Raise Time

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

Let’s hear it for more money! I will never complain about receiving a higher salary.  With times being what they are at the company, I was not expecting to receive much this year, just hoping for a little.  I was awarded an increase of $1,500 to my annual salary.  So, where did I spend this windfall you might ask?

Budget Balancing

Truth be told, I didn’t really do anything fun with it.  I simply balanced my budget.  When my wife began babysitting back in September, I increased my 401k contribution at that time, going from 8% to 9%.  That obviously meant a reduction in my take-home pay.

I used some of the additional money that she was bringing in to bring to make up that difference.  The difference worked out to be about $85 a month.  I figured my wife was likely to continue babysitting again this coming fall, but I did not want to count on it as an absolute certainty.  I wanted to play it conservative.  If she does indeed bring in additional money this fall, I can always reevaluate my budget.  My $1,500 annual raise works out to be $125 a month.  After all of my deductions, 401k and taxes, my take-home portion of that comes out to be about $100, not too bad.

Sources of Income

I wish I could say that my take-home pay covers my entire budget and then some, but it doesn’t.  Don’t worry, I’m not living paycheck-to-paycheck or racking up credit card debt.  I am just supplementing my take- home pay with my credit card rewards.  Since I’ve switched to the Citi Cash Rewards card, I generally receive about $50 a month in rewards.  I take it as a direct deposit into my checking account and use it for my monthly expenses.  I would love to save it completely and am working towards that goal.

Changes this Year

I have made a couple of changes related to expenses this year, one more recent than the other.  The first was an attempt to control our food spending.  Specifically, the category I call “Other”.  This category was any food purchase that was not related to a food shopping trip, think fast food, pizza and the like.  I have budgeted $50 a month for this bucket, but we were spending well above that, often a $100 or more.

I decided in January to be more disciplined about my food spending.  Any spending that I did, if it was not a ‘need’, would go on my own credit card.  This was especially true of the “Other” category, but I applied it to any food purchase I made.  I would often buy myself a little treat when I went food shopping, usually candy for a $1.  Those treats, if I buy them, now go on my card.

Since I made the change, I have managed to reign in the “Other” category.  In the 3-months preceding the change, the average for “Other” was $111, in the following 3-months it was $30.

The other change I made was I actually reduced my allowance.  I had been giving myself $120 a month to spend however I like.  It is my ‘Fun Money’.  My wife has her own ‘Fun Money’.  You are able to spend it however you want, no questions asked.  In looking at my money, I decided that I could be a little more disciplined with what I spent my money on and actually get by with less.  So, when the raise began flowing through my paycheck, I lowered my allowance to $100 a month.  It’s not a huge difference, but it makes me feel like I am keeping our household expenses in check.

Continuing to Chug Along

More money is always welcome.  I know there are lots of people out there dealing with either no raises or actually dealing with salary reductions.  That is why I never take them for granted.  What it actually made me do was to reevaluate a couple of items in my budget to see if there was some fat to trim.  Turns out, there was and by cutting it, I was able to give myself another raise of sorts.  How is your year going, an extra income coming your way?

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