Wrote down our monthly expenses - GULP!

[Russell]

Apt Rent                $1700.00
Webserver               $100.00
Car gas                 $80.00
Car Maintenance         $50.00
Car payments            $250.00
Car Insurance           $165.00
Cat Food etc            $25.00
Gas Bill                $35.00
Elec Bill               $40.00
Utilities               $30.00
Life Insurance          $50.00 (both of us)
Phone                   $35.00
DSL/Internet            $35.00
Netflix.com             $25.00
Doctor/prescription     $15.00
Food (mainly lunch)     $200.00
Groceries               $150.00
Day Care                $900.00
Student loan (wife)     $350.00

Total:          $4235

The rent is the killer. Luckily, I do have enough in my savings account to payoff the car so that frees up the $250 a month but the total monthly expenses are still way too much. Trouble is, I don't see any useless stuff on there, like cable, gym memberships, golf club memberships etc so I don't know what to cut back on. We don't even have a 'land-line' we use our cell phones (mine is free/company provided).

[mom-from-missouri]

What about the $250 for lunch? Could any of that be brown bagged and saved?

[Russell]

That's a great suggestion. I honestly envy those of you who bring your own lunch everyday (and those here that are vegitarians like my wife) but its just not in me. Maybe 1 or two lunches a week is doable. But that would only be a drop in the bucket.

I just noticed the two biggest expenses are the rent and the day care. Just those two alone are $2600 *ouch*. I really need to think about cutting down on these two expenses. My goal is to be able save at least $500 a month.

Do you guys see anything unusual in my list that most of you don't have ? well, besides the webserver ? And for the things I have on my list do the amounts seem unusually high ? i know the rent is pretty high but its a temp arrangement until we can figure out what we want to do in the future ? We want to move to a cheaper state but having lived my whole life in CA I don't know if I can adjust to the weather in most states...but that's another topic altogether

[mom-from-missouri]

Since daycare is $900 a month, I am going to assume that both you and your wife each make over $900 a month.(?)

As a former daycare-preschool director and owner--what are the ages of your child(ren) and what type of care are you paying for? Many people don't realize they have options on daycare besides paying full time rates.

[Russell]

Yes, we are fortunate that we make just enough money to cover our monthly expenses but we don't have any savings right now.

Our daughter is almost 7 months now. My wife and I both work full time. I work from 11am to 8pm so the baby stays with me until about 10:30AM before I drop her off at the day care. The wife picks her up around 5:30PM. The nanny's are even more expensive here and we worry that no one is around to watch them, at least with the day care people come and go all the time.

Until 7 months ago we didn't have the $900 expense and we were paying $300 less on the rent too so we were doing pretty good for a while. But now we have an adorable little munchkin and she's totally worth it so we need to make some adjustments to be able to save and put some money away for her college etc

[baselle]

Originally Posted by Russell

That's a great suggestion. I honestly envy those of you who bring your own lunch everyday (and those here that are vegitarians like my wife) but its just not in me. Maybe 1 or two lunches a week is doable. But that would only be a drop in the bucket.

1 or 2 lunches a workweek is still a 20-40% reduction in your lunch line item. You might want to try it, just to see if you can get into the habit. If you do bring a lunch from home, you might want to put what you would have spent on lunch in a change jar at work. Pay yourself to reinforce the habit.

I don't think that you have a lot of big things to cut - I think you're going to have to turn the screws slightly on many little things. Library instead of the Netflix, for instance.
I just couldn't resist this action smiley - maybe it should be whacking your budget.

[terry1156]

Originally Posted by Russell

Luckily, I do have enough in my savings account to payoff the car so that frees up the $250 a month but the total monthly expenses are still way too much.

First, I see there are no credit cards there which puts you way ahead in the game. Congrats on that.

The first question I would ask is which has a higher interest rate, your car loan or the student loan? The one with the higher rate would be the one to tackle first.

While after paying off the car loan or student loan, you'll have that money to build up your savingsa again and pay down the other debt a bit more.

None of the other numbers seem completely out of whack. There are areas that you could delete such as the netflix, but it doesn't seem like you are in a position that you have to unless you want to.

I don't know about your work, but do either of you have flex time? That may cut down on the daycare hours. I think Jeffrey mentioned something about a daycare plan where you can put the money away for daycare and you get it tax free if your company allows it. That would cut 20% - 35% off the bill.

