Tax Rates, Paychecks, Overtime, and Road Trip
I got my paycheck today and as always, it was about $50 from what I expected it to be. I finally found out why! Overtime is taxed at a higher rate than regular hours! Thank you to my friend in accounting that finally explained that. I’ve always had a varying discrepency with my paycheck. I calculate my 401K deduction(6%), I subtract my health care contribution (10% per paycheck or $51), then try to multiply by what I calculate is my taxable rate, which seems to change from paycheck to paycheck!!! Not knowing until today that regular hours and overtime hours are taxed at differing rates has always stupified me!!! Now I finally know why.
This paycheck today is abysmally small. It’s only for a 10 day period, and there is precious little overtime. So it’s on the low end of what I typically get paid. Unfortunate, sad, and potentially disasterous unless I remain vigilant about my spending until May 4 (my next pay check which as you’ll soon see is going to be a humdinger). I’m managing my new budget under a microscope, and as I just posted about, I’m trying to reduce my lofty idealized expectations of how much I can afford to save and how much I can afford to pay towards debt. Both have shrunken from what I want to spend, and with this even smaller-than-usual paycheck I just received, it’s going to be that much more of a struggle. I guess I’ll take it as a lesson in humility and learning some lessons on creative budgetting! Maybe it will make me look at my food spending and throw in some extra frugal meals like soups and rice and beans, etc etc (now doesn’t that sound boring?).
Balancing my tiny paycheck today is the ginormous amount of overtime I’ve been working this week. I have had several 12 hour+ days already this week. It’s exhausting, and mentally draining, and makes me not have time to cook or prep lunches for the next day, and makes me want to not get out of bed, but in the long run, overtime makes me happy. I wish it was something more controllable, but it’s not. It’s all driven by clients and circumstances. I am responsible for closing the building I work in 2 nights a week. If jobs go long, I have to stay and wait for staff to return. Sometimes we have after hour jobs. I love those! They are great overtime opportunities for relatively little effort. This week is a cornicopia of overtime, but the last 2 weeks were a famine. Nothing I can do about that except be available and desirous of working long hours. Luckily I have very little other competition for this among my coworkers. Yeah me! I guess I’m the only one without a life.
I normally average about 3.5 hours of overtime per week (due to my closing responsibilities) – when I stay until at least 6 or 6:30 twice a week. I have to be available 8:30-5 to answer the phones (I’m the main point of contact with the outside world), so anything that makes me stay late is gravy. As I can’t come in any later (remember, I have to be in by 8:30), I just have to stay longer. When I have nights that allow me to stay until 7, 8, or 9 pm, it’s a slog, yes, but the overtime hours are yummy. Getting paid time and a half for every hour over 40 that I work (and double for any jobs that happen between midnight and 5 am, which does occur occasionally) is so financially satisfying! Being able to get paid 4 hours minimum at overtime rates when sometimes i only have to drive in to work during off hours and weekends and be in the building 30 minutes to 1 hour is so awesome. It can suck not having time to do anything but grab some grub (quickly), and go straight to bed, but it’s a small sacrifice. This week alone I will have 12 hours of overtime!!
So. Back to this month’s finances. My yummy overtime paycheck (probably $300 more than I typically get) won’t be until May, so I have to make do with scrooge-like proportions. I’m also planning a road trip to eastern washington to take some photos. I have planned it already and I’m taking a friend who’s up for the 16-18 hour day!!! 4 hours to drive to the area I like to photograph, each way, plus 6 hours photographing, plus down time to snag a meal or two. It will be a long day. And expensive. I estimate $90 – $110 in gas. Then I will come back and have several rolls of film to process at $6 a pop – it’s a special larger format size, different than 35mm film (it’s called medium-format), which takes 12 images per roll and costs a lot of money, both to buy ($5/roll + $6/roll to process). Basically it costs about $1/image. And there are only 2-3 places in Seattle that process it. I have a show in July that I have to prepare for, so this is the fun part – going and taking photos. Then comes the financial drain of processing the work, and going to a lab and working on them and printing them (and paying for the time and ink to do so). $$$$$ Expensive. So I will be cutting into my debt payment a bit this month.
I was gonig to celebrate sticking to my frugal lifestyle this last 2 weeks, and get a nice dinner and a bottle of wine tonight. But UGH, that costs a lot! I may stick with a less expensive cut of steak, but I think I’m going to continue to avoid buying any wine for a few weeks. I’ve already stopped myself from getting wine to go with dinner several times in the weeks prior, and I’ve been totally ok with that.
