2010: A Fresh Start / Saving $20k in One Year

My goal of saving $20k in 2010 feels within reach. I used Mint to create a strict budget for myself which, allowing for occasional splurges, still should see me saving $1670 per month...

Auto: $300
Bills: $200
Education: $60
Entertainment: $50
Investing Fees: $12
Food & Dining: $200
Health & Fitness: $400
Rent: $633
Personal Care: $440
Shopping: $50
Travel: $50

What's in bold above is the hard part. I can see myself sticking to budget everywhere else, but it's going to take a lot of effort to make sure I spend less than $200 on food per month and less than $50 on shopping. Honestly, the shopping is easier since I can just avoid the mall and therefore not buy anything. I spend way too much when I let myself near a mall, so no mall visits in 2010 except to buy gifts.

I don't know how to spend $200 on food per month, even though in theory that should be easiest. Why can't I spend less than $200 a month on food... I'm only feeding myself (and occasionally my boyfriend.) I eat out WAY too much which is why in 2010 I will eat out ONLY ONCE A MONTH (really?) and this will be an extreme change in lifestyle for me. That means I need to eat breakfast at home (so I don't pick up $13 Starbucks on the way to work), figure out affordable lunch options, go out to lunch with my coworkers just once a week, and eat dinner at home -- or pack a dinner. I honestly have no idea how to eat cheap / frugally. When I shop for food at the supermarket I usually buy too much that I don't end up eating. I try to feed myself in the moment, which is bad, and usually wait to figure out what I'm in the mood for (am I craving protein? Calcium?) to decide what to eat. Well, that has to stop, as my $400 - $500 a month food diet is way too expensive and honestly not at all healthy for me.

If my income level stays the same this whole year AND I stick to my budget, I really feel like I CAN save $20k. It really helps using Mint's planning tool to visualize this. I'm such a nerd but I love adjusting my monthly spending in each category and seeing the yearly savings figure go up. It makes a few dollars saved each month seem a lot more valuable.

Now, chances are I will not remain at my job all year for a few reasons. Namely because I work at a startup and this is our make-or-break year. We may "make" but just looking at the odds there's at least some chance we'll "break." The good news is that with this tight(ish) budget savings plan, I should save $10k the first 6 months, which would at least put me in a good spot when I need to look for a new job (though would completely throw off my goal to save $20k and would depress me greatly.)

Now, I just need to figure out what to do about my 2010 Roth IRA. Over the past three years my IRA plan as been pretty simple... save up enough the year before to put in $3k on April 16 for the year, then put in a few hundred dollars a month until hitting $5k. It probably makes more sense to just max it out right away since I think I'll have the money and the market looks like it will recover more in 2010 (though it could do the opposite, but how much would dollar cost averaging $2k over a year really help?) Additionally, at my current income tax bracket, I'm unsure if I should be doing a Roth IRA or if I'm at the point where a traditional IRA makes more sense. With no 401k to speak of (I've never worked for a company with a 401k, let alone one that matches) the Roth is my only pure investment vehicle. So I need to be smart about it.

After a really awful December in terms of spending (vacations, gifts, dining out) I'm so ready to turn a new January leave and live a semi-frugal life in 2010. With the help of this blog and Mint's budget tools to keep me in check, I think I can accomplish this. This should be do-able if I keep myself in check every day. No more impulse buys. No more $1500 days at Bloomingdales to cure my temporary depression and need to feel free and reckless. No more alcohol. If I feel the need to do something impulsive - ever - I'm going to the gym.