My First Budget, please review

**disneysteve** · 09-14-2012, 04:21 AM

I don't see a car payment. Do you own the car outright?

What's the interest rate on the SL you are already paying on?

Is $360 for groceries and dining out just for you or for the two of you combined? That's pretty high if it is just for you.

**dczech09** · 09-14-2012, 04:43 AM

Originally posted by disneysteve View Post

I don't see a car payment. Do you own the car outright?

What's the interest rate on the SL you are already paying on?

Is $360 for groceries and dining out just for you or for the two of you combined? That's pretty high if it is just for you.

That $360 does not seem too high. Even if for one person, that is per the month (roughly $90 per week).

sagremus

Based on these numbers, you have a surplus of roughly $800 per month. Where is that money going? The purpose of a budget is to assign each dollar a name. Whether you spend that money or just save it, you should make sure you put a name on those dollars.

For instance, I save about $100 per paycheck for general savings. After all of my bills, I put any extras towards my student loans. I have some months where I am paying in excess of $1,000 to my loans.

None of you payments appear to be out of whack. Everything looks reasonable and you certainly make enough money to cover. What I recommend is looking at all of your categories and making sure you are allocating enough money. For instance, is $50 per month enough for entertainment? That seems low. Make sure you give yourself enough fun money. Not too much, but enough to have fun!

**bjl584** · 09-14-2012, 05:28 AM

Do you have any other savings? Are you eligible to enroll in a 401K?

Groceries seem high on the surface. Everything else seems ok.

**BMEPhDinCO** · 09-14-2012, 09:43 AM

So after all your expenses, you have $1494.70 left each month. That's pretty good, but those student loans look high and will be coming due soon (grace periods usually are 6-9 months).

You said your savings goals were:
Car (repair and new)
Pet
Medical
Gifts

I would also add EF there - you need at least 3 months, with student loan payments ($3,670 + SL payments). And for now, I'd also add a "Student Loan Repayment" fund, since they are in a grace period.

So first, I'd estimate the payment amount for each loan (~$550 for all?) and realize that means an EF of around $5,400 - you have $1,000 so you need $4,400 more. You can do that in about 5 months, saving $880 per month.

That leaves you with $614. Here's how I'd do that:

Car - $120 (repair and next car)
Pet - $40
Medical - $40
Gifts - $14

Student Loan #4 - $400 - that'll pay it off in 6 months.

So in 6 months, you'll have your EF set (3 months), you'll have one SL paid off, and hopefully you will be making a bit more when those other loans come due.

So month 7:
EF - $180
Car - $120
Pet - $40
Medical - $40
Gifts - $14
Fed SL, 3 private loans = $1,100 to pay on these - if minimum payments are around $500 (since the last loan is gone), that leaves $600 - in 8 more months, you can get rid of the next lowest loan (and high rate).

So there's your plan for the next 14 months!

**sagremus** · 09-14-2012, 01:22 PM

Thank you for all of the replies. Here are the answers to the questions, I hope I got them all.

Car: I own my car outright. My parents are selling me my deceased grandma's old car for $1,000 whenever my car (extremely old) breaks down.

Food: Yes that money is just for me. I need help decreasing this, but food is just so expensive. I eat almost all of my meals at home and take all my lunches to work. I am a strict vegetarian and do not eat eggs.

Savings: The $1000 is my only savings.

Extra Money: The extra $800 in my budget has been going to pay off my student loan in repayment.

401k: I am eligible for 401k from my employer. I have not yet opted in because I am following the Dave Ramsey plan and he advises not to begin retirement savings until paying of your debt.

Loan Interest: The current interest rate on my loan in repayment is 4.25%

Since I was following Dave Ramsey I only had a $1000 emergency fund. You recommend having 3-4 months instead? That makes me feel better, but it also is hard for me to save because I am so excited to aggressively pay down my debt. I have been putting everything extra towards my current loan in repayment.

