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Thread: I need advise on a budgeting plan

  1. #1
    Veteran Member DancingDaisy's Avatar
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    Dizzy I need advise on a budgeting plan

    I have never been a good saver. I have an impulse buying problem. Iv been thinking about doing stripping full time and quiting my regular job. However I want this to be means to an end and I dont want to come out with nothing. Iv thought about stripping 4 days a week and going back to college the rest of the week. Probably about 2 classes onsite and 2 classes online.


    1) How much do you set aside every week for savings? taxes?

    2)What about a 401K plan?

    3)Should I be investing? Or openen a CD?

    4)Would you recommend talking to a financial advisor?

    5)If anyone has a recommendation for a personal tax preparer in Dallas that would be appretiated. PM me if you prefer (I dont know the actual name sorry)

    Alot of people get into the trap of having their living expenses go up as their income goes up. I fell into that trap with my last job when I got a significant raise. Im going to try and live as I always have been even with the extra money so I can save. No new car, no expensive clothes or makeup, same apartment, ect. I would just save the rest because I dream of owning my own business some day.

    Id love some advice from some women who have a plan.

  2. #2
    Banned Melonie's Avatar
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    Default Re: I need advise on a budgeting plan

    Based on some wild assumptions about your personal tax situation and your probable earnings potential i.e. $400 gross dancing earnings per night = $400 * 4 * 50 = $80,000 per year as a self employed single renter ...

    - your probable tax rate will be 15.3% for Social Security plus about 25% federal income tax. At the moment, Texas does not have a state income tax. Therefore, from every $400 night the first $ 400 * .403 = $ 161 has to be set aside for estimated taxes ( leaving $ 239 earned after taxes )

    - I would recommend setting aside 20% of your after tax earnings i.e. $239 * .20 = $ 48 for savings / investments ( leaving $ 191 in earnings )

    - after this, the next allocation needs to be for costs of living i.e. rent, utilities, food, tuition payments etc. If you are working 17 days per month on the average, and your total costs of living are say $1500 a month, that calculates out to $88 on a nightly basis ( leaving $ 103 in earnings )

    - if you want to start a retirement account, as a self-employed person your best bet is probably a Roth IRA. The maximum contribution is set at $5000 per year which calculates out to $ 5000 / 50 / 4 = $25 per night ( leaving $78 in earnings )

    - the remaining $78 * 50 * 4 = $ 15,600 per year is your 'disposable income', to be used for such things as car payments, health insurance premiums, and the occasional night out / vacation.

    As far as 'initial' investments go, the very best rate of return available is paying off any existing high interest rate debts you may have i.e. credit card balances, subprime auto loan etc. If you have student loans already, it may or may not be 'worth it' to pay these off ahead of schedule depending on the particulars of your specific loan ( gov't guaranteed vs private, low interest rate vs high, gov't guaranteed etc.). With $48 a night available for this purpose, the amount of time required to pay these off will depend on how much outstanding debt you currently have.

    After paying off any existing high interest rate debts, conventional wisdom says that the next area for 'initial' investments should be an 'on demand' bank account ... where the balance needs to be built up to the point of equalling six months worth of living expenses. Based on my $1500 a month assumption, this means $9000. With $48 a night available, it will take 47 weeks to reach a $9000 balance ( AFTER you have paid off any high interest rate debts first). You can also consider looking at CD's for a portion of the $9000 total ( like six $1000 six month term CD's with maturities staggered a month apart, plus $3000 in a 'demand' savings account) to squeeze an extra percent or two in interest earnings.

    Once your pre-existing debts are paid off, and you have built up a $9000 bank account 'emergency fund' balance, THEN you can start thinking about entering into more complex investments with higher rates of return.

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    Default Re: I need advise on a budgeting plan

    Quote Originally Posted by 2fly4awhiteguy View Post
    I have never been a good saver. I have an impulse buying problem.
    I have two bank accounts with the same bank. I can transfer money electronically between the two. As I'm a 'wage slave', as soon as my monthly pay check hits, I transfer what I want to save from my 'day to day' to my 'savings' account. I then make sure I live on what's left in the 'day to day' account.

