Ninja Budget: Married Edition

Shoe Budget

It’s that time kiddos. Time to crunch some numbers and see what the Ninja households’ life looks  looks like through the eyes of an Excel Spreadsheet. This is my budget prior to marriage…

Click To Make Larger

And now let’s take a gander at the prospective Married Budget of Pure Epic Gloryness…

Married Buget
Click To Make Larger

Does the layout make sense to you? I know looking at other people’s budgets can be pretty confusing, so let me try and clear up any potential confusion.

Gross Income:

This section is probably the most confusing. It includes the gross income from both my full time job and any side hustle income I can bring in. It doesn’t include any of Wife Ninja’s teaching money, not because her money doesn’t count, but I put her NET income at the bottom of the spreadsheet a long time ago and have never moved it up. As you all know, my side hustle includes tutoring and blogging. I make $40/hr tutoring high school math, usually about three hours a week. My blog income is much more inconsistent ranging between $0-$1,000 a month. I like to budget conservatively so I estimated $200/month for all my side income, but it in reality is closer to $500+.

Investments:

We’ve decided on only two primary investment vehicles at this point, but will likely add a third soon. I contribute 5% of my gross income to my 401K as that gets fully matched by my employer (for a total 401K contribution of 10% of my gross income). I’ve also made a habit of maxing out my Roth IRA each year ($5,000/yr). That is all Wife Ninja and I will do for the remainder of 2010, but when 2011 comes around we will start up a Roth IRA for her as well. Pretty boring stuff if you ask me. This should make our total retirement investing somewhere between 15%-20% of our gross income.

Taxes, etc:

Getting paid every two weeks makes budgeting a bit more difficult. We’ve decided to plan our budget around only two paychecks a month, even though twice a year I have a three paycheck month. I basically manipulate my tax number to reflect what my actual Net Pay was after the typical two paycheck month ($3,100).

Expenses:

Again, pretty boring stuff. I include a 10% random category at the bottom of the expense category as it seems like most months have unexpected and non-budgeted things come up. Instead of make random guesses how much we spend on cleaning products, clothes, etc each month, we’ve decided to just keep all that miscellaneous spending at or under 10% of our net income. Do you budget every last purchase; beauty products, coffee, etc?

Left Over:

This is the most important part of the budget. As it stands right now, Girl Ninja and I are looking at having about $1,380 each month in discretionary income, for an annual savings potential of $16,500. But wait! It get’s better, remember, there are two months each year that I get an extra paycheck. That bring the annual savings potential up to about $19,500, but even more awesome than that… I only assumed $200/month in side income (which would only be $2,400/yr), but so far I’ve brought home a little more than $5,000 from my side gigs this year. If we buckle down, we could easily be saving $25,000 or more each year.

The stuff on the right side is just stuff I track for myself, annual savings goals, what bills have been paid, etc.

I personally believe our budget SHOULD NOT be a restrictive law, but simply a spending guideline. Some months we will spend more in categories than budgeted, just as there will be months where we are way under. Our life ebbs and flows, and our spending is no different. We have a great potential to do some serious wealth building and I’m excited for the journey ahead. I’ll keep ya’ll updated if there are any significant adjustments.

How serious is the budget in your house? Does it dictate every dollar you spend like the envelope system would, or is it more of a estimate like in the Ninja house? What’s your preferred budgeting tool (Mint, Quicken, Excel, Paper/pencil)? Do you add any sections to your budget (like Goals, Payoff dates, etc)?

Stick Figure Blog

Stick Figure Blog

Most Exciting News:

I have some extremely exciting news to share with you all today. I just gave birth. Not to a human (that would just be weird), but to a new blog. Stick Figure Blog to be exact.

While the goal of Punch Debt In The Face has been to financially educate those dumber than me, I have to face the facts. And the fact is, very few of you read this blog to learn. You only stick around (pun intended) for my silly stick figure drawings accompanying each post.

