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    Who wants to critique my post-debt budget?

    OK background. At the end of this year, we'll be consumer debt free with our current snowball plan. We still have some student loans but I've decided that once the consumer debt is gone, we're going to slow down and ramp up the savings. There is a good chance we'll be getting ready for a big move at the end of 2012 and may have some other major expenses so I'd like to really pad the savings until then.

    DH is a full-time student and only works one day a week so the income is small and the budget bare bones. Let me know what you think. This does not account for my annual bonus or the raise I anticipate in December. The bonus will be used to knock out the rest of our debt this year and whatever the raise amounts to be (probably small) will just be added to savings.

    No medical category because I have an HSA that takes care of those expenses. Retirement is currently at 10% but I will be ramping it up to 15% at the end of the year, and hopefully to 18% by the end of 2012. I'm 25, DH is 30. Currently have $28k in retirement ($25k in my 401k, $3k in DHs Roth I started for him last year but contributions have been put on hold since he went back to school and we had to scale back. We'll start them up again once debt is paid).

    Current savings: $5,500

    Income: 3,000
    Rental income: $134

    SL: $141 (current balance $10,200)
    Extra SL pmt: $120 (this will go toward DHs loans once he has to start paying on them but mine are higher interest so for now we're just putting it toward mine -- he currently has $9k in SLs and we won't be taking any more out)
    Roth for DH: $250
    Savings: $250

    Mortgage: $506 (PITI + $32 extra toward principle each month)
    Gas and electric: $101 (budget billing -- slacked this year, but trying to get this back down)
    Water/sewer/trash: $45
    Phone: $78
    Hulu/netflix: $20
    Internet: $30
    Home improvements/maintenance: $40
    Auto insurance: $87 (paid semi-annually)
    Fuel: $200 (estimated high)
    Groceries: $285
    Dining out: $50
    Pets: $25
    Entertainment: $200
    Daycare: $48 (before school care 3x/week)
    Education savings: $500
    Gym: $42
    Gifts: $80

    So what do you think? Anywhere we could improve short of DH bringing in more (trust me I'm working on it! )? I did ramp up our fun money a little with the post-debt budget and I question whether either of us will actually be able to spend that much given how long we've gone on such a small amount. Other thoughts/input welcome!

    #2
    I would stop making extra mortgage payments until the student loans are gone and you are saving 20% of income.

    Where is clothing, auto maintenance? Do all health costs get covered by the HSA?

    What is Education savings?

    I think the $200 for Entertainment sounds high. What does that include? You've already counted Netflix, dining out and the gym.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


      #3
      Originally posted by disneysteve View Post
      I would stop making extra mortgage payments until the student loans are gone and you are saving 20% of income.

      Where is clothing, auto maintenance? Do all health costs get covered by the HSA?

      What is Education savings?

      I think the $200 for Entertainment sounds high. What does that include? You've already counted Netflix, dining out and the gym.
      Yes all health costs are covered by the HSA. My work puts in $1000/year and I contribute $100/month that comes out of my check automatically so it isn't accounted for in my net pay.

      Entertainment is our monthly fun money -- it includes clothes and shopping, lunches out (dinners together come from dining out), going out with friends, haircuts, etc. It really encompases a lot. Currently we each get $60/month, and I would really like to bump this up a bit once our consumer debt is gone just becuase we've been so disciplined for the last two years.

      Auto maintenance comes from unaccounted for income I get from traveling for work... I feel like the amount I make is not predictable enough to include it in our budget but it is always ample to cover regular maintenance on both our cars. Major repairs would come from the efund.

      Education savings is for DD and DHs school tuition (DD goes to a private school and tuition is paid annually).

      Comment


        #4
        Yes, I agree that entertainment that costs $200 a month should probably be the first thing to go and to pare down. We only spend about $20 a month on entertainment, and it really helps us stay closer to budget. It just means you stay home more on the weekends, and do not really eat out.

