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.

2010. Year of the “Non-budget” budget

I pinky promise I wont turn PDITF in to a wedding/marriage/love blog, but you are gonna have to bear with me, for a bit longer as this engagement thing is uncharted territories for me. Getting married is going to completely change the way I have been managing my money. Apparently wives don’t just cook and clean (dear feminists, that was a joke), but they also do things like make money and spend money.

In years past, I have made my budget on January 1st and made assumptions of what the next 12 months is going to look like. It has been pretty easy for me to do, seeing that all I had to account for was myself. I knew what my income would be, I knew how much food I bought each month, and I knew how frequently I was putting gas in my car. It was really easy to make a budget once every 12 months, because few things in my life varied.

Well Girl Ninja, I hate to break it to ya, but you’re throwin’ a little wrench in my tires. I think I’m going to be forced in to budgeting twice this year. One for now through wedding day, and again wedding day through the rest of the year. That means I have to do twice as much work, ugh.

Even more unfortunate… I have no idea how to budget for our life post wedding. I have no clue how much women cost. To further complicate things, Girl Ninja is a substitute teacher so her income can range from $200-$2,000 monthly (depending on how many days she works). My guess is our wedding will take place in August, which leaves me with four months of assumptions (Aug through Dec).

It really seems pointless to make a budget for the last half of the year at this point, since I really have no clue what things will be looking like. We could be spending $900 to $1,500 on rent, $300-$500 on grocery/dining, $100-$400 on gas, blah, blah, blah. Nearly every category has a couple hundred dollar variance. It kind of defeats the purpose of budgeting, when you have no clue what you will be spending on virtually all aspects of your life.

Right now my game plan is to establish my budget from January to August and call it good. Once married life begins, I will closely monitor our spending habits and be totally prepared to make my 2011 budget on January 1st next year. I guess it’s not a huge deal though, because I treat my budget like a spending guideline. Do any of you all recall how much your overall expenses increased post marriage? Do you make a budget each month, once a quarter, or like me, once a year?

p.s. a few of you bloggers (mostly women) have mentioned you would like to hear a little more about my thoughts on weddings/marriage/love, so I plan to begin touching on those topics at least once a month. consider me your official Love Ninja 🙂

The dreaded third pay check

For those of us that get paid every two weeks, we face an epic battle, that others do not. For us, managing a budget is no easy task. Ten months of the year, things are just fine, but when March and October come around, my whole world turns upside down…I get an extra paycheck.

Although it is definitely a good problem to have, it does make things more difficult than other payment plans. We are really left with two options…

We can break up the two extra paychecks, by twelve, and calculate that in to our online budget app. Say for example you get $2K every two weeks. That means 10 months of the year your income will be $4K, but for two months it will be $6K. You can take the extra $4K (from the two extra paychecks) and divide that by twelve, this gives you $333. For budgeting purposes, you can average your monthly pay to be $4,333. In my opnion this method sucks. It’s a lot of work, a lot of planning, and a waste of time.

I subscribe to the “Booya, extra money” budgeting plan. Instead of breaking up my extra two paychecks over the entire calender year, I simply pretend they don’t exist. If I get $2K every two weeks, then I budget my cash flow around a $4K monthly income. When the time comes for the extra paycheck, I get to do with it what I want. Why? Because I have established spending habits around a $4K income.

If you haven’t noticed…it’s October, which means I’ll have an extra $1,500 coming my way. Perhaps I will buy 1,500 McChickens, maybe I’ll give it away to one of my lucky readers, but most likely I will contribute to my Roth IRA or pay down my student loan. Ah, the life of being a frugal ninja 🙂 I know there are others that get paid every two weeks. What method do you use? Is there a third option I haven’t thought of?

I’m a hypocrite

Yes it’s true. Full disclosure, I’m a big freakin’ hypocrite. I preach the wonders of living on a budget, when in reality, I pretty much don’t. Maybe this makes me a terrible person to go to for financial insight, but I think it just makes me normal. Let’s face it, we all compromise a little bit on financially sound principles every now and then. Even the Dave Ramsey “rice and beans” fanatics dine out occasionally, when that money could have been put towards paying down debt. See, I’m not so bad after all.

Just because I don’t live by a budget, doesn’t mean that I am a reckless spender. Actually it’s quite the opposite, I’m a frugal mother lover. I think my frugality fills in as my quasi-budget. If you have been tracking my expenses, you know that I have a dining out/grocery goal of being under $250 each month. If you really pay attention you will notice I’m almost always under that amount.

My budget may say that I have allocated $250 in spending this month, but I rarely restrict myself from doing something I want because “It’s not in my budget.” I guess what I’m trying to communicate is: A budget (to me) is a lifestyle and not necessarily a set of defined parameters. If I live in a way that reflects my ultimate goal of being debt free and owning a home, I don’t have to count pennies. All I have to do is make as many smart spending choices as possible and do my best to minimize any stupid ones.

So now I’m curious. To those who have a budget: Does it determine all of your decisions? How often do you track your spending to make sure you are within your limits? Am I a crappy financial blogger for saying that I don’t really use my budget that often? I guess this is just another area where I resist the financial norm, and make things personal.

This is the way I live…

So if you are poking around this page that means you’re like me and you like knowing other people’s financial situations. I guess I really have no problem letting people ask questions about my money. Call me crazy, but if you are looking at this article than you have at least SOME interest also.

So here is how this little gem work…

  • INCOME pretty self explanatory. This is my monthly pay from my current job. If you have read my other posts, than you know I also tutor to make some spare change. I decided I didn’t want to include this in the income section of my budget as that income fluctuates each month and I did not want to build my spending habits around inconsistent income. I include the tutoring income at the bottom of the spreadsheet and I underestimate it for each month. I’ve been averaging $1,000 a month, but I still don’t want to change it’s current $500 value…I know that makes my budget less accurate, but less accurate in a good way right 🙂

  • INVESTMENTS, TAXES, and EXPENSES. Again, pretty straightforward so no real need to elaborate. I will mention, however, that I DO have health insurance, but since I am 23 I was able to stay on my parents plan (you know I’m gonna ride that out till I’m 25 and get kicked off their policy). I included a 5% increase section on my expenses because sometimes ‘ish happens (consider it like a mini-monthly emergency fund).

  • GOALS, BILLS, and PRIORITIES. The top right section is where I set out my financial goals on January 1 of each year. It starts with what I had in my accounts on 12/31/08 and I make assumptions as to what my accounts will look like come 12/31/09. The section below this is where I keep a list of my fixed monthly expenses…otherwise I’d be forgetting to pay that darn cable bill. And lastly, below that is where I list of the priority of all of my expenses. I did this so if I’m ever in a situation where a ninja stole all my money and I was fired from my job, I would know exactly how to spend each precious dollar that I had. Basically I put the most important bills at the top.

So that’s my life in a spreadsheet form. Hopefully it makes sense to you all, but if it doesn’t feel free to shoot an email or comment and I’ll let you know how it works.

Enjoy,