As the year comes to a close, I have come to the realization that this has been the first full year (2018-2019) that I will have lived on my own. Yes, I have been living on my own, in my own apartment, managing my own budget, for longer then a year (I moved back in late June 2017). But this will be the first time I will experience a full January to January, New Year to New Year, of living on my own. It has been a great experience. It has been enlightening to manage my own budget and finances for the first time in my life. Since then, I have also noticed something else. I am experiencing the monetary effect of those small costs and small gains.
Since I moved back I June 2017, I had tracked my expenses and set an unofficial budget at around $1,000 per month. On normal months, I have been able to live slightly under this budget without living like a monk on a ramen noodle diet. I moved to where I did because of the low “rent” of $507.71 per month. My second biggest expense is food which is usually between $240-260 per month. The other expenses included cell phone, internet, supplies, electricity, and gas bills which are usually between $160-$200 depending on the month. I don’t have a car and walk everywhere, including to work and back, so I have no transportation expenses.
One thing I have noticed that costs have increased over the past year. In years prior, when I was financially illiterate, I would not have noticed such changes or worse, would not have cared. But since financial literacy and managing my own budget I have become more conscious of the small expenses and small gains. The first was that my internet costs have gone up by an additional $20 per month (my one-year price lock has expired). This is largely because my 12-month low rate has expired. I am currently look at other options for this however.
The second increase came in the form of rent. I own an apartment in a Co-op. When you own a Co-op you pay a monthly rent which is called “maintenance”. Everyone in the building pays this, though the amount varies based on the size of your apartment. This monthly “maintenance” goes towards paying for the building expenses. Well, for the past two month we have had an “assessment”. That means an additional amount is charged to cover an expense (normally a repair or enhancement of the building).
For my building, the water pump broke so we were getting little to no water pressure. We needed a new one. When something like that happens, the building charges an “assessment.” In a Co-op, an “assessment” is preferable to a rent increase because “assessments” are temporary. Once the repairs or project is paid for the “assessment” is removed and rents go back down to normal. This added an additional $56.71 to my rent and pushes up my total rent to $564 per month.
Now I am perfectly fine with paying a little extra for a short amount of time (especially for good water pressure). But based on the recently board meeting after the assessment is done, there is more then likely to be a rent increase. They have not raised rents here in many years. However, they mentioned the rising costs of everything around the area and for the building. So, I am expecting a rent increase probably sometime in 2019. I don’t know how big of an increase it is going to be. But I have heard talks of gradually increasing the rent over a stretch of time until it reaches 10% of which it currently is now. If so, that would mean my monthly rent would increase gradually to around $557 at some future time. Still, incredibly low for a studio apartment in New York City.
Taken altogether, I have seen an expense increase of $76 total per month of what was mentioned above. If that number holds that would mean a total $912 cost increase annually for the next 12 months. See how those seemingly “small” costs add up to big numbers.
Of course, not all is bad. The opposite is also true: small gains can add up big. I do have a few things going for me right now. The first is that it winter is just about here, which means lower costs from electricity and gas. My heating is included in the rent, so I have no worries there. My electricity bills will be dropping from around $70 per month during the summer months back down to the usual $30 per month until next summer. No more air-condition running.
Another positive is that I got a raise from work. Granted it is not a major raise (you don’t usually get major raises when you work for the city), but it helps out a lot in the face of rising costs. The raise comes to $94 added to my monthly income. I’ll definitely take it! At $94 per month, this raise will add up to a $1,128 annually. See how those seemingly “small” gains add up to big numbers.
So, there are positives and negatives in the ongoing story of managing a budget. As 2019 approaches, I am holding up pretty good so far. Small expenses here and small gains there. Both of these matter in terms of long-term planning. What seemingly looks small and add up to huge amounts over time. If there is another way to illustrate this fact, I think this next one will be it. I have been saving my spare change over the past year and am happy to report that the amount now totals over $124! There you have it. Small amounts adding up to large amounts over time!
Like this:
Like Loading...