Our budget - are we doing ok?

[seashells]

Monthly income - $2,654

Expenses

$800.00 - Mortgage, escrow, and about $21 extra principal payment

$180.00 - Student loan, including about $15 extra principal payment

$150.00 - Medical bill, about to be paid off

$100.00 - Electric bill ($100 in winter, but down to $50 in summer)

$75.00 - Auto insurance payment (*see below, it's not as high as it looks)

$65.00 - Gasoline

$35.00 - Internet (required, as 100% of our income is Internet-based)

$8.00 - Prepaid cell phone credit for emergency phone, not needed every month though

$450.00 - Groceries for a family of three (*more below)

$250.00 - Catchall for remaining needs (*more below)

Total Expenses - $2,063

Sinking Funds

I set aside any money we don't spend to be divided into sinking funds and savings. These are estimates of what I save; it varies from month to month. Sinking funds are categories that we do not spend every month but will need money at some point (quarterly, yearly, etc.)

$20.00 - Life insurance (annual premium for both me and DH, 20 year term life)

$50.00 - Medical. Meant to cover deductible. We have $1000 individual and $2500 family deductible.

$8.00 - Christmas gifts. We give nothing to each other, but are kind of forced to give some stuff to extended family.

$30.00 - Airplane tickets for annual visit to see my parents.

$60.00 - Auto needs. Currently prioritizing this as we need brake work, new set of tires, and something else I forgot. We also recently had to replace the battery. Car is in good shape, though, and we own it.

$12.00 - Pharmacy. DH has a prescription and he buys a 3 month supply online.

$135.00 - Heating fuel. No monthly payment, we just fill up the tanks when they are low and buy cords of wood every now and then too.

$15.00 - A pitiful fund for a new car. Not currently on the horizon (cross fingers) but hopefully our car will last years and years and we'll have a little saved up for a clunker. Obviously we'll have to increase our contributions to this fund at some point.

$15.00 - City water/sewer bill, quarterly

$6.00 - Trash. Have to buy permit semiannually and city trash bags when we run out. We go to the dump rather than having it picked up.

$24.00 - Home repair. This is a new fund and it would cover things like a new kitchen faucet (which we had to replace when it broke a few weeks ago) or whatever.

$15.00 - Home upgrade. Perhaps a temporary fund, just want some paint and a few other things, total probably $150.

Total Sinking Funds - $390.00

Savings

$120.00 - Emergency fund. Fund is currently at $1000. Next goal is to get it to $10k but as you can see, it will take years and years to get there.

Currently not contributing to retirement or anything like that. Have a small bond portfolio but that's it.

Not planning to save for DD's college, it seems impossible to us and we would prioritize our retirement.

Total Savings - $120.00

Grand Total Budget - $2,573.00

Seems like there's $80 left over here as fudge factor - maybe we spend it or maybe we save it. We keep a pretty tight budget but things do happen. Like I said, the sinking funds and savings are estimates.

* Auto insurance - The payment would actually be around $44 a month (not $75 like I pay), but they charge us $6 per payment as a processing fee if we pay monthly rather than in a lump sum. So my plan is to increase the payment and lop off a few months, thus paying our premium off early and saving some multiple of $6 (I haven't figured it out yet). Then, once it's paid off, I will add a sinking fund of $75/month and save up almost half of next year's premium by the time we get the invoice. If I keep doing this, in a year or two we'll have enough to pay the premium in full and save $60 a year in fees.

* Groceries - This is probably the glaring hole for most of you looking at this, but what can I say. We never (and I mean NEVER) eat out. Even when in-laws or parents come to visit, they usually spring for the tab for one dinner out. We eat organic vegetables from a CSA but everything else conventional. We are nearly vegetarian (eat meat twice a month). I cook from scratch. I also eat very little, trying to save money (probably 1200 calories a day). We buy generic of everything, but not the cheapest version (example: we buy "natural" peanut butter, but the generic version - Skippy would be cheaper; or we buy the cheapest loaf of whole wheat bread, but not white). I think that our area has lower than average housing costs, but very high food costs. I know we could save some money here, but honestly, I don't feel okay at all about doing any more. I really don't want to eat Skippy peanut butter or white bread. As it is, I really feel deprived food-wise, both in quantity and quality. We don't deprive DD of course. DH maybe feels a bit deprived on quality but he gets enough calories (he fills in the gaps with PB&Js).

* Catchall - This includes toiletries, pet food and litter, and basically any household needs that might come up. However, I've started instituting sinking funds for many things - we had to buy a car battery recently and it came out of the catchall ($80 for a good battery). Or when the sink faucet broke, that was $100 out of our catchall and very painful. I'm hoping in the future the catchall might be reduced as our sinking funds grow stronger and catch those expenses.

