Adjusting My Budget as My Income Increases

Where do you put those extra dollars?

We’re all going to knock on wood together, but it looks like I’m going to spend the rest of the year earning roughly $8,000–$9,000 per month instead of my usual $4,000–$6,000. (You might have noticed that my July income was higher than usual.)

Checking In With My Savings Plan: July Edition

This means I need to figure out what to do with the extra money.

I don’t want to do anything with it right away, because I haven’t earned any of it yet and I know this business well enough to know that things change quickly.

But I’ve also used Mint to re-adjust my budget expectations for an $8,000/month income, and here’s what I learned:

I’ll still be putting money into my sub-savings accounts, and if I do earn exactly $8,000 every month—which is unlikely, but also a good-enough estimate—I’ll siphon $4,160 off the top, as follows:

• $1,760 for taxes
• $1,600 for debt
• $800 for savings

My fixed expenses (rent, bills, health insurance, renters insurance, public transportation) will stay the same. Rent is $995 and all the bills, etc. are $475.

Groceries have been bumped up from $350 to $400. (I was going over budget on groceries every month anyway.)

This means that my total overhead costs (fixed costs plus food) are now $1,870.

That leaves me $1,970 to figure out what to do with.

This isn’t an exact figure-out-what-to-do-with, because I don’t know which paychecks will arrive when, but it’s close enough to let me know that I might have a little extra spending money.

I’ve already slotted $100 per month for charity, which I’ve been wanting to do for a while. (And I’m already asking myself if I should give more.)

My next priority is outstanding debt/getting that three-month savings buffer/funding a Roth IRA, and I feel like my extra income, if there is in fact extra income and I don’t have another month with $1,370 in business expenses—which I don’t anticipate, since I don’t have any business travel planned for the rest of the year—should go towards these goals.

Debt first, savings buffer second, Roth IRA third.

I should also put aside some money for holiday travel, and I think I need to buy a new mattress (my current mattress is literally “the second cheapest one on Amazon”), and beyond that I’m trying not to think too hard about any of this.

But y’all asked, yesterday, if I was going to adjust my budget as I finished paying off my debt and started earning more, so here is my answer, as best as I can give it right now.

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