critique our budget please!

[proudmamanow]

So we are about 6 months into Dave Ramsey's Debt reduction plan. Some things are going well--we have paid off about half of our cc debt and have paid some other debt. We are no longer using credit cards at all

And I have shifted to a full time work schedule because using a proper budgeting tool made us realize this was necessary. Not so great, but it's good to be on top of things.

But we are still barely breaking even, and don't have enough extra $ to pay for any further debt reduction at this point. I really feel like there are some areas that we could reduce and I need your suggestions!

Some details: I work FT, Dp is a SAHM who does daycare 1 day per week, we do not want to increase this right now. We have two girls ages 2 & 5 and we homeschool. Our 2 yo has a large number of food sensitivities so we buy special foods & a fairly expensive supplement for her.


Our monthly income: $3625

Our monthly expenses:
Mortgage $584.86
Utilities (includes natural gas, electricity) $260.00
Phone+ internet $120.00
Cell Phone $25.00
Car Insurance $72.00
Home Insurance $72.00
Other Insurance $22.28
Bus Pass $78
property taxes $184.00

Groceries $500
Dining Out $80
Clothing, shoes etc. for all 4 people $100
Pets $20
Gifts (family, friends) $50
Charitable Donations $30
Household maintenance $50
Natural Food Buying co-op $80
Gas $150
car maintenance $50
medicine $30
supplements $75
toiletries $10
hair care (includes hair cuts) $25
homeschool supplies $20
Activities Adults $100
Activities Kids $150
personal spending -me $60
personal spending -dp $60
spending on kids $60
Miscellaneous $10
Credit Cards $100
Car Payment $280
window loan $81
line of credit $5

TOTAL: $3675, so we are over budget by at least $50


Thanks so much mamas! I really appreciate the help I've had on this forum in the past.

[lyterae]

In our experience with our budget, if we are over for whatever reason we start trimming out the extras. Like lowering our eating out budget or our personal spending/activity amounts.

ETA: Each familys' budget is unique to them so it would be difficult for any of us to pinpoint what should be cut out. For example we do not have a clothing budget, we have spending money ($20 each a month) for DH and myself and a category for DD. If any of us need new clothes it needs to come out of our spending money. Now if we had a larger budget I would of course love to have a clothing budget, but we're not there yet.

Congrats on your debt paid and being on a budget! We've been on a budget now (following Dave Ramsey) for almost a year and a half and what a difference it has made in our finances and our marriage. I just wish we'd done it sooner.

[proudmamanow]

that's a good point re: the clothing budget, lyterae--we could consider collapsing those two areas together--or maybe just having an item for shoes. I find shoes for the kids to be the biggest part of that budget, but otherwise we usually just rely on hand me downs for the kids. As for the adults, well, we have the clothes we really need for the most part, everything else is a bit of a luxury.

Thanks for the input! I know everyone's situation is different, but I do find it helpful to hear others' perspectives, it helps me think out of the box a bit!

[happysmileylady]

Coming from an area that doesn't have public transportation easily available, why do you need a bus pass if you also have a car? If you are spending $150 on gas each month, I am guessing that you get to most places in your vehicle, and I bet that dropping the bus pass all together and using the car for those trips wouldn't add another $78 to your gasoline. At the very least, I suggest taking a very close look at your bus usage, see what you could cut our, or cut down on, you may find that even if you can't eliminate using the bus all together, there might be a cheaper way to use it, maybe paying by the trip or something.

Car insurance, it doesn't look too high to me (we pay $85 a month) but depending on the exact situation with your vehicle, you may be able to get that lower, try calling around and checking. Our $85 covers three vehicles and I don't have the best driving record, if you only have one or two, I bet you probably could get it lower.

