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New paycheck, new budget

February 20, 2008

Tomorrow is payday, meaning today is the day we look at our paychecks online! This is my first paycheck with 80 hours and all the appropriate deductions. With taxes and all other things taken into consideration, my paycheck was a little less than I expected/hoped.

The main thing I miscalculated was that I took what I expected to be my net pay and divided by 12 and made a monthly budget off that. Really I should have divided by 13. This would give me two “extra” checks, but giving me a more realistic view of my monthly cashflow. Then the “extra” I’m sure will easily find itself diverted to various savings–efund, gifts, travel, or car funds. There never is actually any extra.

This means my idea of putting 20% of my paycheck into my 401k just wasn’t realistic. My original goal of 15% may not even be realistic, but I’m going to try to work with that and see where we get. Secretly, I thought 2008 might be the year I maxed out my 401k. It was quite a ridiculous thought. Even if I could afford it, my new employer only lets us do up to 20% pre-tax, and 20% of my pretax salary is less than $15,500. Clearly 2008 will not be my year. Not only can I not afford it, it is mathmatically impossible! Perhaps 2009, but at the very latest, once I get my M.S. degree (2010) I should be in a better position. By then, who knows what new savings goals I’ll have come up with!

My budget isn’t quite working out–I can’t get the numbers to come out the way I want! I just am not seeing anywhere I want to cut back that I’ll honestly be able to stick to. Travel seems high, but even if I don’t budget for it, I’ll spend it, so I have to save for it. Otherwise I won’t be able to go home, ever.  Rent can’t be helped, at least until next year, and even then, only if I wanted a roommate. Which I would be fine with, if the roommate was the boyfriend, but tentative plans on that are over a year away. The car fund is both for maintenance, and also to (very very slowly) start building up for a new car in the distant future.

2 Paycheck income: $2932
Monthly Expenses:
Rent: $1,425
Efund $150
Cable/Internet $60
Roth IRA $325
Insurance $110
Student Loan $133
Utilities $30
Grocery $130
Restaurant $75
Gas $110
Clothes $50
Entertainment $70
Home $50
Gifts $50
Car Fund $200
Travel Fund $100
Leftover/Misc -$79 (Calculated by income – expenses)

Any ideas? If not, I’ll decrease the 401k savings until the budget works out.  (Of course, no less than 8% for full match.)

(By the way, I updated the retirement savings sidebar with my expected contributions for tomorrow.)

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8 Comments leave one →
  1. February 20, 2008 9:26 am

    I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Mike Harmon

  2. February 20, 2008 9:59 am

    What do you plan on using the $50 home fund for? I live in an apartment, so I usually don’t buy anything for it. Maybe you could decrease this…

    cable/internet–you could always decrease your cable package. A lot of TV shows are available online.

    You could also decrease your Roth IRA contributions. I personally would rather down grade my lifestyle then cut into my retirement savings.

    You could also cut a little bit out of your restaurant budget and try to join Krystal’s lunch challenge.

  3. sjean permalink*
    February 20, 2008 10:10 am

    I would rather downgrade my lifestyle as well, which is what this exercise is about… Still, I don’t know if it is possible to scale back much more, or if it is so necessary for me to save so much this year. There is something to be said for having quality of life now, though retirement savings should never go by the wayside. Maxing a roth is important, but 10% may be enough for the 401k rather than 15% (i get 6% match).

    I don’t buy lunch at work–the restaurants are for weekly dates with the boy, about $25 each, assuming he pays one week a month. They are mostly my idea and my treat. Taking that into consideration, perhaps entertainment could be lowered a bit. Maybe they could become bi-weekly outings and the other weeks we could cook something new.

    I’ve been going back and forth on the cable…. I need internet ($30) but I could easily give up the cable ($30) but it seems like such minor savings… Perhaps you are right….

  4. sjean permalink*
    February 20, 2008 10:32 am

    Also, home = laundry detergent/cleaning supplies, new towels (really need these soon),and any new decorations/bedding. Things like that.

    I’ve actually spent a LOT on home already with the relocation–new dresser, new filing cabinet and three new wall art decorations, coat hook and a drill to hang stuff. Two new pillows. Ice cube trays. 🙂 However, this came out of relocation money. In theory. All my money is mish mashed together, but I’m trying to change that.

    You are right though, this could be decreased to $25/mo from here on out as I have most of the basics (still short on cleaning supplies). I want some accent color for my living room, but it can wait. I want to do something with my bedroom (no color theme) but it can wait. The towels maybe can come in march though.

  5. February 20, 2008 12:28 pm

    Well, $30 in cable is almost half of your negative amount!

    Is it possible that the clothes/home categories could become more intermittent and come instead out of the “extra” paychecks? It’s not an ideal solution, no, but it allows you to keep your monthly retirement numbers strong and just reduce the “bonus” retirement contributions.

  6. jay permalink
    February 20, 2008 4:52 pm

    Reality is, your rent is a huge portion of your salary. If you’re stuck with that number, then you have to face that reality: having less than “others” do for your other categories. Depending on how long you will be paying the rent, I would seriously cut back on your IRA contributions, and entertainment. You can always catch up on the IRA at the end of the year, but once you put it in, you no longer REALLY have access to that money. I know you wouldn’t “earn” as much by waiting to invest, but you have no built in monthly cushion at the moment.

  7. sjean permalink*
    February 20, 2008 6:11 pm

    Rent isn’t that large of my SALARY, just of my take home. I’m currently putting about 800/mo pretax dollars in a 401k, which is more aggressive than I have been in the past. Rent, I’m (sort of) stuck with, but even if I could get a roommate tomorrow, I don’t think I would.

    I want to spend less than “others” in order to fund my 401k, at least to the maximum I can without depriving myself too much. I do want a $100 cushion, but any more than that (with the level of detail I have in my budget) shouldn’t be necessary.

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  1. Revised budget « Stacking Pennies

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