As I wrote in my last post, my 2008 savings plan was a success. But in 2009, a lot of variables are a changin’, and I can’t save 50% of my income for taxes anymore. Being a full-time employee means regular tax withdrawals from my paycheck. No more saving for taxes in a nice 3% interest ING account. So what does that mean for my spending and saving in 2009?
First of all, I recognize that at 25, my medium-term goals (buying a house, grad school, having kids) are suddenly becoming more-or-less short term goals. I won’t go into how much that’s freaking me out at the moment, and instead will concentrate on how I can best save for them while my fixed monthly out-of-pocket expenses are low.
Even though I use Mint to track my spending, I find it most useful to have a Google Doc spreadsheet set up for my monthly budget.
First, I make a row of “Budget Headers” — which includes everything from “income” to “travel.” For now, I’m not too picky on my breakdown. I have a few columns left for income – my base paycheck, some small additional freelance income I earn monthly, and other revenue streams that may pop up throughout the year. Then, using my strategy from last year, I deduct 50% of my income from spending power.
The next columns are set up for fixed expenses: Rent, Bills, Insurance, Gas, Food, Gym, etc. After I got all those in, I made a column for remaining liquid cash called “LEFTOVER.” My LEFTOVER money in 2009, assuming I can take in $2650 after taxes, is $1178.
$1178 seems like a lot, but it’s not extravagant.
After the “LEFTOVER” column I added a “REMAINDER” column, which basically tracks the difference between my extra spending/saving and the LEFTOVER amount. The goal would be to get this as close to 0 each both as possible, without going under.
On the right side of the REMAINDER column I made columns for all of my un-fixed expenses: clothing, travel, Roth, downpayment account (currently at $0), gift, entertainment.
I’m sure I’m forgetting something but I’ll add it once my January totals come in.
The cool thing about this spreadsheet setup is that I can adjust it for income. My favorite thing about 2009 is that I have a few easy income streams for a couple of extra bucks a month if I can get myself out of bed early. My main job is going to really take up most, if not all of my time to “work,” but if I really want the extra cash I can write a blog post once a day for $25, up to $500 a month. Last month, I earned $250 doing that… which was a good thing since my other generally stable freelance income stream of $400 a month payed out only $100.
At the end of each month, I’ll post my budget chart here.