    The 'savings' account I only use for contingencies, and every few months I transfer the surplus from it into a building society account which I try never to touch.

    I found the key was to put money into the 'savings' account as soon as it was available. It's still there if I need it, but it feels wrong to use it for an impulse buy.

    And the discipline of living within my 'day to day' account makes me think "can I afford this?" For example, I'm replacing some of the furniture in my front room. Before, I would have raided my 'savings' account and brought the lot at one go. Now, I spread the purchases over a few months and do it all from the 'day to day' account.

    Quote Originally Posted by 2fly4awhiteguy View Post
    4)Would you recommend talking to a financial advisor?
    The other thing you can do is set up a spreadsheet to work out your anticipated monthly costs. Then you can estimate what you're going to have to unavoidably pay out (bills, rent, etc). Subtract this from your total cash and you've got your disposable income.

    You can then divvy up your disposable income into 'spend this month' and 'savings'. Try and put the savings away ASAP (for example into a separate bank account) so you're not tempted to spend them.

    Quote Originally Posted by 2fly4awhiteguy View Post
    A lot of people get into the trap of having their living expenses go up as their income goes up. I fell into that trap with my last job when I got a significant raise. Im going to try and live as I always have been even with the extra money so I can save. No new car, no expensive clothes or makeup, same apartment, etc. I would just save the rest because I dream of owning my own business some day.
    Good for you.

    Phil.

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  5. #4
    Featured Member Laurisa's Avatar
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    Default Re: I need advise on a budgeting plan

    I think Melonie pretty much covered it all. However, I can share my specific plan with you as far as a savings account, college, taxes, and monthly bills goes.

    My monthly (approximated) expenses are as follows:
    $600 - rent
    $120 - car insurance
    $300 - health insurance (for three people)
    $200 - gas
    $500 - tuition
    $50 - school books
    $200 - diapers
    $100 - formula (going to breastfeed and use formula)
    $300 - taxes
    $400 - groceries
    $250 - work related expenses
    $250 - savings
    $106 - cell phone (2 from boost mobile)
    $200 - utilities
    $150 - cable/internet package

    I would like to be able to make around $1,000/week. I don't know if I could work more than four nights at a club per week without getting bored. I'm thinking that private parties or different sources of income might be another way to add $200 or $300 toward my weekly income to help me get toward that $1,000 goal. Since I will be working in an area that is drowning in extras girls, I will have to work very hard to earn my monthly $4,000. My annual income will be about $48,000 before taxes and business deductions. Currently, my boyfriend/baby daddy works full time as an assistant sales manager, so for right now his income will be added to mine. However, no where in my plan will I be relying on him to survive and provide for my unborn child. (I am unsure yet, but I think my monthly tax payment allotment may be a too low).

    The total monthly expenses comes to: $3,426 out of my $4,000 monthly goal. That will leave me with room to be short, and room to save more and splurge on recreation. I never make room for recreation in my budget plans because I think you should only spend money once you know your bills are paid. If I divide all of those expenses by the number of days per month I plan to work, then I will know how much I should put away after a shift. For example, if I am going to work 4 days per week, that is 16 days per month. I would need to put away $37.50 after each shift to make sure my rent was going to be paid. If I don't have enough to meet a goal then I take away from the less important ones nightly. (Cell phones being first because Boost Mobile doesn't require a contract). Cable and internet being next, you get the idea. Then once I make up for the difference during other shifts I'll replenish what I didn't put aside for those luxuries. My savings account can be accessed if I'm going to be late on a payment.

    I don't trust banks and will only use them so that I can have a debit card and a check book to pay my bills. (i.e. depositing the money for my rent once I have it).

    I hope this helps!
    -Laurisa
    If you are willing to do for one year what other's won't, you can spend a lifetime doing what other's cant.


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  7. #5
    God/dess hockeybobby's Avatar
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    Default Re: I need advise on a budgeting plan

    All I can add is open an online daily interest savings account and set up an automatic weekly transfer from your regular chequing account...even if only $25 a week...and watch it grow. Don't touch this money for anything. This is a good way to build the emergency account Mel talked about without missing the money.

