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First Paycheck = FAIL!!!

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I received my first full paycheck at my new rate of pay. I was shocked that it was much lower than I had anticipated (even after using a couple online calculator programs to try to accurately predict take-home pay).  My expectation was that I’d earn somewhere between $5-6,000/month take-home.  The reason for the large range is that I have a LOT of money coming out in pre-tax deductions, including:  medical and dental insurance, Flex Spending Savings accounts for health and dependent care, and 7% retirement investment (required and matched by my employer). In total, I have 20% of my check removed pre-tax. Taxes remove another 20% of my paycheck. So when looking at my base weekly salary compared to my take-home pay, I’m only actually bringing home 60% of what I earn (to be fair, I’m saving money by being able to pay a portion of medical and childcare from our FSA with pre-tax dollars, but our FSA has caps that we exceed, so some of those expenses are still paid out of my take-home pay post-tax).

After all deductions, my first full paycheck was for a total of $2269. I get paid bi-weekly, so we’re talking about $4500/month for most months (except for the odd month with 3 pay periods). This was a huge shock, given that we’ve been quite accustomed to budgeting for literally double that income amount.

I’ve never shared exact income numbers before on the blog because it made my husband feel uncomfortable for his business earnings to be shared and analyzed. But now that he’s shut his doors down and it’s all me – I feel fine with sharing my personal income. Guess what, y’all….my salary is $95,423/year. That’s with my big raise. I was originally hired at $55,000 two years ago. I guess there’s some disconnect in my brain or something because I thought $95k sounded like “BIG MONEY.” When I got my raise I was overjoyed – I was expecting a huge, wild difference in my rate of take-home pay. Under $5,000/month was NOT what I was expecting. Call me spoiled or privileged of whatever else you want (and I own that I am some of those things – I’m lucky to have the job I do), but this was a huge shock.

So although it feels like “starting over” (although it’s not!!! We’re still down nearly $80k in debt over the last 3 years), it’s definitely a come-to-Jesus moment. Hubs and I have had to totally start over on our budget with fresh eyes. Thinking about how to continue making progress on our debt reduction journey while simply surviving (here, we thought we’d be “thriving” with this huge raise). Some tough realizations have been made:

