Planning My 2018 Budget
As you might have guessed from today’s Question Wednesday, I’ve got budgeting on the brain.
Here’s what I know about my 2018 overhead expenses:
- Rent: $650
- Health insurance: $580.60
- Renters insurance: $16
- Electricity: ~$25
- Water: ~$25
- Internet: $40
- Phone: $98
- Food/toiletries/household: ~$400
I can estimate my new monthly overhead cost at $1,800, which is what my Seattle overhead cost me two years ago. (It’s that health insurance bill that is making everything so expensive.)
I’m going to earn a little over $66,000 pretax this year; if we assume I continue to earn at the same rate in 2018, that means I’ll earn around $5,500 per month (on average), which breaks down as follows:
- Taxes get 30 percent, or $1,650
- Savings get 15 percent, or $825
- Overhead gets $1,800
That leaves me with $1,225 per month for all business and discretionary expenses, plus the cost of transportation (still haven’t figured out what I’m going to do about the car thing).
If we want to break it down even further, since I just did this math for my health insurance application, I spend $650 on business expenses per month (on average), and yes, a lot of that is business-related travel.
But that means I really only have $575 per month for all discretionary spending: clothes, haircuts, books, Netflix, Patreon subscriptions, going to see Nutcracker performances, and so on. This is also the pile I’ll be drawing from when I book personal travel, buy more stuff for my apartment, etc. (This pile has to do a lot of work.)
This was around what I had per month for discretionary purchases in Seattle, although now transportation costs will have to come out of that. (Transportation came out of the discretionary pile in Seattle too, but most of my non-bus transportation expenses—such as Lyft rides to the airport—were also business expenses.)
Obviously there is some shuffling I could do; maybe put some of that business spending back into the discretionary spending column, maybe spend less on food/toiletries/household or on my business, definitely talk to a CPA to see what I need to be setting aside for federal/state/business taxes.
I could also continue to grow my earnings.
But yeah, I have budgeting on the brain right now.