[mom-from-missouri]

With you both working full time, you probably won't like this suggestion, but--if she is in a daycare center, most centers give employees a 25-50% discount on their daycare rate. My fulltime teachers-caregivers I gave 50% off. My part timers and even the janitor I gave 25% off. You might want to check into seeing if she needs janitoral or handiman type help-Our janitor I rarely saw-he came in and emptied trashed and mopped after we closed at night, but before we opened the next morning. Yet he had a 25% discount on their children which his wife was always the one to drop off and pick up. Towards the end, he had even more of a discount instead of getting paid-(we bartered that one out).
Another suggestion is see if you can flexcare your childcare-we had several families who only had their child there in the mornings, and others in the afternoon. Between them, they took one slot and each paid half rate. However, if you do this, all people must be aware of their time slots and honor them-as the state regulates how many children/infants can be there at a time. The last suggestion is to see if you may qualify for reduced childcare. Basically that would be through your state-you pay what you can afford, and the state pays the rest. In our area, they look at your income, medical issues, and also how much of your income is going to student loans. Just because one is out of college and working doesnt put them in a good financial situation if there are loans involved. Some states are now considering that when they look at childcare assistance.

[terry1156]

I found what I was talking about. It's a childcare flexible spending plan <A HREF="http://www.savingadvice.com/forums/showthread.php?t=2631">here it is</A>

[Tree0164]

Hi Russell! Welcome the boards!

Can you move? Your rent seems very high I know you are in California so that may not be a possibility. Or atleast look into buying...

Taxes adjust your taxes so you are getting more in each paycheck since your little one is here. Also do the childcare flexible spending plan if you can. It maybe too late for to sign in 2005.

Your food bill.. $200 a month for lunch. Start brown bagging. Or cut down to 1 to 2 days a week.

Webserver???

Are you saving anything towards retirement?


Good luck!

[PrincessPerky]

Day care, you might find a cheaper alternative, unless you must use the state to help I am no in favor of that. But cheaper options include a SAHM friend. or a home Daycare which is generaly cheaper than the bigger ones. I noticed you already aranged your schedule to limit the amount of time she is in, It might be possible to go even further. Possibly with one of you being able to work for home or something. Remember that you could if you had to, neccessity is the mother of invention. But since you don't have to, you have the time and freedom to figure it out at your own rate.

On the netflix, I have no idea if you are an avid movie watcher or not, but I have noticed that the arival of a child either reduces or increases the movie habits. If you have increased, you might want to look into weather you like that or not. If you have decreased you may not be getting the most out of your subscription anymore.

On the brown bagging, if your work has access to a microwave, that opens up a huge amount of possiblitys for lunch. My DH doesn't brown bag it he takes a huge cooler in of snacks and leftovers, and the occasional canned soup. Can of soup is 49cents, plus some butter and saltines. Way cheaper than any meal you can buy. And hardly any last minute planning, if you have the room you can leave some soup at work wit a bowl and a spoon, no need to pack in the morning.

[kashi]

Hi Russell!

Bringing lunch from home really is not as hard as it may seem, especially since you don't have to drop your baby off at daycare until 10:30. If you could get up just a few minutes earlier in the morning, you can put together a sandwich, throw in an apple and a bag of chips, and voila! lunch! I second the idea of keeping things in your desk drawer. Easy Mac is great on days when you just didn't have time. Pretend to be a college kid again and keep some packages of ramen noodles close at hand. Soup, frozen burritos, a big salad and a slice of bread, leftovers from dinner, Boca burgers on a bun, etcetcetc.

Some days, I make soup or chili in a crockpot during the day while I'm at work...I come home and eat a bowl for dinner, then package the leftovers into individual containers and freeze them. It's so easy to grab in the morning, and I'm not as tempted to eat out. Plus, soup is CHEAP and filling.

I think you are right, though - daycare and rent is really eating up your budget. Cutting back on those, and bringing lunch to work as often as you can will allow you to start saving.

[Russell]

Thank you for the excellent suggestions everyone.

Yes, the wife has the flex spending account through her work, I forgo to factor that in. Not sure how much she gets back from that I will have to ask her.

Lunches, good suggestions there and I will give it a try.

Webserver, i used to have a business doing webhosting for small businesses way back in '98 but with the webhosting rates as low as $20 a yr I haven't found any new business for a long time now. However, I still have a few websites that use my server for their email server so it has to stay.