    Good luck, you sound like you totally have your shit together.

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    Default Re: I need advise on a budgeting plan

    Quote Originally Posted by Melonie View Post
    Based on some wild assumptions about your personal tax situation and your probable earnings potential i.e. $400 gross dancing earnings per night = $400 * 4 * 50 = $80,000 per year as a self employed single renter ...

    - your probable tax rate will be 15.3% for Social Security plus about 25% federal income tax. At the moment, Texas does not have a state income tax. Therefore, from every $400 night the first $ 400 * .403 = $ 161 has to be set aside for estimated taxes ( leaving $ 239 earned after taxes )

    - I would recommend setting aside 20% of your after tax earnings i.e. $239 * .20 = $ 48 for savings / investments ( leaving $ 191 in earnings )
    Two Things....

    (1) I'm slightly disheartened that no one seems to question the $400 per night assumption. This would imply that it is doable and, while that is the case for some ppl, I am not one of them .

    (2) Her marginal tax bracket is 25% but the effective tax rate is much less. The following link explains the difference between the two .

  9. #7
    Banned Melonie's Avatar
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    Default Re: I need advise on a budgeting plan

    ^^^ actually, based on 2010 IRS estimates, a 25% marginal federal income tax rate will apply to all income from $34,000 up to my estimated $80,000. Yes the first $33,999 earned will be taxed at a lower rate ... standard deductions and a personal exemption will (probably) apply etc. But on the flip side the federal gov't is desparate for additional tax revenue, and a number of potential 'revenue enhancers' are being discussed which could wind up affecting a single person earning $80k per year. Thus while my estimate may be 'conservative', it might not be too far off from 2010 reality. We'll have to wait and see what congress cooks up over the next few weeks.




    I'll also mention that one of the most disruptive influences upon a dancer's financial discipline is failure to set aside sufficient funds for making timely estimated tax payments. While this was common in the 'distant' past, the common 'remedy' is becoming less and less viable ( with that remedy being the non-payment of estimated taxes the dancer didn't have the money to pay, and the non-reporting of a portion of the dancer's income as a consequence). But with today's automatic income / expenditure reporting mechanisms to the IRS, there is simply no way that a dancer can have a bank account, student loan payments, an investment account, a retirement account, a car etc. without the IRS automatically being informed of how much money the girl is spending. And IRS computers are very good at calculating how much income the girl would need to actually be earning in order to support this spending, based on their zip code specific cost of living database !

    ~
    Last edited by Melonie; 10-21-2009 at 03:45 AM.

  10. #8
    God/dess Zofia's Avatar
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    Default Re: I need advise on a budgeting plan

    Quote Originally Posted by gemini_baby View Post
    Two Things....

    (2) Her marginal tax bracket is 25% but the effective tax rate is much less. The following link explains the difference between the two http://www.moneychimp.com/features/tax_brackets.htm.
    25% is about right for social security and income taxes. Remember, most dancers are self-employed and subject to paying the self employment tax which is almost double an employee's social security/medicare tax. Another thing to remember is self-employment/social security is a flat tax that is imposed from dollar one.

    HTH
    Z

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    Featured Member sexy_celeste's Avatar
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    Default Re: I need advise on a budgeting plan

    Im in Australia, so things a re a bit different here.
    I put aside 20% for taxes (into a high interest account, so I get some return) then 40% into savings, and 40% goes towards expenses.
    My husband works full time as well, so if I dont work we still have his income,but right now its going right into savings.
    I make around $1000/week doing 2-3 shifts, (Im too tired to work more, with bubs and morning sickness) our rent is $250/week, food $50, bills $25, car/gas $25 with around $50 left over for gym/health insurance etc.
    Im only working until the end of Jan (at this stage) so have 12 working weeks (not counting xmas) so save another few thousand before Im too huge to dance (Ill be around 6 months preg when I stop)
    Theres no sense crying over every mistake,
    you just keep on trying till you run out of cake

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