DINK Budget

[lvl3mp]

My girlfriend and I are Dual Income No Kids and I feel we have a solid budget in place, but wanted to get some other opinions on it. We currently have a checking account setup that we both contribute the same amount to each paycheck to cover our bills like Mortgage, Cell, Utilities, Groceries, Gas, and Student Loans. We have an emergency fund with 3 months worth of expenses setup and after contributing to our Bills checking, we pay ourselves $200 each pay period (every other week) for spending (bars, beer, food, etc). I currently contribute 7% of my income to my 401k and she does 4%. After all is said and done (401k contributed to, bills checking funded, we have spending money in our checking accounts) we still save $1000 every month on average. The issue is, we feel like we don't have enough spending $ like its not OK for us to spend, and that something is always coming up.

I've been reading up on the 50/30/20 budget and had a question on that. If setting up 20% to go into our 401k for retirement, is that 10% per person to get the 20%, or should it be 20% each? In our case, I'm debt free (except house) and she has a car payment and student loans so we would need to be more like 60/20/20 due to the amt of our bills each month. Any advice is appreciated.

Thanks.

[autoxer]

I've been reading up on the 50/30/20 budget and had a question on that. If setting up 20% to go into our 401k for retirement, is that 10% per person to get the 20%, or should it be 20% each?

10% of your income plus 10% of her income is only 10% of your total combined income.

[feh]

10% of your income plus 10% of her income is only 10% of your total combined income.

+1

20% means 20% for each of you.

If you want more advice, I suggest you post a complete budget. You guys are spending $800 per month on entertainment; that seems like a lot to me.

[kork13]

Hello fellow DINK's.
To answer your original question, you should save AT LEAST 20% from each of your incomes. Personally, I feel that a better rule of thumb for people is 50% expenses, 30% SAVINGS, 20% fun. Be careful to keep in check the feeling of "I need to spend more on myself to truly enjoy my life." It's a fallacy. Happiness and enjoyment never need to be expensive. Certainly, you can and should enjoy yourselves, and the money you earn should enable that. Just don't let yourself feel that you need to spend more to be happy...that only leads down a rabbit-hole toward debt, stress, and heartache. Don't look at it as "I'm not spending enough on myself" .... instead, look at it as "I have bigger, more important priorities than burning my hard-earned income on bars, booze, and eating out."

With that said, if I can offer some additional advice..........
Are your intentions to never have kids? Or are they on the horizon (whether 1 year or 5-10 years from now)? I'd recommend that you emphasize savings more. For us, we decided to live off of only my income, and to save 100% my wife's income, plus 15% of mine. I make a little more than her, but we are literally saving 47% of our combined gross income. Two benefits there:
a) We're already used to living on a smaller income, so if/when one of us chooses to stop working, the transition will be FAR less extreme, and that decision will be way easier for us to make if/when the time comes.
b) DINK status is a fantastic opportunity to save a whole lot of money for kids, houses, cars, retirement and whatever other goals you may have planned. Your expenses are (or can/should be) quite low, so save everything you can to get a headstart on the rest of your lives.
Bottom line: Reduce your expenses, clear out any debts (except mortgage, that's tough to do quickly), then save like mad. It'll set you up very well for when you may have other competing priorities for your cashflow, namely a growing family.

[bjl584]

I'd advise against mingling your finances too much before you are legally married. Things could get messy should there be a breakup.

The savings recommendations aren't set in stone. You can adjust as needed based on your individual circumstances. You may want to go after the debts before bumping up savings for instance.

[lvl3mp]

Thanks for the advice, I plan on upping my 401k contributions. We do not plan on having kids, that's not a lifestyle we feel is for us, but we are soon to be engaged. As for the $800 spending per month, that's 100 per week, per person which ends up going towards dining out, clothes, small things around the house, and not just bars and booze, and doesn't seem to be enough. I'm not saying I need to spend more to be happy, or that I'm not happy now, but we feel bad when we spend money, like its something we shouldn't do, or can't do. We make good money with a combined household income over 110k. I plan on upping our 401k contributions, but want to make sure there is still money to take care of things around the house should they come up w/o having to get into our emergency fund.

[phantom]

I would suggest budgeting the money you use for fun and the money you use for small emergencies/stuff that comes up separately, at least until you get more comfortable with how much fun spending is okay. Try giving yourself a fairly small amount for fun (say $150/month/person instead of $400/month/person), and give yourselves permission to spend that and no more than that on fun completely guilt free. Then you'll be left with ~$500 for "stuff that comes up." Adjust the numbers overtime based on what does or doesn't work.

I would also suggest keeping the fun money budget a little tighter till the student loans and car loan are gone. I think it's easier to keep the fun money part of the budget tight when you can say, "We're working towards a goal here, and once we accomplish it, we'll be able to spend more freely." But, I would hesitate to tell you to put your money towards your girlfriend's debt until you actually are married, and I'm not sure how I'd balance that in the meantime. Of course, how much sense cleaning up the debt makes is partially dependent on how much debt there is and what interest rates it's at.

[autoxer]

As for the $800 spending per month, that's 100 per week, per person which ends up going towards dining out, clothes, small things around the house, and not just bars and booze, and doesn't seem to be enough. I'm not saying I need to spend more to be happy, or that I'm not happy now, but we feel bad when we spend money, like its something we shouldn't do, or can't do.

I know the feeling. Sometimes I feel guilty after spending on certain things. For me it comes from my conflicting goals, saving for long term and spending on things that I want. A few years ago I was a lot more wasteful and didn't have the same feelings, because I wasn't really aware of the extent of my long term decisions. Now, I like to look at saving money, like I'm buying freedom, because it is easier to feel good about the decision.

If you feel guilty about spending on certain things, then those things probably aren't that important to you. Try going without them for a little while and see how you feel.

We make good money with a combined household income over 110k. I plan on upping our 401k contributions, but want to make sure there is still money to take care of things around the house should they come up w/o having to get into our emergency fund.

It looks like you are making very good choices, but I just wanted to point out that 'We make good money' is not a reason to spend good money. Either use it for things that add value to your life, or save it for your future self. Don't automatically do things, just because other people in that income bracket do those things.

[disneysteve]

I currently contribute 7% of my income to my 401k and she does 4%.

As for the $800 spending per month, that's 100 per week, per person which ends up going towards dining out, clothes, small things around the house.

$100/week/person is $10,400/year. That's 9.5% of your household income. So you are blowing a lot more on WANTS than you are investing for retirement. You need to turn that around.

Up retirement to 15% for each of you. Get your emergency fund up to 6 months of expenses. Then live on what is left.

How does the income break down between the two of you? If you aren't both earning nearly identical amounts, some of what you are currently doing needs changing and might be part of your problem. If one of you earns a fair amount more than the other, you shouldn't both have the same amount of spending money and you should both be contributing the same amount to household expenses.