  • Hubs must keep earning an income somehow. Hubs has run a successful flooring business for almost a decade, but recently quit to go back to school. Many people have commented that he should keep his business going for some side-income, but it just doesn’t work that way. Unless you’ve owned a business in the construction trade before, you probably don’t realize how expensive it is just to maintain the proper insurances, licenses, etc. Hubs is NOT the type to do business under the table without the appropriate certifications. It’s a big problem in his industry (and where we live, in particular), and he was not about to go that route. But to just keep his insurances and licenses up to date cost several thousand a year. When we looked at what he was bringing in part-time versus the costs to keep the company legal, it just wasn’t enough to make it worthwhile. And, maybe surprisingly, the flooring trade is not as flexible with a school schedule as we need. Hubs’ first semester back was this past Spring and he had many stressful calls from employees (or worse, home-owners) with issues that demanded immediate attention, while he was still stuck in class for many hours to come. All in all, this was a losing proposition for our family. So now we’re trying to think of more flexible and accommodating ways that hubs can earn some side-money while in school. So far brainstorming has included: driving for uber or lyft, doing some type of food delivery, and perhaps trying to become a personal trainer. Remember – hubs has been big into health and fitness the last couple years, so the latter is his preferred method, but it will also take the longest to get started and requires additional research first. Any other ideas?
  • Food consumption has to get under control. A friend recently posted on facebook to inquire about how much her friends’ families pay per month for groceries. The most common number I saw was $250/week. I have to say, for the past couple of years since I’ve been working 2 jobs, our food budget has been way over $1,000/month (including groceries + eating out). I mean, $1,000/month was a GOOD month. But remembering back to when I first started blogging, it hasn’t always been this way! In fact, my original grocery budget was only $400/month!!! And I stuck to it! To be fair, it was never easy. I would spend a TON of time researching sales, carefully planning meals around sale items and food we already had in our pantry or freezer. I would easily have to go to 2-3 stores per week to get the best priced items (Walmart does their ad matching, but our local Walmart doesn’t have great quality produce). I’d also make a ton of items from scratch. Everything from breads and homemade granola bars to fruit leather and yogurt – even baby wipes I made myself for cheaper than could be bought bulk at Costco. Between ad searching, meal planning, grocery shopping, food prepping, and scratch baking, I probably spent a good 10-15 hours/week on my efforts. It paid off big-time in terms of money saved, but I just simply lacked the time when I started working full time (plus kept my part-time job, on the side). When I accepted my big raise I had to sign a non-compete so I had to leave my part-time job. So even though I still work full-time, I have significantly more time in the early morning/evening/weekend hours to try to devote to some of my old grocery-saving ways. I don’t know that it’s reasonable to get back to only $400/month. But I think if I shoot for $550-600/month (again – that’s for all food: groceries + eating out), it would be a huge savings over our current spending. I’m going to give it an honest effort for the month of August and see how I do.
  • The budget, in general, needs to be slashed. It’s scary how easy it’s been for things to creep up over time. When I first started blogging all our gifts were in the $10-15/range. Recently our gift-giving has been closer to $25-35+/gift. Hubs and I have both rejoined a gym. It’s very important to hubs (and he spends legitimately a ton of time there), but maybe I’ll cancel my own membership to try to save some money since I’m perfectly happy to run outdoors for free as my preferred form of exercise. I also had a friend recently mention that some health insurance companies offer discounts for gym memberships? I need to call Blue Cross, Blue Shield to inquire about this. Spending across the board needs to come down.
  • Debt payments??? Probably the hardest thing to accept is that our debt payments are going to drastically decrease. We’d grown accustomed to throwing thousands a month toward debt! I’m talking many months where we were paying $2500-$3000/month toward debt!!! Obviously if I’m only bringing home $4,500, there’s no room for a $3,000 debt payment. It’s just not possible. So we have to adjust expectations, adjust our 2017 financial goals, and just keep plowing forward, making as much progress as possible with what we have to work with.

So, ultimately, we need to cut our expenses AND try to find a way to increase our income. There’s not much wiggle room for me (since I can’t pick up side work in my current industry), but I think we can try to find solutions to get hubs some part-time side gigs. My focus will be best spent on trying to reduce our food expenses, since that tends to be our #1 monthly expense (cumulatively speaking. And yes, I know how ridiculous that sounds, but it’s true).

So there you go – I’ve laid it all out on the table. Next up will be formulating a solid budget plan and figuring out how to juggle our debt payments. Especially now that we owe $1,000/month to the IRS from our poor planning last year. Ugh! But baby steps here – if I think about everything at once I become overwhelmed so it’s one thing at a time. We now have a solid “income” figure so we know what we’ll be working with in terms of take-home pay. Now it’s time to figure out how to make our outflow match with our inflow and to find additional areas to cut back.

 

How much does your household spend per month on groceries (and how many people are in the household)? How do you save money on your food budget?


House Hunting….kinda

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Hi from sunny (and HOT) Madison, Wisconsin!!!

I’m here for my work conference and, unfortunately, brought the Tucson heat with me! Just last week the average temperatures were in the mid-80s. I arrived on Tuesday of this week and since I’ve been here it’s been in the high-90s/flirting with 100 degrees F plus muggy. Boo!!! Get it together, Madison! (I kid, I kid – it’s actually quite gorgeous aside from the heat + humidity).

Anyway, that’s neither here nor there. The REAL point of this post is about HOUSE HUNTING!!! AHHHHHHHH!!!!!! The time has finally arrived. It’s FINALLY arrived!!!!

