I make exactly $37.94 per hour which after all taxes and deductions comes out to just over $2k bi-weekly.
I've written a rough budget:
Rent 1465
Utilities 200
Internet 70
Phone 55
Car Insurance 78
gas (car) ~100
Orthodontist payment 300
Surgery debt payment 127
Groceries/personal hygiene/toiletries 400
dining out 200
entertainment 200
total – $3,195
On paper I should be able to say $800 every month but I don't know how to properly account for the type of stuff that just pops up all the time, like I just had my water pump on my car go bad and that was almost $500 to get fixed (car is only 6 years old too I don't recommend Kia tbh). I basically saved nothing this month after paying for that. I had to get new tires a few months ago. Thankfully I won't have to get tires again for several years now but still, that wiped out my budget for that month too.
I'm on a payment plan for braces (medically necessary not cosmetic) and I'm also making interest free payments on a surgery I had last year that cost $2k after insurance. I know it will get a little easier once this is paid off but even an extra $400 doesn't feel like a ton of breathing room in my budget.
I just don't understand how I'm living basically paycheck to paycheck on $80k gross salary. I put 10% and get 5% match on my 401k. Lowering 401k contribution is really not an option I want to even entertain. I guess the other option is to cut out food and entertainment but I can't believe I'm at that point when I make decent money :\
Constantly feeling broke despite making what I think is a decent salary? Is my budget that bad?
byu/Basic_Butterscotch inpersonalfinance
Posted by Basic_Butterscotch
11 Comments
Honestly I think you are doing pretty good. You seem to have a good head on your shoulders and a good idea of where your money goes.
The upside that I would like to point out is that $800 a month seems to be doing it’s job. You didn’t have to put your water pump or your tires on a credit card. That’s better than many people.
I would say keep your head up, try to cut a little bit if that helps, but be sure to include a little fun. You could try $100 for both dining and entertainment each and that would be another $200 into savings.
Do you have a savings account? Do you move that $800 over each month into a separate account?
How old are you? How much is the 10% contribution in dollars? I know you don’t want to entertain lowering that, but you could just until you pay off surgery and braces.
You could also try getting a second job just until you pay off surgery, braces, and build a solid emergency fund.
Also, I don’t know what field you are in, but could you get overtime instead of a 2nd job? How long have you been in the position you are in? Do you have good earning potential in the long run?
I also suggest sinking funds (separate from emergency funds) for things that you KNOW are coming at some point (car maintenance, etc.) Sinking funds can also help you plan for fun things like travel.
Hang in there! You are doing a good job.
> properly account for the type of stuff that just pops up all the time, like I just had my water pump on my car go bad and that was almost $500 to get fixed (car is only 6 years old too I don’t recommend Kia tbh). I basically saved nothing this month after paying for that. I had to get new tires a few months ago. Thankfully I won’t have to get tires again for several years now but still, that wiped out my budget for that month too.
You need an emergency fund for truly unexpected expenses and job loss. And, you need sinking funds for expected expenses (like car maintenance and repairs)
For example, your budget should probably have a line item for $150 for car maintenance. You won’t spend that every month, but when you don’t spend it you put it into savings and track that so that when you do spend it it doesn’t feel crazy.
I know you said you don’t want to touch your 401k savings which is great, but if you need the extra money to have cash on hand you can drop it to just get the match, and then once you pay off your surgery and ortho debts you can boost the 401k to 11-13% as a catchup
Have you tried working it backwards?
I tried and tried and tried but was terrible at budgeting – and sticking with it. You’re not touching a healthy 401k contribution – that’s great! Definitely keep on with that…
But – if your budget calcs say you *should* be able to save $800 a month… Don’t set yourself up for frustration, but what I did (simultaneously building up an Emergency Fund + saving for a home downpayment) —
1) Get a separate HYSA – not with your current bank….
2) Change your direct deposit to a reasonable amount – say you get paid bi-weekly, so just $100 a paycheck.
3) Create recurring transfers — maybe just $10 a week.
