I know I said that I would be back on Friday with my next steps, and I will, but that post will largely focus on my job/career outlook. As I sat down to do my second, only slightly neurotic financial assessment of my pending unemployment, I thought I’d share my assessment here.
Retirement I’ve decided to get fully financially naked here. Cause…why not.
Fidelity
University A – $4,279.48
University B – $16,328.47
Vanguard
Organization C – $5,937.20 – This will creep up by another $800.00 come this Friday when I receive my final paycheck from Organization C as a result of employer and employee contributions.
Yea…I really should have more saved for retirement at this point but you all know the story so there really isn’t a point in belaboring it again here. Also, the market has been brutal lately and my return on all three accounts is -%15.00. Obviously, during my unemployment, retirement contributions will cease.
Savings
Emergency Fund – $5,000.00
Other Savings – $5,500.00
The emergency fund savings is pretty clear given that you all watched me save it. The other savings is money I earned or was paid in July that is waiting to be allocated on August 1st because I live on last month’s income. More on that below…
August Budget Below is my tentative August budget. The FDGM category seems incredibly light, however, I am trying to do a super low spend month while I am unemployed and I still have a few funds remaining on a couple of gift cards (~$100.00 in total) that I need to use up. I plan to track my spending in August here to keep me in line as I found that helped in February. On the income side, July was a good month due to the payouts from my academic camp work in June and July. I’m grateful that the check for the June camp work didn’t come in June, otherwise, it would have been allocated for student loan repayment on July 1st. Because I didn’t get it until July 1st, it meant that I saved it to budget for August, which allowed me to add a sizeable chunk to my savings.
Unemployment Budget On my Excel spreadsheet, I currently have this labeled as my “September 2022” budget. It is a bare-bones budget, that doesn’t yet employ any cost-saving/minimum payment strategies and assumes I don’t have any income in August, which would be the worst-case scenario. In this budget, as with the August 2022 budget, I make an interest-only payment on my student loans, which are currently in a paid-ahead status and don’t require payment until January 2025. While this would allow me to not make any payment, I don’t have it in me to watch that balance increase, and I really don’t think I’m there just yet.
So…I would need to earn approximately $2,000.00 in post-tax income to meet my financial obligations each month. If I earned nothing each month, I could keep afloat for six months if I employed cost-saving measures in month three. I can’t imagine a world where it would come to this (I actually love working retail and I would do it in a heartbeat if I absolutely had to), but it’s good to see the numbers on paper.
Whew, May is mostly over and not a day too soon. Neither my wallet nor my waistline could handle it for much longer. To the budget…
Unplanned Spending – Okay, let’s talk about the obvious: I had unplanned spending of $2,426.22 in May. How did that happen? Well, I spent a month traveling the eastern seaboard with my best friend. We visited Williamsburg, Virginia Beach, the Outerbanks, Charleston, Savannah, Panama City Beach, Mobile, Biloxi, and New Orleans. Generally, we spent a couple of days in each city, staying longer in Charleston and New Orleans. It was an awesome almost month’s long trip and I only regret not budgeting better for it. Initially, the plan had been to stay in two different places for the month and perhaps split the cost of a house rental. However, things changed late in the game and my bestie suggested we visit a bunch of different cities. As I have stated previously, my bestie and I are in much different places financially and I should have maybe pushed back a bit against this idea. Spilled milk.
My only saving grace here is that as a result of tuition reimbursement and an outstanding consulting work payment that paid, I was able to immediately payoff the balances from this trip without dipping into my emergency fund. Yay! However, this means I will also have the lowest debt repayment month update on July 1st that I have had in awhile since it also took all of the money usually targeted for debt repayment to pay it off. Nay.
FDGM – The next thing you probable noticed was the skimpy $122.91 food, dining, gas, and miscellaneous budget. Yea, I know. Even if I scrimp, it is unlikely that I will be able to get by on that little in June. However, a couple of things are working in my favor… First, my new diet. So the traveling also meant eating out almost every night and enjoying decadent foods. While delicious, it did terrible things for my waistline, and my budget, and I will tighten it up significantly in June when I also get back to regular exercise. The move out of my parents’ home (more on that below) means I will also spend less on gas getting to everywhere. Additionally, I am expecting one more very small check (less than $150.00) that I would love to put towards debt repayment that will actually go towards helping me meet ends so that I can resume meaningful debt repayment on July 1st.
