Creating a budget is the first step that led me down the path of becoming a personal finance blogger. I’m still adjusting it monthly, reducing spending in some categories, trying to cut out expenses in others. But for the most part, it remains the same. Here we go:
Income:
- Full-time job: $5,150 (after taxes, insurance and 401K contribution – $95,000 annually before all of this)
- Boyfriend (to help with mortgage and bills): $570
- Roommate (rent/bills): $735
Required bills:
- Mortgage (including taxes into an Escrow account)- $2,096
- HOA – $220
- Electricity – $150 (approximate)
- Gas bill – $20 (approximate)
- Car insurance – $112
- Student loans (my only debt, other than my mortgage) – $434
- Vision insurance (not covered by work) – $13
- Pills: $20
Total monthly required bills: $3065
Bills (“wants”):
- AT&T (uverse internet and TV): $110
- Verizon (4 cell phones): $220
- WoW: $15
- Hulu: $8
- Spotify: $10
- Personal training: $120
- Groceries: $150
- Gas: $250
Total monthly “wants” bills: $633
Savings:
- Wedding fund (currently building this up): $1450
- Emergency Fund: $60
- Car savings: $20
- Season pass: $100
Total monthly savings: $1630
This might be kind of strange that I’m building up my wedding fund first before my emergency fund. However, if I need to, I can use my wedding fund AS emergency money but this makes me feel happier about what I’m saving for which in turn makes me want to save more. Budgets are all psychological.
Total after monthly expenses to be used for eating out, entertainment and shopping: $877
I’m going to put my “wants” bills under entertainment (even though it includes groceries and gas) because these are things that if I had to, I could cut down. According to this, here’s how my monthly income breaks down:
The Simple Dollar helps break this down a little. According to Elizabeth Warren’s book, All Your Worth, your budget should be:
- Bills: 50%
- Entertainment: 30%
- Savings: 20%
Although I skewed this a little because I put debts under bills and she put it under savings. In this case, I’m actually doing pretty well – I’m spending a little less on entertainment and putting a little extra into savings which I’m happy with.
Of course, as The Simple Dollar points out, it’s not that straightforward. Everyone’s budget will be a little different – you can’t just stuff percentage numbers on things. However, I’m an engineer and I like percentages and it gives me something to strive for so in this case, it works.
As time goes on, I’m going to try to decrease my bills and entertainment a little in order to put more into savings – we’ll see if that actually works!
Young Professional Finances 
Michelle
/ February 14, 2012We need a wedding fund! I should start now.