Critique my monthly budget

[expatpumpkin]

Wow, sorry but the smartphones and gym have to go. You're 25K in CC debt yet spending nearly 8% of your income on phone/internet/cable/cell and gym. And I think you'll have to skip the summer vacay this year - put that money toward the CC debt. I'm not sure what else you can cut, but you are literally living paycheck to paycheck. I would be FREAKING out in your situation. Sorry

[expatpumpkin]

And your husband needs to get a second job as well.

[Deleted]

Is $600 what you contribute to savings every month, or how much is currently in savings?

How can you use FSA money for a vacation, did I read that right?

[kadams767]

I really don't think taking that kind of vacation is a good idea this year. You need to put that money towards the CC debt and/or savings.

[bostonmichelle]

I would definitely look into lower amounts for cell/tv/internet and the gym. I would suggest putting half of the tax return into your efund and half towards cc debt. I would do the same thing with the dependent care and skipping the vacation. Also can your husband pick up a second job? I know it sucks to cut back, we have cut back a lot in the last few month, but its definitely worth it when you start seeing that debt actually decrease.

[steph96]

The cable/Internet/phone/cell phones is beyond ridiculous. 

You can get a cheap go phone with the minimum minutes to leave at home in case your kids have an emergency.

[abeaverhausen]

I'm sorry but I think you have your priorities seriously out of order. This what stood out to me.

Jan 26, 2013 18:51:56 GMT -5 mellie907 said:

We live in a HCOL area and have 3 children (14, 5, and 2)

Income:
Me: $3372
DH: $3424
My second job and child support: $419
Total: $7215

Savings:
$600 in a savings account - Like a previous poster said, and you agreed with, if either you or your husband lost your job you would be seriously screwed.
4.5% of my salary goes to a 403b (includes employer match) - Between you and your husband you are only contributing 4.5% toward retirement? Can I ask how old you are?
$416/month into Dependent Care FSA ($3400 is used to fund a summer vacation) - You need to skip the vacation this year. You honestly can't afford it and this money could be used much more wisely.
$166/month into Healthcare FSA

Expenses:
Rent: $2100 - I realize you live in a HCOL but can you find something cheaper?
Childcare: $1500 (includes a 20% employee discount)
Gas and Electric: $240
Water: $42
Phone/Internet/Cable/Cell: $402 - I'm assuming you and your husband have smart phones? Maybe even the iPhone 5? Get a cheaper phone with no data plan or a pay as you go phone.
Auto and Renter Insurance: $165 (2004 VW Golf, 2005 Civic)
Food: $750 (includes diapers, toiletries, household products)
My student loan: $232 (~$27k, 6.25% interest)
DH student loan: $103 
Gym membership for DH and I: $146 - Can you find a cheaper gym? Do you have a Planet Fitness or Retro Fitness nearby? DH and I pay less than $30 a month.
CC Debt: $25,500, interest rates range from 7.9-24.99%, minimum payments=$546 (we've been paying extra towards those with balances with higher interest rates) - This says it all. You are living way above your means. I apologize if I'm wrong, but I have a feeling you are in a "keeping up with the Jones" type situation. Let it go.

Financial Goals:
Pay off cc debt - Yes.
Save for new cars - If your cars are running fine, this should be at the bottom of the list.
Save for a dp on a house - Eventually, but I think it will be a while until you are able to do this.
Increase contributions to retirement - Yes.

I would focus on paying off your credit card debt and increasing your amount in savings. Increasing retirement contributions should be the next priority.

[abeaverhausen]

Jan 26, 2013 20:07:38 GMT -5 mellie907 said:

Jan 26, 2013 19:56:03 GMT -5 milsaroo said:

- Definitely build your savings because if you lose a job, it sounds like you're screwed. Yeah, we probably would be. 

- Cut out the summer vacation. There are plenty of activities that cost less than $3,400. This makes me so sad, but you're right. Can we go away for 1 week instead of 2?

- Do you budget your grocery fund (I know it includes diapers and toiletries)? If not, start! Use coupons, and shop sales. I feel like we don't buy a ton of extras, but we eat mostly organic, which drives up the cost. I buy a lot of store brand items, mostly shop sales. 

- How often do you go to the gym? Do they provide childcare while you're there? Is it REALLY worth the cost? Probably 4-5x/week. They provide childcare but we don't use it. DH and I alternate when we go/who watches the kids. They're already in childcare 4x/week for 8+ hours, so we like for them to be home when they can. 

