Category Archives: Budget

Reverse Income Requirement Calculator

For anyone who has trouble with negotiating salaries and benefits for oneself, it helps to go into negotiations with a full picture of exactly how much the life you want to live (a reasonable life with the cost of living in your area) costs. This doesn’t mean that you’ll be able to make this amount, but it’s important to have a clear idea of what the ideal world would be and you can use this to determine if you need a new job, need a second job to make up for missed income, or if you can possibly negotiate for higher pay at your current position.

While this calculator is not perfect, it’s a start. It takes major budget categories and addresses the total salary required assuming a total of 40% taken out for state and federal taxes. It also takes into consideration a tax-advantaged retirement account (401k), so this helps reduce the total salary requirements (and if a job does not offer a 401k for tax-advantaged savings then it can be considered an addition to the total salary required.)

In order to reach my goal of saving $75,000 per year, assuming $1200 per month rent (50% of the average 1 bedroom in my area) and maxing out my 401k, I need a pre-tax income of around $175k. (*I currently make around $120k with my bonus, so I have a lot of work to do to get to my goal salary.)

What salary would you need to make to live the life you want and still be able to save the amount you would like to save?

February Budget Plan

I need to stick VERY close to this budget in February. I’m maxing out my 401k as fast as possible in 2014, which means I won’t actually see a portion of my paycheck until the end of February, and I won’t see a full paycheck until March 15.

Auto & Transport: $300 (*includes $200 registration)
Bills & Utilities: $100
Entertainment: $500 (two weekend trips)
Fees & Charges: $100 (*includes $85 credit card fee)
Food & Dining: $400
Health & Fitness: $350 (*3 therapy sessions)
Home: $650
Personal Care: $70
Shopping: $200
Travel: $150
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$2820 BUDGET
( $3740.34 Remaining cash for February – since I’m maxing out my 401k this month)

March 1 = $650 in bank account for rent; March 15 my paycheck will start appearing in my bank account again.

January Budget & Goals

The first few months of every year I remain gainfully employed, I have one goal and one goal alone: max out my 401k right away. In order to make this possible, I left a chunk of cash liquid in my checking account to help me “survive” the first three months of the year, while putting the maximum amount of my monthly pre-tax income (90%) directly into my 401k.

Thus, assuming 90% of my pre-tax income is $8250, it will take me approximately 2.1 months to max out my 401k. This also helps alleviate the concern that should I lose my job later in the year for any reason I’d be forced to miss out on the opportunity to save $17,500 pre-tax this year. Once I save the $17,500 the next check goes into maxing out $5000 of a Roth IRA (which might not make sense at my current income rate, I need to figure that out, but I always like the idea of continuing to put a portion of my savings into an account where I can tax out all the funds and interest on those funds tax free in retirement.

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February 1-10 Spending Update

I spent too much so far this month, but due to some upcoming work travel and a lot of remaining food in the fridge, that should balance out. I planned to not save much this month outside of my 401k investment (50% of income) so I have about $2500 to work with after that. I’ll be going back to a frugal life to make up for the lost cash this month in March and April, in order to save for a May car purchase. Post on that plan coming soon.

TOTAL SPEND MONTH TO DATE: $2204 

Home: $657
– Rent
Shopping: $141
– lipstick set
– perfume full size
Cooking Supplies: $212
– slow cooker
– food scale
Bills & Utilities: $212
– passport replacement
Fees & Charges: $147
– annual credit card fee
– checking account fee
Health: $80
– drug store stuff
Travel: $432
– 5 night roadtrip w s/o – hotel only
Entertainment: $134
– 2 tickets to comedy show
Food & Dining: $376
– groceries ($284)
– restaurants ($92)
Gifts: $25
– med for sick s/o

The unexpected expense was the $432 in travel, which I decided to splurge on for the experience. We’ll be staying in relatively cheap yet not disgusting hotels on our trip. We’ll be going for a 5 day, 5 night trip and s/o will be providing coverage for all food and entertainment on the trip.

January 2013 Spending Report

$3846.07
$4383.34 401K
(*note my bonus hit in January so had atypically high salary this month.)
$3062.71 Expenses
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$5166.70 Savings in January?   

