Yesterday, I was looking at my Mint.com account, which I signed up for over the summer to better track my spending. Let's just say that after getting the account, I probably visited the site a total of 5 times between then and yesterday. Looking at the charts from the past six months, I was horrified to find out that in the span of half a year, I had spent over 35% of my annual pre-tax earnings. I know I'm not cheap, but I didn't realize I had spent that much!
Fortunately, upon further inspection I noticed that Mint.com was adding my total credit card charges to the totals on my credit card statement, making it look like I spent a lot more than I did. Mint.com also counted several transfers to savings accounts as spending. In the end, I computed that I actually spent 29% of my pre-tax earning in the span of a WHOLE year. Still not that great, considering I live at home, but not as terrifying as the idea that I spent more than I made.
Here are a few more things I pondered as I worked on my 2014 budget:
-Due to the ACA I am now paying $3000/year in healthcare premiums, double what I paid last year. I am also budgeting $200/month for gasoline, and due to my long commute to work I will likely go over that amount. Adding the two, it looks like I will be spending over $5000 on healthcare premiums and gas alone!
-Reading through an old post about the costs of moving out (written before studio prices rose above $1000) and number crunching, I know for sure that I would be broke if I moved out in 2011. I suppose this is one perk of being part of a family who believes in living at home until you 1) get married or 2) buy a house. Since 2011, I've been able to travel extensively, shop, help my family, donate to charity, contribute to a retirement fund, and set aside a down payment to be used when the housing market calms down. Absolutely no way I could accomplish all of that living in a shabby studio.
-My cheap boyfriend told me that I should be only be spending $1000 a year on non-essentials (i.e. shopping, travel, eating out) because I live at home. Considering my travels plans alone for this year, I conclude that he's crazy.
-I spend WAY too much money on shopping and need to work on this... maybe.
Anyway, here are my main spending and savings goals for 2014:
1) Spend no more than 25% of my projected pre-tax earnings. This basically covers shopping, food, drink, presents, travel, health insurance, gym membership, gas, and a $708 emergency fund. I plan on using Mint.com to track my monthly spending.
2) Max out my Roth IRA ($5,500) and HSA ($3,300) contributions, a total of $8,880. Since I work several per diem jobs I don't get a 401K. Fortunately, my HSA provides a helpful deduction for my federal taxes. I really need to do some research and look into alternatives to 401Ks so I can start another retirement account, though.
3) Split the leftover money between retirement savings, house down payment, and rainy day fund.
That's pretty much it! I think these goals are definitely achievable, though my boyfriend might complain that 25% is way too high. Hey, I'm a social worker, and 25% of my salary is lower than 25% of his tech salary! Overall, I hope that setting these goals will help me be more cognizant of my spending, yet leave me some breathing room to enjoy my money as well. We'll see how the year goes!