Home > Very little wiggle room in my revised budget

Very little wiggle room in my revised budget

August 27th, 2011 at 05:52 pm

I decided to again revise my estimate of monthly expenses, monthly income and the shortfall I need to make up each month.

My unemployment benefits have changed recently, to the tune of about $19 less a week. And several of my monthly expenses have risen. I also know I left out a few things from my earlier estimate and want to make it as accurate as possible so I know what I'm dealing with.

There's very little wiggle room.

I decided to rank and separate my expenses by "tiers." My revised monthly bare bones expenses are $2,309.

My Tier 1 top 3 expenses... account for nearly 80% of my bare minimum monthly expenses. They include:

1. Mortgage and property taxes: $1152
2. COBRA health insurance: $469
3. Food: $225

That's pretty amazing that I can shave all my other expenses to make up for just 20% of total monthly expenses.

Tier 2 expenses are what I consider mid-range expenses and are largely utility bills and other costs I can't eliminate entirely, but can control through careful usage. The values here are based on actual averages from last year. For bills that occur only once or twice a year, I calculated the monthly cost. They include:

4. Electric:$66
5. Heating oil: $65
6. Sewer (usage and loan): $50
7. Homeowners insurance (already increased deducitble to $5k): $56
8. Phone and Internet: $47
9. Gas for car (based on ONE monthly fill-up): $45
10. Car insurance: $35

My remaining essential expenses are much lower, though together, they do add up. They include:

11. 2 dental cleanings: $25
(Am considering giving up my favorite dentist becus at $152 a cleaning, he's not at all cheap.)
12. Water: $15
13. Haircuts (1 a month): $15
(I think I can skip an occasional month, but certainly need a haircut prior to any job interview becus it really looks bad when it gets too long)
14. Borough taxes: $14
15. Car tax: $7
16. Dump sticker: $7
17. Neurologist co-pay: $4
(I have to see this doc 1x a year absent any problems, just to renew my meds. I don't know why my insurance didn't make me pay the full amount of his fee since I haven't paid my deductible.)
18. Car maintenance: $2.50
(This only allows for 1 oil change. Not driving the car much.)
19. Cable TV: 0
(Cancelled this entirely last month.)
20. Wellness-type healthcare: 0
New healthcare changes mean I can get the following paid for 100%, without even a co-pay: mammogram, routine gyno, colonscopy, annual physical, flu shot...thank you Obama)

Total monthly essential expenses: $2309
Monthly net unemployment: $1954
Monthly shortfall: $355

Goal: $150 a month from online surveys
I know if I really stay on top of it I can earn about $105 from Toluna and Pinecone; I just signed up for Global Test Market and plan to increase monthly survey income by $40.

That leaves $205 a month that I must make up through my freelance income, which can be very erratic and unpredictable, along with focus groups, academic studies, product testing or whatever I can find.

So, what haven't I included in the budget above?
1. Any healthcare beyond the free stuff listed above, like eyeglasses or coverage for the Lyme I recently treated.
2. Any additional car repairs
3. Home maintenance
4. Annual chimney or furnace cleanings (I had both done last year, so I hope and plan to skip it this winter.)
5. Mortgage prepayments
6. Retirement savings
7. Dining out
8. Entertainment
9. Netflix
10. Bird seed
11. Clothing

I do have plans to have lunch with a new friend next week, so already I am blowing my budget. That money will have to come from somewhere else.

See what I mean? Not much room for error.

I have a bit more gold/a diamond I can sell next week. There's the $200 I'm looking forward to from the Chase Freedom card reward. (Once I have that in hand, I'll cancel the card and open a Chase Sapphire card for $500 in retail gift cards at Wal-Mart.) I have about $270 now due me from freelance writing with another $333 worth of work to start in September. When I finish the nutrition study by year-end, that will be another $250 and I'll get a check in the mail for $40 this week from the product study I recently did. New freelance work is impossible to predict, that's why I really could use even a very p/t job for regular income. whatever tax refund I receive next spring, I will divide between my emergency fund and a mortgage prepayment.

I am reduced to thinking in very, very small terms.

Still with me?

Let's imagine a worst-case scenario. My unemployment benefits would run out in January 2012. It may go longer, but I can't get a straight answer from the Dept of Labor. Part of it depends on whether what the state considers "high" unemployment continues or not. Basically, if a lot of other CT residents share my misery, it works out better for me.

So then, again assuming worst case scenario, I run out unemployment and still don't have a job. I could live on my taxable, non-retirement savings (about $95K) for about 3.5 years.

By that time, I'd be around 56 years old, still far too young to think about collecting Social Security. However, I could tap into retirement funds with no penalty. Something I would NEVER do.

But also by that time, I should have my mortgage paid off!!!! That would greatly and significantly lower my monthly expenses. Just imagine the possibilities. Sigh.

8 Responses to “Very little wiggle room in my revised budget”

  1. Jerry Says:

    It seems many people are seeing an increase in bills with a decrease in income, and your case leads to a demonstration of how stressful it can be to live on the edge. I can see why you continue your COBRA insurance with Lyme and some other considerations. Good luck! I hope it all works out well for you...

  2. Jenn Says:

    Ever thought about using your taxable savings to pay off the mortgage? That money would earn 6% and give you some slack in the monthly budget.

  3. patientsaver Says:

    I have thought about it, Jenn, but it would mean paying a big tax bill if i sold a bunch of mutual funds. Also, it would leave me with that much less cash although i know in the long run it would save me money. I'm concerned about keeping some liquidity becus who knows how long I'll be unemployed?

  4. patientsaver Says:

    Also, the stock market's not doing so great, so i'm guessing I'd be selling at a loss.

  5. patientsaver Says:

    Well,now that yo raised that question, I investigated. I have my taxable money in just 2 funds, Int'l Equity has the bulk of it, with about $16K in Equity INdex 500.

    It appears that if i took all $28K to pay off the mortgage from Int'l Equity, I'd lose about $5400. If I cashed out the entire balance of the Equity Index 500 fund, I'd only have a loss of $98, but the $16K in that fund would only cover a little more than half my mortgage balance.

    I suppose I could get the balance from Int'l Equity and maybe cut my total losses to about $2300 total. Not sure it's worth it, considering that getting rid of the mortgage will lower my monthly expenses by I think about $700; the rest is taxes.

  6. baselle Says:

    Are taxes withheld from unemployment in CT? When I was unemployed in AZ it wasn't withheld and the state taxes threw me for a loop.

  7. patientsaver Says:

    It's up to you whether or not to have taxes deducted. I do have them, so my figures are net of state and federal taxes.

  8. Petunia 100 Says:

    You have done such an excellent job of saving for your future. You really, really inspire me!

    I know its not your first choice, but it is so great that you have savings to carry you through.

    I really, really hope that the perfect job drops right into your lap soon.

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