Groceries/Dining Out/Natural Food Buying Co-Op-I am sure you can cut here. I realize you said you are dealing with food sensitivities, so I don't know that you can cut DRASTICALLY, but eating out-you can totally eliminate that. I know it's HARD, but it's a total luxury and if your DP is home full time and only doing daycare once a week, that should make it easier to confine all eating to at home. Just cutting out the dining out will get you the $50 you need. And if you work a little at strategically shopping the sales and using the coupons you can probably save more than you might think. Yes I know that there are few coupons for fresh produce, organics, etc. But if you take a moment to really look at what you buy, I bet you will find more useful coupons than you think, and even if not, just shopping sales and stocking up at sale time can save quite a bit. I am not sure what a "natural food buying co-op" is but I also suggest taking a close look at it, and see if it's REALLY worth that additional money also. Between just groceries and the co-op, then add in pets, you are spending $600 a month on that stuff. I also have a family of 4, plus 5 pets-3 cats and 2 dogs- and we spend a little more than half that per month for all that....including disposable diapers for my 20 month old and stocking up for the new addition coming in September and our toiletries too. For example, I have enough toothbrushes in my linen closet to last a year, and I didn't pay a dime for them, because of coupons and sales. (grocery store here has toothbrushes 10 for $10 this week, and the coupon insert in June had $2 off 2. I had gotten a dozen or so inserts from the recycle bin at the dollar store, with their permission)

Activities and Personal Spending-again, not sure exactly what this covers, but I am thinking these are your entertainment and toys types of catagories? If that is the case, then I am sure you can cut here. I am not even advocating eliminating them, I think an entertainment catagory is important otherwise a person is more likely to blow their budget. But I think you should really look at cutting back on something. If this is covering things like sports or lessons for the kids, consider cutting your activities first, and in general, look for more free stuff. Things like free days at the children's museum, taking a picnic to the park and throwing water balloons at each other, etc, are much cheaper than say going to the state fair on a regular day.


The only other suggestion, if nothing else can be cut-I suggest temporarily eliminating the charitable donations. Once you are out of debt, you can afford to donate much more anyway. That will at the very least, put you just $20 over instead of $50.

[happysmileylady]

Oh, holy moly! I totally missed that you have a car payment!

It's not TOO high, but you might want to look at whether or not it's possible to sell the car and buy something with cash outright. If you are upside down on it, see about borrowing the difference-that could at the very least lower your payment. If you are not upside down, and maybe even right side up, selling it and using the difference to buy a "beater" will save you $280 a month.

How much longer do you have on the loan? If your payoff is just a few thousand, perhaps take a very serious look around your house and see what you can dump in a garage sale or such, to try to get it paid off asap.

[proudmamanow]

thanks happysmileylady for those helpful suggestions.
-bus pass is a non-negotiable. This is how I get to work every day, and while our commuter transit is great, our transit for day to day use isn't, so dp really needs a car to get out of the suburbs where we currently live.

-Groceries, I think we should definitely be able to cut back here. We have been using a meal planning service which is cheap & really helpful, but I think it also means we are spending more than we might normally...I am going to try and do a pantry & freezer challenge for the next little while. And I think we could be much more strategic about coupons & shopping sales. And I hear you on the eating out.....maybe we will cut that down even further.

-Food co-op is actually a good thing because it lets us buy goat milk & goat yogurt in bulk at a discount, which is a pretty big staple for us given dd's cow dairy allergy.

-spending & activities...definitely could be trimming this down, though with homeschooling I find that we need more activities not less. But we will keep looking for less expensive options, and maybe fewer activities at a time.
-spending tends to get blended into eating out, so maybe I should take a look at putting these two categories together & cutting the $80 from eating out. If we eat out, we pay for it from our spending.

[nd_deadhead]

proudmamanow, I want to congratulate you for what you've already achieved! If you've paid off half your CC debt and are no longer using the cards, you are halfway there! In another 6 months, you'll have another $100/month to play with (or put toward the car or window loans). When those are paid off, you'll really have something to crow about!

So is your budgeted amount for things like personal spending, activities, eating out a planned amount, or is it what you're actually spending on those things?

I assume you are tracking your spending, and I congratulate you on having very specific categories, and lots of them. Maybe if you look closely at how much you've actually spent in each category in the last 4 or 6 months, you might see an area that you can trim.

Keep up the good work!!

[proudmamanow]

happysmiley--good point about the car. We are pretty attached to it, I'm embarassed to admit-we've only had it since March 2009 so we've got about 3 years left to pay it off. I will think about this one
but the idea about having a garage sale is a good one--and using the money to pay off other debt. We have a bunch of stuff around the house that I've been thinking about selling (an extra bike, car topper, Chariot stroller etc.), not sure if a garage sale or maybe craigslist or ebay, we'll see.

