Help me play with my budget.

[Mal85]

I figured this would be a good place to post this. I'm thinking ahead, here. I graduated from college almost a year ago and gave birth to our first baby just a couple months before that. I've been doing daycare in my home so that I could be at home with DD (with intentions of one day expanding it out of the house, but not in a huge hurry for that). I baby sit 3-4 kids at the moment (3 currently, the 4th is on leave at the moment, hoping to have him back by the end of the month).

So, anyway, we're talking about having another baby and want to get pregnant sometime between July-Dec of this year. I reeaaalllly want to be a SAHM after having my second baby, but could deal with just cutting back on my number of kids, maybe to 2 kids (2 of them are my nephews, so I'd probably keep them as a favor to my brother).

I'm just going to lay out all our numbers the way our budget looks right now and I need you ladies to play with them and show me how I can make my hopes and dreams a reality.

Income
-DH gets paid every two weeks. Paycheck is roughly $690=$1380/month. (Twice a year, he ends up with 3 paychecks in a month, each coming to about $900, so an extra $1800/year).
My daycare income:
-$500/month for one child.
-$700/month for nephews.

Total monthly income is roughly $2580. (we need wiggle room there because there are days when kids are sick or DD is sick and I lose my daycare income for the day)

Expenses
- Utilities: roughly $130-150/month
- Mortgage: $535/month
- Car payment: $145/month
- Student loan payment: $250/month
- Groceries: roughly $480/month (or $120/week)
- Internet/house phone: $57/month
- Cell phones: $75/month
- Gas for house: roughly $90/month
- Gas for cars: roughly $80-100/month
- Car insurance: roughly $90-100/month
- Household items (tp, cleaning supplies and such): roughly $75/month

We also owe about $300 on a credit card that will be paid off by summer.

DH isn't thrilled with the idea of me cutting back on daycare or quitting it altogether, but he's a logical thinker. If I can show him the numbers and make it work for us, he'll go with it. He just wants to know that everything will be covered. So, help me out and show me what we can do with these numbers and where we can cut back. DH getting another job is not an option.

[SleeplessMommy]

when does your car payment end?

[tinuviel_k]

It looks like without your credit card payment your bills will be about $2000 a month. You could cut out your other day care child, keep your two nephews and just make it.

But I personally like to have two or three hundred dollars available each month that are not budgeted in. There are always expenses above and beyond what we expect: a car repair, a birthday, travel, a vacation, necessary clothing, a repair... something always comes up. If you have $2000 in bills and make $2000 in income every month you WILL be back in debt quite quickly. There is no avoiding those extra expenses, and if you income is that tight it would be easy to add them on to that credit card.

How about savings? Do you have a plan in place to put aside a little each month for emergency savings? I lived for years from paycheck to paycheck, and it is just in the last year that we seriously made savings a priority. I can tell you I never want to go back to not saving! It gives me such a feeling of security to know that we can put that money into an account and that we will not be reliant on debt in an emergency.

Are there any budgeted expenses you can cut out? The cell phones would save you $75 a month. how long does your car payment have? If you got rid of that payment and your cell phones you would have that extra $200+ available for those unexpected expenses.

[Mal85]

We owe about $3500 on the car and that's not going anywhere anytime soon. It's a small vehicle and won't fit two car seats, so the plan is to put the car up for sale after the first of the year, pay it off and take whatever's left plus our tax refund next year to get something else. We probably won't need a real big loan to get what we need, but the payment won't be going anywhere. With any luck, it'll stay about the same as it is now.

Right now, our budget is supposed to include $300/month going into savings. It just hasn't happened yet. DH needed new tires for his truck, DD needed new diapers because hers were making her break out, etc, etc. Luckily, we haven't needed to go into debt for those unforeseen expenses, but it hasn't made its way into savings.

Our cell phone plan could definitely be reduced. I'm kind of stuck right now. I got a phone for Christmas that requires a data plan in order to use the phone, so our bill went from $45 to $70. This was something we didn't realize when we got the phone. I'm still trying to figure out how to get out of it without losing anymore money...

Our grocery bill could probably be reduced if I'm keeping less kids as well. We're working on DD eating less jarred foods and more table foods and it's going well so far, so that will also be an expense we can cut out hopefully by the end of this month, reducing our grocery expenses by about $80/month.

ETA: DH will be up for a promotion is the foreseeable future, which is nice. However, most the extra money will be going into a fund to save for the house we're planning to build. We may have another $100-200/month to play with, but probably not much more than that. At the very latest, that will be happening in 1.5 years. So, a few months after the next baby is born if things go as planned.

[mnnice]

Did you budget anything for withholding from your income and social security taxes? If you are going to self employed you really need to do that first.

[Mal85]

I had planned on setting aside 20%, but last year didn't make enough money for it to count. After my expenses, it evened out and my net income was $0.

