Do I have anything to save each month? Budget help, please!

[darien]

I've spent my adult life with tight finances, hand to mouth, and I think that has skewed my perception of money. I'd like you all to take a look at my expenses and advise me how to budget my "excess."

Six months ago, I left my stbx before he could land us in a second bankruptcy. We had/have no savings, no life insurance, no college fund for our 2 kids. I have no retirement savings, but in theory, will get half of his.

The kids and I moved to a very little apartment, which includes all utilities, plus cable and internet. Stbx pays $650/m cs, although he will likely be paying up to double that after our lawyers duke it out.

I make $32,000 gross/school year teaching at my kids' school. I get discounted tuition and free before and aftercare. Tuition is about $5,400/year, total.

My bare bones monthly income and outgo look like this:

$2038 net pay (after taxes and tuition)
$650 cs

$985 rent/utilities
$500 groceries
$150 gas
$ 50 car ins/AAA
$ 25 phone
$ 50 afterschool activities

That leaves $928/month for all the things that vary every month: entertainment, haircuts, clothes, car maintenance and repairs, school supplies, toys and books, holiday gifts, travel, medical copays....

That "excess" would be where I'd get all the things we don't have, but should: health ins for me (stbx carries the kids), life ins, renter's ins, college fund, retirement fund, savings account....

Just to add to the fun, the school I work for is struggling financially. No raises are in sight. Also, remember that I have 3 months (summer) where I have decreased income. This summer, I worked half time at a camp, and was lucky to get it.

If you were me, how would you use that monthly $928?

[pinksprklybarefoot]

It would probably help to do a tentative plan of the next year's expenses.

I would consider socking away as much of that $928 as you can in case you do not get a summer position next year. It looks like you need (at the absolute minimum) ~1200/month to live, so you would want to put away ~$400/month during the school year to be able to live over the summer. I would also try to have a little emergency fund *just in case*

What is your car's condition? I would consider budgeting for inevitable repairs (even $15-20/mo) if it is not brand new.

Look at the other categories and figure out about how much you have to realistically spend/year. Clothes - work clothes for you, school clothes or uniforms for the kids. How many gifts do you wind up having to buy per year (Do you have a large family that makes a point of exchanging birthday/holiday gifts? Do the kids attend a lot of birthday parties? Any weddings coming up this year that you know of? I am continually shocked at how much we spend on gifts.) Hair is another one that surprises me - we spend over $100 every-other-month on haircuts for a family of five (DH and the boys have short hair). Is there travel that *must* be budgeted for (holidays)?

Can you get health ins through your employer? What would that run?

[bluebunny]

$985 rent/utilities
$500 groceries
$150 gas
$ 50 car ins/AAA
$ 25 phone
$ 50 afterschool activities

Hmm. Some questions for you:

-If after school care is free, why are you paying for afterschool activities?

-Your grocery budget seems high. Could you cut down?

-I pay $50 per year for AAA. How much is your yearly car insurance?

-Most teachers I know get their salary split up in to 12 months, rather than nine. Could you do that?


If I were you, I would find out how much life and health insurance is. Then you can better budget the rest. Is there any way to stay on your stbx's insurance for a while?

[Nemesis]

I think for two kids and yourself you can definitely cut the grocery budget, if you need to.

I've found the calculator on Dave Ramsey.com to be useful for playing around with: http://www.daveramsey.com/tools/budget-lite/

For a couple of months, I would save as much as possible until you have a large enough emergency fund to see you through a real emergency.

I would also shop around and see if you can get lower car insurance. I get mine through Progressive, and our renter's insurance is only $17 with them (replacement up to 40K and extra coverage for some of my DH's really expensive electronics).

[BunnySlippers]

You have $928 a month in spare change? Thats an awful lot and you should not be living hand to mouth.
Stop with the eating out and entertainment for one. Cut anything you can live without.
Do you cut your hair every month?
You probably have more clothes than you guys need, do you buy new or used?
Cut back on the toys, books and gifts.
I'd use that spare $928 to pay off debt and build some good savings.

[Delicateflower]

I would not budget with your monthly income, I'd budget with your nine month income divided by 12. The difference for the school year needs to go into an account to carry you through the summer. Keep that separate from your true ef, because otherwise you'll be in real trouble come next August.

Roughly, you should save $500 of that excess every month for summer pay. Which leaves about $100 a week in excess, which isn't that much for everything you need to take out of it.

If you get summer work the income from that can go towards savings and a good emergency fund.

And you need to have renter's insurance. If you have a fire or your downstairs neighbor has a fire you will be in big trouble.