$872 – Shopping ($465 on electronics including my new iPhone 5; $233 on clothes, $143 on makeup, $38 on other)
$716 – Home
$697.78 – Food
$252 – Car
$162.04 – Health
$149 – Bills
$133.9 – Fees & Charges
$59.49 – Entertainment
$20 – Personal Care

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Actual Networth Increase w/ Investment Performance
$205,571 ($5479 / 2.74%)
$44,429 left to hit 2013 goal or avg $4039 per month

Belated 2012 Spending Breakdown

In order to save more money this year, I wanted to take some time to analyze where my dollars went last year. After all, I spent $50,115.14 so it would be wise to know where that all went. I don’t feel like I purchased $50k worth of anything, but apparently I did.

$16,773.61 – Shopping

  • $9164.78 – Clothing
  • $4477.61 – Shopping General
  • $1272.98 – Camping Supplies
  • $858.67 – makeup
  • $811.76 – hobbies
  • $187.81 – electronics Continue reading

Mid Month-ish Budget Check In

The race is on. With only 5 months left to the end of 2012 (wow) and my goal to exceed $200k in networth AND buy a new (used) car this year, I must watch my budget closely to get close to my goal. I always want to go *over* my networth goal (helps me hit next years goal and makes me feel comfortable that I can survive a few months if something, god forbid, happens to my job.)

Current Networth: $192,431 (remaining to save $7569 + $10k for 2013 cushion)

$3513 per month average savings is required to meet my goal.

AUGUST 2012

Expected Liquid Income: $4200
401k Automatic Contribution: $2080

$1433 Avg monthly savings required from Liquid Income.

Rent: $660
Shopping: $575
Health & Fitness: $452 (Yr Supply contacts)
Fees & Charges: $50
Auto & Transport: $777 (paid off $600 of my $1800 DUI fine this month, plus insurance hike from $44/month to $125/month for next 3 years, sigh)
Food & Dining: $269
Travel $300
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$3083 ($1117) 

So I already spent too much this month to hit the $210k goal. If I buy a car, my goals might be shot. Then again, I could theoretically make up for this next year, as it will be my first full year with a six-figure salary, and I can try to be frugal for the first six months to play catch up. I never like to assume I will have a job from one month to the next, though, so it’s troubling to purchase a car now and know this will keep me from my $200k goal (unless the stock market performs extremely well…)

 

 

 

2012 $200k Networth Goal in Reach

The $200k in 2012 networth goal seemed impossible in January, but I’m inching closer to victory. It doesn’t hurt that I just received a $10k raise and now, for the first time in my life, am making six figures in a FT position (I was making more on an hourly basis at a contract job previously, but this is still a big deal as it’s FT.)

I just calculated my current networth, and according to my records it is $190,586.49 — which leaves $9.4k or $1.8k/month left to save for the remainder of the year to hit my goal. I’m a little hesitant declaring success as $20k of my networth is tied up in company stock (private company exercised options.) That said, theoretically that $20k is worth quite a bit more than $20k right now, if I am to believe what the exec team says about the current value per stock. In any case, I’m considering it an investment like any other, and I still don’t have all of my options vested anyway, so until they vest I’ll just count those options as $20k, which is exactly the amount I spent to purchase them (well, plus a few hundred dollars to repay the loan to purchase them.)

So the big question is, do I buy a car this year or wait until next year? If I don’t buy a car this year, I need to at least put $700 into my current P.O.S.mobile to make it save to drive.  I spoke to a car dealership and they said I’d get a whopping $400 to trade it in, so it’s probably not worth doing that. Maybe I’ll just donate it if I decide to purchase  a new(er) car.

Even though with my company stock and other savings I could theoretically be a  paper millionaire right now, I don’t feel like one. I’m still paying $650 a month in rent living with roommates and driving POSmobile. I wish my boyfriend made a decent income so we could move in together, but as of yesterday he quit his job and — although he plans to find another one — has not started to apply for anything yet. It’s a pain when a voice in the back of my head keeps telling me I’m stupid for committing to a guy who has $0 in savings and no job, but he makes me happy and if that isn’t worth more than a stable income and security, then, I don’t know what is…

That said, I still have my big $200k success to look forward to, that’s now within reach, as long as the stock market cooperates. With $50k of that in Apple, my networth value keeps going up and down and up and down. I still believe in the long run Apple will go up, but I probably should start to diversify a little more.

