I spent last weekend doing my budget for 2012. Yes, that is my form of weekend entertainment. And yes, I know I am three months too early. My organizational and planning streak has been going bersek this past month.
I normally like to plan the annual budget a couple of months ahead. 75% of the year’s tracking figures are available by this time, and I normally have a good idea by September of the stuff that is coming up next year. This also gives me two months of tweaking the budget and perfect it for usage in the coming year. Can you tell that I take budgeting seriously? 🙂
The main principle of my budget is that I only use my monthly basic salary for day to day spending. Overtime, bonuses, share options will be tracked as I receive them, but they will not be budgeted in. The budget also only covers my regular outgoings. Major items like new computers, home renovations etc etc will not be included. These are normally separately planned for, and pulled directly from available savings.
The biggest difference between the 2012 and previous years’ budgets is that I would have home ownership costs and rental income added to the mix. Since we have yet to decide where we would eventually stay, I used the lower rental income for budgeting.
Thanks to the increased cost of house ownership, I had to make a number of cuts across various categories. The biggest cut came from contribution to family. I now pay $550 a month to my parents to cover my share of the home expenses (food, utilities etc). If we end up staying in the new condo, I would be paying the full conservancy charges and the utilities bill which will come up to about $600 per month by my estimate for the whole family. As such, I have reduced my family contribution to cover only food, which will be around $150.
If we end up staying at the flat, I would continue to pay the original $550 (or more), but the increased rental from the condo would make up for the increased costs of owning it.
So, the annual numbers look like this for now:Salary: $43,512 Estimated Rental: $26,640* Total Income: $70,152
*After prorating for the months of zero income while we are renovating both condo and flats for rental and living purposesInsurance Premiums (Life, Accident, Medical): $9,482 Condo Expenses (Mortgage, Property Taxes, Insurance, Utilities, Conservancy): $35,160 Family Contribution: $1,800 Income Tax: $ 10,584 Transport: $960 Medical: $1,056 Communication (Cell, Internet etc): $712 Personal Meals (excluding home cooking and eating out with friends): $780 Entertainment and Lifestyle: $996 Toiletries and Grooming (Haircuts, Facials, Gym etc): $1,992 Gifts and Charity: $915 Union Membership: $108 Education: $780 Total Expenditure: $65,325 Automated Savings: $11,134
Balance: -$6307 (pull back from savings)
Obviously, I still face a shortfall of about $525 per month. This extra $525 comes from the increased income tax liability from share options sales. The payments should actually be covered by the profits I made during the sale of the share options, and I can legitimately draw from savings to cover them. Indeed, I have set aside money for this very purpose. I tried to see if I could cover the shortfall using just my basic salary with the rental. Well, apparently not unless I want to live a thoroughly miserable life next year.
I am quite satisfied with the way things are for now. It will be quite a challenge in the entertainment and lifestyle area, but if I can keep the cab rides in check, I should be fine. I have also given myself a clothes spending ban for the rest of this year and the next. My goal is to lose enough weight to fit into the other 75% of my wardrobe, or else make do with the 25% available to me now. Only exceptions will be a new dress for Chinese New Year 2012 and any specially budgeted spending for next year’s vacation (We are thinking aboutBritish Columbia or the Maritimes!).
Lofty goals, but I have confidence in me!