        Comment


          #5
          Originally posted by Frugal View Post
          Yes, I agree that entertainment that costs $200 a month should probably be the first thing to go and to pare down. We only spend about $20 a month on entertainment, and it really helps us stay closer to budget. It just means you stay home more on the weekends, and do not really eat out.
          But what does your entertainment include? Because if ours was $20 my husband would be out of fun money for the month if he got a haircut...

          I'm not saying we don't want to cut back where we can, but we also want to live a little too, especially once our debt is repaid. We play sports in the summer, have BBQs with friends, go camping, etc and all of these expenses come from the $100 we each will get. Is that really so much of an outrageous number for the scope of our budget?

          Comment


            #6
            Originally posted by riverwed070707 View Post
            But what does your entertainment include? Because if ours was $20 my husband would be out of fun money for the month if he got a haircut...
            I wouldn't include haircuts in "entertainment" or "fun money" as a haircut isn't really either of those things. Personally, my wife and I cut our own hair so we spend $0 in this category, but if we did pay someone else to do it, I'd have it as a line item on a budget. I used to spend $13 every 5-6 weeks before I started doing it myself so it was a fixed, predictable expense.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #7
              Originally posted by disneysteve View Post
              I wouldn't include haircuts in "entertainment" or "fun money" as a haircut isn't really either of those things. Personally, my wife and I cut our own hair so we spend $0 in this category, but if we did pay someone else to do it, I'd have it as a line item on a budget. I used to spend $13 every 5-6 weeks before I started doing it myself so it was a fixed, predictable expense.
              Well neither are clothes but we include those in this too because both are splurges as far as I'm concerned. DH likes to get his haircut, I cut my own... I like to buy new clothes every now and then, DH is OK with keeping his old stuff until it wears out. So instead of putting a montly line item for something that doesn't happen monthly and then having to track how much is in that "account" its easier for us to just be accountable for our own expenses and only splurge on them when we can afford to. I also think having them come from fun money makes us think about them a little harder and whether thats how we want to spend our funds.

              Comment


                #8
                Originally posted by riverwed070707 View Post
                Current savings: $5,500

                Income: 3,000
                Rental income: $134

                SL: $141 (current balance $10,200)
                Extra SL pmt: $120 (this will go toward DHs loans once he has to start paying on them but mine are higher interest so for now we're just putting it toward mine -- he currently has $9k in SLs and we won't be taking any more out)
                Roth for DH: $250
                Savings: $250

                Mortgage: $506 (PITI + $32 extra toward principle each month)
                Gas and electric: $101 (budget billing -- slacked this year, but trying to get this back down)
                Water/sewer/trash: $45
                Phone: $78
                Hulu/netflix: $20
                Internet: $30
                Home improvements/maintenance: $40
                Auto insurance: $87 (paid semi-annually)
                Fuel: $200 (estimated high)
                Groceries: $285
                Dining out: $50
                Pets: $25
                Entertainment: $200
                Daycare: $48 (before school care 3x/week)
                Education savings: $500
                Gym: $42
                Gifts: $80

                So what do you think? Anywhere we could improve short of DH bringing in more (trust me I'm working on it! )? I did ramp up our fun money a little with the post-debt budget and I question whether either of us will actually be able to spend that much given how long we've gone on such a small amount. Other thoughts/input welcome!
                riverwed, you helped me with my budget. Here's my help to you.

                Hulu/netflix: $20 Go away. Recently canceled our $11/mo Netflix. [edited for legality]

                Dining out: $50 Go away. Dining out is a LUXURY.

                Entertainment: $200. Go away. Do things for free. Walks. Swimming. Camping is not very expensive. Etc.

                Gym: $42 Go away. A LOT can be done at home/around your neighbourhood.

                Gifts: $80 Go away. Make gifts.

                Now, I do realize that this is a post-debt budget. But until you're 100% debt-free, I would cut costs wherever possible, WITHOUT making a dent in your HAPPINESS. You cannot expect to put all your money towards bills, debts, savings, etc., without giving yourselves a bit of fun. So remember that when you look at my post - I'm not telling you to ditch all of that.

