A revised and hopefully less ridiculous budget

[takeonyou]

How much is the total debt?

Is the daycare for 2 kids? When the 5 year old goes to school ft, earmark that money for debt repayment as well.

You need to see where that extra money is going. With 3 kids, I would want much more than $600 in savings.

[Deleted]

I think you need to decrease college savings and up retirement. I think that in 4 years when your oldest is ready for college you will have paid off debt and will be in a better place to cash flow some of it, but your retirement is too low.

[RandZB]

It looks better, but you've really got a lot of debt. It's going to be hard to dig out of it but you can do it if you are careful. Refresh my memory, are you the one that takes a two-week vacation every year? Hopefully your vacation will be a little more modest this year. I'm trying to think about what I would do with your DH's income increase: put it all in savings or put it all toward debt. What if you put your entire tax return in savings and then started throwing his increase at debt? That would give you a little more breathing room savings-wise and would allow you to start knocking out credit cards when he gets his raise.

[Deleted]

I agree with delaying additional college savings and putting that money in retirement.

I think $5k sounds like a good emergency savings then go with your plan of another $300 in savings a month and the rest towards repayment.

If you stick to your budget and have a little good luck with wage increases, it looks like you should be done with your debts.

At that point just split the repayment money between college and regular savings.

[zacksbride]

i am a little confused why the dependent FSA is being counted as income, and why you aren't maxing out the $5K that you could put to a dependent FSA.  if you do 5K to dependent FSA, that equals $416 per month which will be taken out pre-tax.  do the paychecks you have listed take that decrease into account and that is why you are adding it as "income"?  just curious. 

[zacksbride]

Feb 2, 2013 17:16:44 GMT -5 mellie907 said:

The paycheck amounts are our take home pay. I max out the 5K and cash it out every month. When I figured out that number, I did it based on 2 paychecks/month. I figure those months we get an extra paycheck it'll just be bonus money I can save or put towards debt.

ok that makes more sense.  i forgot baout the 2 paychecks a month. 

[CloudBee]

Congrats on cleaning up your budget and making some adjustments that will really help you take several steps forward. I'm so happy you posted again.

I would do away with college savings altogether, for now. I think that money should go into savings until you hit at least $5k. Then I would put part of that $150 towards debt, and a portion towards increasing retirement contributions.

My answer might change a few months from now if we could foresee what you actually spend in the misc, clothing, and food categories. You have 3 children, so that's 3 birthdays and 3x the spending for holidays such as Easter, Christmas, etc., or whatever you may celebrate.

If I were you, I would try my best not to "realize" the raise your husband has ahead of him. Throw chunks of that into savings and debt for now. Don't tell yourself you can wiggle numbers and spend more in the categories posted above. You really need a good year or two of living within the limits, paying debt, and saving, before you can make adjustments. (Though I think gifts might need to be upped a smidge once he does get a raise.)

Is there a category for medical costs of any sort? Do you have co-pays for office visits or prescriptions?

Do you have pets that have expenses?

Keep reminding yourself that the only way anyone gets ahead is by spending less than they make. And the only way to have savings, is to treat savings as if it were a bill or monthly expense. Self reliance is very important. Beef up savings and you will feel so much weight fall off of your shoulders.

Also keep in mind that once you hit, say, a milestone of $5k in savings... what happens when you need to pull from that e-fund? You still need to retain enough room in your budget that there's enough cash flow to pay that back. So divert what goes into savings once you hit $5k to debt over-payment, so if you pull from savings you can still afford to pay your e-fund back.

Great job making adjustments thus far. Good luck!!

[whiskeytails]

I haven't been following your story, but just some random thoughts. Your tax refund seems HUGE, do you need to reconsider how much you are withholding?

Also, I have no kids, So I may not "get it", but couldn't DD get student loans/grants for college and pay her own way?

[Roc A Bee]

I would take half your refund and put it into savings. Then I would take the college savings and add it to the $850 surplus and have an even $1000 to put towards debt. When your DH gets his raise, I'd take $300 put towards your efund to get to 5k. That should take 4-5 months. The other part of his raise should go to debt repayment. That would be 3k/ month to debt. You could get out of debt within a year. Any extra income should go to debt.

Once your out of 25k debt, bump your retirement a lot.