For the past year, we really haven’t been able to stick to a specific plan for saving, investing, and putting aside money for fun. From April through October 2012, we were stashing away as much cash as possible just to close on our new house that was being built. From October through December 2012, we were rebuilding cash reserves and making an attack plan to pay off our rent house mortgage. And from January to early April 2013, we were redirecting all extra money towards that mortgage which is now paid off. So, for the first time in a year, we could really use a plan that isn’t all-or-nothing.
The New Plan
Mr. BFS really misses the balance that we had up until this time last year between paying our bills, saving for our future, and budgeting in the fun stuff . He wants to get back on track. I agreed that it was time to step back and breathe a little. So here is our new spending and savings plan…
Step One – Cover the Stuff in Our Budget
Here is our current budget of necessary expenses, chosen luxuries, and the new-to-us car savings goal that we need to be able to cover every month no matter what…
- Income Taxes – $2500
- New-to-Us Car Fund – $500
- Home Mortgage – $990
- Home Insurance/Property Taxes/HOA – $750
- Rent House Home Insurance/Property Taxes – $275
- Health Insurance – $360
- Life Insurance – $30
- Car Insurance – $55
- Electricity – $175
- Water – $60
- Natural Gas – $40
- Gasoline – $150
- Eating Out – $250
- Groceries – $250
- Sprint – $150
- Cable/Internet (DSL) – $120
- Medicines – $20
- Toll Roads – $25
- Housekeeping – $175 (average over the year)
- Lawn – $80 (average over the year)
- Miscellaneous – $200
- Cash – $100
- Total Expenses = $7255
Then comes the fun part. 😀 We bring in about $8000 a month from the business and at least $2000 from rent house and reffing income that Mr. BFS brings in. So, in a normal month, it looks like we’ll have about $3000 extra to leverage how we wish. Here is what we came up with.
Here is how we are allocating the monthly extra until our 2013 Roth IRA’s are taken care of:
- Roth IRA’s – 60%
- Emergency Fund – 10%
- Rental Property Maintenance Fund – 10%
- Mortgage Payoff – 10%
- Vacation Account – 5%
- Fun Money Accounts – 5%
Long Term Plans
We aren’t 100% on all of our long-term plans, but we do know we want to be financially independent as soon as possible. That mostly means that we want to work towards complete debt freedom and funneling more into our retirement planning. With that in mind, when the Roth IRA’s are fully funded, we will be opening a SEP IRA and Mr. BFS will start investing in some of our favorite stocks again. In fact, we may end up doing it this way every year – fully fund all of the Roth IRA’s and then move on to putting as much into the SEP IRA and stocks as we realistically can while still having fun with 10-20% of the extra too.
Anyway, thanks for reading along as we figure stuff out. How have you been doing? Anything you want to just let out?
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 a year. I went self-employed in July 2011 and make between $80,000-$100,000 through blogging, a rental home, and professional pet sitting. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you). I even have all of my favorite tools on a resource page - I hope they help you too. This all gives me the time to be with my aging family members, the flexibility to stay close with my friends and family, and it should help if we finally get pregnant too! Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!