For several months now, I've been toying with a version of my zero-based budget spreadsheet that I'm calling 'Hypothetical 2009'. Since I've been planning on dropping to less than full time status next September (maybe cutting back by as much as 25%), I wanted to see how my income would be affected. I also wanted to know how much I should sock away now, to cover the gap in income later.
Well yesterday, during a meeting that I unfortunately missed, our department heads started using the dreaded 'furlough' word. Meaning, we may need to cut our budget to such an extent that employees may be asked to 'voluntarily' cut their hours.
My first reaction was: "Yikes"!
My second reaction was: "Hey, I'm actually prepared for this"!
And, since I was facing the prospect of having to talk my boss into cutting my hours anyway next year, this might just turn out to be a blessing in disguise.
The tool that has been most helpful to me in visualizing what my financial life will look like next year is a website called Paycheck City. On this site, you'll find a salary calculator that will allow you to play around with your income, your tax withholdings, your deductions (for example, tax deferred retirement savings) and other variables that will affect your net income.
I can play around with my withholdings to my heart's content, plus I can plug the final income number into my zero based budget and really see where I still need to cut my expenses. Seeing my future finances in black and white also makes me much more committed to saving money now so I'll be a bit more comfortable later. I recommend this for anyone facing layoff, furlough, or other change in circumstances.
Friday, February 13, 2009
A frugal prophecy. . . .?
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3 comments:
Thanks for the resource! I'll check out different scenarios for withholding for my part-time jobs.
Paycheck city was helpful. Thanks!
Think how far you've come along! A year ago you were freaking about hours cut and now you are thinking it may be a blessing in disquise! How great to be prepared - and how much your attitude has changed! Congrats on your progress!
It's amazing how much difference a year can make---and actually, I guess it's not the timeframe that is so extraordinary, but the change in my own attitude, as you've noted, Marci. About money and debt and savings, and so many other things. You're right: a year ago I would have been beside myself with fear at the thought of dropping my hours at work. Now, it's not ideal, but it won't kill me either!
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