Critique our budget please!

[coffee]

Income

DH:  $4754

Me:  $2260

Total: $7,014

Expenses:

Mortgage: $1,118.  We pay $1,400

Insurance: $138

Cell: $73

Gas/power: $200

Water: $22

Sewer: $60

Cable: $56

Internet: $54

Netflix: $8

Gas: $300 

Groceries: $300

Entertainment: $300 

Miscellaneous: $300 (doctors, medicine, gifts, clothes, etc)

Savings: $800 

Debt:

Car: $333 (We are paying $3,000) Left: $12,090

Savings

$2,425 (Total right now)

Total: $6,711

Do not ask me about the remaining $303. Some months we have money rollover,  but I guess some other months we spend more than what we have budgeted. 

I know our savings are too low. We were saving for my DH’s new car. We bought it last june, paying about 80% cash, but then in October I had a car accident and totaled my car. With the insurance money we paid off DH’s car and put the remaining towards the down payment of my car. We also took most of our savings for the down payment.

Our goal is to pay the car by the end of May in order to be debt free and put those $3,000 extra towards mortgage/savings.

We just learned 2 weeks ago that we are expecting our first baby in September! =D and I would like to be a SAHM... Would we be fine with just DH’s income? I don’t know how much our expenses will increase with the baby. 

My plan right now is to pay the car by the end of May. And then we would have $13,000 in savings by the end of July. I’m a teacher so I’m thinking  to finish the school year which means my last paycheck would be in june (-$2,260). 

We would need to take some of our savings to buy everything for the nursery, but I don’t think we would need more than 3K. (Let’s say we have $10,000 in savings by then)

Can we make it with just one salary? Our mortgage is for 30 years, but our goal is to pay it in 15, so we actually want to pay a little more once we finish paying the car. 

What do you think?  Any recommendations?

BTW, Dh saves 18% for retirement (401k) and I save $600 a month. This money is taken before we get our paychecks, so is not included in our monthly expenses.

Also, we are not from the U.S. We travel twice a year out of the country. We don’t have to do this, but we would like to keep doing it.

Any comments / recommendations will be very much appreciated!! =)

[Deleted]

Congrats on the bfp!

What is the interest rate on the car? If its low, I dont think you should be paying it off so quickly.

If you SAH, baby expenses wont be huge, maybe $150 a month if you FF and use disposables, less if you BF and use cloth diapers. But things like utilities may go up-- I saw an increase in this when I was on ML. Also, start up costs can be a lot. We were gifted a lot, but we still spent around a thousand on things. Also DD's birth itself cost us $5000, so check that out from your health plan.

Do you really only spend $300 on groceries? Or is that where the other $300 or so you dont account for goes to?

I also recommend funding a ROTH IRA. I think 18% for your DH is fine, but 6% for you is low and if you aren't working, you should definitely have a line item for that.

[coffee]

Thanks!!! We are very excited, even though nobody knows yet! =) The interest is 7.5% . About my retirement I actually save $600 which is about 20% of my salary before taxas.

About a ROTH IRA, how does it work? and how much should I put every month if I'm not working? What is the ideal?

[SJ]

I definitely agree that I would try to work a Roth IRA into your budget. You can put up to $5,500/year for 2013.

It is easy to open one and I would recommend Vanguard, Fidelity, or Sharebuilder.

ETA: I would prioritize the Roth far above paying extra on your mortgage