Trying my hand at yearly budgeting...

[Firebird]

This morning I did my expenses for January, and realized that I had finally kept consistent financial records for a full calendar year. So I thought I might try making my first yearly budget.

Here's what I came up with-- it's a combination of last year's numbers (when applicable) and my projections for this year's (when not).

Gross income: $65,000 (not including bonus)

Take home after 401k contribution (currently 6% but I am raising it 1% per month and I took that into account), taxes, transportation costs, and other benefits: $42,000

Expenses:
Savings: $10,000
Rent: $8,500
Utilities: $1,400 (includes cell phone)
Student Loan: $2,400
Car Loan: $4,200
Food: $4,000 (includes eating out)
Household: $700 (e.g., toilet paper and toothpaste)
Travel: $2,135 (includes flights, gas, parking, etc.)
Insurance: $1,375 (car and renter's)
Car Expenses: $680 (maintenance, repairs, registration, etc.)
Entertainment: $700
Clothes: $550 (includes dry cleaning)
Services: $650 (computer repair, taxes, stuff like that)
Family: $2,000 (long story but I have to plan for this)
Gifts: $2,000 (includes Christmas)
Medical: $710 (medication, copays, etc.)

TOTAL: $42,000

Half of the savings total is allotted for my 2011 ROTH (2010 is fully funded as of this morning, yay!). The rest goes to EF for a total of ~$10k. With my ROTH contribution plus my 401k, I'm saving almost 14% right now and I'm planning to be up to at least 20% by the end of 2011.

If my calculations are correct and I stay basically on track, my net worth should look something like this in 11 months:

Assets:
EF: $10,000
ROTH: $14,000
401k: $10,000

Liabilities:
SL: ($12,000)
Car: ($4,800)

Net Worth: $17,000

Of course, experience has taught me that it's never going to go exactly the way you think it will-- but this seems pretty realistic to me.

Not looking for any specific advice, but I'd be glad to hear thoughts that anyone wants to share with the class ;D

[Firebird]

Thanks, I will! I live with my boyfriend so we split the rent and utilities-- otherwise they would be double what they are :-)

[hsclassic]

Looks good. Doesn't it feel great to have all of the facts so you can see exactly how well (or not) you are doing??? We do something similar, and it feels wonderful to know you are in control and meeting your goals. Way to go!

[Clifford]

I know I may be stepping on toes here, but if you are able to put >$800/month toward savings, why maintain the car loan of $350/month? If you are not investing it, thus yielding returns - and your EF is already 10K - why continue to pay the interest? Unless it is at 0%?

Otherwise, things look promising. Saving 15-20% is very respectable and empowering. Maybe you could get to 20% sooner with the car note out of the way.

[Firebird]

Feb 2, 2011 17:33:41 GMT -5 Clifford said:

I know I may be stepping on toes here, but if you are able to put >$800/month toward savings, why maintain the car loan of $350/month? If you are not investing it, thus yielding returns - and your EF is already 10K - why continue to pay the interest? Unless it is at 0%?

Otherwise, things look promising. Saving 15-20% is very respectable and empowering. Maybe you could get to 20% sooner with the car note out of the way.

Perfectly reasonable question-- however, the car note is indeed at 0% I'm happy to leave it there for awhile. I'm much more inclined to pay down my student loan-- once that is paid off, the car note will practically be gone anyway so I'll most likely make a lump sum payment and get rid of it then.

[TrixAre4Kids]

Hair/personal grooming/etc? Do those come out of your household budget or

[Firebird]

Feb 3, 2011 14:04:49 GMT -5 TrixAre4Kids said:

Hair/personal grooming/etc? Do those come out of your household budget or

*laughs* Household budget. That's mostly what it's for, although sometimes I'll buy things for the apartment out of it as well, such as toilet paper or dish soap.

[phil5185]

Good analysis!

You can add the car's present value to your 'assets', that will bump up your $17k NW by a few thousand?

It might be good to account for the 'other' $23,000 - we tend to think of it as out of sight, outside of our control - but often we can adjust them. Eg, the 401k affects income taxes. And we can control when we pay the withholding - ie, use the W4 to withhold less tax during the year, and pay it later on April 15 - that gets money flowing into your Roth 16 months sooner.

[Firebird]

Phil, would you suggest maxing out my 401k before contributing to a Roth so as to minimize my taxable income, or an approach similar to what I'm using now?

I do plan to adjust my withholdings so that my return is smaller (or hopefully nonexistent) next year and I'll have more money coming in monthly.