[proudmamanow]

Originally Posted by nd_deadhead

proudmamanow, I want to congratulate you for what you've already achieved! If you've paid off half your CC debt and are no longer using the cards, you are halfway there! In another 6 months, you'll have another $100/month to play with (or put toward the car or window loans). When those are paid off, you'll really have something to crow about!

So is your budgeted amount for things like personal spending, activities, eating out a planned amount, or is it what you're actually spending on those things?

I assume you are tracking your spending, and I congratulate you on having very specific categories, and lots of them. Maybe if you look closely at how much you've actually spent in each category in the last 4 or 6 months, you might see an area that you can trim.

Keep up the good work!!

Thanks nd deadhead We are in a much better situation than we have been and it is good to remember that!
The budgeted amounts for spending, eating out etc. we manage through an envelope system & we also track our spending at the Spark Savings website.
I do find it a bit difficult figuring out what we should use the envelope system for and what we shouldn't....still learning what works best.

We were tracking our spending using a different system that didn't work as well, so our record keeping in June & July was suffering. But I am starting to get a sense of how much we actually spend.

[Kyamo]

Originally Posted by proudmamanow

Utilities (includes natural gas, electricity) $260.00

That sounds high to me, we pay less than that even for the most expensive midwinter months, and less than $100 in the summer. I don't know what climate you live in or type of house, so maybe you can't do any better, but perhaps you can save in this category by dropping the temperature a little in the winter, raising it a little in the summer if you have AC, programmable thermostat, being more diligent about turning off things that are not being used, such as lights, computer, etc.

Phone+ internet $120.00

At first I thought this included cellphone, but then I noticed another line for cellphone. So $120 is just for a landline and internet? That seems like a lot. We pay $65 including taxes for landline & internet, and that includes a lot of long distance. Maybe you can change plans or change companies.

Dining Out $80

This can be cut down. Try making larger quantities on purpose when you cook so that some can be frozen for nights you don't feel like cooking or don't have time.

[proudmamanow]

[QUOTE=Kyamo;15670302]That sounds high to me, we pay less than that even for the most expensive midwinter months, and less than $100 in the summer. I don't know what climate you live in or type of house, so maybe you can't do any better, but perhaps you can save in this category by dropping the temperature a little in the winter, raising it a little in the summer if you have AC, programmable thermostat, being more diligent about turning off things that are not being used, such as lights, computer, etc.


At first I thought this included cellphone, but then I noticed another line for cellphone. So $120 is just for a landline and internet? That seems like a lot. We pay $65 including taxes for landline & internet, and that includes a lot of long distance. Maybe you can change plans or change companies.


QUOTE]
Kyamo--we don't have AC, and we heat with natural gas & keep it pretty cool in winter. I think we're just kind of stuck with local rates. That said, we could be more vigilant about turning things off like computer, lights etc.

We should look into the phone thing for sure....I do think we could get a better deal.

[Tjej]

Compared to how we spend money, your food, clothing and activities budgets are really big, and also your cable/internet is expensive. You have a lot of categories for food and activities that are quite a bit of money when they are all glommed together.

Also, the co-op may save you a lot on the goats milk, etc. but does it REALLY save you over $80 a month? If it does, can you also get other groceries there for a savings? I only ask this because I have found that even when memberships seem like a good deal, when I look at the actual numbers for our levels of use they often don't end up being a good deal for our family.

If you REALLY want to save money, you can just not spend money. Things like activities, "personal spending" and homeschool supplies - there are SO many things you can do that are absolutely free and there are a bajillion resources online for free. I understand wanting to spend money on certain things, but if it is a high priority for you to pay off that CC debt these types of spending are something you COULD lay aside for a few months.

