. When I was surviving on unemployment (not too long ago), I only allowed myself to spend money on five essential things:
1. My mortgage
2. Utilities (heat, electric, water, sewer, phone/Internet
3. Taxes (property, homeowners, car)
4. Food
5. Gas
Now that I am working full-time again (albeit, at about 25% less salary than I'm used to and without affordable employer-paid health insurance), I've decided I can "loosen the purse strings" to add a few key items to my list of allowable expenses:
6. Health care for me, even though having a high deductible means I'll be paying 100% of costs for all health care. If I remain a contract worker and on COBRA for most of the year, the saving grace will be that I'll be able to deduct my medical expenses.
I've already scheduled routine gynecological and a physical; I already saw my neurologist and plan to get an eye exam as the co-pay is just $10 and it's not subject to the deductible.
7. Selected home improvements (I had 2 closets redone and still have to decide what to do about my exterior siding: paint again or vinyl? Vinyl would be a huge cost, 1 quote so far at $17K.
8. Eating lunch out with friend once a month. I view this as a kind of release valve; you do need to enjoy life once in a while, after all.
9. Savings and Mortgage prepayments: I should be earning enough money to return to saving modestly as well as resuming prepayments on the mortgage, both of which are very high priorities for me. I plan to save and/or mortgage prepay at least $1,000 a month, possibly more, but will have to see what's left over after making quarterly tax payments.
So that's it. I'm still allowing NO spending on the following:
* Eating out (more than once a month)
* Clothes-shopping
* Netflix
* Jewelery (a weakness)
* Subscriptions
* Entertainment (I still have free kayaking, bike-riding and walking, and there are the library DVDs)
* Anything else not considered essential!
The good thing is, every spending opportunity is a conscious decision-making process. For instance, yesterday I decided I would renew my $88 annual AAA membership, mainly because:
1. My car is 13 years old.
2. I gave up my cell phone last week.
3. Having AAA gives me a 10% discount on all car repairs at my dealer.
However, I did give up my prepaid cell phone, mainly because:
1. I have never had good reception at my house, and I'm not sure whether it's a dead zone or just this carrier. The sound quality was bad enough that people remarked on it and and I had to sit in the bathroom to make a call, or go outside, and i didn't much care to go outside this winter.
2. I may try another brand phone, prepaid again, but probably not right away as I'm still extremely cost-conscious. Besides, I'm only driving in to work 1 day a week, so less chance of a breakdown somewhere.
How I make every spending opportunity a decision-making process
March 20th, 2011 at 05:42 pm
March 20th, 2011 at 05:59 pm 1300643962
March 20th, 2011 at 06:02 pm 1300644127
March 20th, 2011 at 06:02 pm 1300644140
I feel like I don't need a cell phone. If my car breaks down, everyone else in the world has a cell phone and they can call for me.
March 20th, 2011 at 06:10 pm 1300644613
March 20th, 2011 at 07:35 pm 1300649746
As high as our income now, I think few people appreciate how much we have made these same decisions in the past. (So often, frugal-ness is just written off to easier circumstances). All through college, and definitely the first few years after having children, we had to approach our budgets in this manner. I think this is why we have a firm grasp on wants versus needs. Anyway, I just had to say, times like these only make us smarter and stronger.
March 20th, 2011 at 09:41 pm 1300657286
March 20th, 2011 at 11:58 pm 1300665528
March 21st, 2011 at 12:46 am 1300668362
March 21st, 2011 at 12:44 pm 1300711478
March 27th, 2011 at 02:08 am 1301191708
March 27th, 2011 at 02:31 am 1301193073
March 27th, 2011 at 12:04 pm 1301227459
I got confused becus i'm not really familiar with the self-employed health insurance deduction.