Rent – I am really excited to be moving into new digs on June 1st. The property is cute, centrally located, and a steal at everything included for $550.00. While staying at my parents’ home would have been the better financial choice (and they have suggested I stick around several times since I told them I was moving out), this is the much better choice for me overall. While I told Paula (hey, lovely) I would break down what the “true” cost of moving my June budget update, I am thinking it’s better left to another post.
I recently admitted, under direct questioning by Dude Avery, that I, ya know, like, like him. He seems to, ya know, like, like me as well, so hopefully another bonus of moving back to the city is getting to spend time with him.
Storage – Because I can’t move into my new digs until June 1st, I had to keep my storage unit for June. It is my hope that I will be able to ditch this for July or at the very least downgrade to a smaller unit. We will see.
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…
Income
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.
Fixed Expenses 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.
Unfixed Expenses
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.
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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.
This overage is a bit deceptive as it was actually “planned” spending on Christmas gifts. While I could have waited until December so that I didn’t have to count the “overage” in November, it made more sense to save money on some Black Friday/Cyber Monday deals instead. As of December 2nd, I only have two more relatively inexpensive gifts to purchase and then I’m all set for gift giving. While I resisted doing it at the outset of my debt repayment journey, next year, I may finally commit to creating sinking funds.
One change that did materialize in November was my expectation that my part-time paychecks would be much smaller now that I am no longer picking up extra shifts at other sites, and just working hours at my current site. I shared that I needed to do this to avoid additional “costs,” and I am disappointed to see that my monthly part-time income has declined from about $500.00 when I started to now less than $400.00. As I have shared previously, my employer really seems to like me and has reached out to reassure me that the renovations at the site will be completed by New Years day and that my hours should return to what they were. I still don’t know…
When I was in graduate school, I was working for a company that was paying me a miserable wage for what was expected (and they were super smug about it) and I finally decided I was finished and my time and skills were worth more. A very short time later, a new opportunity came along that paid me twice as much. While it was likely just coincidence, I think there is something to be said about appropriately valuing your time and making space for the market to respond…with help from a good gig search of course. I think it might be time for me to do that here.
December 2020 Budget Forecast
So the exciting news I shared on December 1st is that I made my three (3) month emergency fund goal of $5,000.00 and will return to aggressive debt repayment this Friday, with my first part-time paycheck for December! However, I know most eagle-eyed readers will immediately look at that “food, dining, gas, and miscellaneous” budget and say, “What?” Yea, I know. So this month is one of those months where I “know” there is “income” coming in from some other places as a result of some contract work and gifts (December is my birthday month). Additionally, I have quite a bit of time off this month that I will likely spend at my parents’ home where I will have to fight my mother’s inclinations to overfeed me. For that reason, I’m not really worried about overspending this month.
I overspent in my October 2020 budget by $454.68. There. I said it.
Let’s get to why I am not freaking out as badly as I might during any other month…
October 2020 Budget Review
YIKES! What the heck happened? I was so excited as I was creating this budget that I put a note for myself at the bottom of the budget! I had crushed it in September and then…this. October was one of those months where a lot of things (some predictable, some unpredictable but preventable) came together in a way that was financially costly. Like, locking my keys in my car and having to call a locksmith to get them out at 11:00PM at night 😳 I also got sick (Not COVID-19; I think we forget that there are still other viruses and bugs out there waiting to prey on our immune systems) and began ordering take-out soup and comfort food. I was bad. And the social-political tension in the United States didn’t help. (I work in a student affairs role and have to provide support to students who are stressed out, anxious, and experiencing mental health concerns. It can generally be a bit draining and this significantly increased over the past few months.) Over the last two weeks or so I had a low level of anxiety about work and all that is happening in the U.S. Unfortunately, food is my crutch. Working on that.