Tjej

[SunRise]

Originally Posted by proudmamanow

Our monthly income: $3625

Our monthly expenses:
Mortgage $584.86
Utilities (includes natural gas, electricity) $260.00
Phone+ internet $120.00
Cell Phone $25.00
Car Insurance $72.00
Home Insurance $72.00
Other Insurance $22.28
Bus Pass $78
property taxes $184.00

Groceries $500

Pets $20

Dining Out $80
Clothing, shoes etc. for all 4 people $100
Gifts (family, friends) $50
Charitable Donations $30
Natural Food Buying co-op $80
Household maintenance $50
Gas $150 if the car is being used for mostly errands/pleasure, try to cut out one tank of gas a month
car maintenance $50
medicine $30
supplements $75
toiletries $10
hair care (includes hair cuts) $25
homeschool supplies $20
Activities Adults $100
Activities Kids $150
personal spending -me $60
personal spending -dp $60
spending on kids $60
Miscellaneous $10


Credit Cards $100
Car Payment $280
window loan $81
line of credit $5

TOTAL: $3675, so we are over budget by at least $50


Thanks so much mamas! I really appreciate the help I've had on this forum in the past.

Utilities seems high. Is this an average cost or are you paying a set monthly amount? Is your water bill included in this? Make sure you have no leaks in your in your pipes...

Phone and internet - I am sure you can find a better deal! (Mine is verizon $60 includes longdistance to Canada (which I need). And another 20 for internet. Look into Vonage - there are deals for 40/mth and less.

Really, your necessary payments are pretty decent.

I would suggest grouping a lot of the extras (the bolded items) together and move all that extra money to the credit card. I think you can get a couple hundred extra to go towards the cc. I underlined the categories that appear to be ones that one can do with out for several months (or at least pare down i.e. gas). These seem to be items that can fit in your budget quarterly...so maybe these are savings to go towards that? Either way, that's a big chunk of extra money that can be re-routed for the time being.

Keep the car. You need it, its not a huge expense. And you probably cannot sell it for what you owe on it right now.

For insurance prices, if you want to bring those down, increase the deductible (if you haven't already).

[VisionaryMom]

Originally Posted by Kyamo

This can be cut down. Try making larger quantities on purpose when you cook so that some can be frozen for nights you don't feel like cooking or don't have time.

A lot of people eat out for entertainment and not because they don't cook. Since this is a budget category, I'd guess that's the purpose of an eating out budget.

OP, are these your only debts?
Credit Cards $100
Car Payment $280
window loan $81
line of credit $5

How much is on each of them? How much I would cut would depend on how quickly I could pay off each loan.

[VisionaryMom]

Originally Posted by Tjej

If you REALLY want to save money, you can just not spend money. Things like activities, "personal spending" and homeschool supplies - there are SO many things you can do that are absolutely free and there are a bajillion resources online for free. I understand wanting to spend money on certain things, but if it is a high priority for you to pay off that CC debt these types of spending are something you COULD lay aside for a few months.

Tjej

I have never lived in the suburbs, but I understand that in some of those areas, there aren't lots of free activities. If that's the case, OP, I would opt for memberships. Our children's museum, for example, is $75 a year, and we could go weekly and not run out of things to do for the kids. Our zoo membership also is $75, and that's a wonderful spot to spend a day. If you're spending $150 a month on kids' activities, you may be better off buying a couple of memberships and making the most of those places. For example, the children's museum has one day a week for homeschoolers during the school year, so you can let that membership fee be double-duty.

Why are you spending so much on kids' shoes? You said that's most of the $100 monthly clothing/shoe budget. Our kids have a minimal number of good quality shoes. We only buy new shoes 2-3 times a year (DD tend to get them more because her feet grow faster).

[IngaAnne]

Don't take this the wrong way, but it completely freaked me out when I saw your income and how low your mortgage was! I was just laid off and we are trying to make ends meet on an income similar to yours and a mortgage three times as high. My son is also a highly food allergic kid so I know how much of a pain and expense that can be, too.

Honestly, it looks like you have a ton of extras budgeted in every month. Perhaps, add together all the gifts, clothing, entertainment and divide the number in half. Use the second half to go towards existing debt.

You are spending a lot on gas considering the vehicle is not being used to commute to work. Try combining errands and planning trips so you aren't driving all over town each day. For example, if you have a couple of places you want to go on the west side of town, group those together in one trip. On another day, go to the north side of town. Instead of driving the kids somewhere to play everyday, set a day or two to just stay home. Let them ride bikes or play in the yard instead of driving them somewhere.

There's also a lot of money being spent on food. Is everything being eaten each week? I used to throw away food (and money) every single week by not properly planning. You can save a lot of money by planning an entire week of meals and snacks, prior to shopping, and cooking from scratch. Only buy what you really need.

