What Should Your Monthly Housing Costs Be?

housing costsHow much of your salary should you be spending on housing costs? What do you actually spend? We decided to devote a post to this topic after seeing an interesting discussion about readers’ rent/mortgage payments as compared to their incomes.

Before getting to specifics about housing: The general 50/20/30 rule for budgeting is still commonly accepted advice. The guideline was made popular by Senator Elizabeth Warren (who happens to be a bankruptcy law expert) in her book All Your Worth: The Ultimate Lifetime Money Plan. As described in this LearnVest article, you should:

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Tales from the Wallet: What to Do When You’re Facing “Frugal Fatigue”

frugal fatigueHow do you prevent “frugal fatigue,” also sometimes called “savings burnout”? It’s that feeling that you’ve been scrimping and saving and you have no money and the debts are still there and you’re not getting anywhere and dammit you just want to not think about it and buy what you want for a little while? I know readers have talked about this, and when I was writing the post about my budget spreadsheet, I realized that I have another spreadsheet I use also that, for me, prevents this kind of frugal fatigue: my “snapshot spreadsheet.”  This is how I personally prevent frugal fatigue, but I’m curious to hear from you guys — ladies, how do you prevent savings burnout? Do you rely on Mint or YNAB to give you an accurate picture of your net worth? How do you track net worth changes? Do you have similar ways of recognizing and patting yourself on the back for major monetary accomplishments, like debt payment or saving? (These particularly are helpful in guarding against savings burnout!) 

Pictured: Vera Bradley Georgia Wallet, $98 at Zappos in six colors. Love the fun inside lining! 

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Tales from the Wallet: Leave Room in Your Budget to Take Advantage of Sale Prices

leave room in your budget for salesI just saw a great study on this, so I thought we’d discuss — do you leave room in your budget to take advantage of sale prices?  Do you do it in a disciplined way (“I have $300 to spend for fun purchases, no more!”) or is it just part of your budgetary cushion? Which sales do you splurge on? 

This seems like a great follow up on our recent post about how to make a budget: Of course it’s great to be aggressive with your savings, student loan payments, and investments — but be wary of trying to live on too tight of a budget if you don’t have to. Probably the biggest long-lasting effect the recession had on my money habits is that I leave enough room in my budget for unexpected sales on household items. When I’m in the grocery store or the pharmacy, I look for items with good sale prices and then purchase them even if we don’t need the item immediately (provided we have the storage space). The headline of the HuffPo article I saw about a relevant study says it all: “Poor People Have To Spend More On Toilet Paper Than The Rich: Study.” The study found that low-income households don’t have the cash to buy in bulk, so they end up paying higher per-item prices; the article also mentions that poorer people often end up paying more for “discount” toilet paper than richer people do on “premium” toilet paper. (A lot of readers agreed with me when we talked about everyday splurges: sale prices or no, life is too short for cheap toilet paper!)

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Tales from the Wallet: How to Make a Budget

how to make a budgetFor today’s money feature, let’s discuss living within your means — how to make a budget and stick to a budget. What does “budget” mean to you? What tips and tricks have you used to set a budget, pay down debt, save money and protect against lifestyle inflation — and what alarm bells have you used to tell you that it’s time to reassess? 

The No-Budget Budget

I’ve mentioned before that I don’t think every person needs to make a budget — there were years in BigLaw where I would automatically move my second paycheck to savings/investments, living entirely off my first paycheck (and auto-contributing to my 401k). That was enough of a “budget” to me, with no further thought. I knew then and know now I was lucky in those years, and I’m still so grateful for them — that simple decision has laid a great groundwork for me and for my family.

Pictured: MICHAEL Michael Kors ‘Jet Set’ Travel Wallet, on sale for 40% off in purple; at full price in several other colors.

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Stressed About Filing Taxes?

Stressed About Filing Taxes? | CorporetteLadies, we have a bit more than a month before (dunh dunh dunh) Tax Day. Are you done with filing taxes? (And, who is doing them?) Are you stressed about them? Are you looking forward to a refund? Are you nervous about how much you’re going to have to pay?

For my $.02, I’m just starting to get stressed. I’ve used an accountant for as long as I can remember, but this is the first year I’m trying to use a bookkeeper as well. (I’ve never actually used TurboTax or similar software for filing taxes — my father may have used that when he “helped” / did my taxes for me my first year or two out of college.) But after law school, a friend recommended an accountant to me — this wonderful, older gentleman who I really liked. I had a simple tax situation at the time, and his services were, perhaps accordingly, pretty affordable. When we bought the apartment in 2009, though, he nearly missed a major tax credit; thankfully we caught the mistake before we signed our taxes. When we started looking for a new accountant, we knew income from Corporette was making our tax situation more complicated, so we were ok to sign on with a fancier accountant who cost 4-5 times what my former accountant charged. (Something else I learned when I switched accountants: estimated taxes aren’t optional for business owners, which was something I understood after talking with my first accountant. Fortunately it wasn’t a big problem since the extra income was so small back then, but it really drove home how much the first guy was hurting more than helping.)

Every year since signing on with my new accountant, he’s sent us a huge “Tax Planner” PDF as part of filing taxes. It’s about 50 pages long in tiny print and asks a zillion questions, and it’s always taken me hours and hours to complete. This is the first year I’m trying to outsource the tax planner to a bookkeeper; my hope is that my reviewing it will take a lot less time than my doing it. (Gotta delegate, right?)

In terms of actual taxes, April 15 is usually pretty rough as a self-employed business owner because my retirement savings are due, to be invested in one huge chunk, usually; final taxes for 2015 will be due, which may be higher than what I paid the previous year in estimated taxes; and the first chunk of estimated taxes for 2016 will be due, using new numbers based on my 2015 taxes. Those are three unknown numbers — and in the past we’ve had some nasty surprises where I needed a lot more in cash on April 15 than I had set aside. (Hooray for the emergency fund!) Now, after paying work-related bills, I earmark about 40¢ of every dollar I earn for month-to-month living expenses, and save the rest in Ally accounts that get 1% interest for taxes and retirement. I’ll breathe a happy sigh of relief should April 15 come and go without too many surprises.

Ladies, how about you — do you do your taxes by yourself? Do you consider them complicated or easy?  How did you find your accountant? 

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The F@#$ Off Fund

the f-off fund -- a discussion with professional womenSomething that everyone seems to be talking about is the concept of the “f$*@#$ off fund” — the original piece in Billfold went viral, and I’ve seen it popping up everywhere in conversation from FreeKesha stories to the discussion of that Yelp employee who got fired after complaining about her salary publicly (here’s Ask a Manager’s brief link to get you started on that drama). For those of you who haven’t yet read it, in the article, a hypothetical woman has to stay with an abusive boyfriend and a sexually aggressive boss because she doesn’t have the money to leave or quit. Here’s the core of the article, but note two things: a) the original is worthy of the 6 minutes Billfold helpfully tells us it will take to read it, and b) warning: language ahead.

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