I’m 3 paychecks into the new job, and I’m starting to realize exactly how this lower pay is going to affect me. So, let’s talk numbers, shall we?
I knew before I accepted this job that if I was going to survive on $12/ hour I’d need to shift to a bare-bones budget. And really, I mean bare. No more dance classes in the budget, no more eating out (unless I include it in my groceries budget), no more miscellany. Even after cutting all that out I’d still be short. So I made the decision to take out my “irregular” line items from my budget….like license plates, car insurance, renters insurance. I’m obviously still going to have to pay them, but when I do they’ll have to come from my savings. [sigh]
And guess what? I was still short.
So I started thinking…maybe I should pay off my car?
Now, paying off my car would free up $229.50 each month. However I would still be about $180 beyond my means (meaning 4 paychecks wouldn’t cover my remaining expenses and I would still have to take money out of my savings to make it each month). On top of that it would also drain my savings by about $7,800. The only thing that has me leaning towards paying it off is the psychological benefits…..1) it would feel better only taking $180 or so from my savings each month as opposed to $400+, and 2) it would feel GREAT knowing that I was finally rid of my car loan!
(Side bar: I was looking at my car payoff information and I noticed that they have my last payment date as 5/30/14. Which is 5 years after my first payment. That would all be fine and good except for the fact that I’d made a $500 payment last year….what happened to those two months it should’ve knocked off my loan?!!! Definitely looking into that…I don’t want to be robbed of my $500!)
For those wondering about the state of my savings, I currently have about $31k left, so taking out $8k would still leave me with about $23k. Which should be fine….
So, before I leave you all, here’s my “final” budget (with my car loan still in there):
|Utilities||$ 100.00||$ 1,200.00|
|Groceries||$ 150.00||$ 1,800.00|
|Internet||$ 45.00||$ 540.00|
|Cellphone||$ 40.00||$ 480.00|
|Gas||$ 150.00||$ 1,800.00|
|Car Loan||$ 229.50||$ 2,754.00|
|Student Loans||$ 167.25||$ 2,007.00|
Oh, and a few footnotes….
- The above assumes a 4-paycheck month. 5-week months will be a nice little bonus.
- Yes, my rent is high. And I’m planning on moving to a smaller, cheaper place as soon as my lease runs out….which is in August.
- There’s the occasional chance that I could get paid for overtime. However they only pay it on a per-project basis, so I’m not going to count on any of that. Bottom line is I need to budget for the worst case scenario, and this is it. (I hope.)
- I need to negotiate my internet bill….
So, what do you think…..should I pay off my car loan?