- Do you NEED a home phone? Regardless of the answer, you should shop around for a better deal for phone/TV/internet/cell. We just got rid of TV and use Netflix instead. We have found that we still watch TV in the evening to relax, but we actually find other things to do (read, play board games, etc.) so that's a win-win, IMO. The only reason why I would not want to give up the home phone is because DD comes home from school and is alone for about 3 hours. In the event something happened, I want her to have some way to get in touch with DH, my mom, or I. I don't know what the alternative would be. We have a bundle through Verizon for phone/internet/cable which is $84.99/month. We do have 3 boxes that drives up the cost.

I just went back and read the piece about the phone/internet/cable. Do you really need 3 boxes in the house?

[Deleted]

I don't usually comment on budget posts but you have a lot going on here, my anxiety would be through the roof. Definitely cancel the vacation, cut down the cell phones/cable, and meal plan. Then I would focus on building an efund and then on the cc debt. Once you have addressed these I think you need to increase retirement. Finally, are you putting anything away for college?

[Deleted]

You need to reduce the phone/cable/Internet. Get rid of the multiple boxes and downgrade to basic services.

Also, you do not need any vacation when you have that much cc debt and very little retirement contributions.

Split your refund between savings and debt.

Your gym membership is way too expensive given your debt.

It kind of seems like you are still living the lifestyle that got you into debt. You make a healthy income and if you cut back on everything as much as possible I think you could knock out your debt pretty fast.

[h]

Child support plus your second job brings in $419? That seems like very low child support to me. Is there any chance you can get it adjusted up or does your ex have a very low income?

I agree that you simply cannot afford gym memberships, cable, expensive cell phones, a two week beach vacation, and an all-organic diet. As much as it sucks, you are in a dire cut cable, eat rice and beans, skip vacation kind of situation here. I would cut anything that isn't a true need until you are able to pay down some debt and build up a little bit of a savings cushion.

[RandZB]

Yeah, I couldn't sleep at night either in your situation. I have no debt but a mortgage and around the same income as you and I can't even fathom taking a 2-week vacation with over $25,000 in credit card debt and only $600 in savings. I am thisclose to breaking out in hives just thinking about it. One household or vehicular emergency, and you are in a reeeaaaally bad situation. Your savings amount won't even buy you groceries for the month. You've got some serious fat-trimming to do.

[Deleted]

Jan 26, 2013 21:54:19 GMT -5 mellie907 said:

DH is waiting for his transfer to a new unit to be complete. After that goes through, another few weeks for them to write his orders. We're hoping that he'll go on orders by early March. It'll give us a significant amount more per month to put towards savings and debt repayment.

So you'll get $2,300 more a month starting in March?  Well that's not so bad.  I would take $1k of that money and put it towards savings and the rest towards the credit card debt.  How long will he be eligible for that?

And yes I'd cancel the summer beach house but you can go camping for a week near a beach instead.  I love camping.

[Deleted]

You can take the days off work without going away on vacation.

[Roc A Bee]

Ok so where is the 1k in your budget that isn't accounted for?
your phone/Internet/cable/cell is INSANE
you can't afford a vacation 
you can't afford to eat organic 
do you buy clothes? Hair cuts? Eat out? Your budget is missing a lot.
Do you track your spending? What are you really spending?
have you cut up your CCs?

i feel like I'm going Sisugal on you, but omg your 25000 in debt and want to take a 2 week vacation!

[abeaverhausen]

Jan 27, 2013 7:26:30 GMT -5 minniemouse said:

With that much debt, and your income for a family of 5, it seems like it will be very difficult to pay off your cc's. Even with cutting back to a bare bones budget, your cars are older and will likely need expensive repairs or replacment soon. I normally wouldnt say this, but have you considered bankruptcy?

I think they are able to pay them off if they really want to do it. Also, bankruptcy is only useful if they are not going to repeat the behaviors that got them in this situation. I'm not feeling like she really gets it. I just keep hearing that her husband will be making $2300 more a month soon but I think that will turn into they have $2300 more to spend soon. Then, she'll be able to go back on vacations, buy coffee, lunches/dinners out, mani/pedis, etc.

OP, another poster noticed you have a lot of categories missing. Can you share those?

[expatpumpkin]

You need to do a modified Dave Ramsey plan:

Save for a bigger e-fund (3-5K) and don't stop retirement. Do EVERYTHING else and snowball your way out. To put things in perspective for you, we have no children and no consumer debt. Yet we would NEVER take a vacation with only $600 in an e-fund. That's insane. Sorry.

