Budgeting

[GREENBACK]

My goals are to become wealthy beyond comprehension and retire very early. We already have 2 kids and Purchased our first home last year.

This is where you might want to keep an eye on things. I dont know the age of your kids but as they grow and things start getting hectic you may be glad you paid attention to budgeting or at least tracking expenses. It's easy to fall into the trap of thinking you make and save a lot of money so what's 100 here or 1k there. Before you know it your big surplus can disappear. I don't think that's your situation but at the least you need to track your expenses to know where your money is going....today, next month, 5 yrs. from now. It's great to look back at previous months and years and know how your spending trends and demands have evolved.

[kork13]

This is where you might want to keep an eye on things. I dont know the age of your kids but as they grow and things start getting hectic you may be glad you paid attention to budgeting or at least tracking expenses. It's easy to fall into the trap of thinking you make and save a lot of money so what's 100 here or 1k there. Before you know it your big surplus can disappear. I don't think that's your situation but at the least you need to track your expenses to know where your money is going....today, next month, 5 yrs. from now. It's great to look back at previous months and years and know how your spending trends and demands have evolved.

That's a really good point, and probably the most important response to your question--no, budgets aren't only for those living paycheck-to-paycheck. Budgets are also a way to help you keep track of your spending, and plan for future spending. I use mine as a reality check--if I see than my spending is higher than planned for, I can figure out where/why, and address it if necessary.

[maat55]

A budget is a great way to look at where your money is going. I would write down all your expenses as best you can just to see where your money is going.

You can chose to continue what you are doing or trim unnecessary expenses.

Your next step would as mentioned above, locate a fee based CFP to make sure you are covering all your bases. I would recommend that you go to Dave Ramsey's website and find one of his ELP's for financial planning. It would be a good idea to get two opinions, you should be able to get these free as first time consultations.

[snafu]

This list was published to help people figure out if their spending was typical in specific categories. For those spending more in a specific category, it is suggested that they adjust their spending or earn more income.
Housing includes rent/mortg.,utilities, taxes, insurance, operations.
Auto includes payments, insurance, operation, maintenance, repairs, tickets
Food includes take-out/restaurant, booze
Medical includes dental, premiums,RX and OTC meds [we don't have co-pays]
Misc. includes allowances, gifts, personal expenses

Housing 30%
Auto 15%
Food 17%
Health & Life Insurance 5%
Entertainment 7%
Clothing 4%
Medical 6%
Debt Repayment 5%
Savings/Investment 5%
Misc. 6%

[disneysteve]

Housing 30%
Auto 15%
Food 17%
Health & Life Insurance 5%
Entertainment 7%
Clothing 4%
Medical 6%
Debt Repayment 5%
Savings/Investment 5%
Misc. 6%

I think this budget is seriously flawed. 5% to Savings isn't nearly enough. Unless you have a rock solid government pension, you need to be saving 10-15% for retirement alone.