So, I am a salaried employee and get paid once a month. That is usually a hard place to be for most people. Most of us don’t have all our bills due at the beginning or the end of the month, but throughout the month. Now, this was no great challenge for me this year because I have been living on a once a month, fixed income for the past couple of years. However, it was still a challenge to reconcile the pay dates and transition into a new pay schedule.

Therefore, I created a spreadsheet to keep track of how much I received and when and what bills were due.  After 6 months, I am glad to report, the income-expenses cycle has finally regulated.

Once that was taken care of, I needed a budget. I will give you my percentages, though they are very unlikely going to work for anyone else. 

First, let’s be clear. My mom is kind enough to house me and feed me, so I have no rent payments and spend a small amount on food. I also have no car payment as I just finished paying off my car this week! On the other hand, I have a huge amount of student loan debt. 

This is what my budget looks like:


Percent of Net Income*

Student Loan Payments



0% – 24.67%

Miscellaneous Expenses (i.e. car maintenance, doctor’s bills, life insurance)

0% – 20.58%

Daily Expenses (i.e. gas, food, personal care)


Utilities (i.e. my contribution to household expenses, cellular family plan)


Insurance (auto)


Disposable Income

2.55% – 6.64%

* At least half the year I save the maximum percentage, but only once every 18 months do I fail to contribute to my savings. Miscellaneous expenses take place 4-6 times a year, within the percentage range. My student loan payments are 25.42% of my income, but I make extra payments against my highest interest rate student loan.

Second, notice that while I pay extra every month on my student loans (4.18%), I do not put all my money into paying it off but instead put it into savings. This was a very personal decision, as I struggled with whether I should “just pay it off” or “save for a rainy day.”

I came to the conclusion that while I would love to be completely debt free and be rid of pesky monthly payments, the opportunity cost was too high. For example, if I put all my money against my student loans, I would finish paying them in 5-6 years, but I would have to forsake vacations, an occasional shopping trip and a multitude of other opportunities, plus I would have little to no cushion given an emergency or unexpected circumstances. Furthermore, if I died before paying off the balance, I gave up on many things to pay off a debt that would now be discharged.

On the other hand, if I just paid a little extra – first against the one that would cost the most in interest and then cascaded down, I would still pay off the entire balance 4.5 years early and save about $5500 in interest, with the potential to save an additional $40,000 during those 4.5 years I would have been making payments. So I compromised and signed up for automatic payments on three of my loans, which gave me a ¼% reduction on the interest rate of about ²/3 of my total student loan indebtedness. By paying a little extra and saving the rest, I get to enjoy whatever may come, to feel financially secure, to save $5500 in interest and to put away over $125,000¹ in the same time it would have taken me to pay off the balance with the minimum payments.

Lastly, there is no consumer debt on budget and some may wonder why (or not). The reason is that while I do accumulate consumer debt throughout the month, it is paid off each month and it comes off the Daily Expenses allocation. I have endeavored for 2-3 months and put all of my would-be savings into paying off all consumer debt, including my car loan. Unlike with student loan debt, the high interest of consumer debt, the fact that it follows you to the grave and the potential for it to increase exponentially in a short period of time, all, made easy my decision to pay it off at all costs and as soon as possible.

This is how I molded my finances to work for me. I haven’t decided what I am doing, or where I am going. But I know that my financial plan will make it easier for me to do it, or get there.

¹ This amount assumes that (1) my income remains constant at its currently modest rate, (2) savings deposits remain at the current rate of 24.74% of my yearly income, and (3) the highest monthly student loan payment amount is allocated to savings once the debt is paid in full.