We’ve established that it’d be mighty difficult to live on half of $30,000.
We couldn’t even do it on $36,000. Of course, we had $700 rent and $500 high-risk insurance in addition to the rest of our expenses.
But our household income is now significantly more. So could we live on half?
In a word, no.
In this case, I’m counting all steady income. That means my paychecks, Tim’s disability checks and $400 rent from the guest house.
Since I’m self-employed, I pay regular taxes plus both halves of FICA. That plus the mortgage payment come to 27.6% of our total income. (It’d be 25.9% if we paid the minimum payment.)
Insurance, our medications and my therapy come to another 8%. It looks like medication will almost certainly go up soon, so that could be 11% or more. 40.9% to 46.8%
Car insurance and gas are another 2%. 42.9% to 48.8%
Our fun money adds another 3.2%. 46.1% to 52%
Massages would normally be considered a luxury. But one every two weeks keeps Tim (mostly) mobile. And one a month for me because I have my own back problems. Thanks to an amazing rate, we pay $165 for three massages and tips. Which is another 2.1%. 48.2% to 54.1%
I should point out that I’m basing all these numbers on my new income. (The overtime I took will give me almost a full week’s pay each month.)
Last year, the percentages would have been 52.7% to 59.4%.
And none of this includes toiletries, food, clothes/shoes, haircuts, car repairs, home repairs and other incidentals. Food is a huge budget-suck, as I’ve talked about in the past.
At any rate, despite $17,000 of major expenses this past year, we put away more than 20% of our income (including retirement contributions).
Before anyone says anything, I know that still leaves a pretty big gap unaccounted for.
But there’s still the day-to-day expenses. Plus health problems (including multiple $40 OB/GYN visits and the ER visits for miscarriages) and a late 1960s house mean that unexpected expenses crop up pretty constantly.
At least our savings percentage will go up even more this year thanks to our $10,600 goal.
So how about you guys? Are you happy with how much you save?