Decent budget? - Single parent in NYC

**LivingAlmostLarge** · 06-12-2013, 06:05 PM

Why are you insisting you have to live in NYC? I don't know that you make enough to really live there. What happens if the child support and family contribution don't come through?

You are missing stuff like clothes, household furnishings, etc. Glad you got a job. How old is your son?

**snafu** · 06-12-2013, 08:29 PM

Since rent [62.5% of your salary] is sacrosanct, your 2nd budget issue is $ 3,350. in CC, consumer debt at a horrific 15% interest. For the short term, I suggest that you stop using CC and throw every spare dollar to that account as fast as possible. Don't wait for billing dates just make payments as soon as you have funds. I'd take lunch from home to move the $ 120. [lunch] to CC. Have you done the write down every sum spent each day in a small notebook or Excel exercise for two months? It helps to identify any dollar leakage - often a surprise.

Good on you for taking on a weekend job, it speaks volumes of you determination to clear debt and develop an emergency fund and begin to capture a retirement plan. Until funds are available, what is the employer contribution? What investment choices will be available? Let's explore your most favorable options.

Since the school term is ending, do you have child care expense? Do you have vacation plans?

**NetSkyBlue** · 06-13-2013, 05:40 AM

I would start by figuring how much you spend for the eye doctor, gifts, etc and make budget categories for those things. If you aren't putting money aside, you aren't going to have it when you need it. That's how the cycle of cc debt keeps going. In fact, I'd go so far as to calculate those expenses for the remainder of this year, and divide that out by how many months are left. Or paychecks, if that's how you do it. Then reevaluate in January with the whole year's expenses over 12 months. Then whatever isn't required for those expenses goes to debt.

**Nika** · 06-13-2013, 06:40 AM

I'm from NYC, so I can see that you are living very frugally and doing the best you can under the circumstances.

Your retirement is very low, but the fact that you are even making it on this salary as a single parent in NYC is a testament to your excellent organizational skills.

Perhaps something can change in a future (like a higher-paying job), or that 200K can be used as a down-payment on a small condo/coop so that your living expenses can remain fixed while your salary grows...

**dchd** · 06-13-2013, 04:36 PM

Thanks very much for your responses.

@LivingAlmostLarge - I very much want to stay in NYC, it was my dream to settle here. I've been here 11 years, my son is eleven, and we have close ties here. My family is not in the U.S. so moving to a new city would be a big risk emotionally and financially. Also my skillset is tied to the media, tech, e-commerce industries and if I move to a place with lower cost of living I will likely take a big pay-cut or have less job stability. Also I like my job, the mgmt is supportive and investing in my training, which is why I anticipate a big pay raise in the next six months.

@snafu - I agree, the first thing I can do is bag all my lunches and not eat at the cafeteria. I did the daily expenses exercise years ago and will try again. My weakness is using the CC for necessities like groceries. Employer contribution matches .25 of every dollar up to 6% income (so max company match is 1.5% of income). It's T. Rowe Price, I have it 90% index funds now (I'm 29). I have no vacation plans. My mom is visiting and my son will spend 5 weeks with her (out of the country) which is why I found the weekend job.

@NetSkyBlue and snafu - I sink about $3000 annually in healthcare, clothing, son's school and sports, and holidays. I have all the furniture and clothes I need.

@Nika - Thank you! I agree, I can't worry about buying a home until I sell that property, and for now I should focus on raising my income.

**Petunia 100** · 06-13-2013, 05:12 PM

I'd make 6% into 401k a higher priority than Roth. You get a guaranteed immediate return of 25% on that first 6%, so pass that up only if it is life or death.

I'd also make reducing debt a higher priority than Roth, as that is guaranteed return of 15%. If your credit is good, look around for balance transfer offers with better terms.

There isn't much fat in your budget. I do notice you are paying $80 per month for 2 phone lines. I'm paying $45 per month for 3. You could reduce that a bit, but will have to weigh that against the possibility of needing to buy new phone(s). My cell service provider is Ting, who uses Sprint's network.

What will help you the most is more income, so good luck with that raise.

**snafu** · 06-14-2013, 06:25 PM

Glad mom is there for son for summer. P-l--e-a-s-e, stop using CC, your are using money not yet earned for groceries! Very bad idea. Is your Credit score high enough to qualify for a 0% interest card? Look at the terms carefully because you will need to pay off CC before terms expire. The downside is the incredibly high interest rates charged if you have not cleared the balance. Will PT employment be sufficient to clear CC? Is there anything you are no longer using that could be sold?

Like Petunia, outlines, you need to capture matching employer retirement contributions. It's your dream to live in NY but there are a lot of trade-offs.

**snafu** · 06-14-2013, 06:31 PM

Glad mom is there for son for summer. P-l--e-a-s-e, stop using CC, your are using money not yet earned for groceries! Very bad idea. Is your Credit score high enough to qualify for a 0% interest card? Look at the terms carefully because you will need to pay off CC before terms expire. The downside is the incredibly high interest rates charged if you have not cleared the balance. Will PT employment be sufficient to clear CC? Is there anything you are no longer using that could be sold?

Like Petunia, outlines, you need to capture matching employer retirement contributions. It's your dream to live in NY but there are a lot of trade-offs.

**dchd** · 08-25-2013, 07:38 AM

Thank you Petunia and snafu!

I have literally frozen my credit card in a block of ice. I haven't used it all summer and have been paying it off. It should be gone in six months.

Good news - I got a 20% raise at work! I now have breathing room. This in addition to my side job means I can sock away 800 - 1000 a month.

I've changed my 401(k) contribs to 6%. Here's my plan:

1. Live within budget so sudden large expenses can be paid in cash, not credit.
2. Pay cc off with $364 /mo (that's my child support income)
3. Save $540 of every paycheck in my savings account. This will hold my annual large expenses and Emergency Fund (goal is 18k)
4. After EF goal is met, restart my Roth IRA contributions so that retirement savings equal at least 12% of my income.

My manager is requesting another 20% raise for my next annual review , as part of my promotion to Archivist, so the extra income will make me meet these goals faster.

**TBH** · 08-31-2013, 12:18 PM

If you're an archivist in NYC, you're making an incredibly good salary. Good for you.

Decent budget? - Single parent in NYC