Road trip – 1
Finances – 0
debtmaven out
Reality check: my new 2012 budget
I just posted my 2012 budget on the side bar. Putting it together made me think really hard about my spending on a macro scale. It also made me realize that thoughts and deeds are very different things. I want to save $200/month on my car (for an upcoming timing belt change). I want to put at least $100/month into savings and build up my emergency fund from my end of 2011 decimation (and I’ve elected to do so slowly, a little at a time, to avoid delaying paying debt any more). I want to save money for a big international trip in 1-2 years (as I haven’t on an airplane since 2001. I also WANT to pay at least $700 towards my SBA loan every month (in addition to my car payment, my only other debt). What I want and what is happening are distinctly separate activities.
Rent and car payments are set and not open to change. My other bills are pretty set in stone. I don’t have cable, just internet. I don’t spend frivolously on shopping sprees (um, just don’t read about my February spending, that, uh, was an anomaly, truly). I don’t want to reduce my spending on food. I’m happy with the quality of the foodstuffs that I buy. I don’t want to purchase crappy packaged meals, or commercial-grade meats, lower quality produce, or things with preservatives, fillers, corn syrup, you name it. I buy good quality foods and I’m not budging on that point. Basically, I’ve reviewed and rehashed my spending for 3 years now and I’m unwilling to make any further reductions or changes from where it’s currently at. I’m not acting with gazelle intensity, but I’m happy with my current plan.
I have a little leeway with buying alcohol, and a gym membership, and I am going to cancel Netflix after this month (I don’t use it enough to justify the online $9/month service – Hulu Plus is enough). However, all of these things tally less than $100/month! The biggest thing that will be affecting me in the next 6 months is exercise-based activities. Hiking and biking. I’ve already purchased an expensive new bike. I have a few paraphernalia items I need to get: a $20 multi-tool to adjust it, a spare inner tube at $5, a bike rack ($25) for a pannier ($50-$100 for a single one) so I can do longer rides and carry a jacket, extra water, and lunch, and then finally an electronic device to track mileage, revolutions per minute, and speed ($60-$120). For hiking, I don’t really need much, but each trip costs about a half tank of gas or more, depending on how far I drive (often 1.5-3 hours each way). If I want to do a road trip for photography, that is at least 1.5-2 tanks of gas, possibly a little more. Basically, most of my spending is for leisure activities, having to do with my wellbeing, my mental health, and my creativity. I’m not sure I want to compromise in any of these areas.
What I’m realizing is that my goals are in conflict. I’m 40, I’m used to being relatively comfortable (I don’t want to eat pbj and ramen for meals), and enjoying activities in the wilderness (which cost a certain level of money to perform). I want to create artwork – if I don’t then I’ll just be someone with an art degree that does nothing with it (and what a waste that would be!). I also have realized that my “extra” spending of $200/month is just not enough to cover my bike purchase AND my minimal other spending. I can’t not buy clothes or shoes, or $20 to start up an herb garden at my new place (which I just did this weekend), or avoid getting an annual permit to enjoy the wild areas of the pacific northwest ($30 for a recent discovery pass to go to state parks). Maybe I can for 1 month, but definitely not the 6 it will take to pay off the bike. Something’s gotta give.
I mentioned at the start of this post that the genesis of all this thought and reflection had to do with my 2012 budget. When I was putting it together to post I realized that my savings and debt payments were not allowing me to budget in line with my wants and desires. I can’t scrimp for 6 months like I mentally think I might be able to. So instead, I’ve reduced my savings by $75 ($50 from my car mini fund and $25 less towards my EF) each month. I am also going to reduce my debt repayment by $50-$100 each month. This will give me enough slack to still pay myself first and pay down debt, but without sacrificing my quality of life. I’ll still be able to hike, enjoy my new bike (as I pay it off in 6 months), and take photos (and spend the money to process, print, and mount/frame for shows as needed).
Being able to go hiking and do a roadtrip or two or three to take photos is completely worth extending my debt payments by an extra 2-3 months. I can delay a big 3-4 week trip to France/Spain until 2014 and do it right.
It’s all about compromise.
debtmaven out.
Credit score…dropping
My credit score has been dropping in the last year, and it just dropped again. You’d think that my decision to pay off my debt would be a good indication of credit worthiness, but apparently not! The credit bureaus have their own criteria, which I am obviously not meeting.
