New Salary, New Plans! [Updated]

Well, I guess it's good timing that I just finished my Back to Basics Budget Review, as my new job/salary and new PhD stipend increases have kicked in starting this month. 

I now need to take another look at my income and budget given what I know about my financial circumstances for the next year. Because I've already done a deep dive on most of the categories, adjusted where needed, and cut costs where I can (Fees, Electricity & Internet), I have a good handle on how much I need to maintain my current lifestyle.

Current Budget

Here is what is staying the same for the remainder of 2023: 

• Income: $3,023.44 in a 2 paycheck rent month; $4,535.16 in a 3 paycheck rent month
  
• Rent - fixed but varies between $780 and $975/mo depending on if it is a 4 or 5 Friday rent payment month; avg $845/mo, $10K annual, 
• 26% of my August 2023 take-home income, which is a 2 paycheck month and 4 Friday rent payment month
  
• 32% of take home in a 2 paycheck month and 5 Friday rent payment month
  
• Groceries - variable; $500/mo, 17%
  
• Internet/Electricity - both fixed (internet = $70/mo) & variable; $150/mo, 5%
  
• Eating Out - variable; $150/mo, 2%
  
• Charity - variable; $60/mo, 2%
  
• Cell phone - fixed; $35/mo, 1%
  
• Medical - variable; $100/mo, 3%
  
• Misc - variable; $485, 16% 
• Savings - fixed; $50 (minimum), 2%
  

Total in 4 Friday rent payment months: $2,310, with any remainder going to Savings.
 

Total in 5 Friday rent payment months: $2,505, with any remainder going to Savings. 

 

July 2023 Raises & Temporary Lifestyle Inflation

With my raises in salary and stipend, I've effectively gone from 0.3 FTE of $70,039 to 0.3 FTE of $91,328 per year, with a PhD stipend for the next 6 months of 0.5 FTE of a tax-free $33K, or $16,500 per year. 

My monthly take home income should be $3,023.44 for 2 paycheck months, and $4,535.16 for 3 paycheck months. What to do with the remainder? This is the last gasp of my PhD and I'm losing my mind with stress. Anything and everything I can throw money at to make my life easier from now until I hand in my thesis in December, I'm doing.

Even when I know that that finance cushion isn't going to last...

The rest will be saved, of course.

 

Changes in 2024

If my finances were that simple, my annual gross income would now be $43,898 NZD, with $16,500 of that untaxed. Totally a very comfortable income.

But it is not that simple. Two things happen in early 2024: 

1. my salary increases to 0.3 FTE of $94,981 in February, and
   
2. I lose my PhD stipend in January
   

This means that my *only* income starting in January 2024 will be my 0.3 FTE salary. It will increase to $28,494 (gross income).

Despite the increase, this is still an unsustainable income for my current budget. After 3% Kiwisaver and taxes, this equals a net income of ~$23,717, or an average of $1,976 per month (~$1,824 per month in 2 paycheck months; $2,736 in 3 paycheck months). 

 

The Shortfall

Obviously, if I keep my current budget, I'll have a shortfall of $746 in 2 paycheck months, and only $166 left over in 3 paycheck months. This adds up to an overall shortfall of over $7K per year. 

That ain't good! Especially because I'll be going through the end phases of my PhD: arguably the most stressful, with my PhD defense and responding to manuscript reviewers and graduation, all on my own dime. I won't get paid for any work I do for my PhD after December 2023.

There isn't much I can cut comfortably and be happy in my current budget. I've lifestyle-inflated and am old and stuck in my habits now, so sub-$31K net income living is not super appealing. I guess I could do it but it'd suck, and I'm not excited about having a sucky post-PhD life when my PhD life has been so miserable.

Possible Solutions

1. I've already talked to my supervisor about increasing my FTE from 0.3 to 0.5. If that happens, I'll be in the clear. I'd make $1,464.40 per paycheck, on average $3,173 per month, with $2,928.80 in 2 paycheck months and $4393.20 in 3 paycheck months. I would be able to breathe a lot easier then.
   

   However, this increase in my time is NOT built into the budget we just created for July 2023 - June 2024, so I'm not super hopeful about this.
   
