The 50-30-20 Budget

 One major rule I follow when making a budget is the 50-30-20 rule. 

• 50% of my net income goes to needs, i.e. food, gas, rent, aka the really important stuff. 
• 30% goes to wants, dining out, lottery, video games, etc. The moving fund is in this category.
• 20% goes to debt repayment and savings.

For debt repayment and savings, I assign percentages on a point system. The most important item gets two points, and everything else gets one.

For example, before I got my bonus, my most immediate debt was my credit cards (2 points). That was followed by my emergency fund (1 point) and my student loans (1 point). By this breakdown, 10% of my budget went to my credit cards, while 5% went to each of the other items.

Now as the items get paid off, the points shift down the list, and with less items, the percentages increase. Now the emergency fund (inching ever closer to three months) is two points, and the student loan payment is one point. By this breakdown, the emergency fund is 13% and the student loan is at 7%. 

There are some nuances to these percentages, especially when it comes to the moving fund and the student loans.  

Bonus Check Breakdown

I've been fortunate to have a job that allows me to continue working from home during the pandemic. I've been doubly fortunate that said job pays a bonus during this time of the year. In this post, I discuss how that check is going to use, without going into specific numbers.

First off, I'm using a fifth of my check for fun money. I plan on taking a fifth of the fifth for playing the lottery. After that, I'm planning on taking my family out for dinner. I'll keep some cash on me should I think of something else to do/get.

Next, I should have plenty to pay off both credit cards. The payments I already had set aside for them will instead go to my emergency fund.

From there, the remainder will be split into three categories: my emergency fund, my student loans, and my moving fund. The emergency fund will see a good boost from this bonus, in addition to the money previously marked for my credit cards. Paying extra on my student loans will help me push down the monthly payment needed to pay them off in the original ten years. And of course, I'm continuing to push toward my down payment goal. 

Reconciliation: Budget Vs. Bank Book

I recently recognized some discrepancies between my budget and bank book. At the time I wrote this strip, I had about 10 months worth of transactions to review. 

Like that time I took out $20? It was actually $100.

On my budget spreadsheet I split my transactions into separate categories. Say I spent $25 at the gas station. This would be broken down into $15 for gas, $5 for lottery, and $5 for groceries. I also have the "keep the change" feature on my account, so any non-exact dollar amount has to be rounded and the difference marked as savings.

There's also the big issue of windfalls, namely the $1,200 stimulus. I tried to keep it on a separate sheet to not mix it into my budget, but because it's in the same account, any untracked spending ends up reflecting on the bank book. I had to put the unspent amount into my budget to reconcile with the bank book. I hope to avoid a similar situation when I get my annual bonus.

Asking Parents For Money

Not asking my parents for money has been a point of pride for me. My mom has been setting a few dollars a side for me, and I figured saving for a house would be a good reason to ask for that money. The following is a paraphrasing of that ask.

Me: Hey, Mom. You know how you had that money set aside for me?

Mom: Yes, what about it?

Me: I was wondering if I could put it in my savings for a house.

Mom: Of course, if it's for that purpose, but don't expect anything else unless I will it!

Me: Wait... Do you mean if you choose to, or if you die?

Mom: Sips Tea Yes.

The Struggle With Side Hustles

Side hustles have been a consistent challenge.

Tutoring is slow during the summer and my work.travel schedule limits my availability.

Crocheting, though relaxing and artistically appreciated, doesn't provide anything money-wise.

Likewise, I enjoy writing novels, but I don't have the skills or resources to move books.

Maybe I should go all in on YouTube? SocialBlade puts me at 100 subscribers by the middle of 2021, so there might be something there.

Opening a High-Yield Savings Account

 How much interest do I get from my current bank? A few clicks reveals that I get 0.01%.

Oh Hell No! If I have to save $25,000 over any period of time, I'm making it worth my while.

A simple search of high-yield savings accounts should find something favorable.

I opened an account with an advertised APY of 0.99%. Currently it's actually paying 0.65%, which is much better than going with my current bank.

Having Job Stability

 One factor working in my favor is job stability. As I am writing this post, I've been with my current employer for over two years.

I don't want to jump ship during this point of my journey, but I can still train for that next role.

I dabbled in some HTML, CSS, and JavaScript, and have constantly thought of building my whole website from scratch. One day, I shall become...

THE PROGRAMASTER

(Program Master)