I worked hard in October. And while this isn’t an excuse to blow my budget, it does mean that some of that hard work is paying off in November and cushioning the impact of my overspending…
1) I picked up shifts at my regular part time gig – I blogged about that in a post on the cost of earning more. Overall, the extra shifts I worked over these ten days resulted in approximately ~$181.94 in additional income. (That is not net income and does not include the increased fuel costs).
2) Activity referee – As I mentioned previously, I sometimes serve as a referee for an activity that has transitioned successfully into the virtual space. While this does mean the number of opportunities for refereeing are more limited, and I am now competing against a larger and more qualified pool of candidates for gigs; ultimately, when I do find a gig, they are still pretty lucrative. This month, I got paid for work done primarily in October and I was paid $300.00.
While some of the additional income was used to payoff my spending from October, and pad my November FDGM budget, most of the additional income went towards my emergency fund as planned. In fact, because of the additional November income, I now expect to have my emergency fund completely funded on December 1st when I get paid by University B, AND to still have a few dollars to restart aggressive debt repayment. I KNOW!
Part of me is like, you could have been done even faster if you had been more careful and disciplined in October. The other part of me is like, my debt repayment journey will be long. I will undoubtedly fall short sometimes. It seems like the most important thing is not to lose sight of the end-goal and to keep going.
P.S. Sorry it’s late Ellen 😓 I didn’t have it in me to write on election day. Hello to all my new visitors 👋🏿
So…I have been hemming and hawing about it for some time, but despite tepid concerns of over-posting, over sharing, and mild embarrassment, I am going to post my budget again. You’ll remember I posted my budget once back in March and then promptly never did it again. However, a thought I had after my most recent post, “Income Update/Am I saving enough?” is that my debt repayment progress, savings goals, etc. don’t really make sense if you (the reader) don’t have some idea of the context in which I am making those decisions. Okay. Enough preamble. To the numbers…
For the most part, my budget is pretty self explanatory. Today, when I paid my bills, for the first time I noticed that I had one less payee or account to log into this month as a result of paying off Private Student Loan 1. It was a good feeling.
The (*) – My federal student loans were in a deferment on an income-based-repayment plan that generally requires renewal each December. My income relative to my student loan balanced meant that my required payment was $0.00. On March 13, 2020, the interest rate abatement and temporary deferment on all federal student loans superseded this, which was continued by the CARES Act and another subsequent Executive Order. While I had initially expected my income to increase this year, and possibly render me no longer eligible for my current payment under the income-based-repayment plan, because University B froze all bonuses, merit increases, and cost of living adjustments through September of 2021, I may still be eligible.
The (**) – This amount reflects the increase from additional responsibilities at University B.
Paycheck from University B – This is a net amount after taxes and other deductions like health insurance, dental, and 401K. I currently contribute 2% of my income to receive an 8% match from University B. This is pretty awesome, BUT you have to stick around for three years to keep the match. Given my current salary, and that my second anniversary will occur prior to the end of the salary freeze (which means no increase prior to my third anniversary) I can’t say with absolute certainty that I will make it to three years. However, like many things, that is a post for another day.
Food, dining, gas, and miscellaneous – I know this amount is going to seem woefully low to some folks. It’s not a ton and I won’t be able to keep it that low forever, but while the pandemic continues to severely limit social engagements, I work from home, and I remain single, I might as well dig deep.
Debt Repayment – All of this means that my allocation for EXTRA money towards student loan debt repayment is now $1,429.85. (This is in addition to the $657.31 I already make in minimum payments.) Well, for now, that is the amount I am contributing to my three month emergency fund. Whether or not I push the increase of $129.85 to savings/investment come January remains to be seen. As of today, the poll results from my question as to what I should do with the additional amount is currently 60% in favor of saving/investing and 40% in favor of putting it towards student loan debt repayment. I have to admit that I was a bit surprised. Although, I probably shouldn’t have been. This is the internet and there are bound to be significant differences of perspective on this issue. On that note, if you haven’t already voted, but feel strongly one way or another as to what I should do, you can vote on the poll here or leave me a comment.
Budgeting in the era of COVID-19… Some things have changed, some things are very much the same.