[darien]

Originally Posted by BunnySlippers

You have $928 a month in spare change? Thats an awful lot and you should not be living hand to mouth.
Stop with the eating out and entertainment for one. Cut anything you can live without.
Do you cut your hair every month?
You probably have more clothes than you guys need, do you buy new or used?
Cut back on the toys, books and gifts.
I'd use that spare $928 to pay off debt and build some good savings.

Ok, I guess I was not nearly clear enough. I said I am used to living hand to mouth. Now that I do not live with my stbx, I hope not to have to.

The $928 is not "spare change," it's the money left after I pay for the items I listed. I was hoping someone could help me prioritize what to do with it-- should I put life insurance ahead of renter's insurance, for example.

As for eating out, I take my kids to Subway for dinner about once a month. Our entertainment is mostly free. I cut my boys' hair with a clippers, and I haven't had a haircut for a year.

Why do you have the idea that we have more clothes than we need? Jeez. I get virtually all their clothes and toys from the thrift store or freecycle. Half my clothes are a decade old! I spent less than $100 buying my "new wardrobe" when I got my teaching job.

Our books come from the library or the thrift store. I get a lot of holiday gifts there, too. I don't have any debt. I (finally) paid off my student loans. I have one credit card, which is paid off.

As for afterschool activities, aftercare works for my younger ds, but older ds is in high school. He does karate, soccer, and robotics club.

My car is 8 years old, in decent shape. I paid $100 this year for AAA (to keep stbx on it). Next year it will be less, if I drop him off. Car insurance is about $500/year. I did shop around, but perhaps not enough?

I can't get health insurance at work without losing my tuition benefit, which is much better. I can't make stbx keep me on his insurance. The school won't issue paychecks on a 12 month schedule, either.

I can certainly squeeze our grocery budget, if need be.

Thank you all for your advice.

[A&A]

$25/mo. is high for a phone. You can get a TracFone and pay about $10/mo. Also, health insurance can be priceless if you end up with something major. I'd take that over tuition reduction, unfortunately (and perhaps send my kids to public school, if need be.)

And is it at all possible to rent something cheaper? Your rent seems high to me, but I don't know where you live.

And if you don't get a summer paycheck, you really should be putting 25% of each paycheck into a savings account to get you through the summer.

[darien]

Originally Posted by A&A

$25/mo. is high for a phone. You can get a TracFone and pay about $10/mo. Also, health insurance can be priceless if you end up with something major. I'd take that over tuition reduction, unfortunately (and perhaps send my kids to public school, if need be.)

And is it at all possible to rent something cheaper? Your rent seems high to me, but I don't know where you live.

And if you don't get a summer paycheck, you really should be putting 25% of each paycheck into a savings account to get you through the summer.

I do have a TracFone. The $25 is for my phone and my older ds'. I do want to get health ins, of course, but their school is nearly non-negotiable. It's a "great deal" for a number of reasons, and our public options are sub-par for ds2 and dangerous for ds1.

I would looove to pay less for rent, that's for sure! But, my rent is quite low for our area. I got really lucky getting this place.

[laura-belle]

By my rough math, at least $500/month of that $928 needs to be put into savings to cover your summer expenses in the event that you don't get any sort of summer position. If you do get a position, you can put what you didn't need of that savings into an emergency fund.

After that, I would prioritize renter's insurance (which should be really cheap) and health insurance for yourself. Anything left over after that should be put towards developing a large emergency fund (separate from the summer expenses fund) that could cover your necessary expenses for six months or so.

Re the tuition benefit vs health insurance question, just a few things to think about. Have you priced health insurance for yourself to be sure that the tuition benefit is actually worth more? Last time I was paying COBRA it cost me nearly $10,000 for a year (although thinking about it, for two kids in a private school...). Shouldn't your STBX be paying at least 50% of the cost of tuition; is this factored into the child support and is the discount you are receiving counted into your contribution towards the tuition?

[BunnySlippers]

Originally Posted by darien

That leaves $928/month for all the things that vary every month: entertainment, haircuts, clothes, car maintenance and repairs, school supplies, toys and books, holiday gifts, travel, medical copays....


If you were me, how would you use that monthly $928?

I suppose this is where I get that idea

[darien]

Originally Posted by BunnySlippers

I suppose this is where I get that idea

Okay. I didn't put them in my monthly tally, but said that they were expenses that vary every month. The only absolute implication there is that I have, at some point, spent money on those items.

[Tilia]

Have you looked at prices for renter's insurance? Mine is only $9 a month, and so worth it.

I don't think $500 for groceries is bad for you, your almost adult son, and another child. It sounds like you live in a higher COL area.

Does your teen have a job for spending money?

I would budget $40/month for car repairs, oil changes etc.

I would also budget for two co-pays per month, maybe three.