I hate budgeting. I simply don’t like taking the time out of my day to run through the numbers when I could be doing so many more interesting things. One of the reasons that I think that I am relatively frugal is that by being so, I haven’t needed to budget for years. I don’t buy a whole lot of “things” so, within reason, I have been able to basically do whatever I wanted and still be well under the amount I was earning. There was never an issue of having to find where the money was going because I was spending far less than I was making. This is one of the wonderful perks of having my finances in order.
Of course, this minimum wage challenge bet changes all that. With a greatly limited amount to live on in 2013, the first thing that I really need to do is create myself a basic budget to help me make sure I have a plan to make it work. I started the process today and this is what I have quickly come up with:
Self Employment Tax: ???
Spendable Income: ???
With congress still undecided what they are going to do about tax rates, I will have to wait a few months to be able to determine both of these. I guess I could place in 2011 numbers and then adjust when this has been settled. I will go ahead and do that when I have a chance.
Homeowners/Renters Insurance: $0
Property Taxes: $0
Home Repairs/Maintenance/HOA Dues: $0
Home Improvements: $0
Water and Sewer: ???
Natural Gas or Oil: ???
Telephone (Land Line, Cell): ???
One of the first things that I need to do is sit down and decide whether it makes more financial sense to remain homeless or whether renting out an inexpensive place makes more financial sense. I’ve started to run the numbers through my head on my walks, as well as the pros and cons, but I haven’t come to a decision yet…
Eating Out, Lunches, Snacks: ???
This will be determined by whether I rent a place or not. If I rent a place, my food costs will be much less as I know I can get plenty of food for virtually nothing if I have to. If I don’t have a place to stay full-time, my food costs will rise quite a bit as it’s much more difficult to coupon while on the go, and there is no place to stockpile good deals.
Medical Insurance: ???
Unreimbursed Medical Expenses, Copays: ???
Fitness Memberships: $0
Currently I have my own medical insurance and since I’m self-employed, I can deduct this from my earnings. Because the earnings will be so low, I will need to run the numbers to see how much will be my responsibility for the year and how much can be written off as a business expense.
Car Payments: $0
Auto Repairs/Maintenance/Fees: ???
Auto Insurance: ???
Other Transportation (tolls, bus, subway, taxis): ???
I currently have a car, but I have lived without a car for long periods of time. I need to make the decision whether I should sell the car and get rid of all the expenses that go with it, or if it makes sense to work it into the budget. There are a number of things that I need to think through because even though the first appearance is that not having the car would save a lot of money, it also comes with some inherent risks that could prove much more costly than owning a car. I will need to weigh them and come to a decision.
Cable TV/Videos/Movies: $0
Computer Expense: $0
Subscriptions and Dues: $0
I’m pretty sure that all these will be minimal to none. I very rarely watch TV and can’t remember the last time I went to see a movie in a theater (out of choice — I stopped watching them when I lived in Japan and they cost $20 a ticket and that didn’t guarantee you a seat in the theater…)
I will have to think hard about this. I rarely buy clothes (maybe once a year), but I do go through hiking and running shoes fairly quickly since I do a lot of both. My guess is that there will be some costs here, but not a lot. I will have to try to place an accurate number on this for the purpose of budgeting.
Toiletries, Household Products: ???
This is an area that I may simply put down a token amount just in case. Most toiletries I get for free using coupons or when I stay at hotels, but there are times that I do need to buy something. I think that if I pay a bit more attention, I can keep this down to $0 for the most part.
This is going to be a tough one. I usually give quite a bit in charity and think I can continue to do so using methods I have used in the past without it costing me a lot of money. I may need to change things a bit to make sure that it is still Kosher with the rules of the challenge, and in a worst case scenario, I can volunteer or do other free methods to help charities.
Miscellaneous Expense: ???
This is actually the area that scares me the most with this challenge. These won’t be the leaks that most people think about when they place this into their budget, but the emergencies that inevitably happen in everybody’s life. The way that I am currently looking at it is that all the money that I don’t have committed to other areas in the budget needs to be my “emergency fund” and the goal is to make this as big as possible.
I know that there are a lot of numbers missing which need to be filled in. I would welcome any suggestions that you have in any of the areas, as well as the numbers you would shoot for in each area. Even more importantly, have I missed any important expenses that I need to add to this list?
I have always been of the mind that while I am the one that will be doing this challenge, all those that read along are my supporting cast and I expect that I will get a lot of valuable information from all of you that I would not have considered on my own. With that in mind, please feel free to comment and let me know which budget areas you see as those which should be viewed with the most concern. And the first steps of the journey begin…
Next entry: Renting or Homeless
(Photo courtesy of http://www.flickr.com/photos/wonderlane/5582186621/”>Wonderlane)