Changes I’m making for 2011

January 29, 2011 at 9:47 am (budget, goals, paycheck)

I made a decision about a year ago that I wanted to increase my 401K contributions. But how to do that while focusing primarily on debt repayment? Well, I came to a compromise. Every year, I would increase my 401K contribution by 1%. I figured that that should be either equal or less than any raise I might get, or if I didn’t get one, I’d not really notice the $500/year reduction in my paycheck, which is what I calculated what 1% is equal to. So on Dec. 30 I changed my contribution from 4% to 5%. So far so good.

Then came the news that I got a $1 raise, quite unexpectedly! Then I heard about the payroll deduction changes in social security taxes. I had heard about it, but it wasn’t until I looked over my first paycheck of 2011 that I saw it made a big different. That means that I’ve gotten a 6.5% raise this year between both income changes. I thought about it a while, and decided that I’d increase my contribution up to 6%. While I could go higher, I have some other immediate goals I also want to contribute to.

Debt repayment is still my main, primary focus right now. But I am also making a big investment in my health this year, which by happenstance, started at the new year, but is not really a resolution. It’s been building for a while, and after I finally got healthy after some lengthy nasty winter colds, I started returning to the gym (for which I have been paying and not using since last summer!!! Boo.). I started cooking almost every meal at home (no more restaurant spending! yeah! or at least, much less). I started bringing all food to work for lunch (no more lunches out, yeah! much cheaper!). But I also need some additional clothes and shoes, and such. That’s going to be hard to maintain my clothes fund at $50/month if I have to get sneakers and additional (and highly expensive) workout clothes. Wicking undees, $15/pair! Good quality no-bounce bras ($50+). New sneakers every couple of months $100-$125/pair! Plus, I have committed to going out on regular outdoor excursions. Snowshoeing and hiking at least 2-3 times/month. That’s a lot of gas to drive 2 hours into the mountains. Plus some additional gear. I need a new waterproof backpack (my $10 pack from target is fine for the gym, but not for putting on the snow when I take break snowshoeing and need to eat my lunch!!!). An annual forest pass, $35. Mount Rainier annual pass, $40.

I have already realized that I also want to start a trip fund. No, I don’t have plans for a big extensive trip to Hawaii or Europe or anything like that (at least for now!), but I do want to do an extended driving/hiking trip this summer. Extra gas, maybe a motel room? Or maybe going up to Whistler in Canada for a snowshoeing trip with a girlfriend. Fitness based, and relatively local, but with a tight budget, there’s not much room for extra $200+ expenses! And J wants to go visit his family in N. Dakota this fall, and have us do a driving trip out there. All this means more money. So I’ve decided to start a $50/month trip fund. And that may be too low, maybe $75? This should alleviate some large unaccounted expenses that occur for me. And with all the changes to my salary due to the above reasons, I have enough to cover it without having any overt changes to my budget!

I am also happy to report that I have maintained my goal to pay $750 per month, instead of the $600 I had been averaging last year. It was less difficult and more realistic than I had expected it to be! I am being way more frugal than I had been, but I’m still able to do the things I want, just a little less so. I’ve reviewed my spending habits and have recalculated my debt free date to be November 2013!

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