I finally, FINALLY, found out my new compensation numbers today, after my promotion a couple of months ago. First, a bonus.
Year End Bonus: ~$4,300
I got a 2016 annual bonus! When it hits my account in a couple of weeks, this is where it will go:
Emergency Fund: $1000
Health Maintenance: $1750
- I expect doctor visits, diagnostic tests and treatments this year relating to some chronic health issues. I’ll be paying out of pocket (HDHP). I may also need some dental work this year. Hopefully this will be enough.
Opportunity Fund: $1250
- Most of this will be saved for gifts and travel to see relatives during the 2017 holidays. I didn’t get to see them during the holidays last year.
Checking Account: ~$300
- I’m not entirely decided about what I will do with any money that remains. I’ll likely keep it in my checking account to cover unexpected or annual charges.
2017 Salary Increase
Guys… (Sigh)… I tried.
I tried my best to keep my expectations looooww. I did not even entertain the thought of a raise above 5% even though I just got a promotion in job title. No matter how low I set my expectations, my employer somehow found a way to come in below that. My big, grand salary increase for 2017….? 3.4%
Yep… That’s it.
I can’t lie. I was hoping for at least 5%. The fact that I had to wait so long to find out made it sting even worse. My manager, who is great, sounded really apologetic while telling me that my increase is above average for my team given my excellent performance last year.
I was so stunned that I couldn’t even pull myself together to ask any questions, let alone voice any disappointment. It wouldn’t have done any good anyway. My manager does not control my salary. It’s all determined by senior division executives and HR. Once I’ve composed myself, I’ll talk with my manager to learn more about how that number was determined. I’ve heard other employees complain now and then about how impossible it is to get a significant raise for great job performance. Now I understand. It’s true.
It’s been demotivating, but I’ll be okay. This will limit what I had hoped to accomplish financially this year, but I’m not going to spend any more time complaining about a pay raise of any percentage. #FirstWorldProblems.
I’m going to focus on what I can do instead of what I can’t do, so this is what I’m setting up this year. Once I get my February paychecks I’ll have a more accurate assessment of where things shake out after taxes and mandatory deductions. In the meantime, take this as an estimate.
2017 Pre-Tax Contributions
I should be able to max out my 401(k) and HSA for 2017.
- 401(k) – Set to max.
- HSA – Set to max.
- Public Transit Pass – $100/mo. $1,200 year total
2017 Net Monthly Spending Plan
Unless my math is off, and it may well be, I should bring home about $4,000 each month. By increasing my student loan payment to $2650, I will be out of debt on 12/15/2019. This will shave 6 months off my debt sentence! If I can keep up the payments, that is…
The cost of this accelerated payment will come at the expense of Roth IRA investments for 2017. I will not be able to contribute to the account this year under my new spending plan. I really want to get my debt down to a more manageable level by the end of the year. I will still have time at the beginning to 2018 to contribute to my 2017 Roth IRA if something changes in my finances.
The Food + Personal category is my monthly allowance. It includes all food, clothing, toiletries, entertainment, etc. This category will be a big focus for me this year. I struggled and failed to keep within my $600 limit for 2016, so I need to come up with some tactics to help me stick to this.
It will be a challenge, but if I can pull off this spending plan, I’ll be in a much better place, debt-wise, at the end of the year.
Student Loan Interest Rate
My interest rate is now already 3.76% (up from the original 3.42%) and due to move up even more quickly this year. It may be time to refinance into a fixed rate.
Thanks to blonderbetterfasterstronger for suggesting that I look into refinancing with First Republic Bank, however, I don’t think they will work for me right now. There are requirements that would be quite a hoop for me to jump through, including having to maintain a direct deposit checking account with them and hold a $3,500 min balance at all times. And if you slip at any point in meeting all the requirements, you lose the low interest rate. They also appear to not offer forgiveness for death or disability (need to fact check this), or forbearance for unemployment.
My current lender, offers death and disability forgiveness and a 3-month ‘forbearance’ of sorts in the event of job loss. I don’t want to give those up. I think First Republic might be a good deal for those who have smaller balances relative to income. For me, right now at least, it’s too risky. I plan to shop around – including potentially refinancing with my current lender. If I’m lucky, I may be able to lock in a fixed rate in the neighborhood of what I have now (below 4%). I’m going to look at a variety of options, even other variable rates if they are low enough.
That’s it for my 2017 plan. Short and sweet.