Hubs and I had originally planned to start house hunting in early summer but had to push back the start of house-hunting a bit to finish adding to our house down payment fund. As a reminder, we’re planning to put down 20% so we can avoid any mortgage insurance. To do so, we wanted to save up $10,000 during the first half of this year (one of our 2016 goals, now done – yay!!!); we’ll add to that all the money from my money market account (roughly another $10,000…a little more at this point); and, finally, my mom is gifting us a sum of money that I haven’t disclosed.

We decided to start by shopping mortgage lenders. We’ve hired a realtor and got her recommendation, plus called around to all the local credit unions to ask about mortgage current rates (though none of them keep the loans in-house, they can still offer better deals than most big banks). Note, we haven’t actually hired a lender yet or processed any paperwork. At this point, we’ve just begun the process of shopping different lenders. We’re not letting anyone run our credit, etc., until we’ve decided on a lender, so we’re just comparing generalities (by giving our credit, an estimated loan amount, etc.)

I’m pretty sure we’ve found who we’re going to go with, but I’m still waiting to get my contract for the 2016-2017 academic year so we won’t actually start the paperwork process until I have that in hand to prove my continued income, etc.

Once that occurs, the hunt is ON!!! We’ve already been zeroing in on a couple of neighborhoods/areas that we like and I’m dying to actually get in some houses and look around. Can’t wait!!!

In other news – remember how I mentioned having a friend who lives in Madison (it was one of the reasons I was excited about coming here for my conference)? Well, I totally called it because she had her baby literally in the early morning hours on the day I arrived in town. I’m glad many of you advised me to really make the trip more about WORK than about socialization. I’ve been here 2 full days and have yet to see her. I was going to swing by her house this evening after the conference, but she had just gotten home from the hospital, is nursing a 3rd degree tear (in addition to her infant, har har), and just didn’t feel very well. No hurt feelings – I 100% understand. I should be able to go by tomorrow after the conference. Even if it’s just dropping off dinner and a baby gift, I’ll at least be able to say hi and meet the new baby for a couple minutes. I’m sure other parents can relate to the overwhelming craze that surrounds the first couple of days home from the hospital with one’s first child!!! Just sucks that the timing of the conference worked out like it did because I would’ve loved to spend more time together and take advantage of my kids-free nights! ; )

That being said, I’ve been ultra productive while I’ve been here. In between conference sessions I’ve done tons of grading. In the evenings I’ve been making lessons for my Fall classes, updating syllabi and course calendars, and getting final grades up from my summer classes (ahem, and writing this blog post). I still feel way behind (I think that’s my new normal, which is uncomfortable for someone who is always totally on top of their work), but I’m still treading water and doing better than I have most of the summer so it’s all good.

And, why don’t I just continue (since this post is total stream-of-consciousness at this point anyway. Let’s just go on with it, lol)…. my girls’ first day of preschool was today!!!! It still breaks my heart a little that I wasn’t there, but it’s helped that hubs sent lots of fun pictures of the girls all ready to go and full of smiles in their new classroom. I’m not going to lie though, it hurt when I FaceTimed with them this evening and they asked, “Why didn’t you get us from school, Mom?!” (tear). I’ll be home Friday afternoon in time to pick them up, so that will have to suffice. The GREAT news about the girls starting back to school is that it means I can go back to working full-time (thank god, given that I have both a full-time AND a part-time job. Whew! How have I done it all summer with only part-time care?!). When I return I have exactly 1 week before the Fall semester starts and it is literally jam-packed just about every minute of every day with meetings, To Do’s, workshops, etc. It’s insanity! I’m so very thankful to get some solid dedicated work-time in both this week (at least in the evenings after the conference) and next week (while the kids are in school – YAY!)

Sorry it’s been a hot minute since my last post! I’ll try to be better about it but, you know, life.

What’s one good thing happening in your world right now? When do kids go back to school in your area? Any must-do thing in Madison before I leave? I don’t have much time but could maybe squeeze in a restaurant or something???


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