My 2013 Budget

August 5, 2013 at 5:43 am (Uncategorized)

My spending has changed a bit since 2012, so I’ve been overdue for an overhaul. After the last 11 months’ medical crisis of dealing with a cancer diagnosis and 9-month treatment plan, I’ve had to reevaluate my spending in quite a few areas. The good news is that as of August, I have just caught up on my medical payments and have finally met my yearly deductible. Combined with my treatment having also finally ended, my out of control medical costs have now reduced significantly and I can get back to a more “normal” budget of paying off debt rather than doctors. I also had my income radically change this past spring. It went from hourly to salaried, but based on my 2012 income (including a massive amount of overtime). My new salary is consistent, and in effect, I received a huge raise. I now have $3800/month to work with. It’s nice to have more money and extra nice that the amount is consistent from pay period to pay period.

I’m still using what I call a “split” style budget and it continues to work great. I get paid twice monthly, on the 5th and 20th. I start each month on the day of my first paycheck rather than the actual 1st of the month. I split all expenses over the course of the month so that I’m not in the red or black at any one time, but consistent throughout. I did make an adjustment – because I don’t get paid until the 5th or 6th, and my rent is due on the 1st (technically, though it is never cashed until the 9th – 11th!), I pay it the paycheck prior so that I’m never late. Luckily, if I forget, my landlord is super flexible and nice about it, but I still want to be proper and pay on time. And while my budget indicates rent paid at the end of the month, it doesn’t get cashed until the following month’s budget. There’s a part of me that hates seeing it uncashed – I like things to be neat and orderly. Having spent money that doesn’t show up in my checking account is quite annoying. However, I do get more interest on it for 2 weeks, so I guess it works in my favor.

I’ve changed my eating habits quite a bit from before I was diagnosed. I’m now eating as close to 100% organic as possible (super expensive!), and drink significantly less alcohol (3 or more drinks per week is a huge risk factor in increasing cancer risk). I also cancelled my gym membership since I’ve been unable to use it, so have nixed both the alcohol and gym categories from my budget. I have been doing very little socializing the last year, and my weekly long-distance driving trips to go hiking have virtually disappeared, so I’ve reduced my gas spending and my restaurant spending is on track for the first time since I started budgeting (previously, it was often over, and by a significant amount). I also added an additional fund for health costs – which are primarily for self-care and things not covered by medical insurance (such as supplements that are medically necessary to help prevent cancer from returning and improve my health, and acupuncture/massage if no longer covered by insurance). Those things are also quite expensive but important to my quality of life.

Category Paycheck 1 Paycheck 2 Subtotal
Food $275 $275 $550
Restaurant $75 $75  $150
Gas $90 $90  $180
Rent $745  $745
Credit Payments $325 $325  $650
Car Loan $253  $253
Coffee  $10  $10 $20
Electric  $25  $25
Netflix/Hulu  $9  $9 $18
Internet $72 $72
Car Insurance $64  $64
Car Fund $150  $150
Xmas/Gifts $35  $25
Stuff $100 $100  $200
Vacation $100  $100
Health $300  $200
Total Budget $1722 $1790 $3512

The total budget equals $3512 but I typically have $3800 to work with. Until July I have had excessively high medical costs (paying off $2500 plus copays, drug costs, supplements, and acupuncture), so this may need to be adjusted in a month or two. I also joined a CSA, which has required payments over 4 months; my food income is thus much higher from June – September, but will be lower afterwards as I continue to get my box of organic veggies through December (the last 3 months are essentially “free”).

I am having any extra money from my first paycheck stick around through the end of the month, just in case I have some crazy big end-of-month payment out of the blue, but I do try to put extra towards debt if there’s a large amount by the 20th of each month. While my minimum debt payment is $650 (not including my car loan payment), I do expect to increase that to $700 or more most months.

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What Does Life After Debt Look Like?

August 4, 2013 at 8:35 am (Uncategorized) (, )

What does life after debt look like? I have no idea, since I’ve never been there! But here’s how I’m planning to restructure what I currently pay off on debt towards paying myself. In reality, it looks an awful lot like my current budget:

Budgetary Savings for Big Expenses (aka my “mini funds”)

401K: increase my pre-tax 401K spending on my paychecks to 10%-13% of my salary. Currently I’m at 6%. In January 2014 I’m going to increase it to 7%. I’ve been trying to increase it by 1% a year.

