Budgets

Last week I posted about my finances and how I am trying to get them in order. (click) In the past week I have had a good conversation with a friend about it and taken some time to analyze my budget.

My friend reminded me about the latte factor in most budgets. (The ideal that the little things add up) I think that dining out may be that for me. Also he reassured me that saving for a house is a good use of money and can be justified.

Even after this conversation I was still a little unsettled about the disparity between trying to live with a simple lifestyle, and the amount of money that feel I seam to "need" in order to live. This weekend I have obsessed over every nickel and dime, categorizing and analyzing everything I can think of and came up with the following. (click)

I found out a few things:

• Tax's suck! I have always been of the mindset that if you make more money you should pay more tax's. But now that I'm 30 I have realized that as your income increases if you don't have children or a mortgage to claim as deductions, you kind of get screwed on your income tax. I end up paying a small fortune in tax's this year because I don't have these two deductions.
  
• I am saving a lot. There is the obvious savings each month for the down payment on a house but I also have deposits into my 401K that are automatically taken out of my paycheck. This adds up at the end of the year. Originally I wasn't taking this into account because I was only dealing with my take home pay not my gross pay.
  
• I actually am living simply. By organizing my budget in they way I did it was easy to see what my actually base living expenses were. (separated from my tax's, and aggressive savings) I also added a "Decadent Luxury" column for things like travel, pet expenses, and dining out. After all I didn't take a vow of poverty I'm just trying to live simply.
  

After looking at this I have some difficult decisions to make. In the end, I don't feel that I can't cap my income a level I would like too. That being said I'll do my best to keep the decedent luxury's to a minimum. (Currently they add up to a little over 9% of my gross income.)
I also was planning on building a cabin this summer. Although I have put a lot of thought into the design and construction of the cabin I really haven't thought about how to pay for it. On top of that It doesn't make financial sense (or justice sense) to be building a vacation cabin when I don't have my first home. I'll start budgeting a small amount each month towards the cabin and in a few years after I am settled in my first home I can resurrect the cabin idea.