I have a lot of things I want to tackle this year. Due to all the spheres of influence I’ve been thinking about, I decided to break it up and share my plans for 2015 over the course of the month of January. Here is part 3: Finances.
Finances have always been something I’ve felt both totally in control of and completely without a clue at the same time. As I’ve written before, there was a point when I thought I could offer other recent college grads advice for getting on track. But then I started getting more and more of the accoutrements and responsibilties of adulthood handed to me (i.e. no longer paid for by mom) and I found myself under the weight of what has to happen coupled with what I want.
I do have pretty good credit. But I tend to move around a lot, which can be a major expense. And I’ve not always been good about eating at home, which is another area for improvement. And I’m a journalist. Though I currently make about $54K, that was not the case for my first several years out of college.
Side note: I think it’s important for women to discuss how much they make, because the secretive nature of the workplace where compensation is concerned makes it so much harder to figure out if you’re working for a fair/comparable wage. I will make about $54,000 +any OT this year. In NC, I was making $32,000 +OT +bonuses/profit sharing.
I’m three years into a 30 year mortgage (on a house that is now a rental property due to my move in 2013). I’m four years into a six-year car note (on which, due to all the driving we do, I owe more than the car is worth). I’m 4 years into six 10-year student loans. I have four active (and maxed out) credit cards totaling $14,500 in debt. Not to mention, we’re supposed to get married in September (pushed back from June), and we have a baby due in August.
On the upside, thus far we’ve managed to make some major cost cutting moves this month and going forward should be able to sock some money away for the wedding. Beyond that, I have some overarching goals for the year and various month-specific benchmarks to get there.
Goals for 2015
– Pay off Citi card ($750)
– Keep Chase credit card open (use and payoff once every 6 months) to maintain credit — I paid this one off in 2014, so I want to maintain its positive impact on my credit.
– Close HSBC account (I paid it off in 2011 and haven’t touched it since, so it hasn’t been impacting my credit score)
– Have an awesome wedding (I think we can manage a budget of $5000, although we would max out at $7000)
– Start college account for new baby
– Increase my 401k withholding to 3%
– Get caught up on all the medical bills that I don’t know if we’ve payed (We have a bunch of $10-$30 bills lying around and I no longer know what’s what. I figure I’ll throw them all away and forward our mail. We’ll pay whatever comes in as it comes in.)
– Spend no more than $100 on meals outside the house each paycheck.
– Grocery budget of $200 per paycheck. There are a number of cost cutting measures I’ve addressed in my food resolutions post.
– Gas budget of $100 per paycheck.
– Maintain my budget tracking spreadsheet.
January is a month to get all the ducks in a row. Thus far, I’ve worked out a deal to lower the interest rate on my Discover card, so my monthly payment goes a lot further. I also set up a bill-pay spreadsheet to get a better handle on what has to be paid out of each paycheck. In the first paycheck of the year, we’ve paid as much as we were able to get ahead, because most of Friday’s paycheck is going to be used to pay bills and movers.
I’m also going to:
– Call Citi to lower interest rate. Check (they said no).
– Call HSBC to close account (see above).
– Put all credit cards somewhere other than purse (to keep me from using one when things are tight). Check.
– One-time expense: Martial Arts class for the little one ($40). Check.
In February, we’ve decided to challenge ourselves not to pay to eat outside the house. T and the little one will still see her mom for dinner, but otherwise we will eat the food we make at home. It’s sort of like a fiscal fast, but just in this one area. In addition, other than food and gas we have very few things we’re willing to spend on this month:
– Flights to Florida for March ($240)
– Register me for yoga class ($42)
We will also be saving all of our tax returns (Fed. $1400, MI $400, NC $?) which will be a major boost for the savings.
This is also the month when the 401k bump will happen. We have a yearly 1% raise in February. At that time, I’ll increase my 401k contribution to 3%. I won’t see a change in my take-home pay and it means more money set aside for retirement. (My company does not match, although guild employees still have a pension which is vested at 5 years.)
March is my birthday month, and we are taking a trip to Florida. We are going to spend as little as possible, but we will be enjoying our trip nonetheless.
– Transfer $150 from Capital One to BBT (maxes out BBT, but brings Capital One down to $550)
– Everything that’s left is for vacation.
April I don’t think there will be any extra to save this month. But it also doesn’t look like things will be especially tight this month.
– Transfer $150 from Capital One to BBT (maxes out BBT again, but brings Capital One down to $350).
– Save everything that’s left (about $200).
– Save everything that’s left (about $100).
– Transfer $150 from Capital One to BBT (maxes out BBT again, but brings Capital One down to $150)
– Everything that’s left is going to be used to move again. Will we have to dip into savings for a security deposit?
BABY! (We will be stockpiling diapers before this, so I hope our grocery bill won’t go up too significantly before January.)
– Transfer $150 from Capital One to BBT (maxes out BBT again, but effectively pays off Capital One card)
WEDDING! (This wipes out the savings, as this is what we’re saving for. We should have at least $5000.)
Let’s just take a moment to relax and enjoy the fact that there are no pressing budgetary items this month.
– Everything that’s left ($200) is for birthday presents.
– Everything that’s left ($600) is for Christmas presents.