   IF they let me go to a casual contract instead, we'll save the project many tens of thousands of dollars in overheads and they could afford to increase my salary, but that is probably not going to be allowed by our finance people. I would also lose things like holiday pay and any sort of career progression track status. I guess we'll see what happens. 
   

2. I should be able to get a $3K stipend to write up my papers for my PhD in January. And/or my PhD supervisor may have some funding to keep paying me for my PhD work.
   
   
3. Barring an increase in my income or FTE, I will need to use up some savings (~$3.5K) to meet the shortfall for the period between January - July 2024, when my salary and contract will next be negotiated and hopefully increased.

This all feels quite doable. It's nice to have options mapped out. Worst case scenario, I top up my income with savings where needed. And then, once my PhD defense is done, I will be looking for increased income immediately.


Future Possibilities - Post July 2024

I hate that my financial life is so up in the air! 

My ideal salary is > $36K net, or $3K/month. Once I hit that $3K/month mark in take-home income, life starts feeling comfortable, with funds to take advantage of some of my newly found, post-PhD free time, and also some funds to save each month. 

There are a few events that may occur in 2024 that may get me there:

1. If I'm able to increase my FTE of my current job to 0.5, I will reach my goal as I will take home $38,074.59. 

I will then need to decide if I want to look for more work to bump up my FTE or if I am happy staying at 20 hours per week. I'm leaning towards the latter, at least for a year or two.

2. A friend is a co-leader of another research programme and they have mentioned that they want/need someone to help them project manage it, and that I would be their ideal pick as they know very well how I work and the results I get. 

I don't think they can afford me at my current rate, but even if they only offer me 0.2 FTE at my current rate or a higher FTE at a lower rate, that would solve many of my money problems, AND still allow me to only work less than full-time, which would be ideal for my ADHD and my personal plans, post-PhD. And maybe I could go casual on that project instead to save them on the overheads.

These are my best-laid plans, but we all know how those go...!

Back to Basics: Bonus #2. Credit Score and Report Check!

Having major personal and financial ties to two countries can be exhausting. Case in point: credit scores and reports. 

I have now signed up for two online accounts to keep track of my scores (not necessarily recommending them here): Credit Karma in the US and Credit Simple in NZ (soon to be Clear Score). I think Capital One also keeps track of my US score, and maybe other credit card or financial accounts too. 

I originally signed up for a credit score tracking account because of a bogus collection claim by a shady doctor's office in 2020. 

[Details in case you are curious: I went in for a mole check on a Grabone voucher in 2012. It was a terrible experience - the wait time was atrocious, I was skipped over while waiting in line, the bathroom and office was super dirty and smelled, and the doctor was creepy and started trying to discuss politics and my marriage status with me. He actually asked me why I wasn't married and told me I was attractive now while young but I'd better do it soon! WTF...

Later said I owed them money because I ONCE called in to ask how to get hold of my medical record. They informed me that it cost $40 for them to give me my mole check results and I would need to see the awful doctor again. I said no thanks. I never wrote back or called again. But they somehow decided to charge me for it anyway. THEN, seven years later, I started getting harassing phone calls from a collection agency about how I owe them money. When I look up what collection agency it is, it turned out it was OWNED by the doctor I saw. Luckily, the debt collector has stopped calling and sending me texts. Apparently it is the law that they only have six years to collect debt, so hopefully I am beyond this threshold now.

Their Google reviews have many many similar stories about how shady the practice is with money and also weird the doctor is.]

ANYWAY, I thought it might be good to check on my scores again!

USA

Scores: 808 (TransUnion) and 809 (Equifax)

(but I *just* closed two accounts, so it is highly likely that these will go up once everything evens out again - closing accounts always causes my scores to dip slightly for a little while!)

NZ

Score: 780 

There are no issues on my report. 

Fab - looks like the coast is clear for me to apply for 2 cc's in NZ in late July when my salary and stipend increases kick in (post coming soon)!

• AMEX no fee cc. It offers 1 Air NZ airpoint per $100 spent, with a bonus 50 airpoints with a $750 spend in the first 3 months. This is a BETTER RATE than the cc I currently have, which offers 1 Air NZ airpoint per $110 spent!! and the fee is $150/year. Why?
  
  
• SBS no fee cc. For those retailers that do not take AMEX. Again, no fee, and you can earn cashback - $1 per $150 spent. Good stuff.

