Nonprofit program director: My budget and planning for the future

My name's Kelly Peaton. I'm Director of Education and Workforce Development at the Silicon Valley Organization Foundation. My annual salary is $110,000. My relationship to money probably comes mostly from my parents. My parents were really big on avoiding debt and on me avoiding debt. I think they'd seen friends and family rack up student loans or credit card debt and it'd be really limiting. So I'd say that's probably one of my primary motivations in relationship to money, so I'm a big saver and I basically try to save a lot, but also I'm not particularly good at budgeting. I'd say probably one of my pitfalls in terms of money is that I don't necessarily set up categories and be really strategic about how much I spend on certain things each month and keeping up with it. I don't have any student loans. Again, my parents were big on me avoiding student debt. Florida has a great tuition program. It's called Florida Bright Futures, and if you have a certain GPA and do a certain amount of volunteer hours, then you get the Bright Futures Scholarship which covers in-state tuition. They also had, my parents also invested in Florida prepaid, which is a savings plan for college that they invested in with the help of my grandparents. And invested when we were very young, when we were babies and that helped cover cost of living and other things related to college so I graduated debt-free from undergrad. And then for my Masters, I got a Teach for America Public Service Fellowship to the Harvard Kennedy School, and that covered tuition but it's a public service fellowship so it requires that I work for the government or a nonprofit organization like this one for three years upon graduating, and I really support these types of public service fellowships. Lots of schools and universities do them to make it easier for people who are interested in public service to go ahead and get higher education but still do these types of roles. I also got an AmeriCorps education award as part of the Teach for America program, and that covered, that helped cover cost of living while I was doing my Masters program. Annually, my take home pay is $110,000, so monthly that works out to $9,167. So each month, out of that comes taxes and other deductions totalling $4,326. So part of that is taxes, both federal and state and California is a pretty high-tax state, but also out of that comes savings to my retirement account and I deduct the maximum that you can into your retirement account each year. And also part of that is deductions to a health savings account, which is a tax advantaged account that you can put money into to pay for things like copays and other healthcare related expenditures, but there's caps on how much you can contribute each year. So after taxes and retirement and other deductions, my take home monthly pay is $4,841. So first out of that comes rent and I pay $525 each month in rent which is really great for the Bay Area, but I share rent with my fiance and we also have two roommates so that helps keep costs low. Then utilities are $60 a month for the electric bill, internet is $75, and that also includes our streaming services like Netflix and Hulu, and then phone is $50 a month. The car payment which is also shared with my fiance is $560, and that covers the lease payment, as well as insurance and electric charging cause we have an electric, not a gas car. I have zero dollars in student loans which is very nice and then my food bill is pretty high, it's about $460 a month, it's partly cost of living, also partly how much I like my coffee. And then in terms of entertainment and restaurants, I spend about $220 a month. So left over after all of that is $1,958 and each month I put at least $500 away into a savings account, so that leaves about $1,458 left over to get spent on different variable expenses, travel, gifts for people, and money that doesn't get spent goes into savings. I'm not a big budgeter. I've tried many times but I'm not pretty good at sticking with tracking and categorizing my spending, so sitting down to do my budget was a bit of a process. I knew that I spent a fair bit on food and restaurants, but didn't realize quite how much I'd been spending. So that was probably one of the big surprises. One of the good pieces of advice that I've heard and is true, it's really easy to raise your standard of living without you noticing. It's easy to get used to monthly manicures and pedicures or get used to three dollar coffee every morning, and to sort of have your expenses rise without you noticing and then feel like you can't dial it back down. So I'm glad that I had that piece of advice and to sort of not let my expenditures rise without me noticing, and to also think how I spend and prioritize it around my goals. Actually being intentional around well I have a goal of travel and seeing my nieces and nephew, so that comes first. So taking money out of your paycheck so that you don't, it doesn't feel like a loss. I think that that is probably one of the things that lets me not budget super closely is that I automatically save for retirement. I automatically put money into a health savings account. I automatically directly deposit money into a savings account, so that the money that I actually see, as money that I get to spend, is actually like the money that I have to spend. All of the savings and bills and things, they happen sort of without me seeing it. And I try doing that as much as possible, like automating having the money just go directly into your savings account so you don't even see it, you don't feel like it's a loss.