Generic budgeting

I’m not really sure how much good this will do me, as every month is different, but now that I finally know how much income I’ll have every month, I figured it was worth doing some generalized thinking about how I should be dealing with it.

After taxes, health insurance, and $1000 a month deducted directly into my 401(k), my take-home pay per month will be (drum roll) $2147 and change.

Fixed Costs — the things that aren’t really adjustable.
$300–rent and most utilities (I know! living with a friend in a very cheap city is certainly a worthwhile financial decision)
$50–electric bill sinking fund (this is the only utility that’s variable, because there’s electric heat in the winter, so I’m setting aside $50 a month in the hope that I can draw on the excess during the winter)
$55–cell phone (at least for now; I am hoping to get onto a friend’s family plan and reduce this greatly)
$55–car insurance
Total: $460

Semi-fixed costs — the things that I could theoretically adjust a little, but these are fairly bare-bones numbers already so it would be hard to go lower
$50–gas and tolls
Total: $300

Everything Else–that leaves $1387 to allocate.
$250–emergency fund (until I get it up to $6000, which at this rate will be years)
$450–credit card debt (until it’s gone)
$50–cash for random spending (dry cleaning, postage, coffee, whatever)
$150–personal care/medical
$200–travel fund

This budget assumes I’m saving 31% of my gross pay (I’m only counting the retirement and e-fund there) which isn’t an awesome rate, but also isn’t as bad as it could be. Once I’m out of debt, I’ll have another $450 a month to play with, and while I could theoretically save the whole thing, what I’ll probably actually do is put half of that, $225, into a housing/car fund, and put the other half into slush. Slush is covering a lot here — gifts, clothing, minor car repairs, professional fees I can’t get reimbursed for, whatever. I’d like to feel less pinched in what I spend on things like that, even if it means I take longer to meet other goals.

What do y’all think?

9 thoughts on “Generic budgeting

  1. I think it looks good! $1000 a month to your 401k is awesome. I may be a huge nerd, but I got excited when I saw that.

    1. we are all huge nerds here, no worries 🙂 I figure I have a lot of time to make up for, since I’m 35 and never saved anything for retirement before this year, so I’m trying to focus on that. I’d rather be able to retire than, say, buy a house, so it seems good to make that my main savings goal for a while anyway.

  2. You shouldn’t scoff at a 31% savings rate, I think that’s great. Are you accruing interest on your credit card debt? Would it be better to funnel some of your EF funds towards that debt? Either way I think your budget looks great, gotta love living with friends.

    1. Yeah, the CC is at 0% interest for a while — I think sometime this spring that promotion will stop (it was a year-long deal) but by then I should have paid it off, emergencies aside. Otherwise, I’d say you were right (I just hate paying interest with a passion). And thanks — living with my friend is definitely helping financially, even though I miss having my own place.

  3. A 31% savings rate is killer! A lot of the blogs that have the 50%+ savings rate is because they’re DINKs… it doesn’t cost that much more to have another person live in the same place, ya know.

    And holy cow to your rent! I thought we were doing well with $900, all inclusive (including electricity) for a 2 bedroom place. You just won 😉

    1. Yeah, even for my current location (which is verrrrrrrrrrrry cheap compared to almost everywhere else in the U.S.) that’s a good rent. I’d be paying 2x that much, or more, to live by myself. But my friend added up her mortgage and all the other expenses and divided it in half and that’s what she got! It makes living in a spare bedroom very compelling, I can tell you 🙂

      I guess you’re right that if I either (a) made more money or (b) had another income involved, it would be easier to get the savings rate up! I’m trying to find the balance between saving and enjoying life in ways that require spending money (like the travel fund), I guess. I’ll be fairly pleased with this budget if I can stick to it (which we’ll see if I can!)

  4. Tania says:

    Really, 31% is fantastic and much more than awesome. I am super jealous of the rent.

    1. ok, I guess I overestimated how much “normal” other people are saving. I’m competitive enough to want to have a really good savings rate, while also liking to buy things, which is kind of an unfortunate combo 🙂 And I know, on the rent — living in an undesirable location definitely has its perks.

    2. Huy Tran says:

      It’s sad how little people are saving in the US. I think the average is around 5% of take home pay. You’re at about 40% of take home pay! I’m at a similar rate but I’m lucky not to have any debt.

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