Since I just started radiology and got a whooping 2k raise for 2015-2016, time to revisit my budget and see if I can save more efficiently.
From my pgy2 income, not including my side job in tutoring,
Monthly Net Pay$3,697.64
|pgy2 monthly budget|
|med insurance premium||-167|
|extra mortgage payment||-50|
|Mini’s painting/voice lessons||-200|
|med insurance co pay||-30|
|Roth 403 B contribution||-1300|
I’m contributing monthly: $1300 to ROTH, $400 to equity, $280 to credit card debt (albeit 0% interest), which means my post tax saving rate is $1980/$4197.64 = 47%.
Mr. Money Mustache managed to save 75% of his income for ~10 years and retired at age 30 to start a family. Although my income is much less than his when he saved 75%, I’m still very inspired by him to live a life of frugality, resourcefulness, and relishing challenges and embracing true happiness.
So where can I cut out fluff and ramp up my saving rate?
The potential categories I can cut back and or save more include:
- I can start contributing to HSA (health savings account). Because by putting in $80/month, I will get $60/mo from my employer’s contribution. This is a 75% match of my PRE-taxed dollars. Can’t get any better than this! As WCI wrote “When you contribute to an HSA, you get a current year tax deduction. Your money also grows in a tax-protected manner over the years. Finally, when you pull the money out, as long as you spend it on healthcare, it comes out of the account tax-free.”
- Mini Wise Money’s lessons: her voice lessons is about $120/ month, I have yet to hire a regular painting teacher/find an art studio. She’s done lots of art in after school and now has plenty of art classes in summer camp (summer camp was expensive but I was able to pay for it with additional tutoring) Once school starts, I may limit her painting lesson budget to one in home lesson/month @ $40. This will allow Joy’s lesson expenses to decrease to $160 instead of $200.
- med insurance copay: both Mini and I get monthly OMT (osteopathic manipulative treatment; i recently started the monthly visits). But I can easily reduce my visit frequencies to every 2-3 months with more exercise and stretching on my own. Can reduce this item to $15/mo instead of $30.
- house maintenance: after brand new roof and a brand new Cadillac AC system, we have not had any real house maintenance expenditure. Even though the budget has $50/mo for this category, we have hardly needed to use it.
- car maintenance: we have low maintenance reliable cars. Even though the budget has $30/mo for this category, we haven’t really used it except for a few times a year. John does all our oil and filter changes.
For item 4/5, i’m happy for the extra $80 we save each month when we don’t spend on maintaining our car or home.
I’m reluctant to really go for item 2, as Mini’s learning and experiences bring me/ and likely her more happiness than anything else. so I think I will stick with the current allotment of $200 and possibly will increase it if i have additional income.
I am very excited about item 1. Instead of paying $101 in health insurance (the other $66 of $167 was for dental and vision insurance), I can save $80 per month in HSA (triple tax free) and receive the generous 75% match from my employer. In other words, without increasing my total income, I will be saving $140 more each month, bumping my saving rate to $2120/$4197.64 = 50.5%.
This is fantastic. I’m always happy to see additional money saving opportunities when re-evaluating my budget. I hope you do the same with your budgets. Budgets are not limitations, they are a fine and necessary tool to financial freedom.
- how often do you reflect on/adjust your budget?
- what are the non-negotiable’s in your budget?
- what is your current saving rate from you take home pay?
- what is your target saving rate?
- any new found cash that you can stash away this year?
Please comment below!