Here goes nothing - My budget

[purpleminion]

Here it is folks, my budget. I'm very open to constructive criticism. Some of these numbers (groceries, household/personal care, entertainment) are rough estimates. I know I need to start tracking better and get some more exact numbers, but this is what I have for now.

Monthly Income (net, after retirement savings, taxes, childcare flex, and HSA)
DH $2,200.00
Me $1,400.00
TOTAL $3,600.00

Monthly Expenses
Mortgage $918.00 (EDIT: I made an error here, so I changed this amount)
Elec/Heat $250.00
Water/Sewer $85.00
Internet $50.00
Gas $120.00
Groceries $500.00
Household/personal care $150.00
Entertainment $200.00
Health Care $300.00
Home Improvements/repairs $50.00
Daycare $565.00
Cell Phones $80.00
Credit cards $100.00 (0% interest until Jan 2016 - $1300 balance)
Life Insurance (DH) $9.00
Car Insurance (2 cars) $67.00
Kids' activities $100.00
TOTAL $3,544.00

A few notes:
-Since I only teach part time, I don't qualify to spread my salary over 12 months. So during the summer, I don't get paid. We save a little during the school year to use as we need it during the summer.

-I'm honestly not sure how, but we do manage to save $400/month. Most of it is being saved for when DH's car dies (it's 12 years old and we don't know how much longer it will last, but we do plan to keep it until it bites the dust) so we're not sure when we'll have to tap into that money. Our total savings is only $1400 because we had an expensive home repair this summer and it pretty much drained out savings.

-We need to be saving more for retirement. I know this, but I'm not sure how. Right now we're both only saving what is deducted from our checks for retirement. For me, that's 5% with 5% matched by my employer, and for DH that's 4% with a 2% match from his employer. We also would like to start saving for our kids' college (although retirement is the priority), but again, I just don't know where that's going to come from. Right now our kids are 3 and 5.

-About the $300 healthcare category: we have a crappy high deductible insurance plan and we have a balance of $1300 with our local hospital/clinic. We are required to pay $300/month right now toward that. I could possibly call and have our required payment reduced, but I kind of just want to get rid of it. Here's where I'm not sure what to do. We're having a really hard time paying it off because every time we walk in the doctor's office, we pay $126 (just for the office visit, not including additional services like labs or whatever else is needed). With two small kids and me with a minor chronic health issue, we can't ever seem to make much headway. We need new insurance and DH is currently looking for new employment with better insurance. But who knows if/when that will happen. The employment market is tough here.

-We don't have cable. Got rid of it a year ago and haven't missed it.

-I know there are lots of irregular things that are not accounted for. Gifts are usually purchased throughout the year on clearance when possible. I give DH and the kiddos their hair cuts at home. I'm sure I'm probably missing something.

Aaaand go!

[purpleminion]

Oh, I should mention that DH and I get paid bi-weekly, and the income totals are based on two pay periods per month.

[lime]

Wait - during the summer, you make 2200 per month and spend 3600? But you make up for it with savings? And you only have 1 month of your salary right now.

(These are honest questions, not snark.)

How much do you have saved for retirement, approximately? And how old are you and your H?

ETA - Assuming that is all correct, you will probably need to find a way to bring in more income. 

[purpleminion]

Oct 20, 2014 21:34:01 GMT -5 lime said:

Wait - during the summer, you make 2200 per month and spend 3600? But you make up for it with savings? And you only have 1 month of your salary right now.

(These are honest questions, not snark.)

How much do you have saved for retirement, approximately? And how old are you and your H?

During the summer we don't pay for childcare, so that expense goes down. But yes, we do run a deficit during the summer. DH gets yearly bonuses, so we will use that to help replenish our savings.

[Poppy]

Does the credit card have a balance or is that something you are charging every month? What is the balance/interest rate? What is the interest rate on the medical bill? You don't have any student, car, or HELOC loans, right? Are you getting reimbursements from the childcare flex or HSA?

Life insurance on you?

[purpleminion]

Oct 20, 2014 21:43:36 GMT -5 Poppy said:

Does the credit card have a balance or is that something you are charging every month? What is the balance/interest rate? What is the interest rate on the medical bill? You don't have any student, car, or HELOC loans, right? Are you getting reimbursements from the childcare flex or HSA?

Life insurance on you?

Oops, I had some of this info there and then ended up re-pasting the whole thing and forgot to add it again.

We only carry a balance on one credit card and it has a 0% interest rate until Jan 2016. The balance is $1300.

No interest on the medical bills.

