Howdy Mustachians! I was sent here by the good folks at reddit to perhaps have you punch me in the face (not too hard I hope!) and let me know if I'm on the right track.
I'm not the most educated on money matters, my parents grew up extremely poor and so did I... I'm the first person in my family to have a degree, and a job that isn't blue collar work. I will do my best to answer these questions with detail, and certainly add details as you guys tell me bits I forgot. Anyways, the point is, I've done a lot of self educating to get to this point, and I know I have a longer way to go still.
Life Situation: IRS filing status is Single, no dependents tax wise (a situation that might change in the future, but for now is none), USA in North Carolina residing currently. I work as a nurse (RN, BSN) part time night shift.
Gross Salary/Wages: I honestly don't have a full picture of my gross wages. Based on my paychecks I should expect to earn at least $28,000 net. Last year I worked full time most of the year, and this year I am part time so my taxes are not a good source to go by for me. I make slightly different amounts depending on if I work weekends or not, and I work 2 days a week and occasionally pick up extra shifts (which I will explain more down further).
My base pay is $26 an hour (this is fairly new to me, just got a raise). I get a $4/hr differential for working the department I do. I get an extra ~$3.50 an hour for night shift work. I also make $3 an hour on the weekends.
Individual amounts of each Pre-tax deductions: I currently have a % of my paychecks going into a 403B through the hospital. Currently, I have $5,808 in that account. I have $1,300 in a standard IRA that I got when I left the service rolled over, and I have $1,394 in a roth IRA both through USAA. I, back in the day, dabbled in buying a single google stock and mostly forgotten about it until very recently and now that individual account has $2,316 in it. I believe it to be on auto pilot buying a stock as it can.
Other Ordinary Income: So, I also receive a monthly check from the VA for my hips in the form of $250 a month. My job pays me $46 after taxes a quarter to be in good health. Each paycheck I receive from work is in the $1,200 range. Sometimes $100 less or more.
I also have the option to pick up shifts if I should need them, options for overtime, and sometimes signing shift contracts (basically, I sign up to work 6 shifts on a floor and get paid $1200 to do so.)
Qualified Dividends & Long Term Capital Gains: I really don't know if I have anything like this yet. My taxes auto import some of this, but I don't think the amounts are of any significance at this time.
Rental Income, Actual Expenses, and Depreciation: This is something that could be a factor in the future for me, but currently is not.
Taxes: I'm poorly educated on taxes, but I have never owed back taxes, and I always get refunds on my tax returns and file them yearly. I do have state taxes living in NC. I don't do any exemptions on my taxes because I'd rather get a larger tax return than accidently find myself owing taxes for whatever reason. My last paycheck read as such:
Gross pay: $1,857.58
Fed tax: 177.89
FICA: 141.21
NC State: 74
Long term disability: 2.92
Short term disability: 4.16
Dental: 11.76
403B: 185.05
Net pay of the paycheck: $1,260.59
Besides this set up, I also have an emergency fund ($3,600 or 3 months worth of comfortable living should I somehow lose my job, but they love me there so I think its alright) and I have quite a bit in savings ($32,000). This I have not invested or done anything with, because it is to be a downpayment on land. I will detail this further down.
Current expenses: I don't have many, but I have some in store in my future. Anyways, this is how a month looks for me right now.
Rent - $300 a month. I split it 50/50 with my partner of 4 years. We live on 100 acres in a cabin from the 30's, and this covers the taxes on the place. I call it rent because we're not married, it is in his family and his, etc.
Propane - $50 a month. I usually pay this in the summer when propane is cheaper, and all at once (then I save up for the next year monthly), but it comes out to $50 a month for the propane tank rental and enough propane for a year. My BF pays electric. We don't have water because we have a spring box. We also don't have trash service, we try to make as little trash as possible, burn what we can, compost, and typically I'll throw away 1-2 shopping bags worth of it downtown on my way to work once a week.
Home repairs - We split these when they come up or we foresee them to come up soon. My BF will come tell me what it is, how long it may take, and what I can do to help. He's a handyman and mechanic so that helps a ton. I tend to pick up a shift to pay half for whatever it is if it is expensive, or I just use my entertainment money if it is inexpensive. This house is a workhorse, but to give an example, our well pump went out (that pumps our spring water from the cistern to the house) and while it took us a month to slowly dig up the cable, find the issue, repair it well, and put everything back together (and do some other work while we're at it) the cost was not very much. We just used a sump pump and put it in a bucket in our creek on the property and pumped water right into the house through a garden hose to bathe and flush the toilet while we worked on it. If we can fix it ourselves, and well, for not much money, we absolutely will.