Back to Basics: Bonus on Fees Edition

Inspired by Ramit Sethi's new tv show on Netflix, I'm going back to basics and reviewing my budget (or as he calls it, my "Conscious Spending Plan"). 

I've gone through each of my budget categories, but one I haven't really focused on is normally lumped in with the Miscellaneous category: Fees. 

Fees in General

Most of my entries in this category are just me paying a Stupid Tax: parking tickets, late library books, etc. Some are unavoidable, like setting up auto-pay for rent out of my checking account. And then there are the ones I willingly pay because I'm lazy: $10/year for my Visa debit card and $150/year annual fee for my ANZ airpoints Platinum card. 

Annual Fees on Cards - Why am I Paying Them?

It is hard to get a credit card here in NZ. Especially one that offers bonuses and rewards. It isn't like the US here. I only have one now because I signed up when my income was much higher! Nowadays I wouldn't even qualify. That is partly the reason why I've held onto it for so long. Another reason is that I believe the Air NZ miles I earned on the cc disappear if I cancel the card - they say they start to expire 4 years after earning them, and I have had my credit card for well over 4 years now. And the final reason is that I'm lazy. By the time I realize that I've just paid the fee again, I say, well, I've paid it now, I'll cancel it next year. And then I never do...

And the last reason is also why I don't switch my checking account debit visa card to a simple eftpos card. The debit visa card had a $10 annual fee associated with it, but for the life of me, I can't figure out what it does really. I don't think I ever use the 'Visa' function?? It is supposed to help you make purchases online but I just use my credit card for that. I can use an eftpos card in person in shops to make purchases and withdraw cash at an ATM just fine. There is zero reason that I can see why I should be paying $10/year. 

The Solution

So I'm investigating cancelling my Visa debit card and getting an Eftpos card instead. $10 a year in the bank, cha-ching!

When my full salary increase kicks in end July, I'm also going to apply for two zero fee credit cards in NZ: 

• AMEX no fee cc. It offers 1 Air NZ airpoint per $100 spent, with a bonus 50 airpoints with a $750 spend in the first 3 months. This is a BETTER RATE than the cc I currently have, which offers 1 Air NZ airpoint per $110 spent!! and the fee is $150/year. Why?
  
  
• SBS no fee cc. For those retailers that do not take AMEX. Again, no fee, and you can earn cashback - $1 per $150 spent. Good stuff.
  

Finally, once I redeem most of my Airpoints at the end of the year, I'm going to cancel my stupid annual $150 fee cc. 

There we go! $160/year in annual fees, gone.

Back to Basics: Summary of Changes & An Updated Budget

Inspired by Ramit Sethi's new tv show on Netflix, I'm going back to basics and reviewing my budget (or as he calls it, my "Conscious Spending Plan"). 

I've reviewed my income already, so I know what I'm working with each month at a minimum. I will take home ~$32,628 NZD this year and have a minimum of $2,509 per month of income. 

Budget categories:

• Rent - fixed but varies between $780 and $975/mo; avg $845/mo, $10K annual, 31% of my 2023 take-home income
  
• Groceries - variable; $500/mo, 18%
  
• Internet/Electricity - both fixed (internet = $70/mo) & variable; $150/mo, 6%
  
• Eating Out - variable; $150/mo, 6%
  
• Charity - variable; $60/mo, 2%
  
• Cell phone - fixed; $35/mo, 1%
  
• Medical - variable; $100/mo, 4%
  
• Misc - variable; $485, 18%
  
• Savings - variable; $50/mo (minimum), 2+%
  

I've now reviewed my Rent, Groceries, Internet/Electricity, Eating Out, Charity, Cell phone, Medical, and Misc spending and monthly Savings.

Today I'm summarizing the changes I've made to my budget based on this review.

• My Groceries budget increased by $100 to $500/mo. 
• My Eating Out budget increased by $25 to $150/mo.
• My Charity budget increased by $30 to $60/mo.
• My Medical spending increased by $50 to $100/mo.
• My Misc spending increased by $165 to $485/mo. 
• Investigate switching power/internet companies and if there is a better deal out there, call up my current provider and ask for lower rates or a deal. If they don't offer this, switch to a new provider.
  