[biogirl21]

Jan 27, 2013 0:37:04 GMT -5 spearmintleaf said:

You can take the days off work without going away on vacation.

This. I'm taking a week off in March. We're not going anywhere, just a staycation. I need some time off work and we can't afford a vacation. Why don't you just take the time off and spend it with your kids? HCOL probably means there's a lot of stuff for you to do in town for cheap/free.

I don't usually comment on budget post but wow, you guys need to get your priorities straight!

[mmmomof2]

Your expenses don't even include gas (for your cars) or things like haircuts/gifts/clothes.

I would definitely cut/reduce the cable and the phones. We pay $67/mo for home phone and internet and then $15 for hulu and netflix streaming.

The gym is way pricey and you can't afford it. Obviously the summer vacation is out. How much a month is wasted on credit card interest? Can you look into a zero interest card to rollover some to?

You also should look at your old credit card statements to figure out where you were over spending - restaurants? clothes? vacation?

[Deleted]

Jan 27, 2013 7:26:30 GMT -5 minniemouse said:

With that much debt, and your income for a family of 5, it seems like it will be very difficult to pay off your cc's. Even with cutting back to a bare bones budget, your cars are older and will likely need expensive repairs or replacment soon. I normally wouldnt say this, but have you considered bankruptcy?

I'm all about bankruptcy when it's needed, I think it's a great way for someone in dire straights to get a second chance.

However, op has plenty of income to pay on this debt, they make a healthy salary and will be making even more in a few months, they just refuse to allocate their income to their debt. Also, if I'm reading it correctly, her DH is in he military, which complicates a bankruptcy filing.

[kadams767]

Jan 27, 2013 10:55:07 GMT -5 papiercherri said:

Jan 27, 2013 7:26:30 GMT -5 minniemouse said:

With that much debt, and your income for a family of 5, it seems like it will be very difficult to pay off your cc's. Even with cutting back to a bare bones budget, your cars are older and will likely need expensive repairs or replacment soon. I normally wouldnt say this, but have you considered bankruptcy?

I'm all about bankruptcy when it's needed, I think it's a great way for someone in dire straights to get a second chance.

However, op has plenty of income to pay on this debt, they make a healthy salary and will be making even more in a few months, they just refuse to allocate their income to their debt. Also, if I'm reading it correctly, her DH is in he military, which complicates a bankruptcy filing.

I agree with this. Maybe flameful, but bankruptcy should be a last resort when a person has exhausted all options. OP has plenty of options other than bankruptcy, she just doesn't like any of them. They have a good income, but can't afford some of the ridiculous expenses they think they can.

[nessness]

Am I understanding this correctly that your cell phones are $300 a month? I don't even understand how that's possible -- H and I have smart phones with unlimited data and texting for $165, and it doesn't sound like your DD has a cell. Regardless, that should be cut down to the minimum.

[Deleted]

Good luck to you!

[Roc A Bee]

I think you should rewrite out your budget with the changes and add your missing categories. What about kids supplies/clothes, gas, etc?

[abeaverhausen]

Jan 27, 2013 12:35:36 GMT -5 Roc A Bee said:

I think you should rewrite out your budget with the changes and add your missing categories. What about kids supplies/clothes, gas, etc?

I agree with this.

[AAM2012]

Great steps in the right direction! I am so glad your DH is on board.

I agree to "re-do" your budget and include the missing items previously mentioned.

[expatpumpkin]

Wow, that's AWESOME! Seriously, great plan! If you make the changes you've mentioned and live lean, you should be able to knock the debit out in a year

[darthnbjenni]

Try calling other gyms and asking if they have discounts for the school district you work in. I know I can get a $25/month membership for our family instead of $75 because of where I work.

Get rid of cable & phone. Buy a pay as you go phone from Walmart for $10 and leave it in the house for your daughter to use in case of emergencies. Right now we pay $40/month for internet and Netflix, which we stream through the smart tv in the girls' room, and the PS3 in our living room.

[nickyd2006]

I think the changes you've mentioned are a step in the right direction. I would highly recommend living on a cash allowance so that you will cut your spending. This requires a very good comprehensive budget first and you give yourself a weekly allowance of cash to use for groceries, gas, fun money. I don't spend nearly as much as I used to using cash instead of my debit and credit cards. We can save again now and we don't have crazy cc bills coming every month and we don't wonder about where the money all went! Good luck.