So step one for the new Re-Budgeting Scheme is now accomplished.
If I’m gonna start budgeting again, I’m gonna need to have a budget. So it’s off to Excel, the classic tool of the numerically obsessed and the arithmetically challenged.
In this draft of the new scheme, monthly figures are arranged horizontally, rather than in a single column per month. This JPEG may not be very scrutable on a web page; try clicking on it for an enlarged version.
The header row lists all the spending categories that consume my annual mite. Some of these things are paid annually: taxes, for example, homeowner’s and auto insurance, and some of the healthcare policies. Even though they’re actually paid when they come due, in order to account for them, they’re prorated monthly. Effectively the money is not available for monthly spending, even though it’s in the bank.
The greyed-out figures in this image are theoretical entries, since July has yet to occur. The bottom line (row 12 here) will represent the amount spent in each category in a given month. The figures on the far right total, horizontally, the amount available (row 6) and the actual amount spent (row 12). The bottom figure in column T ($199 here, as an example) represents the difference between row 6 (amount available) and row 12 (amount spent).
We shall see if that latter figure is ever expressed in positive numbers….
Utility bills will drop to around $300 in the four winter months. They probably will exceed $400 this month and next, given the early heat and now early humidity. And unless we get some old-fashioned summer afternoon rains — which we rarely see anymore, thanks to the paving over of paradise — the water bills also will exceed budget between now and September.
All told, estimated living expenses should add up to about $23,100 annually. The mortgage on the downtown house, which my son and I are copurchasing, runs $7200 a year, for a total of about $30,300 a year.
Alas, Social Security covers less than half that.
Net RMD (required minimum drawdown) from the big IRA is a little over $18,000. I’d prefer not to use that to live on, but it looks like there’s no choice. So, unless living expenses can be cut, the net amount left at the end of the year should be around $2,300.
Not great… I’d hoped to be able to reinvest a fair amount of the RMD, but evidently that’s not going to happen unless something upward of 10 grand can be withdrawn from the S-corp. This will require a lot more editorial work to come in.
So… Can savings be found in this budget, without having to sell the house and move to abhorred Sun City?
To start with, I expect the Costco bill will drop significantly. I’ve canceled the unwelcome Citibank Visa cards, which will require me to write a check or use a debit card to shop there. The extra hassle will be enough to discourage casual shopping there. After this, I’ll go into the store only to buy a few very specific items that are hard to find elsewhere.
This afternoon I bought a $50 cash card at Costco to cover next month’s gasoline, so I won’t have to use a debit card at the gas pump. Since I no longer have to traipse to a job in Tempe — and because prices are so low now — gas bills have dropped to around $45 a month. That will increase, of course, as oil prices rise, but for the nonce, fuel for the car is within reason.
I could cancel Amazon Prime. But…it’s not very much, prorated monthly. And as I scribble, I’m sitting in front of an episode of Downton Abbey, which of course I’ve missed, in the absence of a television. Amazon’s offerings are better than Netflix, and it doesn’t seem to require software that won’t run on my computer or (so far) any other techno-weirdnesses. Since I have no other source of entertainment, it seems to0 bad to get rid of it.
But if it has to go…well, it just has to go.
Laundry can be soaked and washed by hand, and then run through the short, cold-water rinse & spin cycle. That will save a few pennies on electric and gas. I already hang most of the clothes to dry, so there’s not much to be saved there.
The dogs can do without their vaccinations. The vet’s office says they’re not due this year. And in fact, after they’ve had a number of shots, there’s really no need to keep getting more. Most of them confer lifelong immunity, or nearly so. At any rate, the problem is moot until this time next year. Thank heaven for small mercies.
Clothing is easy enough to cut — I surely don’t need any more right now. Future purchases can happen at My Sister’s Closet, a second-hand store fed by Scottsdale socialites. It carries some very nice examples of last year’s latest styles.
Eating out will have to go. There’s not much of that, but it has been sneaking in now and again. No more of it!
Groceries: No more frolics at Whole Foods. Food will have to come from Fry’s, Target, Walmart, and Safeway. There are a few things I’ll still need to get at Costco — chicken, for example, is usually cheaper there than anywhere else, and the pork, which is quite good, is rock bottom.
That’s about it. My lifestyle is already pretty frugal. It’s hard to see what more to cut without selling the house and moving somewhere cheaper to maintain.
And that, I hope to avoid…
Next step: to put this scheme into action.