I recently closed one of my 2 US Bank cards. It had a $0 balance, and they sent a note that they were about to charge me an annual fee. Screw that! I got the card because of a zero interest rate offer. Used it, paid it off, and never looked back. I don’t need a gazillion credit cards, so when I got that letter in February, I opted to close the account. My credit utilization how now increased (bad), the number of credit cards I have available has decreased (bad), and the length of time my credit has been opened has only partially been affected (slightly, ever so slightly good).
The other big reason I’m being dinged is because I had a hard credit inquiry. I just bought a $999 road bike (plus taxes, plus 2 service plans, plus cheap pedals, plus a cage for my water bottle). I opted to go with free financing for 6 months, with GE Capital, for just over $1100. Be able to pay it off in 6 months without having to effectively slow down my debt payments? Fabulous! Not having to pay interest charges by putting it on a credit card and then not pay it off immediatley? Even better! Having decreased the average age of my credit cards by a chunk, oh well. Having a hard credit inquiry (meaning I am about to use credit and am a bigger credit risk since I don’t have enough to pay my bills…), oh well. It was still a good decision, but according to TransUnion, not in the short run!
It will get better eventually. In the meantime, here’s a list of my credit fluctuations that I’ve gotten off of CreditKarma:
April 2010 – 794
Sept. 2010 – 787
Dec. 2010 – 788
May 2011 – 779
March 2012 – 779
April 2012 – 772
I have seen my credit fall from 794 two years ago to 772, a whopping 22 points. In that time I have closed a credit card of over 18 years (FU Citibank!), and I began paying down debt. I opened a few zero percent cards (US Bank/Discover), and opened an REI card for the awesome rewards (since I shop at REI frequently!). I have always been fully up-to-date on all my payments. Yet, I am supposedly 97% less credit worthy than 2 years ago.
Go figure.
debtmaven out.
I love ham…but my budget doesn’t
Remember yesterday when I posted about frugality being my new BFF? Here is an example of life in action. I was resolute in sticking closely to my budget this month. I went home, flush with cash (having just gotten paid), and I needed to do a bunch of shopping to fill the larders so to speak. I went to 2 super markets (one was only to deposit my check, since I don’t typically like shopping there due to their lower-quality stock) and the liquor store. I splurged and bought a bottle of apple jack brandy (yum! $21). When I went to my favorite market they had yet another sample of kurabota ham. It’s Easter weekend, after all!
Unfortunately, I ate a bite. I asked questions on how to cook it! (This is a meat I am unfamiliar with). I was shown the display of where they were and told (in a whisper) that this brand was better than that brand. My taste buds were aroused after my little amuse bouche (ie, a bite sized sample) of ham. I actually snuck 2 samples, one of the outer crusty area, another of the yummy meat with bits of fat attached (2 separate sections of ham). Mmmmm. I was hooked.
My intense hunger (yes, I was quite famished at that point, always a bad thing in a food store) coupled with my salivating taste buds had me looking at the options. A half ham for $35-$45 (bone in), or a mini piece for $25 ( bone out, more per pound). OR I could go for the tiny portion for just $15 (it was very mini, and bone free). I agonized. I picked up. I caressed and felt the proportions and contemplated how much meat on the bone. I thought about how yummyit would be for dinner. What I would make with it (polenta, roasted veggies, scalloped potatoes from scratch, baked potatoes). I thought of my lunches for all of next week completely covered (ham sandwiches EVERY DAY). I thought about being a single person cooking for 1. I looked back at the price tag, give or take $25-$35 for a cut I’d want to take home.
I decided to leave it in the store. I felt sad. It’s the next day and I’m still salivating about it now. I may go back and pick it up. I may wait until the week after Easter to see if prices come down. But as sad as my hind brain is at missing out on all the yummy haminess I gave up, my resolve and my budget are pleased and quite smug. I escaped with my resolve intact.
I will see what happens in the next week, but for now, I’m in good shape. I made a delicious meal of steak, roasted veggies, and polenta as a splurge last night, sans wine, but had a few shots of brandy, and had a great night. I have wonderful leftovers today for lunch, and I have a bunch of yummy things still at home for when I next feel like spending an hour or two cooking. Plus I still have a ton of cheap dinner options for a few days.
