Need help with Budget, numbers inside!!!!

[brig2221]

I'm back, and I wanted to thank all of you who helped out with advice as well as the numbers. I really liked that formula where you were able to come up with a figure of $91K to support our bills as they are now.

A couple of things I have done so far to cut costs. I went ahead and dropped HBO and the High Definition package with DirecTV, dropping my monthly billl to about $60/month from $81/month. Still pretty expensive. That said, it's pretty much the cheapest you can get a normal package with two DVR's with taxes. I'm not read to cut the TV all together yet. Also, please keep in mind that all of the figures I listed above were worst case scenarios, and all were rounded up a few dollars. I want to be prepared for the worst!

I went ahead and had the wife cut my gym membership. She called into cancel it as she has it setup under a corporate account. Our memberships together are about $57/month, $32/month for hers, and just $25/month for mine. Instead of cancelling my membership all together, they offered to "freeze" it for 6 months, which is what she did. Not a bad compromise, although I suspect I will still either cancel or contnue the freeze once the six months is up.

I know someone made a comment about our phone bills being high. My wife and I have the same plans and spend about $81/month respectively on our bills. Hers is paid for 100% by her work. We pay it, and she gets to expense it. Mine, we pay 100% on. I am probably going to drop mine so I can get it in the $50/month range. I hate to do that though because they always may you agree to a new 2 year term when you do that, and I hate being tied down another 2 years if I ever want to switch providers. That said, I will probably bit the bullet and do it.

Regarding our fuel expenses, I really tried to estimate that the best I could. We are very lucky now in that my wife has a company car complete with a gas card that she can use for business as well as personal use. She only has to pay taxes on the personal miles at the end of the year. We don't pay for gas at all on that car. As you can imagine, we do any traveling or long drives in that car as the gas is free, so I really tried to estimate what our expenses would be once we lose that come the first of next year. That said, she will be running off a Runzheimer program where she will get close to $800-$900 month for her car, insurance, gas, etc, and we have a car already paid for that she will then be driving.

I went ahead and downloaded a free trial of Quicken Basic. I don't have everything down yet, but it is really cool. I went ahead and downloaded the last three months statement on my checking account and then went ahead and categorized every expense! It took me several hours because both my wife and I used our debit card for everything. I can't tell you how many $1-$5 transactions we had that needed to be categorized. That said, it really does open your eyes to where your money is going when figure it out to the penny! For us, it is dining expenses. In the months of March and April, we spent $770 and $650 on dining between dinners out, and lunches. Needless to say, I will be cutting that tremendously. As of the 29th of this month, we are sitting at around $290. Not where I want to be, but a lot better than where we were.

We currently have about $112,000 in savings that I am desperately trying to get up so that we can pay off our house before the baby comes. We owe about $116,000 on our home now. We also owe about $14,000 on a new Accord that I just bought a few months ago. In a perfect world, I would like to get that completely paid off before the baby comes as well, but I don't think that will happen. I only plan on paying off the house if we are able to save another $10-$15K on top of the payoff amount as I wouldn't feel comfortable without an emergency savings account. In a perfect world, I would like that number to actually be $20K, but there is only so much you can do in 8 months.

[tinapbeana]

Originally Posted by brig2221

We currently have about $112,000 in savings that I am desperately trying to get up so that we can pay off our house before the baby comes. We owe about $116,000 on our home now. We also owe about $14,000 on a new Accord that I just bought a few months ago. In a perfect world, I would like to get that completely paid off before the baby comes as well, but I don't think that will happen. I only plan on paying off the house if we are able to save another $10-$15K on top of the payoff amount as I wouldn't feel comfortable without an emergency savings account. In a perfect world, I would like that number to actually be $20K, but there is only so much you can do in 8 months.

if it were me, i'd pay off the car before the house (depreciating asset, higher interest rate, etc).

also, while it is admirable to want to pay off the house early, i myself wouldn't be comfortable sinking all my liquid cash into the house and having the baby arrive without a sizeable emergency fund. have you considered refinancing the mortgage with another ocmpany for just the amount you owe, which would likely lower your monthly payment on the balance?

[anonymous_saver]

I would set aside 8 months of an emergency fund from the $112,000 into a high interest account like Emigrant Direct. Then I would pay off the car. Then I would use whatever you have left to pay off towards the house and refinance for whatever is left (it would likely be a very small/reasonable house payment).

This is my opinion as long as you have no other new debt accrued and as long as you are saving for both of your retirements adequately.

[brig2221]

The more I think about it, the more I would agree with those who advise that I pay off the car first, set aside an emergency fund, and then take the remaining dollar amount to either payoff a large percentage of the house, or keep it in savings until we can build that portion back up to our payoff amount.

That said, it's kind of deflating as we will FINALLY have enought money saved to actually pay off the house. Taking a pretty large chunk out of that money to pay off the car and to set aside an emergency fund is going to be tuff!

[disneysteve]

Originally Posted by brig2221

That said, it's kind of deflating as we will FINALLY have enought money saved to actually pay off the house. Taking a pretty large chunk out of that money to pay off the car and to set aside an emergency fund is going to be tuff!

We've had enough in savings to pay off our house for years now. I have no intention of prepaying the mortgage as our investments earn far more than the interest we pay on the house. So we'll keep that mortgage probably close to its full life (I would like to pay it off before I retire which will require paying it off a few years early).