Thursday, October 14, 2010

Reviewing The Budget

My mortgage payoff is only 5 months away so it is time for a budget review. Now, this budget is my very lowest basic budget. My goal is to have the rent from my rental house, $700, cover my basic expenses and anything else will have to be paid for from a part time job or whatever I decide to do, like start my own business.

You will notice that I added $100 for the "Dogs" category. I don't plan to give up my dog hobby any time soon so I might as well put it in my budget to see how it looks. The first column "Min" includes my RV expenses. The next column "Min, no RV" has the RV expenses removed, after I sell it. Then "No RV or H.ins" is if I got a job that provided health insurance for me. And lastly, "No H ins." is if I kept my RV and got a job that provided health insurance.

You will also notice that some categories are very low like gas is only $32. That is enough for one tank of gas a month. If I want to go anywhere farther than the grocery store I had better find another source of income. Electricity is only $50. That would work for maybe 8 months of the year. The other 4 months I had better find more money or sweat a lot. The Christmas fund is only $20 which means I would have to be very creative with gifts or as I said before, supplement my income.

As you can see there is plenty of incentive to increase my income and/or live creatively. I need to have a large emergency fund too because my rental house is not a guarantee of monthly income. I also need a maintenance fund for my rental house of at least $3,000 in case the AC needs to be replaced or the roof has a problem.

An $8/h 20 hours per week job would provide around $550 extra a month for bills such as extra medical expenses, travel, etc.... I haven't decided when I want to make this leap from full time to part time employment. It really depends on how long I can stay at my current job without going crazy. Also, if I do switch to part time that would mean I would be living in my mobile home for a long time, maybe forever.

It is exciting to think about my options as the time draws near. Only 5 more months to go!


Dottie said...

Have you tried to strictly live on the $700.00 budget? If not why don't you start living within this budget for the next 5 months until the mortgage is paid off. The only thing you should have to raise a bit would be the gas since you are still commuting to work. Then you could save any income over the $700 in your emergency fund( that's not already used for the mortgage payoff.
This way you can really find out exactly what you need.
Have you thought about replacing your current mobile home with a new one when you sell the RV?

Dave said...

Are you sure you are budgeting for health insurance correctly? An individual policy will be very expensive if you can't get one through your employer (and getting one while working part-time is not a sure thing).

If you end up not working or starting your own business, it will be expensive. For me, my individual policy's premium will be rising to $700 a month starting in 2011. That would be your entire budget!

If you risk going without HI, one illness would wipe you out.

Obamacare may put a cap on your HI costs, but I would not count on that just yet (and it would not take effect for a few years anyway).

Sorry to sound like a downer but you don't want to underestimate this big expense.

Sallie's Niece said...

$80 a month on food. How do you do it? Color me impressed.

Lizzie @ her homeworld said...

I still think setting up a charity is the way to go. You never spend anything except on you little fluffy family. Maybe there are grants you could apply for for the build costs of the dog runs etc. I have faith in you.

IsPlutoAPlanet? said...

What about the taxes/insurance for the rental property? Or is the $700 rental income net of these?

Petunia 100 said...

You have retirement savings as well, right? What is your plan for that money?

Daizy said...

Dottie, I have been living on the $700 budget since I started the mortgage payoff plan with a few exceptions...take out dogs and health insurance in my budget and re-distribute that to gas, food and electricity.

I looked at mobile homes new and used but decided that I wanted a site built home if I am going to move out of the mobile home. That was because the used mobile homes were just as ugly as my current mobile home and I would have to pay $25k for it. And the new mobile homes start at $40k but the workmanship was awful. I talked to a builder who said he could build a small house for $65k. With dogs I really want a concrete floor base and sturdy construction.

Daizy said...

Sallie's Neice, that would only be for the basic food. If I wanted extras I would have to get a job. I'm a boring eater though. Spaghetti with cheese, chicken and mashed potatoes, chicken alfredo with rice, I eat this for lunch day after day. Toast or dry cereal for breakfast at my desk. I don't eat dinner most days.

Daizy said...

Lizzie, I did look in to registering as a charity but decided that I would rather cling on to an established rescue for now. Too much paperwork! So far they gave me 2 dog runs for free and if i said I wanted kennels built I bet they could send some volunteers to help. I don't want that yet because more kennels means more dogs! I think 4 foster dogs is my limit. I only have 2 right now.

Daizy said...

Isplutoaplanet, yes, the property tax and insurance has been subtracted from the rent. $700 is what is left over.

Daizy said...

Petunia, my retirement money is to bale me out when I reach 60 and find out I have underestimated all of my expenses! haha. But really, the retirement money is there so that hopefully I will be able to fully retire 22 years from now. This first step is just semi-retirement or in other words down-grading to a part time job with more free time.