Overall the changes bring my total monthly budget to $2,505 (assuming a 3-rent-check rental payment of $975, which is the highest my rent will be in any given month). I earn about $2,509 per month at a minimum.

I have my marching orders to investigate lower prices for my internet/electricity, and to watch my spending on goods and wants, gifts, transportation, self care, eating out, and my cell phone top ups.

The before and after pictures: 

 

 

My fixed expenses/Needs (e.g. those I'd have to pay even if I just stayed home and did nothing - Rent, Groceries, Internet/Electricity, Cell phone, Medical) add up to ~60%. My nice to haves add up to about 26%. This happens to be roughly in line with what is suggested in Ramit's Conscious Spending Plan,  (50-60% on boring fixed costs; 20-35% on fun), so that is a nice plus.

You may have noticed the total %'s do not add up to 100. They add up to 74% (before review) and ~87% (after review). The rest is deemed 'unallocated.'

The "unallocated" category is financial trickery to account for the fact that some months I receive 2 paychecks and some I receive 3. Also, some months I have to pay rent 4 times, and some I have to pay it 5 times. Some months I receive 4 garage rental payments, and some I receive 5.

What I've budgeted, above, then, is for my lowest-earning months (2 paychecks; 4 garage rental payments) with the highest payout rates for rent (5 rental payments). Because of the variable payments and income, I will naturally have some slop leftover whenever I have a 3 paycheck month, receive 5 garage rental payments, or only pay out rent 4x. I'd rather budget this way so that it feels like a happy surprise when I can save more than I thought I could at the end of the month. 

So, there you have it. Thanks to Ramit Sethi for inspiring me to take a closer look at my budget!

Back to Basics: Savings

Inspired by Ramit Sethi's new tv show on Netflix, I'm going back to basics and reviewing my budget (or as he calls it, my "Conscious Spending Plan"). 

I've reviewed my income already, so I know what I'm working with each month at a minimum. I will take home ~$32,628 NZD this year and have a minimum of $2,509 per month of income. 

Budget categories:

• Rent - fixed; $10K annual, 31% of my 2023 income
  
• Groceries - variable; $500/mo, 18%
  
• Internet/Electricity - both fixed (internet = $70/mo) & variable; $150/mo, 6%
  
• Eating Out - variable; $150/mo, 6%
  
• Charity - variable; $60/mo, 2%
  
• Cell phone - fixed; $35/mo, 1%
  
• Medical - variable; $100/mo, 4%
  
• Misc - variable; $485, 18%
  
• Savings - variable

I've already covered my Rent, Groceries, Internet/Electricity, Eating Out, Charity, Cell phone, Medical, and Misc spending.

Today I'm focusing on my Savings.

I have previously detailed my savings, various funds, goals, and plans in other posts, so will only focus here on my regular monthly savings. I save (at least) $50/mo into my Rabobank account which requires a $50 deposit each month to get a higher interest rate.

Verdict: I will keep this the same at $50/mo.

Next up: my new budget, a Summary of changes and the overall budget picture after my review.

NZ Ministry of Justice Collections Letter????

I got it over the weekend. They aren't open til 8 am Monday and have no ways to figure it out online. I have ZERO idea what it could be. 

Yikes McGikes. What on Earth is going on? 

Update when I'm able to get a hold of them.

Back to Basics: Miscellaneous Spending

Inspired by Ramit Sethi's new tv show on Netflix, I'm going back to basics and reviewing my budget (or as he calls it, my "Conscious Spending Plan"). 

I've reviewed my income already, so I know what I'm working with each month at a minimum. I will take home ~$32,628 NZD this year and have a minimum of $2,509 per month of income. 

Budget categories:

• Rent - fixed; $10K annual, 31% of my 2023 income
  
• Groceries - variable; $500/mo, 18%
  
• Internet/Electricity - both fixed (internet = $70/mo) & variable; $150/mo, 6%
  
• Eating Out - variable; $150/mo, 6%
  
• Charity - variable; $60/mo, 2%
  
• Cell phone - fixed; $35/mo, 1%
  
• Medical - variable; $100/mo, 4%
  
• Misc - variable
• Savings - variable
  

I've already covered my Rent, Groceries, Internet/Electricity, Eating Out, Charity, Cell phone, and Medical spending.