                Last edited by uRabbit; 07-02-2011, 01:16 PM.

                Comment


                  #9
                  Originally posted by uRabbit View Post
                  Recently canceled our $11/mo Netflix. We download movies online. Now, some people may find this unethical. I call it free.
                  Sorry. I call it ILLEGAL.

                  Please refrain from promoting illegal activities on this site.
                  Steve

                  * Despite the high cost of living, it remains very popular.
                  * Why should I pay for my daughter's education when she already knows everything?
                  * There are no shortcuts to anywhere worth going.

                  Comment


                    #10
                    Originally posted by disneysteve View Post
                    Sorry. I call it ILLEGAL.

                    Please refrain from promoting illegal activities on this site.
                    I agree. Also, the industry is cracking down on it so don't be surprised if you get a knock on your door one of these days.

                    OP-I think many here budget many of the things that you include in "fun" as separate categories, so I can understand why so many are saying that $200 is too much. But if you stripped out haircuts, clothes, an stated that it was $110/mth, there would probably be less uproar about it.

                    As far as Netflix/hulu goes, you can strip Netflix down to the $9/mth plan, still get movies & stream. I tried hulu + and I wasn't impressed, certainly not enough to pay for it.

                    Personally, the only thing that looks high to me is the $80/mth for gifts. I would definitely pare that back.

                    Comment


                      #11
                      I think you budget is realistic and still rather frugal. $200 a month fun/misc money for 2 people is a pittance. $80 a month on gifts seems reasonable too - assuming that includes your Christmas budget.

                      Austere budgets are for people who have the wolf at the door or are trying to accomplish a short term goal. You know if you want to save for a goal - like a vacation - you'll need to make some cuts/sacrifices to get there. Same goes if you want to buy a new car some day. Or furniture. I would budget for those things so the monthly bite is small, if those are things you want to do.

                      Comment


                        #12
                        I would consider clothing and haircuts as more of their own categories. I know I have a category for hair and a separate one for clothing (which I don't think is frivilous - you need clothes, and they need to be replaced sometimes - with undergarments needing replacement even more frequently). I DO pay for haircuts and occasional highlights, and while they aren't really a necessity, my appearance is such an important part of my self-image that they get their own category, lol.

                        Once you take all the stuff that has nothing to do with entertainment out of the entertainment category, I really don't think you are spending much on entertainment.

                        I just calculated what our "blow" money comes to as a proportion of our net income. DH gets $200 and I get $60 each month (DH is more of a spender than me, and this is the level that seems to keep him happy enough). Anyways, this comes to about 3% of our net income. If I were to include haircuts and clothing in that total it would be more like 6% of our net income, which is pretty close to what you guys spend on these items comes to as a proportion of your net income too.

                        Comment


                          #13
                          totally in agreement with debbie, I do the same thing. We budget $50/month for clothes and yes it mostly is once a years. Undergarments, socks, etc don't last forever. Clothes are a necessary thing for growing kids, etc. Haircuts we also budget for. DH ever 3 weeks and I try to now go every 3 months for a cut and color.

                          Fun stuff should be entertainment and you aren't spending a lot.

                          I know that our blow money is low at $80/month per person $160 = 1% (as I write this I cringe at how cheap I am coming off right now) for us but everything is budgeted for like car gas, eating out, haircuts, home stuff, clothes, etc. That's for us to have fun and not account for it, eating lunches out, etc. Everything else I pay on our CC and track. I also usually don't calculate our percentages.
                          LivingAlmostLarge Blog

                          Comment


                            #14
                            Originally posted by riverwed070707 View Post
                            OK background. At the end of this year, we'll be consumer debt free with our current snowball plan. We still have some student loans but I've decided that once the consumer debt is gone, we're going to slow down and ramp up the savings. There is a good chance we'll be getting ready for a big move at the end of 2012 and may have some other major expenses so I'd like to really pad the savings until then.