In an attempt to bring even more smiles to your sexy (or ugly) faces, I’ve gone ahead and created Stick Figure Blog. It’s a pretty straightforward site. I’ll post one stick figure cartoon per day. If you think it’s funny you can comment and tell me. If you think it’s stupid you can go milk a goat.

The ultimate goal for Stick Figure Blog would be to begin receiving reader submissions (submit your stick figure cartoon here), that would then be posted on the blog for all to see. That’s right, it would be a community art project, for all the sucky drawers of the world.

If you want to be my bestest friend in the whole wide internet world, you’ll head on over. Comment, subscribe, follow SFB on twitter, and submit your own drawing. Oh, and don’t worry, I’ll still be doing cartoons here related to my posts.

Pretty exciting news:

Well, I’m not dead, which means the PF bloggers meetup was a success. I rocked my ninja mask the whole time and spoke in a really creepy low voice so no one would be able to identify me. As my Friday post indicated, I was pretty nervous about the meetup. Wasn’t sure if people would like me, or if I would like them. But I can honestly say, PF bloggers are nowhere near as dorky as I feared they’d be. In fact, they were pretty dang cool. We did take a group picture, but I am yet to receive it, so I did my best to recreate the picture with photoshop….

Personal Finance group

Links to those that attended. Len Penzo, Go Banking Rates, Bucksome Boomer, Money Funk, Money Ning, Hope To Propser, Wealth Informatics, Erica, and the newest PF blogger Bruce Bucks.

Very UNexciting news:

Wife Ninja and I sat down and went over our spending in September. We had set our budget (new budget coming soon) allotment for dining out/groceries at $400/month. After reviewing Quicken, we were surprised to see $550 went towards food last month. We were $150 over budget. We spent $200 dining out and $350 on groceries. This leads me to believe one of three things…

1) We suck at finding deals and we are paying too much for groceries.

2) We sucked at setting our budget and the $400/month allocation should be more like $500/month.

3) We are pigs.

I’m convinced #3 is not the right answer, so it only leaves us with number 1 or 2. My guess is it’s a little of both. We can definitely be more intentional in buying things that are on sale or have a coupon. I also think $400/month was probably a little too low for our lifestyle. We buy most of our meat fresh and our produce from the farmers market which, as you all know isn’t cheap.

I need some help from you budget nazis out there. How much do/did you and your significant other spend on groceries/dining out each month? Is $500/month insanely high? Any inside tips to save money on our grocery bill? And lastly, have you subscribed to this blog and stick figure blog yet?!

Love you all like my mom loves making fun of me 🙂

How quickly could you replace your income?

So I’m assuming the majority of PDITF readers operate their lives around some type of budget. Maybe you are a budget nazi….

or perhaps you prefer the informal budget…

It doesn’t really matter HOW you track your money, but simply that you ARE tracking your money. How you budget is up to you, but one thing everyone should do is at least have some type of plan. This means planning for unlikely events too.

So today I thought we could do just that and play the “What if” game. Are you in?

What would you do if you walked in to your office today and were told to go home because you were fired/laid off?

On the surface, the question may not appear that interesting, but when I started thinking about it more, I realized I’d be up a creek without a paddle. Sure my E-fund will help temper the financial strain for a few months, but eventually I’d have to start making some money.

Unfortunately, this is the major dilemma. To be perfectly honest, I highly doubt I’d be able to gain employment at a salary comparable to what I’m currently making. In fact, I don’t even know if I could find a job that paid me $10k or $20K a year less.

I suppose if I was an engineer or the like, I’d be able to rest easy knowing there are a billion different companies with engineering positions, but last time I checked “Special Agent experience” wasn’t a prerequisite on too many job descriptions.

Fortunately, my position is relatively secure so I shouldn’t have to worry about being let go, but I couldn’t help but think about how royally screwed I’d be if I was. Honestly, I’d probably be applying to entry level positions in the $35k-$40k/yr range and try and work my way up the corporate ladder. And if six months down the road, I was still unemployed, you better believe I’d be at the drive-thru asking you “Do you want fries with that?”

