So today we are talking about our budget. We love it. It is good for us. As I mentioned in "Choosing a Grad School", we drew up a budget before we even chose which school we were going to.
But before you have a budget...you need a source of money.
Now...if you are getting a masters, dental school, law school, or medical school, most of the time you are going to have to take out loans or have a company that you work for pay for it. There are scholarships too depending on what your field is, so don't forget to apply for those. After you have done that, figure out how much you qualify for and set a reasonable budget.
**Hint..if you are still in undergraduate and you don't need loans, get the subsidized loans if you can. The interest rate is 0% which is way lower than the graduate school loans. Also you still won't have to pay interest until you are done with your education.**
If you are getting a Phd, the school is probably giving you funding. I don't know of any Phd programs will not give you money to live. It might not be much, but at least it's something. Some schools give you plenty to live on. Some like Princeton give you enough to scrape by, and others you might be eating ramen every day of your life. Another thing to check is if your funding is for the full year or not. At Princeton, Matt's is full year, but for our friends in humanities, theirs are just for 9 months. It doesn't have to be a big deal, but it's something you should know.
And that's it for getting money.
And now for our budget! Tada!!
From Matt's stipend, we get $2,400 a month (after church tithes).
Rent is $984, which leaves us with $1416.
We decided to split the $1416 in half.
Matt and I each "get" $708. We each have our own responsibilities with our portions.
Matt's responsibilities are to cover utilities, health insurance, renters insurance, car insurance, life insurance, and long term debt. Whatever is left over goes to long term savings.
My portion is the more traditional budget. I have to cover food, clothing, gas, activities, and other small bills and purchases. If there is any remaining, it goes in short term savings account.
Long term saving is money that we hope we don't need to touch. If we ever have a catastrophic event (like major car repair, major hospital bills, or large increase in living cost), then we will dip into our long term savings. Otherwise, this money is off limits, and we keep it in CDs just to make sure we really don't touch it.
Short term savings always has $1,000 in it, in case of any medium expenses, like a computer or new tires. Anything over that is fair game for any large non-essential purchases or vacations. For example, our piano came from short term savings.
So breakdown in numbers...
Matt Me
Utilities: $150 Photoshop: $23
Health insurance: $85 Amazon Prime: $6
Life insurance: $22 Food ~ $200 a month
Car insurance: $102 Gas ~ $80
Renter insurance: $24 Baby supplies ~ $50
Student loans: $120 Clothes ~ $60
Car: $0!!! (paid it off!) Activities ~ $180
Misc - whatever is left over usually
Total: $503 $708
So usually we can put $200 in long term savings and on good months about $40 into short term savings.
Miscellaneous really kills any chance of saving large amounts into short term. This month we needed a new cutting board since our other one split, a new dust pan, drop off dry cleaning, and our knives needed to get sharpened. Oh and I kind of drove to DC. :)
This budget has worked really well for us. We very rarely fight over money, and while our budget may seem tight, it actually gives us quite a bit of freedom. We do to have to make choices, since we can't have everything, but in many ways these limitations have been a blessing. It's kind of weird to think that I actually mean that, but I really do.
By having limited money, each major purchase or change to our budget is carefully examined by both Matt and me. We look at our long term goals. We look at our short term goals. We talk about what we can and cannot live without. We look at different possibilities and then very carefully make our decision.
This process has drastically changed our goals and has enriched our marriage. Our communication is better. We are more creative. We have the opportunity to frequently discuss each other goals and dreams. It has made us more grateful and less stressed.
I'm going to be breaking down my portion of the budget in the next few post in this series.
Let me know if you have any question. :) I really love talking about this stuff.
The Grad School Family Series
Our budget
Buying furniture and clothes
Menu planning and food management
Shopping for food
Affording a baby
Entertainment
Making friends
Family Time
Travel
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