Student loans and cars are paid off. No HELOC.

We get the childcare flex reimbursement during the summer to use when I'm not getting paid. We use the HSA to help pay the medical bills, but we didn't put enough in this year. We will increase it at open enrollment.

The only life insurance I have is through work.

[purpleminion]

Now that I think about it, I guess we really only pay $170 for the medical bills because $130 per month comes from the HSA. Thanks for reminding me about that, Poppy.

[Poppy]

Honestly, I'm just surprised that you are so close to 0. It seems like you're walking a very fine line, yet you've not gotten sucked under by some catastrophe and your debt load seems quite manageable. Personally I would try to focus on beefing up my savings for awhile. A Roth is not a terrible suggestion because you can kind of use it as an E-fund, but I would be tempted to focus more on short term savings right now. That car thing could become a big issue.

[Poppy]

And I didn't mention the standard advice because it sounds like you know it, but certainly you will have more control if you do better tracking for a bit to make sure that your numbers are right. Then you can be more educated about tradeoffs that you can make.

[Deleted]

Oct 20, 2014 21:18:13 GMT -5 purpleminion said:

Elec/Heat $250.00
Groceries $500.00
Household/personal care $150.00
Entertainment $200.00
Credit cards $100.00 (0% interest until Jan 2016 - $1300 balance)
Kids' activities $100.00

Congrats on sucking it up and posting your budget. I was SO nervous to do so, and then found the experience to be very positive. I hope you do, too.

First, start tracking (Mint is an easy way to do this) NOW. You will likely be shocked at the sneaky ways your money disappears each month.

The areas above would be the ones I would focus on.

- Electric: I bet you can cut from here by adjusting temps in your house and looking for energy vampires (computers, TVs).
- Groceries: I know you can cut at least $50 from here with careful planning.
- Household / personal care: $150 here each month is a LOT. Allow yourself $30 and no more - I bet you can get by (cleaning with vinegar vs name brand stuff).
- $200 entertainment: You have to trim this. I am a huge proponent of not cutting back all you love...could you get this to $50 and do free / cheap things instead? Lots of ideas here on the board if needed.
- Credit cards: obvious, but pay this off and never get into debt again!
- $100 monthly for kid activities: could you cut in half? Not ideal, I know, but your financial future is also important!

If you took the steps above, you'd free up over $350 monthly immediately. That would go a big way towards your e-fund (I believe you need at least $9k there.). Once your e-fund is all set, start upping retirement and keeping a hawk eye on expenses.

Also, is there an opportunity to create a small income stream given you work part time? Babysitting?

[aurora]

Welcome, and thanks for posting a MM post!

In addition to what everyone else has said, it sounds like you'll have the medical bill paid off by February ($300 each in Nov-Jan then $100 in Feb). After that, don't start spending that $, but instead put it toward re-building your e-fund until you have at least 3 months of expenses in there. You're so close to your income that you're only one unexpected cost away from a much rougher time.

In the meantime, I'd find another $100/month in the budget somewhere (cut kids activities, entertainment, and/or groceries) and put $50/month extra toward each of your retirement accounts (either at work or in a Roth IRA) starting ASAP. Each time you get a raise, add a little more until you're at 15% (including match).

The good news is that your expenses are overall pretty low and you don't seem to be living an excessive lifestyle.

[purpleminion]

Oct 20, 2014 23:42:38 GMT -5 aurora said:

Welcome, and thanks for posting a MM post!

In addition to what everyone else has said, it sounds like you'll have the medical bill paid off by February ($300 each in Nov-Jan then $100 in Feb). After that, don't start spending that $, but instead put it toward re-building your e-fund until you have at least 3 months of expenses in there. You're so close to your income that you're only one unexpected cost away from a much rougher time. The problem is that this probably won't be paid off that soon because somebody always is needing to go to the doctor, so the balance goes up as we're paying it down. It's so frustrating. In fact, DC2 just had an ER visit on Saturday, so I'm sure we'll be in for a pretty big bill for that soon.

In the meantime, I'd find another $100/month in the budget somewhere (cut kids activities, entertainment, and/or groceries) and put $50/month extra toward each of your retirement accounts (either at work or in a Roth IRA) starting ASAP. Each time you get a raise, add a little more until you're at 15% (including match).

The good news is that your expenses are overall pretty low and you don't seem to be living an excessive lifestyle. This is what scares me. We don't live extravagantly, yet I feel like we're just barely making it.