Ham – 0
Frugality – 1
debtmaven out
Spending update…frugality, my new BFF
I’m excited for my planned budget diligence this month. I’m raring to micromanage my finances. Strange, but I made a decision about 2 weeks ago to not. spend. ANY. money beyond my current bank account/remaining budget for February, and it’s been really great to have that hovering over my thoughts and consuming me in my spending habits. What does that mean exactly? Well, it meant that after I paid off my previous massive spending on my credit card, I had very little left over. I had a few evenings of planned restaurant/bar spending ahead (happy hour with a free entree coupon from Outback to spend time with a close coworker that’s having a difficult time at work, then drinks and noshes with a friend I hadn’t seen in a few weeks). I put my foot down and decided not to spend anything further on my credit card. I couldn’t spend even $20 to buy “just a little something extra” at the store for dinner. I had just finished paying off my last 3 months of excess spending and didn’t want to hemorrage any more into March. Please note that when I say credit card spending, I mean not having enough in my budget, then spending on my credit union credit card temporarily, and paying it off within the same billing cycle. It basically means temporarily borrowing money before I pay it back in full (ie, it means poor planning and overspending during a single paycheck period!).
So I got to the point that I was forced to eat food out of the house and not buy any food that I craved but couldn’t afford. It meant that I scrounged to find food to prepare lunches. It meant that Il ived within my means. Crazy, huh?! Well, I made it, I got my paycheck today and I have already planned out most of my spending for the next few weeks – carefully, and with much deliberation.
I’m going to be uber-careful about food spending. I’ve noticed a really awful trend. Since being on my own in my new place, I have been a lot more wasteful with food. I have on more than one occasion, purchased some kind of meat, had it in my fridge, not cooked it in time before it expires, and instead gone out to eat with friends. That’s overspending by a factor of 2! And how wasteful! So I’ve decided to ONLY purchase food that I plan on eating in the next 2 days. I drive immediately by the supermarket that I shop at, so it takes no extra time to drive there. I am out of food and plan on stocking up tonight, but in a mini-way.
In the immediate future, I will be purchasing basics to have in the fridge (mostly veggies & fruits, lunch fixings, coffee and milk, and one protein for tonight). It doesn’t mean a full-out $75+ bill of food for the week, some of which has become spoiled before I get to it. It also means that I will not be going out to eat until this weekend. When I do, I will ration myself to ONE trip out. Yes one. If I don’t make it out, great – I have an extra trip out I can use later in the month. I will be buying a full tank of gas. I may go to costco and get the gas and get some cheese (but limit my spending in the store to $30 or less, which is completely insane at costco!). I may buy a bottle of liquor at the store (Apple Jack brandy, my latest favorite). But that’s it!!!
I will not be buying red wine every time I go to the store. In fact, I may specifically not purchase any for a few weeks (even at one a week, that’s $35 for a month!). I’ve been wanting red wine several times in the last few weeks, but hard liquor lasts much better than an opened but undrunk bottle of wine. And a tiny shot is really all I’m looking for. So no wine purchases for a while. I’ll probably make a few pots of soup this week, too, a great way to stretch spending.
I did get my first electric bill. WAAAY lower than I expected. Including a set up fee of $16, and including half a month of turning lights on for an hour during my deliver/unpacking phase before I lifted there, my bill for 5 weeks is $33 (which includes my heat!). So it’s $15-18 (extrapolated) for 3 weeks of use. I had no idea what to expect. A house is much more expensive than an apartment with shared walls and on an upper level! I had budgetted $50/month for electric, but I have already downgraded that to $30/month (and I expect it to be even less in the summer!).
The other major expense I now have to recover from is the purchase of my NEW roadbike! I spent a bit more than planned – I upgraded to the next level, and spent $1000 plus taxes and some service plans. I was able to get some financing (free for 6 months), which will let me pay it off gradually and within budget, with no fees. However, that means that I have much less disposable income for other things for the next 6 months. In a previous post I mentioend having $200 from selling an area rug – I will apply that, and what is left will basically come out to be $150/month until paid off. That leaves me with $50 of extra spending a month for anything not already budgeted for (my “extra” spending catagory is $200/month, for things like haircuts, photography supplies, entertainment, art purchases, you name it). I expect that to definitely be an issue, so I think I may have difficulty staying on top of my $700 extra payments towards debt. And I still have a bunch of bike accessories that I need to purchase, too. I have made this deal with myself. If I can spend at least $600/month extra on debt, then I can consider buying something beyond the $50/left, but I’d prefer not to.
So. Frugality is going to be my BFF in the next few weeks. I will be very structured (and have been for 2 weeks!) and careful. I’m looking forward to seeing how good I can be!
Happy spring, all,
debtmaven out
DebtMaven 