Although I saved a substantial sum in 2016, I definitely overspent in many areas. It was the year of my wedding so even though my parents contributed a sizable sum to the event, I splurged and spent too much on it outside of their contribution. We did a small “mini moon” which also cost something, but in 2017 we will splurge on a bigger international honeymoon. Here is a quick overview of how my spending went into 2016…
Income (after tax and 401k): $112.4k
(remaining / savings: $31.2k + $18k (401k) = $49.2k saved)
Auto & Transport: $5.1k
Bills & Utilities: $1.5k
Food: $11.7k (yikes)
Health: $5.4k (not counting insurance)
Home (rent and home things): $17.3k
Personal Care: $4k
While saving $49.2k over the year is nothing to shake a stick at, it is sad that I spent $81.2k over the year. Yes, I spent a lot on my wedding and then things related to my wedding that are covered in shopping (dresses to wear to various wedding-related events and such) but the year was rather costly. Luckily I obtained a job with very high income which covered these costs.
This year, I’d like to substantially decrease my expenditures in most areas. I know I say that EVERY year. Here is my 2017 budget that i will try to stick to:
Auto & Transport: $2k (-$3k) — how? walk to train everyday
Bills & Utilities: $2k (+$500) — work no longer covering phone bill
Education: $0k (-$2.2k) — i don’t need to spend money on education
Entertainment: $1k (-$370) — would like to enjoy life before kids!
Fees: $200 (-$243) — cancelled BOA, don’t need more checks
Food: $10k (-$1.7k) — food is the hardest to change, but we will eat out less
Gifts: $1k (-$670) — no planned friends weddings this year except owed $400 gifts
Health: $12k (+$6.6k) — fertility treatments this year will likely be expensive, plus I want a gym membership to lose weight
Home (rent and home things): $20k (+$3k) — new living room furniture and bed plus standard rent, which will go up in may
Personal Care: $2k (-$2k) — this includes my makeup budget so I will significant cut back on that in 2017. Hair cuts, nails, massages for stress relief to help with fertility will add up still. Might be able to get down to $1.5k
Shopping: $5k (-$9.8k) — cut back significantly on buying clothes and other things!
Wedding: $2k (-$7.6k) — have to send tips that we forgot to send out, plus gift for parents
Travel: $10k (+$3.8k) — probably won’t spend all of this, but we want to take a good honeymoon (I have miles and such so it won’t be that bad) and if this is my last year before children I want to travel a bit if possible.
Budget for 2017 total: $67.2k
This is an interesting exercise. I’d like to spend less than $67.2k this year, of course, but I am budgeting based on the reality that I am not good at being frugal and I tend to spend more money than I should – but still cutting back significantly in areas like shopping and such (somehow I still have nothing to wear ever.) This would increase my annual savings by $14k OR make it possible to take a job where I make $14k less and save the same amount. (The later is more likely unfortunately but good to know.)
I really would like to save $25k more next year, so I have to find ways to cut back. Some is obvious (annual travel even with honeymoon can be $5k not $10k for my half of our travel costs) but then it will get harder. Here is a more frugal budget that is still realistic:
Auto & Transport: $2k
Bills & Utilities: $2k
Health – General: $2k
Health – Fertility – $5k (*if the first cheaper fertility treatments work)
Home $17k (no new furniture)
Personal Care: $1k
“Frugal” Budget: $50.2k
So even with a nice honeymoon and such I could spend $48.2k, leaving me with $80k in savings, which gets me very close to my $500k goal prior to having kids (if I keep current job or find replacement with same salary.)
My choice now is how hard to do I fight to keep my current job with my current income for the year. If I do that, and I spend my 2017 budget or less, I can save at least $63k next year, adding to $410k and getting to $473k in networth without any investment growth (close to my $500k goal before I give birth to my first child!) So. I feel more and more like I should try to stay and just do my best and see how long I can make it. If I can keep my income at $9.3k a month after taxes for 6 months ($56k) and reduce it to $7k for the last 6 then I’d have $98k income for the year and, well, math obviously gets us to that I’d have $13.8k less savings, or about the $14k that I’m saving by minimizing my splurges in 2017. Or I just find another job that pays the same, but that is very challenging right now and maybe impossible. The only potential thing I could do is find a job that pays less but also covers fertility treatments, so then I would save $10k on that, but that only really helps in the year(s) I need fertility treatments to begin with, and maxes out anyway. Hmm.