How ’bout you? Honestly think about your skillset and the job market in your area. If you were to be fired today, do you think you could find a comparable salary elsewhere reasonably fast? How long do you think it would take? If you answered yes, what field are you in? If you answered no, like me, how much of an income cut do you think you’d be looking at taking?

Hopefully we never find ourselves in this situation, but it never hurts to prepare for the worst.

I’ve lost touch with my money

Before I get in to today’s post, I just want to take a minute to say thank you to everyone that volunteered yesterday to help me out and provide an article for PDITF while I am gone participating in wedding shenanigans. I’ll be getting in touch with each of you over the next few days to discuss details. Thanks!

I’ve been a very naughty ninja lately. I’m breaking one of my most important PF rules: Manage your money. For the first time, in probably two years, I don’t have a handle on my financial situation. It’s a very odd/disturbing/uncomfortable feeling. Fortunately after, a few hours checking my bank accounts, doing a little quicken reconciling, and a sexy date with my TI-83, I should be back to normal.

I’m totally obsessed with knowing where my money is going, and when it is going there. This means if I have $5,000 in my checking account and $2,000 in charges on my credit card bill, I would immediately transfer $2,000 to my online savings account so that money can start earning a higher yield than my checking account.  This would leave $3,000 in my checking. I’d eventually send another $2,000 to my credit card, to pay that bill in full when it came due, which then leaves my checking with $1,000 for emergencies.

But instead of initiating bank transfers, I’m just trying to calculate/predict how much cash flow I will have by the end of the month. I know I have a redonkulous balance on my credit card (honeymoon, furniture, wedding stuff) and an even more redonkulous sum of money in my checking account (haven’t transferred money out in over a month). I know that my checking exceeds my credit card statement, but for the first times in recent years, I don’t know by how much. And even worse, I haven’t initiated a transfer of that excess in to my savings accounts.

Right now, I’m the perfect example of WHAT NOT TO DO when it comes to managing your money. Tomorrow, I’m buckling down and figuring all this mess out so I can ease the financial anxiety I’ve been feeling these last couple weeks.

Am I going to PF hell for letting my finances get away from me? Do even you BUDGET NAZIS get a little lazy sometimes? How do you keep your money moving, even when you don’t have the time to sit down and tell it where to go? What software/method do you use? Slap some sense in to me will ya?!

I know many of you will suggest establishing automatic payments, but auto payments are not my thing…they kind of freak me out.

WTF is a budget?

There is one thing that always reigns true in the world of personal finance: Everyone does things differently, especially when it comes to budgeting. I’m convinced, no two budgets are the same. Here are a few of the different budgeting methods I’ve observed…

The anal envelope:

This method is no joke. It’s not for the faint of heart as it requires some serious discipline. Essentially you create a different envelope for all of your various expenses (rent, food, car, etc). After you’ve categorized your expenses, you put in a predetermined amount of cash in to each envelope every pay period. For example, if you allow $50/month for entertainment, you’d put $50 in cash in your entertainment envelope. Pretty straightforward. The hard part is not wanting to spend more than what you put in the envelope. Once you’ve spent the $50, it’s gone. No going to the ATM or using your credit card. Not even if that camera you really want is on sale. There is very little flexibility in the envelope system. Let’s just say it’s not for me.

The guess and check budget:

Ahh, this is my kind of budget. All you have to do is get out a piece of paper (or use excel) and itemize all of your monthly expenses. Instead of putting the budgeted allotments in envelopes each month, I use a guess and check method as I go about my spending. For example, if I feel like I’ve spent a lot more on dining out than I normally would, I cut back for the rest of the month and survive on PB&Js. This method is definitely more flexible than the envelope system, but it also allows for overspending if you aren’t careful. I generally stay within my allotments for each category, but every now and again I’ll get a little crazy and spend some money I probably shouldn’t have. If you don’t have some solid discipline I would not subscribe to this method.