If I buy a car this year, I can either buy something cheap-ish… ie, the same car I have now but in much better condition with much lower miles for $7500… or a nicer car like a used Altima 2.5 or Mini Cooper or Camry Hybrid for $15k – $18k. In August, my insurance rates are going to spike thanks to that DUI I got last year — and I’m not sure how much that spike will be (I guess I’ll find out very soon.) So I don’t really want to get a nicer car because I’m thinking it would be smart to keep comprehensive coverage very low for the foreseeable future. I already cut my comprehensive so my monthly insurance rates went from $77 to $35. They’ll probably be back up to $77 or more without the coverage next month, but that’s my own fault. With that fault comes the reality that it probably doesn’t make sense to buy a car over $8k at this point.

Another option, which I’m considering, is moving to a place located on the local train line. My company is moving to a new office which offers a shuttle from the train station. Actually, that train station is my current local stop, but it would probably be easier to take a train from another station there then to take a bus. If I were to move by the train line I could get rid of my car entirely — which would suck because I like the independence of having a car — but would be great from a financial perspective. The train would also be free thanks to a company perk, so I could spend a little more on rent and still do better than having the car. I’d probably keep paying some insurance (since the SR-22 is a requirement for 3 years with the DUI on your record) but I’d pay the lowest possible since I wouldn’t actually be driving my own car.

Hmm. Anyway, lots to think about. Right now I’m so busy with work that I don’t have time to seriously contemplate moving and I’m struggling to find time to figure out what to do about the car situation. All I know is my current car is embarrassing to the point of I really shouldn’t be using it in professional settings, and that’s a problem, and that’s a problem I shouldn’t have when I’m making $100k and have $190k in networth, right? Still, I can’t bring myself to spend on a car when I know next year my goal is to have $250k networth by 30, and I’d prefer to get a head start on that if possible then buy an expensive item that will just depreciate in value.

 

October Spending: A Belated Halloween Fright

My October spending is spooky. But thanks to a $5k surprise bonus and a random $1k return of deductible for a year-old car accident that wasn’t my fault my finances evened themselves out this month, and I managed to save a generous portion of my income as well. Go me. Still, I could have saved a lot more if I were smarter with my spending. Here’s the breakdown of how things shook out last month:

Income: $7400
Auto: $972
Rent: $632
Shopping: $537
Travel: $438
Bills: $292
Food: $266
Entertainment: $189
Personal Care: $74
Health: $35
Fees: $24
Other: $31
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Left over: $3,687   Continue reading

10 Financial Commandments for Your 20s, Part 2

This is part 2 of a series inspired by Give Me Back My Five Bucks, based on a Kiplinger article of the 10 commandments for finances in your 20s… I’m grading myself on each one of the commandments. Read Part 1 here.

6. Establish credit. In order to qualify for the best interest rates on a credit card, auto loan or mortgage, you need to start building a solid credit history. In fact, a good history can also save you a bundle on your auto insurance or help you land an apartment or a job (see Why Your Credit Score Matters). Building a good credit history in your twenties will ensure it’s ready when you need to use it. If you didn’t have a credit card in college, one way of getting credit now is to apply for a secured card: You make a deposit — usually $300 to $500 — in a savings account as collateral, and you can get the money back after one year of using the card responsibly. You can also start building a credit history through www.prbc.com, an alternative credit bureau that gathers data on regular payments for rent, cable and other recurring expenses. (See Rent Your Way to Good Credit to learn more.)

Score C. I’ve never made a big purchase on a credit card and paid it off slowly, so my credit score is not as great as it could be. That said, I’m totally opposed to how you need to carry a balance in order to build credit. I do have a credit card (ok I have a lot of credit cards) but I don’t have a lot of recurring expenses. Continue reading