Friday, January 16, 2015

Easy come, easy go?

I've had money on my mind lately.

A friend volunteered to cut her hours to halftime, but only after the fact did she crunch the numbers and realize that means she's now running in the red by a few hundred dollars every month. I haven't seen the numbers she used - I hope and assume there's some room for belt-tightening to make it work, but I don't want to stress her by asking. I may broach it in a few weeks, very very gently.

However, her situation inspired some number-crunching, and I'm  happy to say I feel absolutely certain that I could get by on half my income, but it wouldn't be fun or pretty. I've also got enough in savings that I could support myself for eight months, which is a good solid feeling to have.

AND - there's lots of room for improvement in my fiscal life. I just looked at all my spending and saving last year. I saved 16% pre-tax for retirement, and saved 19.5% post-tax. Not bad, you say? Well, it's true but I could do a lot better. Most of my post-tax saving was from various bonuses, contract work, my tax return, and other non-work income. If I just look at what I earned vs what I spent each month, I saved 5.6% - meaning 14% of my savings came from sources of income I can't count on next year!

Travel was what killed me (and thrilled me!) the most last year - 16% of my post-tax income went to that. So... I guess that's the biggest place to focus for savings this year! Here's how my numbers broke out:

Category Percent of income Notes
Eating out 6.96% 10-12 times per month on average
Groceries 4.92% That's about 75-80 meals/month
Coffee out 0.20% 2015 will include all at-home coffee expenses
Bills 42.71% That's all mortgage principle/interest/insurance/taxes; plus water, gas, elec, trash, cell, internet, driver's insurance...very little to trim here. In a pinch I'd get a roommate to offset this.
Entertainment 1.64 Netflix, NYTimes, movies, the occasional play or concert in town.
Gifts 1.20%
Charity 1.72% I'd like to double this for 2015, and ideally hit 5% annually.
Travel 16.41% wow! 2015 travel should be half or a third that amount. Good thing nine of my 2014 flights were practically free.
Transportation 1.41% No idea how the car thing will affect this
Clothes 3.05% If my weight stays down I'm going to have to get a few more items, but I'm slowly buying clothes.
Household 1.84% Cleaning supplies, decor, small furniture expenses, etc.
Upkeep/Health 2.64% Haircuts, doctor copays, vitamins, etc.
Hobby 2.71% Knitting, biking, sewing class - bought a number of biking items pre-Cycle Oregon last year.
Misc .15% Glad this is so tiny - means my categories are good.
Booze 1.49% wine, beer for home. Toning this down this year.
House 1.25% Things like a ladder, a couch.
Big ticket 4.02% Big irregular expenses like glasses and other $$ outlays. New-to-me car will go here.

Some of my categories have crossover: is running gear for health or for hobby or for clothing? Is a framed picture household or house? How about a ladder? I just try to be consistent - the art is household (since I'd have paid for it whether or not I owned a house) but the ladder is house (as a renter I wouldn't own one). So far I've slotted running gear into clothing, but as I buy extras that are beyond the bare minimum, I'll probably put them into hobby spending. Registration fees for 5k events will be hobby for sure. If I needed physical therapy, it would be health/upkeep.

The best spots for trimming spending and boosting saving are travel (16%!) and food (when I combine eating out + grocery I see I spent nearly 12% of my income there). Funny that they are the fun ones. We'll see how it goes!

1 comment:

  1. Wow, that's a lot of detail! I used to do a long time ago, I may need to do that again - thanks for the inspiration!