One positive effect of my house hunger was that I took a very close look at my spending and savings during 2015, and did a reality check on my budget. I wasn’t pleased with my findings.
Since moving to the Bay area from Chicago, I haven’t increased my discretionary savings at all. I continued to max out my 401(k) through payroll deduction, and I did add a sizable chunk of money to my variable annuity, but the latter funds came out of the money I received when I sold my house in Chicago. (Most of the money in my savings accounts is actually there because of the house sale, in fact.)
Other than that annuity contribution, I’ve managed to not dip into my savings significantly, but that’s a small consolation. If I want to ever be able to buy a house in this area or take a destination vacation, I need to save more money.
One thing working against me is that I moved here without getting any cost of living adjustment. Although I’m grateful my company allows the flexibility to move from one office to another (and that my superiors supported my request to do so), since my move was voluntary, it was made clear to me that I wouldn’t be getting a salary increase. According to a friend who made a move from Chicago to Silicon Valley, the cost of living adjustment alone would have been a 30% salary bump.
As part of my spreadsheet wrangling, I also roughly estimated my taxes for the year. Since I had no mortgage or property taxes to pay in 2015, I have no reason to take anything other than the standard deduction. If my estimates are correct, I’ll owe just over $1,000 to the federal government this year. That means I’ll actually have to dip into savings — those same savings that I’ve not really contributed to this year — to pay my taxes.
Now, it’s true that I had some extra expenses this year due to setting up a new household. Furniture, bedding, cleaning supplies, and pantry restocking all adds up, even if it is spread out over several months and some items are purchased at consignment or thrift stores.
I also spent much more on my dog this year than I have previously for training (totally worth the expense), boarding, and veterinary bills. My dog has entered her senior years, and while she’s still quite healthy I know that going forward, she’ll cost me more than she has in the past. (Also, out here it’s absolutely essential to keep the dog on heartworm and flea/tick preventatives year ’round, unlike in Chicago where it was possible to skip them in the very coldest months.)
Last summer I added one more expense to my monthly budget: sister and I are splitting the cost of senior day care programming for my mother. Mom loves going to the daycare program twice a week, and it has helped her stay on target with her meds. The cost is between $250 and $300 a month, depending on the number of days in the month, whether there is an extra day thrown in here and there, or whether she is sick and unable to attend.
However, even if I look at these additions to my monthly budget and “exceptions” in spending (I add quotes there because over time one becomes aware that there are always “exceptions” in spending from month to month or year to year), one thing that is clear to me is that I must find ways to decrease my spending and increase my income if I want to save any money at all.
I’ve already made some changes in my monthly expenses and had some thoughts about the other side of the equation (income), too. I’ll hold those for additional posts since I feel that this one is long enough, though. ;-)