Household expenses - $10 a month. I actually made a post about what I spend on this over on reddit, but I am quite frugal with this and mostly use the basics like bleach and vinegar and soap to clean my home, don't use many paper towels, etc. Toothpaste, soap, shampoo, etc. it all fits in here quite nicely. As I said before, I live in an insanely cheap area.
Food - $40/week or ~160 a month. This is for EVERYTHING--restaurants, cooking, drinks, parties, pot-lucks, etc. I am a small person, cheap to eat where I live too. I've always been frugal with my food since I grew up that way, and even though I am more adventurous and eat a much wider variety, it is just insanely cheap where I live.
Cell phones - $98 for 3 lines + 10 gb of shared data, of which we never use all of it but do come within a gig some months. My parents live on a fixed income, and I pay for their phones so that I can keep in touch with them. We have Verizon, and I live in a very rural area so Verizon is the only thing that works in my area. Still, it is cheap for 3 lines worth I have found.
Netflix - $6 a month, split with the BF. We don't own a TV at all, but we do watch netflix a couple times a week at night.
Amazon prime - $5/month or $60 a year now with the price change. I split this with my partner as well. As we don't always go into town, and I live far away from many nieces and nephews and my entire family, this has really helped when it comes to sending my parents something they need last minute, or christmas, etc.
Car: $240 a month. I own my car, a 2007 chevy cobalt I bought when I first got back from Iraq. I keep on top of the maintenance and repairs of it. I budget gas as if it were $3 a gallon (it isn't, but gets really close sometimes) and budget for 5 fill ups a month (or $175) since we have a long commute into town, and $63 a month in insurance. If my car needs repairs, I pick up a shift or two to cover them. If it needed major repairs that were really expensive, I'd use some of my emergency fund and then pick up a contract on a floor to replenish my fund.
My nephew: $60 a month. Long story short, my sister sucks, and she is a bad person. My parents and I came together in regards to my nephew, and they agreed to care for him full time as they are retired, but as they don't make much money I give them money to help care for his needs as well. This can sometimes fluctuate, and I'll dip into my entertainment money if it costs a bit more here and there, but $60 a month is pretty comfortable for letting him do the normal things for school, dentist visits, after school activities, clothes, field trips, etc.
School: $60 a month. My favorite thing besides traveling is swordfighting. Been doing this hobby for a while now, and my school is a non-profit, veteran friendly community that makes me feel at home here in NC.
Healthcare: $10 a month. I only pay a small copay at the VA where I get all of my healthcare.
Spending: $100 a week except the first week which is $50. As many of my first-line-of-defense budgeting involves dipping into this, I keep a good amount available each week. As I said, if things are more expensive than normal, or my paycheck is a little lighter, something happens, this is the first thing to go for me, and doing things by the week is helpful for me to stay on track. If I don't spend anything that week, I put it aside for a while and wait to see if anything should go wrong (car repairs, house repairs, etc.) to avoid dipping into my emergency fund. After a while, I stick the 'older money' into savings. But I do still go out and do stuff, and I have a lot of hobbies and get-togethers with friends and the like. While I have tried other things (like trying to foresee events, or activities, etc.) I found I was less able to keep up with budgeting that way. This flexibility and quickness to adapt with a weekly amount like this just helps me stay on track more consistently than I ever had with budgeting before.
Internet: $0. My boyfriend works for the company and they get free internet as a perk.
Vacation money: $100 a month. I like to travel (I go to Texas twice a year to see family, go to a new country once a year, and several smaller states and events for swordfighting) and I find that if I plan a big trip I just work extra shifts to cover it, but this little amount aside helps me with the rest.
Total: ~$1,450 a month. My first paycheck is $1,200 + 250 from the VA covers my entire monthly spending pretty comfortably.
My other paycheck, $1,200 a month, goes into savings straight away.