[bronxmom]

Where are you and what's the going rate for daycare? Could you charge your brother an extra $100 for daycare? I know you probably want to help him out but that would still end up being a $200 discount off what you get from other kids - and if it allows you more ability to focus on the nephews and your kids then it could be worth it to him. Also, if kids are out sick, they should pay as you're holding the space for them; if you are closed due to sickness, then I agree it's nice to not make them pay. At my daycare, I pay all the regularly scheduled holidays and any days I take off but don't pay for my provider's vacations. I appreciate this but would pay the whole year round if necessary because the daycare is so great.

Also, can you get the student loan payment reduced or in forbearance while your kids are young? That could save you a bunch. Beyond that I"m out of suggestions; that looks like a tight budget.

[orangecanoe]

I just saw someone mention the Sallie Mae extended repayment plan on another thread. I'm not sure if your particular loans would qualify, but that could cut as much as $150 possibly. You could also get rid of the house phone depending on the bundle package you have. There are small ways to make the grocery $$ stretch further.

[Mal85]

I'm already on the extended repayment plan. 25 year plan I believe, maybe 30. The only way to get the payments any lower was to do a graduated extended plan and have bigger payments later, but I don't like to plan on having more money later because you just never know.

I can look at our phone line. We used to have a cable connection for internet, but got rid of the cable tv so we switched to DSL to keep our internet connection. We have to have a land line for the DSL connection, but it's been awhile, maybe they've readjusted their packages since then.

DH keeps saying he could easily get rid of his cell phone as long as I have one. He rarely uses it and can get one through work if he wants to. He'd only be able to use it during work hours, but he'd have access to mine any other time so that could be fine. We're on his parents family plan, so getting rid of his phone will only cut the cost down by about $20/month, but every little bit helps.

I know I can cut down the grocery expenses, I just have to be motivated to cook from scratch more and plan menus better than I have been. This is something I'm working on. I'll have a garden this summer which will help. DH's family always has a huge garden and cans enough vegetables for everyone, so I can get in on that if I want to.

I'm hoping I can start cutting out these smaller expenses and just change the way we spend our money between now and when baby #2 is born. Maybe by then, we can readjust the budget and see where we've cut down spending.

[Mal85]

Originally Posted by bronxmom

Where are you and what's the going rate for daycare? Could you charge your brother an extra $100 for daycare? I know you probably want to help him out but that would still end up being a $200 discount off what you get from other kids - and if it allows you more ability to focus on the nephews and your kids then it could be worth it to him. Also, if kids are out sick, they should pay as you're holding the space for them; if you are closed due to sickness, then I agree it's nice to not make them pay. At my daycare, I pay all the regularly scheduled holidays and any days I take off but don't pay for my provider's vacations. I appreciate this but would pay the whole year round if necessary because the daycare is so great.

Also, can you get the student loan payment reduced or in forbearance while your kids are young? That could save you a bunch. Beyond that I"m out of suggestions; that looks like a tight budget.

Charging them more isn't really an option. I charge pretty high as far as a home daycare for my area (I'm in rural MO). But I have a degree in child development so I use that to my advantage. I am giving them a discount, but it's already come up that they have a hard time affording me.

Financially, it would be better for me to keep the girl who brings in $500/month and advertise for an older kid who would bring in $380/month (or keep the little boy who is on leave right now, assuming he'd be back full time by then). But it's family and I don't want to leave my brother's family high and dry. Good daycare is hard to come by in our community. I'm close to my family and hate to send them packing, ya know?

[zebra15]

I wouldnt cut any daycare kids right now... What I would do is take any money left over at the end of the month and start an emergency fund if you dont have one. After that start paying down debt and saving for that car you need.
Your grocery bill is pretty good considering you have daycare food in there too, but if you coupon, and shop sales you may get better... who knows... My DS packs his lunch for Daycare and sometimes I send along snacks for the whole bunch so I'msure that helps her total bill .

But I'd keep all the kids, plus its got to be easier to entertain the kids where there are more of them around. (and easier to pay down bills and debt including taht student loan ugh)

[doubledutch]

your income is approximately $500 more than the expenses you listed, but this obviously isn't a complete budget. if it were, you wouldn't need until summer to knock out $300 on a credit card. that would be gone. so where is the rest of your money going? here are some things that you may or may not be spending money on.

restaurants
entertainment
clothing
gifts
life insurance
cc payment
medical copays
your spending money
dh's spending money
pets
home maintenance
car maintenance
hair cuts
savings
dh lunches

i'm also surprised that you can get by on $100 a month for gas. are you sure about that number?

i understand where your dh is coming from. $1380/month isn't anywhere near enough to cover your basic expenses. if you're just barely getting by on your current income (not saving, not paying off your credit card), how could you get by on less? it looks like the only way for you to cut back on daycare kids would be for your dh to earn more, either by finding a different job or by finding a second job. i'm not trying to be negative but i don't see how else you could do it.