Realistic Budget Goals for 2019

I'm going to tackle my various goal categories post by post. As money is so on my brain with the increased spending, both planned such as Christmas and daughter related costs, and unexpected, the car and dryer, I'm going to start looking at finances first. One thing I decided I should do, is reverse the way I have been setting goals, and start with the probable, instead of the possible, and then being disappointed when I came up short. I tallied all our known expenses, reviewed average spending in categories that are seasonal or cyclical, divided those out as well, and have a total as to what I think regular life should cost. I also went through DH's past year of net take home, threw out the top three months to be conservative, and then came up with a monthly net average using just nine months. If he has 2-3 anomaly months, that will just help our situation. Subtracting monthly expenses and prorated cyclical, we should average $1,800 more in take home than expense each month. I have three paycheck months twice a year, so those months boosts would come to another $3500. As last year, I should hit my 401 K max in October, so should have at least five pay checks with a sizeable increase in take home, but to be conservative as I am not sure how tax laws will impact us yet, I'll estimate $4,000. Before directing this savings towards any priorities, net reserves are $29,100 cumulatively for the year. I want a stretch though to push myself to skinny down line items in our spending whenever possible, so going to round this out to an even $30,000. 

We don't have the final estimates on college yet because she hasn't made a decision nor have we received final scholarship notice, but what I estimate we will still need to cover through cash flow over the next four years will be between $70,000 and $83,000. To simplify, I'll use the higher figure, and round to $84,000, or $21,000 per year, less her first year, but adjusting for tuition increases gradually and inevitably by year four. I haven't adjusted down day to day living expenses that fall off our budget. Call me ignorant and not proactive, but what we have put aside for college, was only 1/3 of what we now estimate college will cost. Without tapping into our 6 month emergency fund, a non-negotiable, we should be left with $8,100 for anything else. We still will be putting into a what I now will refer to as the "crash and burn account" for car and household emergencies, separate from enhancements and upgrades. We also will be expecting our daughter to contribute to some of the costs not covered by scholarships, but included in the full cost of college, so the $21,000 is based on only parent payment's, and will decrease as we determine her responsibility, most likely books. Spending money above her meal plan is on her as well, but the estimates I am using are only tuition, room, board, books, and assorted required fees..

Roughly-Here is where the $29,100 will go.

College		$21,000
Show Choir Trips		$1,970
Graduation Party		$900
Move in Weekend Trip		$175
Parents Weekend Trip		$175
Choir Concerts Trips		$350
Home Improvement		$5,430
Total		$30,000

Risks in the plan:

• Even with being conservative and taking out DH's high earning months to calculate the average, his job in the current location is precariously vulnerable right now. 
• While most of what we want to put money into for the house is cosmetic, we are leaving very little reserve should something major happen.
• Living so close to the financial edge is straining. I legitimately am worried about our mental health, and our relationship in making sure we both keep the big picture in mind in months that are extremely tight.

Opportunities to enhance the plan:

• There are no side schemes in this plan at all for earning new money or rewards. If we can get creative, there are opportunities to earn side dollars that off set items in the plan such as meals and gas money for the trips, or towards home improvements.The $900  extra savings I hope to achieve in regular smarter spending.
• I did not put  a raise of any amount in this plan for myself. Historically, at least a 2% COLA has been giving in July. If that happens, there is an opportunity for growth. 
• While this plan limits us putting more in the Roth IRA for the next four years, between my self funded portion of my pension, and our 401K contribution, we are putting aside 28% of our gross income into long term retirement, keeping that plan on track. 
• We could skinny down several of the monthly budget/account set asides if we choose to try and increase our rate of savings. Areas such as household and groceries, entertainment, and gift giving while not spend hearty, they are far from austere. 

We have a six month emergency savings account, based on a non austere monthly budget. We have funds in three other savings account that have been held on to for a long time, available should the worst or potentially the best things in life happen that require a large chunk of money. We truly see those as separate, and not even part of the year to year save /spend equation, but it gives me more piece of mind. Overall, considering where we have saved the last few years, this seems much more realistic. I started with the probable saves and built the budget based on that, compared to the reverse. I'll be back to this subject in early February to share progress report number 1.