[flatlan]

Yay for posting your budget! I think that overall you guys are doing well by mostly staying within your means and having very little debt. I think you need to work on starting an emergency fund. $1000 at first and then knocking out your debt. Then you can focus on building up to the 3-6 months efund (per Dave Ramsey) I do think that to make this possible one or both of you need to figure out how to bring in more income from side jobs or selling unwanted items around the house.

[purpleminion]

Thank you so much for all the great suggestions!

I agree we need to really be diligent about cutting that entertainment budget. Most of that is in the form of dining out, so that should be fairly easy to cut back on.

Heat is tricky to cut back on for us. DH works from home and his office is in the basement (it's always colder down there) so I don't want to turn the heat down on him too much. Also, the heat/electric amount is what we pay in the winter (we live in a very cold climate). During the spring/summer/fall months it's much lower. The last one I paid was only $120, but I like to budget for worst case scenarios.

I will try to be better about couponing when it comes to groceries and household/personal care stuff. Honestly, a lot of misc stuff gets shoved in the household category for me, so that's probably why it looks so high. Again, better tracking will help me with this category.

I really don't want to cut the kids activities. They are pretty young so they aren't involved in that much stuff. They are both in gymnastics which costs us $75/month, but the other things they're in (soccer, swimming lessons, that's really all for now) are one time payments, so I added the extra $25/month to account for them.

Honestly guys, 3 months expenses in our efund seems so terribly out of reach for us. My heart sinks just thinking about it.

[purpleminion]

I have been looking into part time work. This is going to sound really bad, but I'm trying to be totally honest with myself here (and with you): I am not adverse to the idea of working a part time job, I just want to find one where I won't be working with the public. The problem is with my pride. I work with high school students, and I don't want to work one job where I am their teacher, and another where I am their co-worker. Does that make any sense? Any ideas?

[flatlan]

Oct 21, 2014 0:24:35 GMT -5 purpleminion said:

I have been looking into part time work. This is going to sound really bad, but I'm trying to be totally honest with myself here (and with you): I am not adverse to the idea of working a part time job, I just want to find one where I won't be working with the public. The problem is with my pride. I work with high school students, and I don't want to work one job where I am their teacher, and another where I am their co-worker. Does that make any sense? Any ideas?

I understand that, especially if you live in a small town.  Maybe you should look into some more alternative jobs.  I know that there is a place where you can tutor online but the website is escaping me now.  Could you also thing of anything you could sell that you don't want or need to help with building your emergency fund?

[Deleted]

Purple, re: 3 months in efund....that amount should include necessary expenses only (so, 3x your living costs, less things like kid activities, eating out, etc.). It may feel immense, but I promise you it is just a matter of setting a goal and working towards it. You WILL get there. And, the funny thing about money is once you start exerting more mindfulness and control over it, you will be surprised at how much of an impact that has.

Regarding part-time jobs....my take is you can let pride stand in the way, or you can stand in your power and not let perceptions hurt your finances.

In regards to not working with the public, that will limit your options, but some ideas:
- Private tutoring
- Childcare, babysitting for neighbors and those that need a night out, etc.
- Helping small businesses in your area (ex: if you were an English teacher, for example, advertise your services to small businesses to help with website text, menus, service brochures, etc.)

Also, I encourage you to think about the worst case scenario - you get a summer time job at Starbucks, where you work with a student and see a few students a day. What happens? You explain to coworker you're excited to build your barista skills and hope you both have a productive working relationship.

I do not mean to dismiss your concern, but as a third party objective reader, you need more income which would help you in a big way, and I don't want you to prevent yourself from even exploring that opportunity!

[krystee]

Job ideas:
--Tutor.com (work from home and tutor online)
--Babysitting/nannying
--Bartending (your colleagues would have to be 21+!)
--Working PT at a hospital, for example in registration or medical records. I did this as an extra job to get us out of debt and you had to be 18+ to work there.

I think your budget is pretty lean and this is really just an income issue. I'd work extra until you had an e-fund of three months and a general savings account of a few thousand built up. I made $800/month take home at the hospital seven years ago working 20 hours. You'd be done in less than a year.

Did you say what your H does? Does he have the option to work more hours or could he apply to places that would pay more?

[dirtyred]

You shouldn't heat the entire house to keep one room in the basement warm for your DH.  Buy a space heater that he can use when he's down there and keep the rest of the house cooler.

[wildfloweragain]

Oct 21, 2014 0:24:35 GMT -5 purpleminion said:

I have been looking into part time work. This is going to sound really bad, but I'm trying to be totally honest with myself here (and with you): I am not adverse to the idea of working a part time job, I just want to find one where I won't be working with the public. The problem is with my pride. I work with high school students, and I don't want to work one job where I am their teacher, and another where I am their co-worker. Does that make any sense? Any ideas?

