Household budget review and feedback

**MonkeyMama** · 07-19-2014, 05:52 AM

How long is she planning to go part-time? Is this more temp or permanent?

How long do you expect to have daycare expenses?

Where does additional income go? Spending or savings?

What is spending at $900/$1300/month? I think that is the part you need to look at closer. That is a *lot* of money unaccounted for.

I'd also shop around on the cell phones. Just strikes me as crazy expensive.

I personally think time with small kids is priceless and think the budget mostly looks fine, but for the long run I wouldn't feel comfortable with so little going to retirement. I suppose it depends on your age and assets too. I don't know if you are ahead or behind on retirement but it doesn't seem to be a big priority in either budget?

**riverwed070707** · 07-19-2014, 06:43 AM

What does your current efund look like? Seems like you're carrying quite a bit of debt (although you don't say the balance on the car?) and you put very little in general savings each month. Is it an option for her to wait it out while you knock out some debts to free up some cash flow and allow you to save more each month?

Agree with pp about too small of a percentage to retirement. How does that overall picture look?

**elessar78** · 07-19-2014, 11:48 AM

Combined retirement account: $45,000 (age 36 and 33) (at 6% return, assuming we never increase our contributions, which is unlikely, that 30 year value is $867K)

Part time for probably two years, maybe more. Kids are 1 and 4. Maybe until they are in school full time. Daycare expenses would probably be indefinite as well, but decreasing gradually as they enter school. Probably looking at 4-5 years more.

Additional income was mostly spent, but the plan is to do it differently this year.

E-fund: $2,300. The past few years were unkind to our liquid savings—brief unemployment for my wife surrounding surgery she needed, the medical bills relating to the surgery. Had a snowball effect on maternity leave and funds available for it so we had to dip into that to cover the living expenses.

"Spending" ($900/$1300): I didn't really look at it closely to what it goes to. Believe it or not, but we don't do outlandish things like regular expensive dinners out or nice clothes. My wife shops at a Goodwill kinda thing. I go out to lunch daily, so that's probably my big vice—probably estimate that at $420/month.

We just bought a house last year and apart from a dining table the (CC #1 with the $288 balance), we really didn't buy anything big. But I suspect a lot of little things around the house were purchased.

Yeah, I think we are going to T-Mobile or Cricket. The cell phone is probably where we can get some movement

**riverwed070707** · 07-20-2014, 06:41 AM

Originally posted by elessar78 View Post

Combined retirement account: $45,000 (age 36 and 33) (at 6% return, assuming we never increase our contributions, which is unlikely, that 30 year value is $867K)

Part time for probably two years, maybe more. Kids are 1 and 4. Maybe until they are in school full time. Daycare expenses would probably be indefinite as well, but decreasing gradually as they enter school. Probably looking at 4-5 years more.

Additional income was mostly spent, but the plan is to do it differently this year.

E-fund: $2,300. The past few years were unkind to our liquid savings—brief unemployment for my wife surrounding surgery she needed, the medical bills relating to the surgery. Had a snowball effect on maternity leave and funds available for it so we had to dip into that to cover the living expenses.

"Spending" ($900/$1300): I didn't really look at it closely to what it goes to. Believe it or not, but we don't do outlandish things like regular expensive dinners out or nice clothes. My wife shops at a Goodwill kinda thing. I go out to lunch daily, so that's probably my big vice—probably estimate that at $420/month.

We just bought a house last year and apart from a dining table the (CC #1 with the $288 balance), we really didn't buy anything big. But I suspect a lot of little things around the house were purchased.

Yeah, I think we are going to T-Mobile or Cricket. The cell phone is probably where we can get some movement

Personally, I would not be comfortable with her cutting back to PT under the current circumstances. That doesn't mean you can't do it, but you could take some steps while your income is higher to make it easier on yourselves. I think its very concerning you have $1300/mo that you don't know where its going and yet you feel you're being conservative. I'd first get a handle on that and know exactly where all those dollars go. Secondly, I'd be more comfortable on a one income household if all the debts were taken care of, maybe with teh exception of student loans, but at your ages, why do you still owe so much? Have you been carrying those 15 years already? Lastly, you're already behind on retirement savings so I think its a terrible idea to have her go PT at the expense of half the monthly savings you're putting away now. You say its unlikely you would never increase your contributions but the fact is you're currently considering decreasing them, and further while $800k sounds like a lot, you will not be able to retire at 65 and maintain your current lifestyle with that amount. I don't know waht your retirement goals are but don't let the perception of that amount of money fool you -- it isn't as much as it seems.

**MonkeyMama** · 07-20-2014, 07:00 AM

Agree with riverwed.

If you threw the extra income into an IRA and considered dropping the eating out and putting that money into an IRA, that would substantially change your financial picture. But the plan, as is, seems fairly shaky. Particularly given your age and current retirement savings.

Your wife is only bringing home an extra $10k working full-time? I honestly can't say that I would bother. That is the flip side of the coin. But, I would be inclined to clean up the debt first and to make retirement a much higher priority. My spouse has been home with our kids for 12 years. The very first thing that was cut was eating out. Your wife will have more time to economize if she goes part-time.

Household budget review and feedback