Bare Bones Living

I've been looking at my finances under a microscope to make sure I haven't missed anything in my transition from full pay to half pay, here's what I've found:

My expenses fall into two categories: essentials (fixed) and non-essentials (variable):

-- FIXED MONTHLY EXPENSES - necessities of life

FULL PAY

Shelter  -  21%  

Food/gas etc. - 21%  

Health Ins. - 11%   

Sub-total - 53%                          

HALF PAY

Shelter - 36%  (no change in $ amount allocated)

Food/gas etc - 36%  (no change in $ amount allocated)

Health Ins. - 18% (no change in $ amount allocated)

Sub-total - 90%

-- VARIABLE EXPENSES - nice but non-essential

FULL PAY 

Broadband/cell phone - 4%  

Treats - 6%    

Saving - 37%     

Sub-total - 47%   

HALF PAY

Broadband/cell phone - 6% (no change in $ amount)

Treats - 4% ($ amount cut in half)

Saving - 0% (eliminated)

Sub-total - 10%

FULL PAY - essentials 53% + variable expenses 47% = 100%

HALF PAY - essentials 90% + variable expenses 10% = 100%

The key to successful skinny living is knowing how much of your monthly budget goes where, what you can squeeze and what you can't.    My housing costs are fixed, what changes is the percentage of my net income devoted to meeting those expenses.  The same goes for food/gas and health insurance costs.   All are necessities.  The dollar amounts won't change, but the percentage of my income allocated to meeting those expenses grows, leaving less for variable expenses.   More allocated for necessities, less available for other things. When you reach 100%, there is no more to be spent.  

Under variable expenses, the frugalista in me rules.  My cell phone (the only phone I have, I haven't had a land line since 1988) is a bare bones go-phone that costs less than $10 a month, with rollover minutes.  I don't text, use it to go online, and it doesn't have a camera.   Broadband is a variable that feels like a necessity.   Free wifi isn't widely available, and less time at work means less use of company internet.  I'll sacrifice to pay my $2 a day broadband bill.   I cut my treat allowance in half.  That'll keep me away from the "buy now" button on ebay.  Also eliminated is additional saving, there's not much gravy on 1/2 pay.  But, this is my income from work.  I'm still saving 100% of my monthly social security benefit.  

I don't feel deprived, I feel empowered.   Knowing where your money goes, and living within your means,  IS power.

Penny Pincher

When the Ax Falls...

I could say I didn't see it coming....but, in truth, I did.  I just didn't think the ax would hit ME.

This week I was informed by new management that my working hours -- and my resulting paycheck -- were being cut in half due to a slow season and cash flow problems.  I've held my present full-time job for 10 years and have never missed a paycheck.  Two longer term employees were recently eased into "early retirement" and now my hours/wages are cut.  I asked if any other employees were having hour/wage cuts.  No, just me.  For now.  I felt like a sacrificial lamb.

I drove home from work with my stomach in knots.  But when I sat down with my calculator and financial spreadsheet, I began to relax.  Being a debt-free frugalista has its benefits.  I own my condo and car free and clear, there's no credit card debt.  I have money stashed in my cookie jar and other save-for-a-rainy-day accounts.  My 50% paycheck will cover my monthly no-frills living expenses (with $5 to spare, it's that close) - what will be eliminated from my budget is treat money and additional saving out of my paycheck.  I can live on what I will be bringing home with little change in my lifestyle (all the basics are covered, I can put food on my table and gas in my car; but I won't be going away on vacation or eating out or splurging on Ebay).  In the past year I got rid of two expenses -- storage and Netflix -- that would have put me underwater on my 1/2 pay.  My monthly social security deposit will continue to be socked away in its entirety into savings.  I'm grateful that I can survive and keep my savings intact.

I will still have paid holidays, sick leave, I'll be paid for vacation time I accrued last year and haven't used yet, and I'll continue to receive a company contribution to my health insurance.

Now I'll have every afternoon free to play.

Who knows?  Semi-retirement may agree with me.

Penny Pincher