Double College Budget

Evaluating the need for every purchase.

Evaluating the need for every purchase.

 

Reader harknessglee asked for information about my budget, being part-time and retirement savings. Here’s my budget, my strategy and how it’s working.

Last year, my income was approximately $50,000 and 11% or $5,500 went into my retirement accounts. I get reimburse for mileage driven for work, which ends up being another $6,000/year I can add to the cash flow. I used to get child support, which stopped when youngest son moved out, and should (in theory) resume, now that he has returned (I have not included that income in these totals.) I ended pulling $14,000 out of savings accounts to pay for tuition for the 2015-2016 school year. The other $10,000 I am paying is coming out of my net income.

I am scheduled to work part-time, three 8 hour shifts. However, the reality of how my employer structures the work load means that I usually work an average of 33-36 hours per week. This is due to how the work is assigned and that there is usually overflow to the work day. Also, sometimes work is offered at a “high bonus” rate if they are short staffed (which happens amazingly often.) I can pick up these extra-pay shifts as they fit in my schedule. Occasionally I will work more than 40 hours/week. This is way better than “full-time” which often is 50-70 hours/week with the overtime being mandatory.

The Monthly Budget

House (principal, interest, insurance and taxes)         $952

Utilities (averaging for the year)                                      $265

Car (maintenance, insurance, fuel)                                 $300

College tuition                                                                     $934

Health Care (deductibles & co-pays)                             $220

Kids (clothes, gifts, music instruments)                       $250

Fawn (clothes, wine, books, gym fee)                            $260

Home maintenance (repair of home, new furniture) $250

Grocery & household (printer ink, cats)                       $500

Some of these costs are fixed, like the house payment. Some are vary with the time of year, like the utilities and Christmas and birthday gifts. These are averages. Obviously, if I get hit with a big dentist bill, I have to reduce elsewhere in the budget and/or take money out of savings.

I know that other people would not favor paying for their kid’s college over their own retirement savings. And other people would put all their extra cash into travel accounts. That is the beauty of knowing your own values/preferences and having the self-discipline to stick with your priorities.

I feel kinship with people who live simply to fund travel, to reduce their carbon footprint, or to retire early. All are worthy goals.

I would love to hear what you are saving your money for.

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8 responses to “Double College Budget

  1. Since I’ve retired, I save to vacation in a warmer clime. The older I get the tougher Philadelphia winters get.

  2. I’m saving because I want to do a lot of travelling when I retire in a few years. I paid off my mortgage last year but I continue putting the payments into a savings account. The sale of my current residence will pay for my next residence in a smaller city with no mortgage to pay.

  3. As always, I find your writings down to Earth and practical. So very Helpful. Thank you!

  4. I am saving to open my own business. Also trying to pay down a bunch of college debt, but savings come first. Retirement is a loooong way off for me, but I contribute a very small amount to my Roth IRA automatically every month.

  5. Elizabeth Douglas

    This post is so helpful. Question–how do you handle savings? Are you not saving now that you are paying out the tuitions? It seems like you must have saved a lot before, because you mentioned pulling money out to pay
    for your kids’ colleges.

    • Other than the 11% that is going into retirement accounts, I am not saving for the 4 years that I have 2 kids in college at the same time. Between the age of 40 and 55, I was able to save $50,000 and likely a big chunk of this will go to pay for college also. I’m not worried. If I retire at 65, I already have 3 income streams that are each about $15,000. I have options for 2 more and my expenses without kids are far less than that.

      • That is truly impressive. Once again, I think your blog is just fantastic and so inspiring. It makes it clear how much we don’t need and what can result (savings!) if we just don’t buy so much stuff. Thanks for sharing the details.

  6. Saving for retirement and travel. Last year at college for final kid graduating next year …. can’t wait. Selling house next year to add to Vanguard portfolio then off we go.

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