Today I'm focusing on my Misc spending.

Ahhh, this is where the real explaining has to occur. I have individual categories in this section (e.g. alcohol, fees) because spending in these areas is very variable but I don't want to put a specific number on each of them. Some months I don't spend anything at all in some of the categories. They will ebb and flow as they do: alcohol, entertainment, self care, fees, gifts, goods and wants (mainly physical items I buy outside of the grocery store, no matter their nature or purpose), transportation, and travel.

I budget $320/mo for Misc spending, or 12% of my income. Thus far this year I have spent $3,727.21 or $621 per month in this category, yikes!

Diving deeper, I have spent the following in each Misc category since January 1: 

• alcohol: $56.98
• entertainment: $30
• self care: $715.20
• fees: $5
• gifts: $806.53
• goods and wants: $1559.19
• transportation: $752.70
• travel: $0
  

Clearly, I need to watch my spending in the goods and wants catch-all and gift categories. I'm just in a really giving mood this year, I guess!

Honorable mention on the transportation and self care spending. Good to know!


Verdict: I will increase my Misc budget to $485 per month (18% of my income), watch my spending in the gift, goods and wants, transport, and self care categories and see how things shake out.

Monthly Savings is next.

Back to Basics: Medical

Inspired by Ramit Sethi's new tv show on Netflix, I'm going back to basics and reviewing my budget (or as he calls it, my "Conscious Spending Plan"). 

I've reviewed my income already, so I know what I'm working with each month at a minimum. I will take home ~$32,628 NZD this year and have a minimum of $2,509 per month of income. 

Budget categories:

• Rent - fixed; $10K, 31% of my 2023 income
  
• Groceries - variable; $500/mo, 18%
  
• Internet/Electricity - both fixed (internet = $70/mo) & variable; $150/mo, 6%
  
• Eating Out - variable; $150/mo, 6%
  
• Charity - variable; $60/mo, 2%
  
• Cell phone - fixed; $35/mo, 1%
  
• Medical - variable
  
• Misc - variable
• Savings - variable
  

I've already covered my Rent, Groceries, Internet/Electricity, Eating Out, Charity, and Cell phone spending.

Today I'm focusing on my Medical spending.

I only budget $50/mo or 2% of my income for this. It includes $25 prescription fees, doctor co-pays, dentist check ups and cleanings, ADHD appointments and meds, and other medical fees. Without calculating anything, I already know it is not enough as I spend that much on dentist appointments alone!

So far this year I have spent $406.50, or ~$81 per month.


Verdict: I will increase my Medical budget to $100 per month (4% of my income). I have a lot of health stuff going on, and will only be spending more as I get older. 

 

Next I'll go through my Miscellaneous spending category - another doozy.

Back to Basics: Cell phone

Inspired by Ramit Sethi's new tv show on Netflix, I'm going back to basics and reviewing my budget (or as he calls it, my "Conscious Spending Plan"). 

I've reviewed my income already, so I know what I'm working with each month at a minimum. I will take home ~$32,628 NZD this year and have a minimum of $2,509 per month of income. 

Budget categories:

• Rent - fixed; $10K, 31% of my 2023 income
  
• Groceries - variable; $500/mo, 18%
  
• Internet/Electricity - both fixed (internet = $70/mo) & variable; $150/mo, 6%
  
• Eating Out - variable; $150/mo, 6%
  
• Charity - variable; $60/mo, 2%
  
• Cell phone - fixed
  
• Medical - variable
  
• Misc - variable
• Savings - variable
  

I've already covered my Rent, Groceries, Internet/Electricity, Eating Out, and Charity.

Today I'm focusing on my Cell phone spending.

I budget $35 per month for this, or 1% of my income. This includes my $17/month pay as you go cell phone plan at Skinny and Skype To Go and Skype Number expenses ($69.50 USD per year). 

So far this year I've spent $113 on my cell phone ($22.60 per month) and $69.50 USD on my Skype. I'm OK with this level of spending but really thought I was only spending $17/mo on my cell phone plan, not $23). I will keep an eye on my top ups. 

 

Verdict: The $35 per month covers my expenses and allows for emergencies so I'll keep it the same.

Next I'll review my spending in the Medical category.