April 2014 Month in Review: Money
Taxes made our month kind of wacky! We paid the rest of the federal tax we owed (after our estimated tax payment from January) and finally brought “home” our EPF income from 2013. We were waiting on transferring the EPF money out of its account because we hadn’t done our taxes yet. Now that we have, we pulled over our net profits and divided it as we always do: Part to taxes, part to giving, part to our Roth IRAs, and the rest as discretionary spending. But actually the day after we filed our state taxes we found out we missed a business deduction, so once we make that correction we’ll be able to convert part of our EPF tax money to discretionary.
We were a bit naughty this month and ordered something from Amazon that wasn’t a need and wasn’t paid for out of a targeted savings account. We waited until we knew we had enough leftover money, which is how you can tell it wasn’t a need.
The Everyday Budget
Top-line items
INCOME: Our normal stipend paychecks, plus:
- $135.47 from Kyle’s side hustle, divided as usual
- $711.30 from EPF in 2013 (after expenses). We brought it over to our personal finances this month because we finally figured out our taxes.
AUTOMATED GIVING:
- 10% of our stipends, Kyle’s side hustle income, and our EPF income to our church
- $50 to the missionary we support
RETIREMENT SAVINGS: We finished maxing out our Roth IRAs in 2013 and are now returning to saving 17%-ish. We also added 15% of our EPF income.
Non-discretionary spending
Rent: $870.
Internet: $34.99.
Cell phones: Kyle’s usual $70.41. This month I paid $0 for my phone because of account credits from people using my referral link to sign up for Republic Wireless.
Variable spending
Groceries: We barely came in under budget this month, and that was only because we used some previous leftover grocery money to buy meat from our CSA. We spent $400.11 on groceries and $16.50 on produce from our CSA, so we transferred that money back into our savings account for next season. That left us with a $3.39 surplus, which we transferred to our CSA savings account.
Gas: Two fillups, no comment.
Restaurants: We went way over on restaurants this month. We attended more group social events than usual, had two dates to console ourselves about our work, and bought a few convenience meals when working late. I regret nothing.
Electricity and Gas: High again. We had been wavering between cool and hot weather and failing at keeping our A/C and heat off. I’m hoping next month will be better.
Water: Right on the money.
Miscellaneous Spending
Every month, we have some transactions that don’t fall into our normal budget categories:
- We spent $1.19 on postage to send in our taxes.
- We spent $3.59 at Target on some toiletries.
- At the end of the month, we saw we had leftover money, so we pulled the trigger on some Amazon purchases we’ve been wanting for a while: a salad spinner and a hairbrush. I broke our previous salad spinner a few months ago by dropping it on the floor and with our CSA starting this month we have a lot of greens to wash! I also lost my hairbrush – no idea how – and Kyle’s just wasn’t cutting it.
Spending Out of Targeted Savings
We spent $677.26 out of these accounts and transferred $652.18 in above our normal savings rates. We paid out a big chunk of money on our federal taxes and transferred in our EPF earnings from 2013.
Travel and Personal Gifts
We spent $40.16 on a baby shower gift, $23.59 on a birthday gift and card, and $20 on a group end-of-year appreciation gift.
Nest Egg
We used $54.51 from this account to max out our 2013 Roth IRAs.
We brought “home” $276.49 of our income from EPF last year for discretionary use, but since I don’t yet know if I’ll want to use it for FinCon14 I don’t want to put it in our Camera account. It’s parked here for now.
Cars
no spending this month
Entertainment
We spent $25 on an hour of jumping time at a local trampoline warehouse.
Appearance
no spending this month
Electronics
no spending this month
Medical
We had a dental checkup this month, which was $176 after applying our dental discount program through our health insurance.
Charitable Giving
no giving this month
CSA
We transferred in $3.39 from our leftover grocery money and $16.50 to reimburse our CSA money for next year. We also spent $36 on meat and eggs from our CSA, meaning we finally used some of the money we’ve been saving since starting our grocery challenge! The money was saved into this account and used to reimburse our CSA money in this account, so it didn’t have to move anywhere.
