I Am That Girl Now

Wednesday, March 15, 2006

A bit of a quandry.

There's a lot of good happening of late: my mouth is healing nicely, my Hub is coming to terms with not feeding me meat, and he's also continuing to chug along the C25K plan. Very, very, very good things.

On the down side, I'm pulling my hair out over finances.

I'm currently working on the budget, and I've got everything in a nice little Excel file. Post-taxes, we're putting 15.28% of our income into savings, 9.08% into insurance of some kind or another, 18.33% into debt-payment, 4.17% into food, and 35.55% into rent and utilities. (Those of you keeping count will note that there's a bit over 15% left: that is to take care of absolutely everything else.) I'm kind of pulling out my hair, because we've reached the point where we have no more wiggle-room. We've cut our "everything else" budget down over the past few months, we've cut our food budget in half. And yeah, it's enough for right now, barely. Problem is, I'm trying to think ahead, and I can't see any way that this budget would be able to handle us having a kid.

And Jesus, this is just me thinking about a baby, much less looking ahead to school and camp and saving for college. I have been assured by many people that "you manage, somehow," but "somehow" is not the answer I'm looking for. I have to figure out how.

The big item on the chopping block is our current apartment. I love our neighborhood, love it dearly, but the hard facts of the matter indicate that we're going to have to squeeze about $200/month more out of the budget, and rent is the biggest expense we've got, and there are rumblings that the rent is going to go up this year because the neighborhood's taxes are skyrocketing. If the rent goes up, we absolutely cannot stay. If we need to move, I'm thinking that we're going to have to find some kind of absolute steal in terms of rent, or find a cheaper neighborhood. And frankly, finding a cheaper neighborhood with easy El access and a decent reputation is not a simple thing.

I'm frustrated. If it was just me, I know exactly what I'd do: I'd find a cheaper neighborhood and if it meant I had to take a bus to get to the El, so be it. I'm trying to figure out how to open this up for discussion with my Hub, and I'm just no good at this. I'm such a sucker for him.

Anyone know any decent neighborhoods in Chicago where we could get a good 2-bedroom apartment for under $900? (The closer to $800, frankly, the better.) I only know a few neighborhoods in person, and this whole thing is kicking my ass.


  • Hey Meg, have you considered Evanston? I know, suburbs, ew, but it's on the Purple Line and there's a Whole Foods. :)

    By the way, my husband and I are thinking along the same lines and just discovered that our state is well-known for having the most expensive day care in the nation. Could we have planned that better? I don't think we could!

    By Anonymous Erin, at 8:38 AM  

  • I hope this doesn't come across as rude - talking about finances can be incredibly personal. But the things I notice are: 1. 35% of your budget on rent is Huge. That's one of the ways the government defines people's poverty level, is what % income goes to rent. You really wouldn't consider a large-ish one-bedroom with partitions or dividers?

    2. One of the things that helps that renter's strain is... buying. Because that will lock in your mortgage payment (and reduce the variability of the condo fee). Granted, right now is Not the Time to Buy, but if you can see that in the future (you say you're saving a good chunk) that will help a lot when you get there.

    3. It's not my place to say, but it is "my job" (i.e. I work in the retirement industry): please, please, please max out your IRA savings every year. I'd recommend putting into a Roth (pay taxes now and not later) if you can. With the recent saver's tax credit, the government pays you if you do so.

    Everyone has different financial gurus that they like. I'm extremely fond of Your Money or Your Life by Joe Dominguez. Your local library should have a copy. I think it will help you take the aggravation out of changing financial habits...

    Best of luck.

    By Anonymous Anonymous, at 8:44 AM  

  • I know, I know. It's a big percent. Would it make me look less like an idiot if I admitted that it wasn't until yesterday that I actually ran the percentages in my wee Excel file?

    Also, that's post-tax, and we've both got our public transportation and 401k and health care flexible savings stuff taken out before taxes, so it's not quite as dire as it could be. And our financial advisor has us both putting money into Roth IRAs, and we both have disability insurance, and now the life insurance is starting up... so we are being well and truly bossed around when it comes to our future finances.

    We can't actually buy a house right now, due to the fact that we only have about $5K in savings. All of our focus before this point was on paying off credit cards and dealing with the wedding (I still claim that we're ahead of the game for that one because we actually saved for it and not one cent went on credit cards), and it's only been over the past year that we've managed to really get things set up for savings-- not to mention all the things that our advisor has pushed us into.

    I know one-bedroom apartments are cheaper, but the problem is that I want to have room for a kid. This may, of course, be putting the cart ahead of the horse, and we are definitely considering one-bedroom options, but there's more at stake here than just having space for the two of us. I've been eyeing Humbolt Park and other stuff on the West Side along the Blue Line, where the rent is about $200 or $300 less than what we're currently paying. It's a thought.

    By Blogger Meg, at 9:01 AM  

  • Also, I just re-did the math to check on what the percentage is of our gross income, not the net income, and it's 17.64%. Which is considerably better.

    By Blogger Meg, at 9:06 AM  

  • WOW I'm glad I don't live on the eastern half of the contrey! In Portland OR. a two bedroom apartment (on the bus line in a nice part of town) runs from 450 to 650 (it goes up higher but thats for places that are quite fancy).

    Yeek! I don't know what advice to give you. Good luck.


    By Anonymous Kelly, at 11:28 AM  

  • You've probably already thought of this, but the other side of the budget equation to cutting spending is increasing income. Could you pick up a one-day-a-week part-time job? And it's ideal to pick something in retail where you actually do shop on a regular basis. There are a number of people at my local Trader Joe's who only work Saturdays or Sundays and they get discounts too. I work one day a week at a furniture store and the money I earn there goes straight into savings. It does leave less time for decompressing which might not work for you, but it is a thought.

    By Anonymous Anonymous, at 1:52 PM  

  • It's been a few years since I've lived there, but Rogers Park around the Loyola area is still fairly reasonably priced, is close to public transportaion and is an ok neighborhood.

    If you could manage to live in a large one bedroom, I LOVE Oak Park. A little pricer, but close to the El and a great place to live.

    By Anonymous Erin, at 11:24 AM  

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