Car: save $300 towards car repairs/new car purchase each month. I’ve never flat out “bought” a car before, I’ve always financed it. How nice to walk in, cash in hand, and just buy on the spot. My last vehicle was $16K, so I’d like to save up $15K at least, but that will take a very long time. Hmm. Maybe I’ll keep saving my “normal” car payment of $250/month plus $100 for maintenance?

Trips: continue to save $100-$150/month for travelling. Haven’t done it yet, but would like to do some more large-scale trips (like Europe!), those are $2K-$3K easy.

Medical: I do need to save about $200 monthly for pills, and other out of pocket expenses like acupuncture and supplements (via my Naturopath).

Gifts: no big family, and none of my friends are in the wealthy/excessive gift-giving category, so I’ll keep it at $35 per month. I often have leftovers after the xmas holiday, so I know I’m in the right range.

After all that (which is basically my current budget, unchanged), that leaves me with my extra debt payments of $650-$700/month. Since I won’t have debt any longer, I need to invest it in myself.

Investing in Myself (Retirement, Buying a House, a larger EF)

First step: save a cushion of 3-6 months of living expenses. Based on my current budget, adding together my food and restaurant expenses, gas (though I expect I’ll be driving less without a job!), bills (rent, internet, electricity, Hulu, car insurance), money for stuff (in which I lump everything non essential that always happens, such as hair cuts, buying clothes, entertainment, photo/art supplies, things for the house), and about half of my medical fund. If things get bad, I will probably cancel any acupuncture that I have, so less will be fine. This comes out to $2069, or $2K a month. I think having a flat $10K available in case of a job loss would be smart. That will take me 3/4 – 1 year to save if I do nothing else.

Second step: save for retirement. I have no idea how to go about this. Putting money aside from my paycheck seems easy. Figuring out how to invest it wisely, not so much. I need to learn how to invest in the stock market. Mutual funds are not doing me much good, and I don’t know how to do stocks. So I’ve gotta learn! Still not sure what to do in this regard,  but thinking of having half my available money go towards the above and half towards investing. This could be through an IRA/Roth IRA if I can invest it rather than do a mutual fund. Again, I’m not entirely sure yet, but it appeals to me, doing investing immediately, as the sooner the more long-term rewards and the more growth occurs.

Third step: save for a house. I don’t know that I want to buy a house, but I’m enough of a nester to know I probably should have one. I’ll probably need 20% down, which would be $40,000 minimum (most houses here are $250K-$300K to start). That’s a lot to save as a single person! I can see keeping up monthly saving long-term. The $10K living expense cushion can keep growing and become my down payment. If I haven’t used it, I can always apply it towards a house then build it up again just for living expenses or catastrophic house repairs.

The above assumes that I remain single, employed, and doesn’t account for any huge increase in pay. Not sure where I’ll be working (or for how much) in the coming years, but I do expect I’ll start looking for a new job at some point. Anyway, this is a rough frame work for how I see my spending habits as of next summer, when I expect to be FULLY OUT OF DEBT! Can’t wait. In fact, I’m doing the wiggle dance of anticipation right now!!

 

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Back in the Game

August 3, 2013 at 11:44 am (Uncategorized)

Howdy folks. Been a long 10 months since my last post. Finally completed my cancer treatment and the drug and chemo haze has faded (mostly) from my head. I’ve buckled down and finished paying off my medical costs ($5,000 deductible over 2012-2013 plus $20 dr visit copays and $25 prescription copays). Surgery and recovery is over and I’m back at work full time. I’m not fully recovered, and probably won’t be for a year or two I’m told, but I’m starting to go back to some normal activities (like going out to a movie, and seeing friends). I probably won’t be able to hike much until next year – I have no conditioning, have to start up my fitness regime again, and battle excessive fatigue (I need an average of 10-11 hours of sleep a night right now).

What has changed financially for me? Well, work has been undergoing figurative earthquakes and tsunamis to which I’ve been pretty oblivious, just trying to get through daily activities and be present (barely) enough to do my job since September ’12. Then I had surgery in early April, and was out for 5 weeks. I went back to work, but started radiation daily for 7 weeks. By the end, I physically couldn’t handle being there (lookup radiation treatment/burns/recovery online if you want to know specifics). I worked from home for about 3 weeks. During this period, we went through the hugest reorg, I had a new manager, and while I was out for surgery, she was fired and everything changed, again. However, my manager, while managing to alienate 98% of the company, decided to help me out by making my position salaried. I had been avoiding this for some time, but she convinced our CEO to pay me based on my last year’s salary, including all the overtime I acquired (which I’ve found out was the most of anyone at the company…I did try, and hard!). This was to allow me to not be penalized while I did my medical treatments. She’s gone now, but thanks to her, I basically got a $3.90/hr raise. Now that I’m back, I am no longer closing the building 2 nights a week, or going in late after hours for late crews. More money, less time at work, who doesn’t love that?