Taxes
We paid an additional $338 in federal taxes this month. We added $256.99 to this account from our EPF account to cover 2013 taxes. We transferred in $30.51 for Kyle’s side hustle paycheck.
Camera
We transferred in $68.30 for Kyle’s side hustle paychecks.
Budget Adjustments
We rounded up our Roth IRA contributions to the next $10 amount. I am working on draft budgets for my looming unemployment!
Bottom Line
We had $48.23 left over this month, which we transferred to our nest egg to repay ourselves for our move last fall.
How hard were you hit with tax payments this month? Is your spending picking up with the nice weather? Has your CSA started for the spring or are you visiting the farmer’s market?
Filed under: month in review · Tags: CSA, spring
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We actually got a tax refund in April, but the bill for our tax guy didn’t come until May.so we will have to pay that next month. Ah we’ll.
The grand irony about people starting to get excited about farmers markets is that ours are actually wrapping up for the year in the next week or two. Very few of ours go through the summer here.
Mrs PoP recently posted..PoP Income Statement – April 2014
We are still waiting on our state refund, but we didn’t file until just before the deadline and it always takes a while. Which is higher, your refund or the tax guy bill?
Oh yeah, I’d say that stinks for you but it totally doesn’t. 🙂 There are farmer’s markets and CSAs year-round here, but I don’t go until the spring because that’s when our tiny one on campus opens and I don’t care much for the winter selection.
First of all, I fully support the “I regret nothing” attitude with respect to thesis-eating. It got me thinking about your underlying budget-creation process, however. How would different areas of your budget expand if you suddenly got a raise? I assume you would increase giving proportionately, and you would increase retirement heftily up to a point, and maybe start going hard at a down-payment, but at what point would your discretionary items expand, and at what rate?
Maybe the simpler question is, how much do you have to be saving before you feel like this month’s restaurant spending is under-budget.
(Maybe also pretend that you don’t have a looming period of unemployment on the horizon)
Richard, why are you posing such an interesting and involved question when I’m trying to spend less time on EPF?! 😉 I could write six posts in response!
For our specific current situation: Kyle’s income increase won’t make up for my loss of income (1-2 months later) by a long shot, but it will cover what we typically spend month-to-month. We will stick to our percentage-based budget minimums of 15% to Roth IRAs (slightly less than what we’re saving now) and 10% to our church (plus some of our other giving commitments, probably). Those percentages will also apply to whatever income I can generate through freelancing or online ventures. We haven’t discussed it in detail yet, but I suspect much of our monthly spending budget will stay the same, including the rather low amount we budget for eating out. If our net income is less than what it is now, we’ll probably just cut back on the short-term savings accounts since we already have plenty there. If it looks like I’m unable to bring in any money through side pursuits and Kyle is going to be in his current lab for a bunch of months, we might take more drastic action in terms of budget cutting or bringing in a roommate.
If I were able to bring in enough to match our current net income or higher, we will keep the percentages fixed and our monthly spending the same and probably just increase our general savings because we’ll be moving and we want to take a vacation and such. Increasing our retirement savings percentage and saving for a down payment will wait until after we settle down into more long-term jobs (and maybe not even then for the down payment depending on where we move to).
In those more long-term jobs, I’m sure we’ll spend more on eating out and other frivolous pursuits than we currently do. For a benchmark, I rather like the Balanced Money Formula. We will definitely save more than the recommended 10% of net for retirement and most likely quite a bit more than the 20% of net for overall saving/debt repayment, but I think the balance between needs and wants is about right for us. Whether that bulk of “want” spending is going toward eating out or travel or entertainment or toys is something we’ll figure out based on our desired lifestyle and short-term spending goals at that time.
For a more general answer, I have a guest post coming out on Wednesday with my thoughts on how to financially handle a big income jump like those seen post-grad/prof school. I’ll link it here when it goes up. The gist is: Set aggressive goals for your new high income. But if you are meeting all your goals, you should increase your lifestyle. You have worked hard and are working hard – there is no reason to save every dime.
Rest assured, I will write about this topic frequently over the next year! I’ll try not to wallow too much in our own finances but try to make general suggestions.
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