4) Of course, don’t lose the account! But don’t activate or otherwise use any of the easy access to that HYSA. Make it at least a bit harder to get at — cash savings are supposed to be readily available in an emergency, but make it a bit harder to have to do things like transfer money out of it, spend from it, etc.
Figure that’s maybe $280 to $300 a month out of budgeted $800 your budget says you *should* be able to save.
Give it time and get used to it the change. Resist all temptation to cancel those recurring transfers. Eventually, you’ll just mentally deduct that $10 weekly from what you actually have available. After a few months of adjustment, maybe adjust the split direct deposit up to 125… 150…. The recurring transfers from 10 to 15 to 20….
I feel your pain on doing all this work on a budget and then ending up with a “Why does it never work?!?!” I could never – and still can’t – do that.
So, rather than looking at my supposed budget leftovers I could never seem to save? I started just – slowly – “paying myself first”…. Suddenly, my savings became “bills to myself”… and the rest is history.
Your feeling is correct.
An $80,000 salary is good, but it’s not enough to live comfortably given the expenses of life. For example you have mentioned auto repairs and health care costs that are things many or most people will experience at some point. Also you pointed out your 10% going to 401k which is great, but that is a measuable chunk of money each paycheck.
Of course the folks getting by on $40,000 a year will disagree.
You just have to keep grinding away and live frugrally when you can. There is no shame in being cheap about things, especially when you are saving money for your future.
I understand that it doesn’t make sense to have $80K but still feel like you have to pinch pennies, but that’s where we are today. Things ain’t cheap.
If you’re feeling this, I *guarantee* you that millions of others are.
Just wanna lend some encouragement that you’re doing well with your budget. None of your expenses are glaringly bad. The sad truth is that $80k today is the new $60k. With the cost of things these days, it’s not necessarily anything you’re doing wrong. Once your medical expenses are done, put that $400 directly into savings for things like car repairs and other emergencies. It may not seem like much but it’s definitely better than nothing. I agree with your reticence to tap into your 401k and just wanna point out that feeling the squeeze today is only setting your future self up for success. Hang in there!
Over 40% of your net is going to rent and utilities. What’s your living situations? That’s on the high end and has you living mostly paycheck to paycheck and where i’d look to make cuts when you can.
Yes, you’d be doing a lot better without the orthodontist and surgery debt but you also don’t currently have a car payment. You are saving a lot, its just in your 401k. If you want to do a reset you can drop down to the 5% match and cut your dinning out and entertainment for a few weeks to boost your emergency fund and or pay off some of the debt to free up more cashflow.
Have an emergency fund for things like car repairs. Can you lower rent? That’s about the only thing that might make a difference after you pay off debt.
As far as your feelings, something to consider is what 80k means in your head. Not sure how old you are, but something interesting to do is use an inflation calculator and compare your 80k to what that would be when you were a kid/teen and starting to hear about and understand salaries. You can do it either way. What was the same salary back then that’s 80k now, or what is the salary now that was 80k back then. Either way, it might help give some perspective.
I think we all kind of know it, but for most of my life it’s been that 100k is a really great salary and the dream/goal, why you go to college, etc. but if you’re 30ish and were 10 in 2006, making 100k now is the same as making 60k back then (80k would be 49k in ‘06). Still not bad, but a big difference in how you might be feeling about it. Alternatively, if you think an 80k life in 2006 is what you should have, you’d need 131k today to match (never mind all the changes to housing/rental markets, gas prices, shrinkflation, etc going on now).
It’s not practical advice I know, but something to maybe consider.
$200 on dining out along with $400 in groceries seems excessive. Is that for one person?
Dining and entertainment. I feed 3 with takeout meal every Saturday and my spend is 200-300 monthly. I make about $35. Some months I barely gain but I know I am doing much better then when I was making $24 in 2023 with no type of benefits. I don’t know what you do for entertainment but I try do relatively free things like beach or discounted stuff like zoo tickets.
I no longer partake but I was on disability for 6 months and the first month, my payment was tied up and panicked and found so many community free food programs. Almost all of them had volunteers that were so happy to have people as a lot of food goes to waste, from produce to hot meals.