data): $95.45 (or $96)
- Car Insurance: $58.33 (let’s call it $60)
- Amazon Prime: $8.25
- Renter’s Insurance: $17.33 (let’s call it $18)
- Citibank Credit Card: $58 (minimum payment)
- CapitalOne Credit Card: $59 (minimum payment)
- Private LAL loan: $167.11 (let’s talk about that a little more below)
The total of all of these comes out to, with some of the figures rounded as noted above: $1215.36.
Some of these amounts might seem scarily high for someone in my income bracket, but here are a few details. The LAL loan has been paid way in advance, and I’m talking years ahead of schedule from when I was making a lot more $ in Boston and paid off several thousand of it before I decided I was going to make a crazy life change and move to the southwest. So there is flexibility with that loan. I could literally call up every month for the next four to five years and tell them to not make the automatic withdrawal payment, and I would not be in default. However, interest would accrue and accrue and accrue, so I am not doing that. I am, however, not paying the full $167.11. Instead, every two weeks, when I get paid, I pay $20 on the loan. It’s enough to cover the interest and make a small payment of about $15 in principal every month. The total amount on that loan is still over $10K so it’s further down my debt snowball than the credit cards.
When I take out the $167.11 number and add in $40, that makes my fixed expenses a little less scary. The number is $1088.25. Now I can eat, and so can my pets! (Of course, if you have read my blog for a while, you already know I will go hungry first before they will.)
You might also think my cell phone bill is high. It is, but I have unlimited data through T-mobile and the way I access the internet at home is by using my phone as a mobile hot spot. I don’t have a wifi provider, router, etc.
So what’s my income? Well, I usually get about 37-38 hours per week, so I will budget myself based on what I would make per paycheck if I only worked 37 hours. I will have $45.01 taken out, pre-tax , of every paycheck for my health, dental, and vision insurance through work. Yes, I realize that seems incredibly low for all of them, but it’s a high deductible plan. The deductible is $4500. The choices at work were not great – even the lowest deductible plan of $1850 was going to cost me $152 per paycheck, and I definitely couldn’t afford that. I usually only go to the doctor anyway for preventive care and for routine things like eye exams, dental cleanings, and to get my prescriptions rewritten.
Oh yeah, my income. If I average myself out to 37 hours per week, I have a salary of $23,088 before taxes. We get paid every two weeks, so I budget based on two paychecks per month. (Yes, there are two months of each year where I then get an extra paycheck. It will go straight to debt and/or savings when I get to that point.) I have decided to put 3% of each paycheck into the 401(k) they have at work which is through Prudential. That comes out to about $53.20/month going into the 401(k). After subtracting my before-tax benefits, I am at about $1632.70. Then I pay taxes of 18% or $293.87. Also, I am paying $2.80 per each paycheck for long term disability. I have calculated my take home pay to be roughly $1,338.87.
I elected to not get coverage for short term disability because it was going to cost me at least $15/paycheck. I definitely had to make some tough choices when it came time to enroll in benefits, which I am happy to say I am now ELIGIBLE for!
I plan on continuing to work out, and will be starting to run again. I’ve been getting the bug to do so, outside. Morgan and I walk on what they call the Bosque Trail and yesterday I saw lots of runners out there, and I really wanted to join them. So, I’m going to. Why just wish or dream when you can DO? [update since I started writing this post, I did it yesterday!! It felt freaking awesome even though I’m slow as molasses fighting gravity to go uphill.]
So, let’s do the math. $1,338.87 minus $1,088.25 leaves me with $250.62 to feed myself, my pets, and put gas in my car. Luckily, gas here is cheap, and there is a lot to do for free. It’s part of why I moved to a city again, to take advantage of what it has to offer. Also, I tend to eat pretty cheaply and hardly ever eat out. And my pets, I know where to get the best deals for their food and litter, toys, etc. I’ve been budgeting about $55 per month for gas, and so far I’m doing it.
Those of you who know about Dave Ramsey know that he preaches that we shouldn’t save for retirement until we are out of Baby Step 2 (paying off debt.) Well, here’s the thing. I’m 44. I can’t wait until I get it all paid off. I need to be saving NOW. If there is one thing I know, it’s that when you save for retirement, having more time can make a huge difference. I hear the stories about how little many people have saved by my age, and I’m glad to say I’m ahead of the game at least in that respect. But I can’t just forget about it, and rely only what I saved when I had a higher income. I don’t have kids, so there is no one to look to, to take care of me when I get older. I need to worry about me.
Looking at these numbers, one might feel a bit constrained, and you might wonder just how I can feel abundant in the face of it. The way I’m feeling abundant about things is by reminding myself that I am following my heart and refusing to live by what others think I should do. One of my current coworkers thinks I’m insane to have left a good paying job at Harvard, and a small bit of me occasionally agrees with her.
But, then I think of how I’ve grown over these past 17 months or so. I’ve faced my fears in a way that a lot of people wouldn’t. I drove cross country all by myself with just my car, and my pets. I found an RV for us to live in and a place to put it. When that town didn’t work out, I found another place for us and was able to sell the RV for almost the same amount as my loan on it. When I knew that Lake Powell wasn’t for me, long term, I moved myself to Albuquerque, and then faced the scariest thing I’ve ever done. (Well, besides leaving my marriage.) I moved without already having a certain job waiting in the wings. Those of you who know my fear (actually, more like a phobia) of being homeless, know how much anxiety and stress that caused me. A LOT.
I’ve realized what are the actual necessities that I have in my life and for the most part, what are wants. I need a car to get me back and forth to work. I need a roof over my head and that of my animals. Nothing makes me feel more accomplished than being able to provide that for them. Seeing all of them dozing, knowing even in their subconscious, that they are safe and warm, is one of the best feelings I’ve ever had. Yes, the place where we are now is temporary, but I’m working on figuring out what neighborhood(s) would be better suited for us and in which my budget will work. (And I think I might have found one!) And having the transcription work, even if this is the one and only time I get it, will allow me to chunk away at those credit cards. I need to take everything from that project and put it on the credit cards because eventually my federal loans will have to be repaid again (I’m on deferment because of my in-school status.)
I just finished reading a book titled Money, a Memoir, by Liz Perle. In it, she talks about the emotions that women attach to money, how what we’ve seen as money habits of our parents as children affects us in how we deal with money in our own lives, how women can fight an inner battle between wanting to be independent and wanting to be taken care of, at the same time. It made me think of the time when I was married. My ex-husband made good money and my salary (looking back) was actually pretty decent. I was able to save 14% of my salary into a 403(b) at one point. Life was definitely more comfortable, financially speaking, but I didn’t feel like I was truly alive. Today, I do. It’s not always comfortable, and not always a happy feeling, but I feel like I am being more true to myself, and that is something that money can’t buy.
And with that, I’ll end this post which I’ve wanted to publish for several days now! How do you feel about your budget? Do you feel like you’re living a life of scarcity, or a life of abundance, or do you feel like you are somewhere in between?
Thank you, as always, for reading.