My work is insane in a way a lot of professional companies could not possibly understand. However, as crazy and dysfunctional as it is, it is a family. Many of my coworkers donated vacation time to me and for quite some time, they were also donating money out of their paychecks to help with medical bills. This has helped immeasurably. I couldn’t have asked for a better work environment – supportive coworkers and management, no issues leaving for appointments, no issues being out 5 weeks for surgery, and the ability to work from home when I couldn’t handle being at work during the healing phase. Wow. I hear stories about other women that get not only don’t get support, but become endangered of losing their jobs!

So where am I at now? Well, I did take a few months off from paying down debt beyond the minimum. I was able to get a payment plan in place for Swedish Hospital and just paid that down (with no interest, who knew?) last month. August will be the first month that I don’t have to pay hundreds of dollars in medical costs. However, I have new expenses I didn’t have before this whole shebang happened.

I’ve been seeing an acupuncturist and my maximum has been reached, so any more and I pay $70/visit. I’m going to go twice a month. It’s helped me a lot so far, and while it is difficult to see real concrete improvements, I do know it has helped with a lot of side effects and my naturopath strongly recommends that I continue treatments. I’m also considering seeing a physical therapist to help with mobility and strength training after a mastectomy (getting my right breast completely amputated). But the largest expense is seeing a Naturopath. Out of this whole cancer treatment, I’ve wanted to help prevent this EVER happening again. How to do that? Well, diet change and exercise and improving nutrients in my body to help fight off future cancers (since I’ve shown that I’m susceptible). Actually seeing a naturopath isn’t all that expensive. It’s like a dr visit – covered by insurance with a copay. What is expensive are the supplements they have you take. I’m taking things to help reduce inflammation and fight cancer (turmeric, green tea, mushroom extract, vitamin D), things to help with my long-term side effects of chemotherapy which will last for a year or two longer, plus a few other things. Right now, I’m taking 12 pills a day. These are not chemical drugs and thus not covered by insurance and totally out of pocket. I’m not completely sure yet, but this will be $1500-$2000 per year, and I’ll need to take them for at least 4-5 years (when I’m most at risk for recurrence of the cancer they treated; after that, if it hasn’t come back they consider it gone or “cured”). So, yes, this is expensive, but it’s an investment in my health. After the last year, it’s an expense I’m more than willing to pay.

Ok, now to talk about my food intake. I’ve greatly changed my diet after seeing the naturopath. As I had expected, I’m eating a mostly vegan diet – TONS of fresh fruits and veggies, lots of plant based proteins (beans/legumes/tofu), and minimal amounts of red meat. They recommend deep water ocean fish. I love salmon, but at $25-$30/lb, it’s a bit pricey!! I’m also strongly encouraged to eat organic as much as possible. Not only because chemicals are nasty nasty things, but organic produce is 30% more nutritious compared to commercially-grown foods. I’ve bucked up and started buying organic as much as I can. When I do eat meat, I try and buy pasture-raised meats and those without hormones and antibiotics. I also joined a CSA and have gotten huge amounts of organic fruits and veggies (and even some cheese and butter!) each week. My food budget has gone up exponentially, as you can imagine. But again, this is an investment in my health. I’m now spending about $500+ per month on food as an individual. That’s buying mostly fresh, organic, unpackaged, bulk foods and organic/natural meats and fresh-caught wild fish. On the upside, I haven’t been going out much, so my restaurant spending is less than $200/month. Either way, food has become much more expensive for my budget.

So what about my budget? Well, I’ll save that for another post. I will say that I am paying the minimum on my car payment, $253/month with 1.75 years to go on my loan. My only other debt is my SBA loan. I’m paying that as aggressively as I can manage. I have automatic payment set up for $325 every paycheck (for $650/month), and add extra if I am able ($50 here, $15 there, it all adds up!). I have calculated that I’ll have the SBA loan paid off by May 2014 and my car fully paid off by August 2014. Provided there’s no other big bumps in the road.

 

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