Financial priorities: what to cut

The state of Florida is in bad financial shape.  The mortgage crisis has been at its worst here, and construction and tourism are both way down.  The state budget comes largely from sales tax, which is greatly boosted by tourism.  And, fewer people are playing the lottery, believe it or not.

The state House has proposed its budget for next year, and has included a 25% cut across the board to all state-

Taking the axe to the state budget

Taking the axe to the state budget

funded agencies, including education.  The Orange County (Orlando) school board would lose $240 million if that was the case.  Wow.  Conventional wisdom is that the final cuts won’t be that deep (our Florida House is renowned for its generalized idiocy).  But even if it’s 10-12%, which is one popular figure, that’s going to be a lot of damage to education.

The folks that make the financial decisions for our school have done (in my opinion) a very good job so far.  A few positions have been cut, because their programs weren’t attracting enough students to make them financially viable.  We’ve been extremely fortunate, because our tuition revenue is way up as more people come to school to train for another job or upgrade their skills to keep the jobs they have.  We’re the third fastest growing community college in the country at this point.  But, if 25% budget cuts should come to pass, things are going to get really tight.

There are a couple of possibilities.  There could be more layoffs and more programs cut, or there could be an across-the-board salary cut.  I don’t know if they’d make that apply to everyone, or if they’d exempt the employees that make the least – custodians, groundskeepers, etc.  That would be okay with me – those folks don’t make much as it is.

If that happens, though, I’m going to have to make some cuts of my own.j0387250

I saw a post at Full Grown Single where she considered how much it would cost her to get by.  She looked at her expenses, figured the ones she could cut completely and the ones she could decrease, and came up with a figure of $32,000/year.  I thought that was an interesting exercise, so I decided to try it for myself.

These are the things that I have to continue to pay, with no reduction:

  • Mortgage, insurance and taxes
  • Food and household expenses
  • Internet and landline (so I can work at home, which I have to do at times)
  • Water/sewer/garbage/recycling (all on one bill)
  • Student loan
  • Medical expenses (prescriptions, doctor’s visits)
  • Dog food, meds, etc.

Here are the expenses that I could cut, but can’t stop completely:

  • Electric bill
  • Clothes

Here are the expenses that I could do without if I had to:

  • Savings
  • IRA contribution
  • Charitable contributions
  • Car (if I sold it)
  • Haircuts
  • Eating out/entertainment
  • Cell phone
  • Cable
  • Exterminator
  • Netflix

I’d rather not do without the car if I didn’t have to; taking the bus to work would take 3 hours a day, and I’d have to give up going to the farm every Saturday.   But I could, if it was absolutely necessary.  Here are my priorities for the things I could give up, in the order I’d give them up:

  1. Cable
  2. Eating out/entertainment
  3. Haircuts
  4. Cell phone
  5. Savings
  6. IRA
  7. Charitable contributions
  8. Exterminator
  9. Netflix
  10. Car

Of course, I could cut back on the savings, IRA and charity rather than cut them out completely, depending on the amount of money available.

Adding up the costs of the things I just can’t give up, I need about $2000/month in take-home salary.  That translates to a pre-tax salary of about $29,000/year.  That’s a little less than $15/hour.

If I add in the car, with car payment, insurance, gas and maintenance, I’d need about $2600/month take-home, which is a pre-tax salary of about $38,200.

The salary calculator is at

My salary isn’t going to get cut to $38,200 (I don’t think!).  A 25% cut would drop it back to about $50,000.  At that, I’ll be able to keep the car and the charitable gifts, at least.  Maybe the IRA too.

Now, whatever happens, I’ll have a plan.

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