Choose Wisely – Budgeting The Last Paycheck Before Unemployment

I have three more full paychecks coming my way before my employer and I part ways in November. After those I will receive a final check for a partial pay period, cashed out vacation, and severance, which will need to take me through the end of the year. Normally my income is variable, the bulk of it coming between August and November. For this reason I plan my larger annual expenses to coincide with my larger bonus payments. I also get a de facto pay increase from mid September through the end of December due to maxing out my 401K contributions and SSI taxes by this point in the year.

Two weeks ago I was thinking about all that I was going to do with the extra funds in my pocket for three months. I knew that I could take on large expenditures because I had the money to handle it now and more coming in the foreseeable future. Then my boss put an urgent meeting on my calendar.

As the countdown to (f)unemployment quickly ticks, reality is setting in. Although I continue to believe a break from full-time employment is a good thing, I don’t feel pressed to find a job, and I have a very healthy cash reserve, I am coming to appreciate the comfort that steady income provides. Yes, I have six months of post tax income saved. However, I am starting to feel the constraints of not knowing when or how I will bring in additional funds. There is so much that I want to do before the year ends, and I feel like it has to be done with cashflow from my last trickles of income. I wouldn’t feel comfortable buying trips and paying for elective medical care with money specifically saved to cover living expenses. These are the expenses I need to cover with my final three checks.

Pay off $2,594 across two credit cards by October 22 to avoid interest charges.
$450 credit card annual fee (it’s so worth it) due December 3
$5,748 annual life insurance premium due November 15. $5,000 is already saved. I just need to get $748 from my remaining income
$667 medical bill. This could be less as I’m disputing the amount with my provider. Take note fellow big mouths, always make sure your healthcare invoices match the Explanation of Benefits from your insurer. I am hoping to cover this with the remaining contributions to my HSA.
Save an additional $3,000 in my emergency fund.
Financial support to family. I don’t know how much, but it’s always something.

On top of having to do all of the above I also really, really, really want to

Purchase a firearm. Guns are expensive. Yes I am licensed. And yes, I have met me. I expect this to cost around $700 for the weapon, ammo, and accessories.
Get out of the US for a while. Although I am sure I can find someone to rent the condo for a month or two, the initial flight expenditure gives me pause. But I guess it’s a tradeoff. If the money was going to go to my mortgage and my mortgage will be covered it doesn’t mean that I can’t use the funds elsewhere. I think this is the most feasible and fiscally responsible item on my list of wants.
Elective medical procedure. I have the bomb dot com insurance. I am grateful for coverage that pays for 90% of care that isn’t medically necessary. The issue is that paying 10% of $16,000 is still a shit ton of money. If I would continue to be employed and have a well funded HSA I’d do it in a heartbeat. Alas, my healthcare costs are coming out of the post tax dollars I’ve saved going forward once COBRA activates in December.

I know that this list isn’t exhaustive. Something else will come up to stake a claim to my year end budget. There will be birthday presents to buy and I heard a rumor that Christmas is happening again this year. I’m also unsure of how another large influx of cash will impact my tax picture for next year so I’m holding back some of my savings in case Uncle Sam decides to rob me blind. Individually, none of these expenses would be a problem. I can do anything I want. The problem is I can’t do everything. How do I choose?

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