I don't have a mortgage at all, or PMI, or anything like that.. but I will soon. I aim on buying a small plot of land in Texas. Part of that is because I travel there often, but more importantly, my parents don't live in the greatest area nor in a very nice house (read: it is awful... liveable for now, but in their health, not for very much longer). They have awful credit, but this isn't due to them being the worst with money, it is due to a lot of medical financial trouble and losing both their jobs all at once back in the day.. we've been slowly crawling out of this hole, and the 3 of us have worked closely with this. I'd like to have some land of my own (I mean, I love my partner dearly, but who knows what the future holds) and my parents could afford a nicer home on land our family owns (read: me) vs paying the landlord in the middle of nowhere right now.
This is why my $32,000 is in savings and not being invested somehow right now. I know I'll need 20% down (because it is not a primary residence for me, and I don't live in texas right now) to purchase the land. We've got a budget of <$150,000 for everything because this is what they would be able to afford to pay in mortgage payments comfortably with their income. The agreement we have is that they will pay me rent in exchange for buying the land myself. I live fairly cheaply, and if something drastic were to happen I could afford the land payments from afar, but we've been working on and brewing this plan for a long while and I'm excited to be able to help my parents live in a house suitable to live in for a change. We hope to put a renter on the property as well to help pay off the land much faster, but we haven't even gotten there yet. (I know not everyone has good relationships with their folks, or money, or anything like mixing those two... but we've all always been close, and honest, I've been part of their finances for a long while, and we've been working together openly for a long while, so as reasonably as anyone can imagine I don't fear being screwed over by my folks.)
As far as where my full-time money went, savings mostly, it also went to things we needed in my family at first, and then things that I needed. Then it went to my emergency fund, and some to myself being a moron and not knowing what lifestyle creep was.
Expected ER expenses: I wouldn't know where to begin on something like this.
Assets: I don't believe I have any besides everything I mentioned above like my savings and emergency account. I do have VA resources should I need them for anything.
Liabilities: I have no debts at all, not from school or otherwise. I will when I finally purchase land though.
Specific Question(s): How am I doing money wise? It has taken me a long while to get to where I am at, and I had to do some of it without the real assistance of the internet because stuff like Reddit was just starting to exist when I turned 18 years old. I know there are things I just have trouble understanding, particularly with taxes and things like that, but I do my best to stay far far away from debt, frivolous spending, etc.
According to MMM's simple calculations for retirement, entering $8k into my assets (for my retirement account + my two IRAs.. I'm not counting my savings until after I purchase the land, and I am not counting my emergency fund) and these numbers, it is saying it will take me 22 years to retire at my savings rate of 38%.
On the one hand... my lifestyle is a sustainable one, and I really like it right now. I am comfortable, which is something I was not for a long time... we were all homeless at one point, and it has taken a lot to figure out how to get here. Now that I am here, enjoying life, and seeing the world, and all that, I am also realizing I really don't want to be a nurse for 22 years! While I know I could retire much faster not buying land... that just is not an option. My parents need a place to stay, and a place for the kid to grow up in, and I could not live with myself if I didn't do everything in my power to help the people that have helped and supported me and mine my whole life.
I know I'll get more raises as I continue to work, and we do have some plans to make our land work for us vs just paying for it every month to free up our pocketbooks some and these things are in the works.. and I believe with the exception of the initial push money wise for a downpayment, my land will be paying for itself slowly but surely. But none of these are things I can 'rely' on as they have not happened yet!
For those wondering why I dropped to part time... it's a 3-way reason: my hips are chronically hurt from my time in the service and it takes its toll to work many days in a row. I also have a love of many things like volunteer work and such but these things don't really pay any money but require time--I found I didn't have time for them when I worked full time night shift because of the way the schedules fell.. and also, my BF is dayshift and works during the week and it is nice to have time to spend with him even on an opposite schedule. (dayshift is NOT an option for me.)
My current plan is: If I can up my savings by $300 a month, I can retire in 11 years vs 22! That would put me right at 42 years old. Not ideal, but definitely better than 22 years! I can be a nurse for 11 more years I think. Taking a single contract in a year's time is worth $1,200, and each of those shifts is also ~$300 each + with some overtime weight will put it in that $1400 a month savings bracket while not killing my hips in the process.
So, Mustachians, what do you think? Am I an idiot, what am I doing right or wrong, and is it feasible for me to retire in 11 years on a plan like this?