Netflix, yes with the baby we don't even have time to eat breakfast some days...she can be very fussy and trying sometimes so we haven't watched the last movies the begining of Feb. Last year when we got the Netflix thing we figure we can at least enjoy a few movies when the time permits since going out to the movies is no longer easy and we also didn't find anything good on the cable (besides the Discovery, TLC and Speed channels) so we cancelled the cable.

Daycare, we will have to look into some of your suggestions here...

Thank you once again, I've gotten some great suggestions from you all.

[DivaJen]

Russell -

Have you considered buying your own server? We have one, for the reasons you listed. It's an initial outlay of money, but then you own it, and it pays for itself after a short while.

I feel for you, trying to cut corners in OC. I grew up in South OC and know how exoensive it is to live there. I'm north of LA now, but prices here are still nuts.

[lisasayzhi]

If you're not watching as many movies with Netflix, at the very least, you could switch over to their new cheaper plan. It allows 4 movies a month with 2 out at a time, for $11.99/month. Atleast that'd save a little if you don't want to get rid of Netflix all together. Just a thought.

[byusteeler]

Actually, I think it sounds like things are missing in your budget. Are you sure you included everything? How about diapers and formula for the baby? What about clothing for yourselves and the baby? What about health insurance premiums, with a baby if you only pay $15 a month for medical you must have good insurance?

In California I don't think it would be easy to find a less expensive apartment, housing there is very expensive. Moving to a cheaper state would only help if both incomes could be comparably maintained. For example: We only pay 785 a month house payment (2700 square ft) mon a 15 year loan for a 2700 square foot house and child care for 1 child would probably be well under $500 a month here, but pay is not as high here. I don't know that there are a lot of cheaper states left, housing is on the rise pretty much anywhere that would have a decent job market.

Sorry, I am not trying to be a downer but having raised three children I know babies make quite a dent in your budget. If your budget isn't missing things you are doing a fantastic job. If your budget is not accurate better you realize it. When my husband and I looked at my taking an extended leave from my work, He said he wrote down all the bills and we could afford it. So I went ahead and took the leave. He forgot little things like gas and groceries. (about $500 of our budget) We had to do some fancy finance work to make ends meet. We did OK and I go back to work in April this year. (I've been off 3 years).

[MrsChambers]

I think that you should read Elizabeth Warren's THE TWO INCOME TRAP.. because it looks to me like you are a living breathing example.

my advise: who-ever makes the least amount of $$ each month (taking insurance into account of course) they should stay at home with your child. That will totally eliminate that child care cost, reduce some of that car gas, perhaps even the car insurance because you arn't driving so much and so often, and it will also reduce your lunch bill.

none-the-less.. you should pick up that book... I think it will answer your questions as to why you are in the situation that you are in.

[gakline]

Here's my 2 cent input. Go for the frozen meals. I've found some as low as $0.99 and others for $1.50 that are good. Granted they're more than making your own lunch. But when I don't have time to make anything, I'll grab a frozen meal, an apple and a glass for water.

Once you start bringing lunches it only gets easier.

[Russell]

Originally Posted by MrsChambers

my advise: who-ever makes the least amount of $$ each month (taking insurance into account of course) they should stay at home with your child. That will totally eliminate that child care cost, reduce some of that car gas, perhaps even the car insurance because you arn't driving so much and so often, and it will also reduce your lunch bill.

We've thought about that before but since I work as a consultant I don't get the health benefits and would have to buy the health insurance at a premium rate. My wife gets full benefits through her work so currently both of us working is the only solution until I try to switch jobs which I don't want to right at the moment. So we come out a bit ahead with both of us working even with the day care expenses. I will check out the book...thanks for the suggestion.

Jen, that's my own server that is co-located at a data center but I have to pay the colo charges which currently come out to be $100 out of my pocket.

byusteeler, I may have conveniently missed a few small items since the wife pays for those...I will go over the list with her this weekend

The rent is actually a bit high in this part of the town, even for So Cal. However, the avg is about $200 or so cheaper (for a 2bd apt) than what I'm paying and the areas are not as nice.

[kashi]

Why couldn't you be the one to stay home with the baby, instead of your wife? That way you could keep your health insurance, and maybe be a freelance consultant from home, still making money on the side.