I've finally gotten my housing assignment for next year, so my rent is a known quantity and its time for me to start setting up my budget. I've given myself budgets in the past, to variable success, but I'm determined to stick with it this time.
The primary challenge to my budgeting process is that I don't know what my tax situation is going to look like. I have a stipend, but nothing will be withheld from it as far as I know. In addition, my fellowship package technically includes my tuition and some university fees that are paid without me ever seeing the money. Do they count as income? Will I have to pay taxes on it? Right now, I have no idea, so I'm just picking the tax bracket that I technically fall into if my stipend were my only income and removing a flat percentage before I start budgeting. If I wind up with extra money at the end of the year, hooray! I'd rather be cautious this year until I figure everything out.
Post-taxes, this is how my budget will break down, percentage-wise.
- For the first year or two, most of this will go towards an emergency fund. My current savings will roll into the base of the emergency fund, and then I'd like to double the amount that I have right now.
- I'm also going to start putting away a little bit of money into general savings (which will eventually become a retirement account) and a future-house fund.
- My rent is about 42% of my total budget every month, although utilities (water and electricity) are already included. I do have to pay a $29 internet fee every month, though. I'm living in university-owned housing, which means I can live close to school without paying the higher rent that the neighborhood can command. I'm also purchasing renter's insurance through my parents' home insurance.
- I'm budgeting $200/month for food. I wish I had kept track of my food costs last summer (I lived in the same neighborhood during an REU) so I could know if this is reasonable.
- I plan to set aside a little bit of money every month to cover what I'm calling "career costs" - books, computer programs, dry cleaning for conference clothes, stuff like that.
- This is the category I'm most worried about sticking to. On the one hand, this percentage feels small compared to my other categories and recommendations I've seen online. On the other hand, the actual dollar amount is well above what I've spent on myself every month during undergrad. On the other other hand, my parents helped me out sometimes and won't be doing that as much anymore. So yeah. Nervous.
- I'm including any eating out that causes me to go over my $200 "Needs" food budget.
I'm sure I'm going to wind up with some serious Wants-Vs-Needs analysis going on, especially the first semester. Right now, my plan is pretty strict and my needs are almost entirely limited to food and shelter. But I don't want to compromise on giving or saving, either. The former category has been important to me for a while now, and the latter needs to become important for the future. So I will make this work. Somehow.