We made a few adjustments to our budget this month and are gearing up for more changes this spring.
First, we are going to budget off of Kyle’s salary alone instead of his salary plus my contractor income as we were last fall. This month, in addition to Kyle’s salary I did have contractor income and I paid myself part of my 2015 business earnings. (I’m going to wait until we finish our taxes and have my net business income for the year pinned down more precisely before paying myself the rest.) We also accounting for some monetary Christmas gifts in our spending this month, as you’ll see below.
Second, we lowered some of our variable spending limits! We took our grocery budget category limit from $600 to $500 and our restaurant budget category limit from $150 to $100. These levels are now only slightly above where we had them when we were living in Durham.
Third, as I’m no longer including the discretionary portion of my contractor income in our ‘miscellaneous’ budget line item, so it’s going to be lower going forward and fixed. However, this month we had a small refund from our car insurance company, so I did include that amount in that category.
We are putting the discretionary portions (after setting aside the proper amount for taxes, retirement and tithe) of my contractor and business income as well as an extra $150 per month into our general savings account going forward. I’ve started feeling nervous that we don’t have enough cash on hand (for emergencies, etc.) so I want to dedicate more money to cash savings.
In other news, I had three speaking engagements this month. I traveled to the East Coast twice – thankfully avoiding most of the interesting weather – and hosted one webinar. I think I would like to steer my clients more toward remote events in the future.
Sources of Income
Our budget is based on Kyle’s income alone, so we are finally living off of one income! Well, that is if we are successful in living within our means.
From Kyle’s net pay, we set aside/transfer:
- 18% toward retirement (Roth IRAs so far this year and soon my solo 401(k))
- 10% for our tithe
We added a new category just for this month, which was the spending we decided to do with the Christmas gifts we received. As usual, we are diving up our net income among our regular, variable, irregular, and miscellaneous expenses.
Rent $1375 ($1375 budgeted)
Water/Sewer/Garbage $120 ($120 budgeted)
Phones $61.57 ($65 budgeted): Republic Wireless for me and Cricket Wireless for Kyle!
Internet $44.99 ($45 budgeted)
Netflix $21.90 ($22 budgeted)
Student Loan $98.32 ($99 budgeted)
Transit $44.68 ($50 budgeted): Two (partial) gas fill-ups this month.
Power $109.11 ($50 budgeted): We are billed every other month for this category, so this is slightly over our estimated yearly average. Not bad for winter months!
Groceries $496.20 ($500 budgeted): Can you tell I was watching this category closely as the end of the month drew near? I’m so pleased we met this newly reduced budget category in its first month! This amount was the sum of two Costco trips and seven grocery store trips.
Restaurants $61.64 ($100 budgeted): We ate out just twice this month, once with friends and once at the end of the month as a date.
In total, we are allocating $950 per month (on average) to spend across five categories.
This month, we spent:
Appearance $150.82: Two pieces of clothing for me and one for Kyle.
Electronics $72.26: We bought a webcam, but we’re considering returning it.
Our available miscellaneous money this month was $69.58 between the normal amount and our small insurance refund. We spent:
- $200 on medical services, which maxes out one individual deductible for the year
- $24.53 on small stuff from Amazon – a ball pump for the basketball Kyle received for Christmas, hair clips, and plastic carabiners to make my travel easier
We received some cash gifts for Christmas, some of which was earmarked for a new jacket for Kyle. This was where our major discretionary spending lay for the month. We put the balance of the gifts into our General savings account.
- clothing $143.89: Kyle needed to be properly outfitted for the Seattle weather, so we bought him two new jackets, a waterproof shell and an inner liner (not matching). I think he looks great in his new duds! This was partially subsidized by some Amazon gift cards we had available.
- kitchen upgrades $49.35: Kyle took over as the main washer-of-dishes following my work-at-home vs. stay-at-home personal crisis. (We’ve never lived without a dishwasher before this apartment, and keeping on top of the dishes does take significant time!) For his comfort, he decided to buy a sink protector (our porcelain skink has already broken a few glasses/plates) and a floor mat. These pair well with the fancy new dish rack we received for Christmas.
- exercise bike $131.51: We made a huge and very unusual-for-us impulse purchase this month after Kyle saw a spin bike listed as a deal of the day. We’ve never owned a piece of aerobic equipment before but I’d been idly thinking of buying one to add a new element to my at-home workouts since the Seattle weather keeps me from exercising outside many days. I’m hopeful this is going to pan out!
- skiing $81.00: Kyle’s boss decided to arrange for a one-day ski ‘work retreat,’ which Kyle was excited to attend. He had to pay for his rentals and lift ticket but didn’t have to use any PTO.
Monthly: Spent $2,433.41 of $2,426 budgeted – over!
Irregular: Spent $223.08 of $950 budgeted – under!
Miscellaneous: Spent $224.53 of $69.58 budgeted – over!
This month, we spent $2,881.02 of $3,445.58 available. Even though we were over budget in two categories out of three, we spent such a small portion of the third category that we were well under for our overall spending this month. This helps a lot to rebuild our checking account buffer after our radical overspending in November 2015.
We still have budget changes to make in February or so. Our irregular expenses projections need some serious updating – I mean, we completely neglected to account for medical and entertainment expenses anywhere! We are also going to buy life insurance in the near future, perhaps in February.
Do you participate in any winter sports and if so how much do you spend on them? Did you have a post-holiday spending boost?