Announcing My Guilt-Free 2019 Budget Projections

Today is Dec 15, 2018 and it's ten days till Christmas. Yippee. With season's greetings come feelings of reflections of the year. I tend to live in the future (not the moment). I've already taken a sneak peek at this year's income and expenses, and I have so many thoughts. I have so many thoughts on how the year has gone, and I am having trouble containing them or even confining them to one space. That's how I know it's time to write a post.

Based on what my income and expenses have shown thus far, here's what I propose for 2019 (God-willing).

My Working Budget for 2019

GROSS SALARY:	$91,000	($44/HR)
NET SALARY:	$71,000	(INCL 401K CONTRIBUTIONS)
SPENDING BUDGET:	$26,000/ yr	($2,167/MON)
TOTAL SAVINGS GOAL:	$45K/YR	TOTAL = POST-TAX SAVINGS + 401K (45K = 26K + 19K)

2019 PROJECTIONS

MONTHLY SPENDING	$2167/MON	26K/YR			SAVINGS	$45K/YR
Student Loans	$570					Per Pay Period	Notes	Annually
Housing/ Utilities	$1,000	(46%)			401K	$731/pp	Payroll deduction	$19,000
[REMAINDER ≈ $600]					[REMAINDER = 26K]
Tithe	$200
Everyday Expenses -Groceries (~$200/mon) -Dining Out -Gas Other (cable, personal supplies, wellness visit, family, other)	$400				Roth IRA	$231/pp		$6,000
					Taxable account	$834/pp		$20,000

For previous versions, see Budget Struggles.

Notes on my guilt-free budget projections. I generally get a couple hours of overtime each month, that will go toward any extra expenses guilt-free.  My spending budget is pretty basic on purpose. I plan to have $400/mon from my paycheck direct deposited onto a prepaid debit card for Everyday Expenses.  I use the Amex BlueBird card (no affiliate) because it has no fees. Extra expenses might include an extra doctor's visit; maybe I'll finally go on a trip; or my family might need help with a purchase. For any larger expenses that might arise, as they often do, I have a built in cushion in my savings budget. Guilt-free again.

More on the taxable account. Yes, my 401k contributions are automatic payroll deductions. Yes, my Roth IRA contributions are automated twice a month to a brokerage account. The remaining savings (20k) are funneled to a broker but those are semi-automated. This worked in 2018, so I'm going to try it again in 2019. I automated 75% of the amount allocated for the taxable account. So each pay period only 75% of the $834 gets routed to the broker. (I use a robo-advisor for now.) The remaining 25% sits in a savings account and is routed throughout the year when the balance gets uncomfortably high.  I do this so that if a big expense does arise, this money is easily accessible. Yes, I do keep a safety net in my checking and savings, but I really do see that as a safety net for job loss. So the taxable account cushion that lingers in my savings account is in addition to an established safety net. I don't want to ever feel strapped for cash.

Overall, while I have a spending target and savings target in mind, my budget is not immutable. I aim to keep financial independence guilt-free. The savings target and spending target are just tools to give my money some discipline and structure; it can't just be hanging out all willy nilly. If I need to spend more, it's enough knowing that I can. If I end up saving less than my target, it really is okay. Keep in mind a reasonable savings rate to a traditional and comfortable retirement is 20%, so anything above that is just gravy.  I want to be mindful not to get to a place where I start feeling bad for spending money that I earn. Financial independence goals are a choice and really not even the end goal, just an avenue to options.

Comparing 2018 vs 2019 Budget Projections

	2018	2019	Notes
Hourly Rate	43/hr	44/hr	Hourly rate based on hourly rate at the start of each year; historically incremental raises go into effect around April each year.
Estimated Gross Salary	89,440	91,000	The estimate for 2018 was calculated using hourly rate x 40 hrs/ wk x 52 weeks. The estimate for 2019 was calculated using a payment model at work.
Estimated Net Salary	67,080	71,000	The estimate for 2018 was calculated on a simple 25% tax rate. The estimate for 2019 was calculated using a payment modeling application at work that accounts for payroll deductions.
Savings Target	$37,000/yr	$45,000/ yr	For 2018, I hypothesized I could save half my salary and spend half based on the observation that I was already meeting most of my expenses from one of my two monthly paychecks. For 2019, after my first year of tracking expenses, I hypothesized I could keep recurring expenses to under 26k/yr and decided to shoot for a target savings of 45k/yr by funneling most of it away from my checking account. No pressure.
Spending Budget	$30,000/yr	$26,000/ yr

Final Thoughts.

I know this 2019 budget update is a little premature since I haven't done my full Q4 update yet, but with only one paycheck left and two weeks left of the year, I have a pretty good idea of what I've spent and what I've earned in 2018. The only lingering thing is whether I take my car in to get serviced before the year ends. The maintenance work has been pending since at least October. Then the weather just got colder and the days got shorter, and I really don't like running errands that require a huge time commitment.  But I'm just so excited to have gotten through this year and actually stuck with tracking my spending, I just had to offer this sneak peek! Let me know what you think...

Stay tuned for the upcoming Q4 update and reflections to see exactly what I did manage to spend and save in 2018!