My biggest goal is to pay off my loans as quickly as possible. I also want to save money for my cats vet bills and funeral expenses. One of my cats has a chronic condition and her life expectancy is limited. Last year her vet bills cost me $900 when she was hospitalized. I want to have a fund so we can have a proper burial for her.

**sagremus** · 09-14-2012, 01:28 PM

The reply edit button doesn't work for me, I just wanted to add that my student loan repayments are coming due in November. I would like to have the smallest student loan paid off by then. I am hoping within 6 month to change my contract hours so that I will make more money, which is likely to happen.

**disneysteve** · 09-14-2012, 02:15 PM

Originally posted by sagremus View Post

Food: Yes that money is just for me. I need help decreasing this, but food is just so expensive. I eat almost all of my meals at home and take all my lunches to work. I am a strict vegetarian and do not eat eggs.

If you eat most meals at home and pack your lunch, I can't imagine how you are spending $12/day on average ($360/month) on food, especially being vegetarian. Are you buying high-end items like organic produce or shopping at upscale stores like Whole Foods or Trader Joe's for everything?

**UnknownXV** · 09-14-2012, 10:34 PM

Originally posted by dczech09 View Post

That $360 does not seem too high. Even if for one person, that is per the month (roughly $90 per week).

sagremus

Based on these numbers, you have a surplus of roughly $800 per month. Where is that money going? The purpose of a budget is to assign each dollar a name. Whether you spend that money or just save it, you should make sure you put a name on those dollars.

For instance, I save about $100 per paycheck for general savings. After all of my bills, I put any extras towards my student loans. I have some months where I am paying in excess of $1,000 to my loans.

None of you payments appear to be out of whack. Everything looks reasonable and you certainly make enough money to cover. What I recommend is looking at all of your categories and making sure you are allocating enough money. For instance, is $50 per month enough for entertainment? That seems low. Make sure you give yourself enough fun money. Not too much, but enough to have fun!

Her food budget per month is high based on what you could live on if you cut back. And this is coming from someone who eats a lot, and I live in Canada where food prices are much higher than the states. I can't even imagine how luxurious I'd be eating with a $360 a month food budget. As is, I spend about $200 a month for myself and I never feel like I'm wanting for more.

**kv968** · 09-15-2012, 03:07 AM

Originally posted by sagremus View Post

401k: I am eligible for 401k from my employer. I have not yet opted in because I am following the Dave Ramsey plan and he advises not to begin retirement savings until paying of your debt.

It's good that you're trying to tackle your debt but does your employer offer a matching program in your 401k? If so, invest up to whatever they'll match.

Also, when you say "consolidate" your loans that are in a grace period, what do you mean? That you're going to put them all into one or the $300/month is going to be what you'll pay for all of them in total? If it's the latter, I'd suggest putting more towards the 7.74% interest rate one if you can and try to pay that off quicker. I'm not really a fan of Ramsey's "snowball" approach (paying off lowest balance despite interest rates) but in your case it just happens to work out that way.

**DebtFree&Broke** · 09-15-2012, 04:39 AM

So you have $76,900 in student loans.

I think that you could raise your emergency fund to $2000, but you don't need to save 3 months away before you attack your loans. You are saving $300 a month in your other little savings goals. So if you had an emergency you would have that money available if you had to use it.

Right now you have $1200 available for your student loans. That is great! But I would still check on lowering the $360 for food and walk to work everyday so you can save the $21.80 away too.

See if you can lower your food budget to $35-$40 a week ($150-$170/month) by:
-Always shop with a list - if it's not on your list you don't buy it
-Price comes first - shop at the least expensive store and buy the least expensive brands
-Stock up when the price is right - watch for sales
-Skip the expensive dinning out

That would give you another $190 a month for you snowball. Walking to work makes it $211 !!

I think that your entertainment spending looks okay. Right now you should only spend your money on needs. I know it's tough, but you have at 5-6 years of debt payments ahead of you. You can't be wasting money on anything.

**kcollins** · 09-15-2012, 07:08 AM

Does employer match any of your 401K investment?