[proudmamanow]

That's okay Inga, we moved 2 years ago so we could have a lower mortgage & I realize it is very low, we are very fortunate. And I sympathize, my daughter is allergic to many of the same things as your son, and it is such a drag!
Gas in our area is very expensive. It costs us $45 or so to fill up a tank so that is about 3 tanks of gas a month. I really don't think that is very much considering where we live (out in the 'burbs).


I really like your (and others) suggestions to look at all our extra items--entertainment, personal spending etc. and to roll them all together & cut them in half. I think I will do up a new budget with that.

Oh and I realized there was a typo, our line of credit payment is $85, not $5.

And I double checked and in summer our utilities are actually $180. Not much we can do about that for this area.

It's true we do spend a lot on food. Dd2 is allergic to soy and all legumes, so we are forced to a eat a LOT of meat these days. We try to do pancakes for supper at least once a week, but I think I should try to look at our budget. We use a meal planning system (relishrelish.com) that I love, but does not always use the cheapest ingredients. I am going to take a good hard look at our food budget.

VisionaryMom--we do have a lot of memberships (local Children's Museum, nature museum, indoor playground), and I think maybe we should make better use of them so that we save $$ on activities.

I also really like your idea of looking at how much we owe for each item and seeing how long it will take. I think having tangible goals like that will help me a lot.

I'm going to work on this budget and post a revised version later today, hopefully.

Thanks so much for all the suggestions!! I really really appreciate people's input, it always helps to shake up my thinking re: what we are spending and to look for new innovations.

[mtm]

proudmamanow, you know I already think you're doing great with cutting the cc debt in half and adding extra time at work. But I'll be mean to your budget if you'd like. We're 5 people, 2, 5, 8 and 2 adults, two of mine are gf, cf. What are the supplements and have you looked on line for cheaper?

Food related expenses 500 plus 80 (eating out) plus 80 (coop) plus 75 (supplements) is closer to 750. Does it seem high to you when written out this way? Can you find a way to get toiletries, haircare, clothing down?

You've got eating out, adult fun, personal spending, kid spending, adding up to a big amount. You could cut here. Our eating out line is our entertainment budget.

A few hard choices will give you some traction.

[VisionaryMom]

Originally Posted by proudmamanow

I also really like your idea of looking at how much we owe for each item and seeing how long it will take. I think having tangible goals like that will help me a lot.

I think it also will make it easier to see how much you should cut. If we could cut everything bare bones for 6 months and pay off all debt, I'd do that. If it would still be 18 months, then I would allow some expenditures for the sake of mental health/living now. It just looks as if your debt payments are really, really low compared to your total money available, so I'm sure you could pay off most of the debts pretty quickly.

[proudmamanow]

Originally Posted by mtm

proudmamanow, you know I already think you're doing great with cutting the cc debt in half and adding extra time at work. But I'll be mean to your budget if you'd like. We're 5 people, 2, 5, 8 and 2 adults, two of mine are gf, cf. What are the supplements and have you looked on line for cheaper?

Food related expenses 500 plus 80 (eating out) plus 80 (coop) plus 75 (supplements) is closer to 750. Does it seem high to you when written out this way? Can you find a way to get toiletries, haircare, clothing down?

You've got eating out, adult fun, personal spending, kid spending, adding up to a big amount. You could cut here. Our eating out line is our entertainment budget.

A few hard choices will give you some traction.

mtm I don't mind if you're 'mean' lol, that's what I'm looking for!
The supplements are: fancy probiotic supplement that is completely allergen free $62.00 , magnesium so that older dd sleeps and is less anxious $10.00
But if I take a hard look at these, we don't necessarily replace them each month, they often last longer, so I should be able to bring that down.

And you're right about the food budget being high. I'm going to try to be much more systematic and careful with it, and try to plan cheaper meals.

And Visionary Mom--I totally know what you mean! It's so much easier for me to think of being really really tight with the budget if I know it's for 6 months....if it's longer than it is just not always psychologically sustainable...

I do think we're more than 6 months away from paying it all off, but 6 months of concentrated effort would still put us further ahead....and we also NEED to be saving a bit for the holidays.