The “WTF is a budget” budget:

Unfortunately, this is probably the most popular budgeting method in our culture. The people who use this method couldn’t spell budget, let alone live on one. They are usually broke, stupid, and stupidly broke…. but hey, at least they have 786 pairs of shoes they never wear. They don’t keep track of their money at all. They often don’t know how much they make and they definitely don’t know how much they spend. This is not a good plan. It’s financial suicide. If you’re a member of the “WTF is a budget” club, you better figure something out quick ’cause a financial disaster is brewing.

What kind of budget are you rockin’? Do you set aside a predetermined amount each month and stick to it religiously? Do you have an idea of what you’d like to spend, but don’t follow it to the “T”? How do you budget for the irregular expenses like car maintenance or haircuts? I’ve never really figured out a good way to set aside money for things that don’t occur on a monthly basis. Any budget tips, tricks, and helpful hints are always appreciated.

I suck at communicating

Apparently I am a pretty crappy communicator. Yesterday’s post left a bunch of you asking “Why is there no entertainment section in your budget?”. Pretty valid question, seeing that I didn’t account for fun, vacations, or household supplies in our budget. Did I forget to include this stuff? Nope. I just do things a little differently.

Since I severely sucked at explaining the budget yesterday, I thought I’d do my best to make it clearer today. Take a look…

Does the infographic help clarify things? It’s important to remember that budgets come in all shapes and sizes, so I’m sure mine looks way different than yours. In fact, J Money has compiled a ton of different budget templates, so you can use the one that best suits you.

Alright, on to the question “Why don’t I account for tampons sponges, clothes, and movies?” The answer is simple. I don’t want to. Hah! How’s that for straightforward? Everything I included in our “expenses” category has little month-to-month variation and is a necessity. Our income MUST ALWAYS exceed these expenses, ’cause if it doesn’t, we are going to have serious financial issues.

The very bottom section of the budget is titled “Left over”. This money then becomes our discretionary income. We can do with it what we want. Referencing the example above, we should have about $2,000 after all of our bills are paid. This money will be broken down to pay for things like haircuts, sunglasses, weekend trips, gifts as well as to save for things like a home, a car, and new furniture.

I personally HATE the idea of having a line item in my budget for “household supplies”, “entertainment”, or “vacations”. These costs are not fixed and can vary greatly from month to month. Instead of making guesses for each variable expense, I much prefer putting all $2,000 of discretionary income in to my savings account and then take when needed.

I realize many of you probably HATE that I don’t budget for all the same categories you do, but this is how I’ve always done things (Girl Ninja is on board with this plan as well) and I don’t think anyone would say I’m a reckless spender. We are both natural savers and understand every dollar we spend, means one less dollar we have in the bank. Our frugality allows us to live outside of a spreadsheet. Maybe this makes me a budget hypocrite, but I don’t really care. In my defense, however, I religiously check Quicken to make sure I’m spending reasonable amounts in each variable category (ie electronics, gifts, toiletries, etc). Did you really think I would not keep a watchful eye on our money?

A few other things to note from yesterday’s post.

Many of you recommended Girl Ninja seek out part time employment, in the evenings, to help stabilize her income a little bit. This is probably because I said we would  “scrape by” if she only subbed 2 days out of the month. What I failed to make clear, was the odds of that happening are virtually zero. Over the last 45 school days, she has been able to work all 45 of them. Basically I was being a big drama queen yesterday, and probably made it sound like Girl Ninja will be unemployed, when that really isn’t the case. My apologies for any confusion. Plus, if she picked up part-time night work, that means I would be home alone at night, which is NOT COOL in my book. How the heck would Operation Make-Baby-Ninjas ever come in to the picture if our schedules were opposite?

