As promised, my April 2021 budget. Usually, I’d just drop this here and say the budget is pretty self-explanatory but a lot has changed since my last posted budget in December 2020 (apartment flooded and I moved in with my parents) so I will try to succinctly review those changes below…
The biggest change in my income from December 2020 to April 2021 is that I no longer have a steady part time job. In, …I Quit, I explained the reasons why I thought giving up my part time gig was a good idea and, for the most part, I was correct. Much like in graduate school, when I decided my labor was worth more than $8.00/hour and I immediately found a gig where I earned double, something similar happened here. Soon after I quit, a mentor and friend told me of his plans to open a consulting firm; since then, he has began slowly but steadily sending projects my way. While these projects don’t pay at regular intervals (I get paid when he gets paid and he doesn’t get paid until after the work is completed) they are flexible, don’t take very much time, and pay a lot more per hour.
My income at University B has stayed pretty much the same. While I haven’t received a merit increase since my hire at University B due to my summer start date and the onset of the pandemic (apparently increases during the 2021-2022 academic year may be frozen as well), I was very fortunate to remain employed throughout 2020.
No Rent – The biggest change to my budget is that I no longer pay rent or other utilities associated with independent living, like internet (utilities and even laundry were included in my stupidly cheap rent…sigh). However, it was obviously not possible or advisable for me to try and fit all of my belongings and furniture into the room I occupy at my parents’ home, so I now have a storage locker and renter’s insurance. The storage locker is fairly reasonable at $55.00/month for a 5×10 unit with a local business; and, they gave me 50% off the first three months of rent. In my haste to be out of my mildewing apartment, I almost purchased the storage facility’s renter’s insurance at $10.00/month for $2,000.00 worth of coverage. However, the manager was pretty great and allowed me to pay just the rent and provide him with proof of insurance before the next month. This gave me time to call my auto insurer, who was able to get me a rate of less than $10.00/month for $10,000.00 worth of coverage.
University Student Loans – Some eagle eyed readers will notice that this is the same payment amount I have previously been making despite my belief that I could get these deferred while in school. So, it turns out that only one of my university student loans (there are four) can be deferred without interest if I enroll in school for any number of credits. The other three only defer without interest if I enroll full-time. (The difference is apparently in the donor language as many of my alma matter’s university student loans result from alumni et. al donations). You may be thinking, “But Afro Penny, if one of them can be deferred without interest, why are you still making the same payment?” Good question. Mostly because the forty dollar difference wouldn’t mean very much to my overall budget each month (or even in terms of my ability to repay PSL3) but over a year, the additional forty dollars per month will help to painlessly but meaningfully chip away at the other three student loans.
Car Payment – I already wrote about this in another post. I will not sport with your intelligence by rehashing my decision making here.
PSL4 – Unlike PSL3, which I actively hate, I have always been somewhat fond of PSL4…if one can be fond of a student loan. The terms of this loan have always been very favorable in terms of interest rates and benefits. This loan automatically deferred when I began taking classes part time, and in discussion with the Pennyfolk, I have decided to just make interest payments (I pay $45.40 each month which is technically more than interest but the minimum payment was $245.40 and I like round numbers) and put the lion’s share of the minimum payment towards PSL3. At the moment, I believe I will make my first aggressive payment towards this loan on July 1st.
PSL2 – No change.
PSL3 – Big changes here. I have maintained the minimum payment on this loan despite changes to interest rate (due to the pandemic) and loan repayment terms (due to my aggressive payments advancing the due date). At the start of 2021, I envisioned being able to put an additional $1000.00 a month towards this loan. While this would be significant, it would not be enough for me to pay off both this loan and PSL4 in 2021, unless I serious hustled for consulting work. However, now that I am no longer paying rent, I can add my $700.00 rent payment to this amount, resulting in an additional avalanche-snowball payment of $1,700.00 dollars each month. This is a game changer and I now expect to pay off PSL3 in June!
Cell Phone – This is new. My parents were previously paying for my cell phone bill as a part of their family plan on Verizon. That bill was over $200.00 a month for limited data. Ummm…no thank you. At the start of the New Year, my parents wanted to upgrade from their gently used six year old phones (yea…I know) and I pushed for them to leave Verizon at the same time. They listened to me and are now on T-Mobile’s 55+ plan, paying a flat $70.00/month for both of their lines and unlimited data. I then picked up my own line with T-Mobile for $70.00/month with unlimited data. There is no real contest in coverage. Verizon’s is just better. However, for the $130.00 in saving each month, my parents are pretty happy with the switch.
Federal Student Loans – The Biden Administration has extended the interest and payment abatement on federal student loans to September 2021. I am almost as grateful for this as I am for the free rent at my parents’ home. Almost. What this means is that about $400.00 worth of interest does not accrue on my student loans each month; and, the difference between my student loan payments and the net decrease in my student loan debt remains very close. At the moment, payments on these loans will remain paused until at least the end of the year when I have paid of PSL3 and PSL4.
Insurance – I explained above that I purchased renter’s insurance to cover my storage locker. Another small change is that like many driver’s across the nation, my auto insurance premium has temporarily decreased due to pandemic rebates for less drivers on the road.
These have fluctuated a bit but are pretty much the same. While I shouldn’t have anything in the “unplanned spending” category, a HSP plan incentive challenge at work has me doubling down on my commitment to exercise more. The University is currently offering $225.00 in incentives for their current challenge. Walking more means I needed to ditch my cute, but not super functional, Adidas, for a pair of Brooks. I also found a couple of great deals on Christmas gifts for my mother. She has an unusual collection and the items are difficult to find. For this reason, I look for them throughout the year and buy when they become available.
And that’s it. I expect this budget will look much the same through at least June of 2021. However, each month, I will try to review major changes in income and expenses from the projected budget where it happens.