H actually gave me this same advice when I started teaching in this town.  I had worked in Wegmans bakery in my hometown and in my college town and wanted to do it here, too, because I liked it.  H strongly advised against it because parents would see my differently (someone who waits on them, I guess, and not a professional.) 

Although I disagree, some towns are like that and I did take his advice.  So it's not such a strange idea.

How about seeing if the local library is hiring or getting on the substitute teacher list? We have some part time teachers who sub the other part of the day.

[tealblue]

I know I can change my HSA withholdings by just submitting a form to my payroll dept. See if you can do the same, that will make your medical payment pretax.

Also, what do you do when you submit your daycare expenses? Does that go to savings or just to pay bills? (Do you cash out that monthly to pay for daycare?)

[purpleminion]

Seriously you guys, thank you for all the suggestions and ideas!

About the daycare stuff: I guess I am kind of double counting daycare expenses since the flex gets deducted from DH's paycheck, but we use that lump sum in the summer when I'm not getting paid. I really do need to sit down and figure out a separate summer budget.

Also, I talked to the activities director at our school and signed up to be on the list to chaperone school dances (you get paid for that) so that's something. And I am currently looking into an opportunity to work for an after school program at our local elementary schools that is run by our district. That would only be about an extra $30/week, but that's better than nothing, right?

[keweenawlove]

On the hospital visits, are there any Quick Care locations in your area? We have several locations affiliated with our local hospital and the last time DH went, I think the walk-in fee (no insurance) was $40-$50. I might work for times you need to bring your kids in for minor sickness.

[arterr0]

The expenses that look high to me are groceries, entertainment, and household/personal care. You mentioned that much of the entertainment is dining out, but you still have a fairly high grocery bill. Do you currently meal plan using weekly sales? I know this can be a little time consuming, but could probably shave quite a bit from your budget. I personally would cut dining out to once per month, but I know that isn't always practical. If you are going to dine out, try to look for coupons or other discounts, such as Coupon Mint.

[mslhb]

Honestly I am impressed that you have kept your debt low with such a tight budget! Definitely better health care sounds like it will help you immensely. To increase income I would check out swagbucks. Doesn't generate a ton of money but I started in January and have already made $300 in paypal cash and amazon gift cards. Once you get the hang of it it fairly easy to use without it feeling like work. You mention your DH works at home so I thought I would bring it up. On days I work from home it is super easy to run in the background. Also I definitely recommend mint.com. I held off on creating an account forever but this has helped me immensely to really understand where my money was going and help keep things in check.

[Deleted]

Having worked in a small high school, I'd suggest talking to the activities director, seeing about coaching, being a referee for any sports, being a score keeper for basketball, etc. Also check with the district and see about subbing, even if you just sub and hour here or there is adds up pretty quickly. I hired the subs for the highschool and I loved it when I had a part-time teacher willing to sub, especially when track season rolled around. In our district, even if it was an hour, it was $30/day.

[sometimesrunner]

Someone may have already mentioned this, but even if you can't change your HSA contributions through payroll, you can still deposit that money outside of payroll. Before you make another payment on your medical bills, make sure you deposit that money into your HSA. Then turn around and write a check out of your HSA. This will help you a bit at tax time.

[laurensmomma]

Oct 21, 2014 0:17:05 GMT -5 purpleminion said:

Heat is tricky to cut back on for us. DH works from home and his office is in the basement (it's always colder down there) so I don't want to turn the heat down on him too much. Also, the heat/electric amount is what we pay in the winter (we live in a very cold climate). During the spring/summer/fall months it's much lower. The last one I paid was only $120, but I like to budget for worst case scenarios.

I haven't read the whole thread, so not sure if this was suggested or not, but could you look into getting an energy-saving space heater for the basement? Seems wasteful to heat the whole house when only the basement is being occupied during the day. Just a thought.


ETA: I now see it was. :0)

[badgergrl]

Is your job going full time in the future a possibility? Can you start talking to administrators about going full time? Would that help your insurance issue too, would you then be eligible for insurance at work to get away from your dh's plan?

[purpleminion]

Unfortunately, I don't think a full time position is going to be happening any time soon, and if it does, I won't be the only one gunning for it. It's super hard to even get your foot in the door in our district. Too many teachers, not enough jobs (or budget) for them.

And again, thank you all for great advice. I just want you all to know that I am taking it all to heart.