If your employer has any matching for 401K investments, I would recommend allocating the percentage matched by your employer. It's a win-win. Free money and reduction in taxable income.

Originally posted by sagremus View Post

Thank you for all of the replies. Here are the answers to the questions, I hope I got them all.

Car: I own my car outright. My parents are selling me my deceased grandma's old car for $1,000 whenever my car (extremely old) breaks down.

Food: Yes that money is just for me. I need help decreasing this, but food is just so expensive. I eat almost all of my meals at home and take all my lunches to work. I am a strict vegetarian and do not eat eggs.

Savings: The $1000 is my only savings.

Extra Money: The extra $800 in my budget has been going to pay off my student loan in repayment.

401k: I am eligible for 401k from my employer. I have not yet opted in because I am following the Dave Ramsey plan and he advises not to begin retirement savings until paying of your debt.

Loan Interest: The current interest rate on my loan in repayment is 4.25%

Since I was following Dave Ramsey I only had a $1000 emergency fund. You recommend having 3-4 months instead? That makes me feel better, but it also is hard for me to save because I am so excited to aggressively pay down my debt. I have been putting everything extra towards my current loan in repayment.

My biggest goal is to pay off my loans as quickly as possible. I also want to save money for my cats vet bills and funeral expenses. One of my cats has a chronic condition and her life expectancy is limited. Last year her vet bills cost me $900 when she was hospitalized. I want to have a fund so we can have a proper burial for her.

**snafu** · 09-15-2012, 09:01 PM

Yet another voice that recommends joining employer's 401K as soon as your eligible for the matching free money. Retirement counts on long term compounding/re investments. The tax deduction can kick start your contribution for year 2 and why not use every benefit available to you!

**marvholly** · 09-16-2012, 06:10 AM

$300/month for a strict veg is VERY high for food.
Tofu, lentils and dry beans are cheap. Nuts have gotten very expensive and should only be used for garnish. Try using some seeds (sunflower, pumpkin�.) wherever you can.

TVP (textured veg protein) made from soy is moderately priced. I recently bought it at a national chain store: $3 for 10 oz, which rehydrates into about 60 oz. That is a LOT of burritos, tacos, spaghetti��anything one could do with browned ground meat.

You said you do not eat eggs but do you eat dairy-milk, cheese, yogurt? All go on sale regularly and frequently have coupons.

Do you one stop shop or watch the weekly store ads and hit a few different stores including local independent markets, ethnic markets and fruit/veg stores? I find the alternative stores are almost always MUCH cheaper than the chains.

I eat meat-mostly chicken, ground turkey and fish about 4-6 meals/week. I buy all my cat food & litter plus paper goods, cleaning supplies and personal care stuff on $25/week. Add on some cheap wine and I spend $125/month.

**sagremus** · 09-18-2012, 08:08 AM

Thank you all for the advice.

Retirement: I will look into my employer's 401k.

Savings: I am planning on having a savings of $3,500. I put $750 more into my savings, so now I have $1,750.

Work Parking: There is no way I could walk to work. Even if I could, I live in the big city and work rotating shifts, and it is not safe for me to be walking in the middle of the night. I already park in the lot that is farthest away from work. Recently my car got broken into. I am considering ditching my car when it is dead and taking the bus. This is a huge lifestyle change for me and neither my parents or fiance are supportive of this decision to take the bus if I needed to. My fiance also cannot give me rides.

Food: Thanks for all of the tips. I am definitely not eating high on the hog. We live in a high cost of living area. I cannot reduce the cost of my cat's food due to my cat's special diet. I used to shop at Aldi, but my fiance won't go with me. Also I was very disappointed with their produce. I am thinking of going to Aldi for non-perishables and then getting fruit and veggies from the bigger chain stores. I live in a big city and we are close to several ethnic markets. I'm just not sure where to go or what to look for. Any tips for shopping the asian or african markets? Another problem is I cannot cook!!! I never learned to cook properly and this is killing me because I know raw ingredients are cheaper then pre-packaged foods.

My First Budget, please review