Okay, let’s get to the numbers…
Below is my reconciled March budget with the “budgeted” column being my expected income and expenses and the “actual” column being my actual income and expenses. I guess perhaps I should change the “budgeted” column to “expected” for conceptual symmetry…
In my original March 2020 Budget Forecast post, I broke down my budget so below I will only review the changes…
Income – I receive my state income tax refund of $197.00. This amount accounts for the “Emergency Fund Deposit” that appears in the last row. While any extra income is usually shuffled towards debt, I withdrew $500.00 in November to cover my insurance deductible and I’m just getting around to back-filling it (I know…I know, I should have done this sooner).
Food, dining, gas, and miscellaneous (FDGM) – There was an overspend here which accounts for the $107.71 overspend you see in red at the bottom. In the comments of my March 2020 Budget Forecast folks mentioned that they thought my budget was pretty bare bones and left little room for flexibility. That is…correct. However, the overspend here was not on essential items and really just happened because I turned cooking into “entertainment” during COVID-19, got my father’s watches fixed (he earns far more than I do and could afford to get them fixed himself but it would take him forever to get it done), and because the spring pollen and construction around my building had my car looking really raggedy.
Onto April!
Income – I believe my income increased because the university stopped billing me for my university gym membership as the facilities are no longer accessible.
Unplanned Spending from March 2020 – Obviously, the unplanned spending from March had to be paid. Ultimately, I had to decrease my student loan payment by $100.00. (The other $7.71 was covered by the increased income).
Food, dining, gas, and miscellaneous – I know! I know! I really did listen to your thoughts and comments and I know this budget seems awfully slender. However, I think I will actually make it this month because 1) I am working like home like millions of other fortunate Americans so I don’t have transportation costs except the occasional trip to the grocery story. However, gas is currently ridiculous cheap and I still have a little over a half a tank left from March. 2) Now that I know I am working from home, I took time to do some meal planning. I have also done some self-care work to address my overeating. 3) Because of social distancing, the need for miscellaneous spending as a result of spending time with friends or out and about drops significantly. 4) I am using this time to force myself to use up some of my stashed goods and de-clutter. Like the million bottles of lotions, soaps, toothpastes, and half rolls of toilet paper I have saved because I might be able to use them “some day.”
Because I know there are folks who are concerned I’m not eating enough (I am so appreciative of your concern), I am planning to do an update post later today to show you an example of my super cheap and healthy dinners.
Okay, I know some folks aren’t going to be happy with this budget and I LOVE and appreciate that. If you think I should make changes, let me know exactly what you think I should do. Should I be pulling away money from debt repayment? Beefing up my emergency fund beyond $1000.00?
I promised I would start doing these post once a month at the beginning of the year but exposing your actual spending seems…hard. However, I realized, one more thing to make me accountable is probably for the best, AND February was a pretty decent month so relatively low embarrassment, so I might as well start now and force myself to stick to it.
Here is a screenshot of the budget I set up in Excel for March 2020. These are my actual numbers, so at some point I might freakout about this level of transparency and take this down. For now…
Some explanations…
Note: I get paid once a month, on the first of the month.
The (*) – My Federal Student Loans are currently in a deferment that will end in December. This is why it would be really great to get rid of Private Loans 1 & 2 this year because it would allow me to reallocate those minimum payments to my Federal Loans once they come out of deferment which would mean my minimum payment amount wouldn’t really change that much.
The (**) – I realized I don’t really use my Kindle Unlimited because of their current content, so I cancelled the service. After a Prime card credit I had, the remaining balance due was $1.05.
Paycheck from University B – This is a net amount after taxes and other deductions like health insurance, dental, and 401K.
Food, dining, gas, and miscellaneous – This amount is about $100.00 higher than it usually is due to the activity referee side money. However, I am still trying to spend as if I only have $222.55. At the end of the month I would hope to be able to push another $100.00 towards my student loan. But I have been too aggressive in the past, small things have come up, and then I have had to rely on credit cards to cover the difference. My goal is to try and leave a bit of a buffer in much checking account vs. my budget so that doesn’t happen. Also, I drive my car for work a lot this months as it is a peak time for my office at work. Unfortunately, this eats into my gas money which is also budgeted here. In May after the semester is over, I will get a reimbursement check from the University but until then my work travel chips away at my budget each month.
Ms. Afro Penny 