The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
Let’s hear it for more money! I will never complain about receiving a higher salary. With times being what they are at the company, I was not expecting to receive much this year, just hoping for a little. I was awarded an increase of $1,500 to my annual salary. So, where did I spend this windfall you might ask?
Truth be told, I didn’t really do anything fun with it. I simply balanced my budget. When my wife began babysitting back in September, I increased my 401k contribution at that time, going from 8% to 9%. That obviously meant a reduction in my take-home pay.
I used some of the additional money that she was bringing in to bring to make up that difference. The difference worked out to be about $85 a month. I figured my wife was likely to continue babysitting again this coming fall, but I did not want to count on it as an absolute certainty. I wanted to play it conservative. If she does indeed bring in additional money this fall, I can always reevaluate my budget. My $1,500 annual raise works out to be $125 a month. After all of my deductions, 401k and taxes, my take-home portion of that comes out to be about $100, not too bad.
Sources of Income
I wish I could say that my take-home pay covers my entire budget and then some, but it doesn’t. Don’t worry, I’m not living paycheck-to-paycheck or racking up credit card debt. I am just supplementing my take- home pay with my credit card rewards. Since I’ve switched to the Citi Cash Rewards card, I generally receive about $50 a month in rewards. I take it as a direct deposit into my checking account and use it for my monthly expenses. I would love to save it completely and am working towards that goal.
Changes this Year
I have made a couple of changes related to expenses this year, one more recent than the other. The first was an attempt to control our food spending. Specifically, the category I call “Other”. This category was any food purchase that was not related to a food shopping trip, think fast food, pizza and the like. I have budgeted $50 a month for this bucket, but we were spending well above that, often a $100 or more.
I decided in January to be more disciplined about my food spending. Any spending that I did, if it was not a ‘need’, would go on my own credit card. This was especially true of the “Other” category, but I applied it to any food purchase I made. I would often buy myself a little treat when I went food shopping, usually candy for a $1. Those treats, if I buy them, now go on my card.
Since I made the change, I have managed to reign in the “Other” category. In the 3-months preceding the change, the average for “Other” was $111, in the following 3-months it was $30.
The other change I made was I actually reduced my allowance. I had been giving myself $120 a month to spend however I like. It is my ‘Fun Money’. My wife has her own ‘Fun Money’. You are able to spend it however you want, no questions asked. In looking at my money, I decided that I could be a little more disciplined with what I spent my money on and actually get by with less. So, when the raise began flowing through my paycheck, I lowered my allowance to $100 a month. It’s not a huge difference, but it makes me feel like I am keeping our household expenses in check.
Continuing to Chug Along
More money is always welcome. I know there are lots of people out there dealing with either no raises or actually dealing with salary reductions. That is why I never take them for granted. What it actually made me do was to reevaluate a couple of items in my budget to see if there was some fat to trim. Turns out, there was and by cutting it, I was able to give myself another raise of sorts. How is your year going, an extra income coming your way?