Am I giving myself too much allowance?

[disneysteve]

The problem as I see it is you aren't REALLY saving 24%. I don't consider vacation, TV, or car maintenaince to be savings categories.

Yes and no. Those things aren't long-term or retirement savings, but short-term goals count as savings, too. Look how many people charge their vacations and take a year or more to pay them off. Far better to do as OP is doing and set money aside each month to pay for those things in cash without taking on debt. If you have to charge your vacation, you can't really afford it.

I think any savings shows a level of financial discipline that is seriously lacking in general today.

That said, I had missed the bit about only 2% going to the 401k. That does bother me. If the employer matches up to 4%, you should immediately raise that to at least get the full match. Otherwise, you are passing up free money.

[Homebody]

Walk into closet, are there tags hanging from clothes. Are there purchased items still in bags? If the answer is yes, your wife is probably a little clothes crazy and might want to curb her spending a bit.

I was at my 26 year old daughter's house in Reno this week since she has been really sick and I was aghast at how many items were unused. She had one bag that was unopened who's receipt was dated January 2007!

This daughter saved $50,000 for a down payment on a home by age 25, but I still think this is a problem in my humble opinion.

[MonkeyMama]

You know it really depends. I think overall if you took $200 out for gas than $200/month is decent. IT could be much worse. You're putting a decent amount to a home and savings and retirement. When we were your age our allowances were pretty much nil as we put are all to get into a home. I would feel the same way if I had any debt to work through. I think not hitting that stuff harder means it will take longer, but you have to find a balance that works for you. I was used to living on nothing through college so it wasn't a huge adjustment for us to not have much in the way of allowance money.

One huge thing about the 401k is you could be really slammed with taxes as a renter and living on 2 incomes. Upping your 401k could lower your tax bill so you may be able to contribute more with little difference to your net pay. I would play with the numbers and look at it. Just something you could save more with little effort.

[PrincessPerky]

it it ain't broke don't fix it...but having said that, no reason why you can't use your surplus allowance to further other goals besides immediate gratification...

[scfr]

Re the 401K contribution, I believe OP is already getting the full employer match. The employer matches 100% up to 4% of HIS salary, but the 2% is the total of both incomes (HIS and HERS), so assuming their salaries are roughly equal, he is already contributing up to the full employer match.

[disneysteve]

Re the 401K contribution, I believe OP is already getting the full employer match. The employer matches 100% up to 4% of HIS salary, but the 2% is the total of both incomes (HIS and HERS), so assuming their salaries are roughly equal, he is already contributing up to the full employer match.

I get it. Since the total retirement savings is 10%, there is other retirement savings going on like Roths, correct?

[LivingAlmostLarge]

I think it's fine, we're like monkeymama and at that age we had nothing saved for retirement because we had put everything into a house. We were house poor. But it turned out okay and we've slammed retirement like crazy now.

I'd rather see a large blow money category and budget sticking than little blow money and you keep not to it.

[project15]

That said, I had missed the bit about only 2% going to the 401k. That does bother me. If the employer matches up to 4%, you should immediately raise that to at least get the full match. Otherwise, you are passing up free money.

No, I am giving the full 4% from my salary. With my wife's income combined into the totals, it only comes out to 2% of our total income.

Walk into closet, are there tags hanging from clothes. Are there purchased items still in bags? If the answer is yes, your wife is probably a little clothes crazy and might want to curb her spending a bit.

Nope, she wears most everything she owns except for a few hoodies she bought during high school and college, so that's not a big problem. The $100 every other month is on professional clothes that she wears for her job, so I see it as an investment in her career not really, it's just the thing she likes to spend money on. It definitely could be worse - which I'm thankful it's not.

I get it. Since the total retirement savings is 10%, there is other retirement savings going on like Roths, correct?

Yes, we both just got raises and I upped my Roth IRA to $300 a month, which I know is not fully funded, but it's much better than $0 or even the $200 a month it has been for this past year.






And here is the new revised budget. As you can see, I creater Gasoline and found out we only spend $275 per month between both of us. I moved our personal allowance down to $200 each per month which gave us an extra $125 to put somewhere, so we made a Baby fund (which is how I convinced her to go to $200 a month ) and I put more into the Future Car.

[disneysteve]

The numbers still don't add up to 100%. Can you clarify that? Also, you show 4% to Roth and 2% to 401k but say it is 10% going to retirement. Where is the other 4%?

[project15]

The numbers still don't add up to 100%. Can you clarify that? Also, you show 4% to Roth and 2% to 401k but say it is 10% going to retirement. Where is the other 4%?

Yeah, my formula for retirement savings was still pointing to Net income, it's actually only 6% of gross income. Also, I'm not sure why it comes out to 96.53% total. All net monthly income is accounted for every month except for about $2, so I'm assuming I just forgot to add in some taxes or deductions from our paychecks.

Actually, I think it's because the taxes I used were based off my wife's half-raise paycheck, so that's probably the reason.

[scfr]

The numbers may not add up to 100% because you're rounding to the nearest whole number, so it may not be a big deal. For example, you have three 0% items that together add up to 1% or more.

It looks like a really good budget - good job. And way to go on increasing the savings portion! Keep us posted on how well you are able to stick to it.

[juniehyatt]

My future Hubby and I kind of do the same thing, we give ourselves $200 a month each. That covers ciggs, clothes, and whatever else we each like...I don't smoke ciggs, but I play Second Life, and like to throw $20 on it every now and then...I too, like to save up for bigger ticket items and I am a huge amazon.com freak, lol..so it works for us..this way, we put aside about $400-600 in savings a month..

[Frugal]

I personally think it is too high. I don't give myself any kind of allowance.

[Eric80]

I personally think that this is a good budget however if you are wanting to purchase a home then maybe you should consider reducing your budget. Friends of mine also give themselves allowances and by reducing it by $100 a month has helped them enormously as they recently had to call out an emergency plumber. The spare cash came in handy for unforseen circumstances.

[krantcents]

It sounds like a lot of money to spend on unidentifiable things. Your wife would probably resent it if you tried to control the spending, but you need a budget. For me $20 per week on incidental expenditures is more reasonable.