                            DH is a full-time student and only works one day a week so the income is small and the budget bare bones. Let me know what you think. This does not account for my annual bonus or the raise I anticipate in December. The bonus will be used to knock out the rest of our debt this year and whatever the raise amounts to be (probably small) will just be added to savings.

                            No medical category because I have an HSA that takes care of those expenses. Retirement is currently at 10% but I will be ramping it up to 15% at the end of the year, and hopefully to 18% by the end of 2012. I'm 25, DH is 30. Currently have $28k in retirement ($25k in my 401k, $3k in DHs Roth I started for him last year but contributions have been put on hold since he went back to school and we had to scale back. We'll start them up again once debt is paid).

                            Current savings: $5,500

                            Income: 3,000
                            Rental income: $134

                            SL: $141 (current balance $10,200)
                            Extra SL pmt: $120 (this will go toward DHs loans once he has to start paying on them but mine are higher interest so for now we're just putting it toward mine -- he currently has $9k in SLs and we won't be taking any more out)
                            Roth for DH: $250
                            Savings: $250

                            Mortgage: $506 (PITI + $32 extra toward principle each month)
                            Gas and electric: $101 (budget billing -- slacked this year, but trying to get this back down)
                            Water/sewer/trash: $45
                            Phone: $78
                            Hulu/netflix: $20
                            Internet: $30
                            Home improvements/maintenance: $40
                            Auto insurance: $87 (paid semi-annually)
                            Fuel: $200 (estimated high)
                            Groceries: $285
                            Dining out: $50
                            Pets: $25
                            Entertainment: $200
                            Daycare: $48 (before school care 3x/week)
                            Education savings: $500
                            Gym: $42
                            Gifts: $80

                            So what do you think? Anywhere we could improve short of DH bringing in more (trust me I'm working on it! )? I did ramp up our fun money a little with the post-debt budget and I question whether either of us will actually be able to spend that much given how long we've gone on such a small amount. Other thoughts/input welcome!
                            Kind of been on a hiatus from here since I got divorced in 2016 and my finances felt like they went in the pits. I just spent waaaay too much time reading through old threads and thought this would be a fun see how far Iíve come update. My savings/assets definitely took a big hit from the split but I Let him have the primary house and a small rental property + the boat and savings and I took the 2 helocs from renovations on the rental in order to keep my retirement in tact and keep the cash cow 4 plex we purchased and renovated in 2015. A year ago I purchased a cute little 1,300 sq ft house for $120k for me and the kiddo. Financed on a 15 year at 4-ish%. It will become a rental someday when the kid and I donít need it anymore.

                            2011 joint net income=$3000
                            2018 primary net income=$4,300 (which doesnít include the $215 /mo child support I pay in our 50/50 custody agreement

                            2011 rental income: $134
                            2018 net rental income: $2,200

                            2011 retirement savings: $28,000
                            2018 retirement savings: $158,000

                            2011 savings: $5,500
                            2018 savings: $13,000

                            Still have no car payment, no debt. Student loans were paid off earlier this year as my 32 bday present to myself. I donít track my budget the way I used to but I want to get back on track so I can start finding some taxable investment accounts to prepare for early retirement which is why I popped back in

                            Comment


                              #15
                              Originally posted by riverwed070707 View Post
                              My savings/assets definitely took a big hit from the split but I Let him have the primary house and a small rental property + the boat and savings and I took the 2 helocs from renovations on the rental in order to keep my retirement in tact and keep the cash cow 4 plex we purchased and renovated in 2015.
                              Because the four-plex is worth so much more than:
                              • two helocs,
                              • the primary house,
                              • a small rental property,
                              • the boat, and
                              • savings?


                              (I'm going through a community-property divorce, and getting all the assets -- we had no debt -- divided takes a lot more lawyer time than I expected.)

                              Comment

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