Another common theme across yesterday’s comments, was the recommendation to decrease tithing until we get a better handle on our financial situation. Again, solid advice, but not really our style. We both share the belief that tithing needs to be something that we do every month. And for us that means 10% of our income. This means before we do ANYTHING with our money (including contribute to retirement or pay rent) we commit 10% to our church. I know many of you will think that’s crazy, or possibly even that we are weird Jesus freaks, but it’s a personal decision we BOTH made and are excited about. (Remember, it’s called personal finance for a reason).

It seems that I totally blew it yesterday and failed to bring my main concern to light. My primary motivation for yesterday’s post was to ask “How do you budget with a variable income?”. I received a bunch of great suggestions on how to increase our income (GN part time work) or decrease expenses (find a cheaper apartment or tithe less), but what I really want to know is How do those with a variable budget navigate life? What’s the secret?

If I confused the crap out of you (figuratively and literally) again today, let’s just pretend these last two posts didn’t happen and we can start with a clean slate for tomorrow’s post… deal?

Girl Ninja always makes things difficult

Seriously. What’s her deal? We were having a little money talk yesterday, and I showed her a copy of my budget. I was explaining how it was configured and how all the different sections were calculated. We then started to play with the numbers a little bit, making our best guesses as to what we think OUR budget is going to look like. It was freakin’ tricky.

As I mentioned before, GN and myself, have different opinions as to how much of our income should go to rent. She would be totally comfortable paying a little more for a nicer pad, where as, I am all about finding the cheapest place we can live. I’ve blogged about this housing predicament before (here) so I need not bore you with it again.

That said, rent is the single largest monthly expense we have (except taxes) so we need to plan our budget accordingly. The only issue is … Girl Ninja makes my life difficult. Granted, there is nothing she can do about it, because it’s not her fault. No. It’s the stupid economies fault. She’s a credentialed K-6 teacher here in California, and if you aren’t aware let me tell you something… The California budget is jacked up beyond all belief! This means, Girl Ninja hasn’t been able to secure a contracted teaching position. Fortunately, she landed the next best thing: A long term substitute teaching job. She makes $150/day, but receives no benefits (no paid holidays, no insurance, etc).

Next school year is a different beast, however. We have no clue how many days a month she will be able to substitute teach. Seeing that we can’t anticipate how frequently she’ll be working, it gets rather frustrating trying to establish a budget. Variable incomes suck.

After our conversation, I came home and made my best guess as to what I think OUR budget will look like come marriage. Here are three possible outcomes…

As you can see, if Girl Ninja is able to work two days (out of 20+ possible school days each month), we scrape by with a $282 surplus. If she has the opportunity to work about half of the available school days, we should be sitting pretty with $1,582 in discretionary income. And lastly, if she is able to get a sub job every teaching day, I will pee my pants with excitement to the tune of $2,582/month.

I should also mention a few other things that help lighten the burden of her variable income…

You’ll notice towards the bottom of the spreadsheet I have a section called “Side Hustle“. This is all the money I bring in from tutoring, house sitting, and blogging. I was super conservative and only accounted for $240/month in extra income, when I have been averaging between $500-$1,000.

What’s more, 10 months a year I receive two paychecks. We decided to budget our expenses around those two checks, even though I actually get paid three times in April and October. This means, twice a year, we will have an additional $1,600 to put in to savings.

Although Girl Ninja’s income will is inconsistent, we should ALWAYS be able to get by. Even if she is practically unemployed, we should still be able to grow our savings account by $5,000yr (even after contributing to retirement). If she is able to land another long term sub job, or even better a contract job, we should be able to save $20,000 to $30,000 over the next year.

Of course all of this is based off a bunch of assumptions, but I did my best to make these assumptions pretty conservative. Barring a major unforeseen crisis, we should be able to start our first year of marriage with a positive financial outlook and that makes me happy. I’ll be sure to keep you posted as we actually start living these assumptions.

What assumptions did you make before combining money?

How do you, with variable incomes, do it?

Am I overlooking anything?

p.s. I did leave out the clothes/entertainment/etc from my budget, but I did so for a reason. I’ll have to explain it in tomorrow’s post. That’s my fault for not clarifying.