Other notes: no landline, no phone other than the prepaid emergency cell. No Netflix, no cable, no entertainment (the Internet is solidly a business expense). We do free entertainment like the library. DD's grandmother buys her a YMCA membership. No clothing budget - DH and I don't buy clothes (well, DH bought a pair of pants from Goodwill last month, but only because another pair were destroyed), and DD's grandmothers and aunts keep her in most clothing (but we did buy DD a leotard out of our catchall budget once, for example, and we have to buy her shoes). I cut DD's hair (and, unfortunately, do a horrible job at it but what can I say), DH shaves his head and I go 2 years between haircuts. We have one car and it's paid for.

Bless you if you actually got through that. I'm just really hoping someone will say we're doing ok.

[GirlBoyGirl]

First of all, what is wrong with Skippy?? Hehe, j/k.

Second of all, I think your budget looks pretty good. You seem to have thought of everything and have put a lot of work into it, so kudos to you! I am currently trying to do the same thing and I know it is tough to figure out.

When your medical bill is paid off, you will have more money to devote to other funds as you see fit. To me it seems like your groceries are on the higher side... do you coupon? shop sales? I know you listed all the ways you are frugal with food shopping...

[iowaorganic]

It looks pretty good to me- other than clothing.  I mean even if you aren't buying any clothing now- you will have to at some point in the future.  Same for shoes.  I don't think your groceries are too high.

[mamaofprincesses]

If you have $80 roughly left over, and paying off the medical debt will free up $150 a month, I would at least work the grocery budget until I didn't feel deprived food wise. I don't think it is healthy to limit calories due to the budget.

Then I would start some sort of retirement, even if it were small, and save the rest. I think you're doing great with what you have. Our net income is similar and our housing higher - but we have four kids! We're only hoping to survive a year or two until DH gets a raise and I can go back to work part-time. Is there a plan in the future for increasing your income?

[seashells]

Thank you both.

Yes, I'm looking forward to having extra after the medical bill is gone. Actually, it's already paid off, but that just happened a few days ago. So it will be March before I can actually enjoy the extra.

I know groceries are high but I don't feel comfortable cutting them any further. I feel deprived as it is. We don't coupon because we rarely want any manufactured food - I've never seen coupons for produce or whatever, it's always for some brand of frozen pizza or Campbell's soup or Ken's salad dressing. But we just make our own. I do shop sales, though, and have a small pantry built up. Not a big deal but like we have a dozen cans of tuna fish, a couple dozen cans of red beans, etc - all bought on sale. I worked on that a few months ago, but I think that inflation is hitting us and we're still dealing with the same bills overall. It's crazy, I can send DH to buy butter, peanut butter, tortillas, bananas, oranges, milk, cheese and sour cream and it's $40 right there and there's not even a meal in there. (And yeah, that's a real example, DH did a shop yesterday).

I do garden, but it's covered under 2.5 feet of snow right now. I did buy a canner last year, and plan to can my own spaghetti sauce from my own tomatoes, and that could save us $50 over the next year minus the cost of starts and jars and the community garden plot - well, I think that's actually a loss, lol, but I do value the skill.

I know I could save some money, though, but I just don't think it would be a lot. Maybe I could save like $8 a week by buying the most processed version of a thing, but I just don't feel like it would be worth it. I just don't want to, I guess. Food is my one "luxury" and it's not even all that luxurious. Luxury would be, like, a bag of walnuts. And an avocado twice a week. And bacon. So many things I drool over when I go to the store, but I just don't get them.

We do get a few clothes as Christmas presents from extended family. I haven't bought underwear - well, ever. I'm wearing the set my parents bought for me when I was in college. If we HAVE to get a piece of clothing, that comes out of  our catchall budget. I would rather eat more food than buy clothes.

I appreciate the validation, thank you both very much.

[seashells]

Originally Posted by mamaofprincesses 

If you have $80 roughly left over, and paying off the medical debt will free up $150 a month, I would at least work the grocery budget until I didn't feel deprived food wise. I don't think it is healthy to limit calories due to the budget.

Then I would start some sort of retirement, even if it were small, and save the rest. I think you're doing great with what you have. Our net income is similar and our housing higher - but we have four kids! We're only hoping to survive a year or two until DH gets a raise and I can go back to work part-time. Is there a plan in the future for increasing your income?

We don't necessarily have $80 extra, it's just fudge factor. Last month, the sink breaking cost us about $100 - and that was just for the hardware and one tool, DH did the work even though he's no plumber. Sometimes we go over grocery or catchall budget, for whatever reason. Not because we're living it large but maybe we have guests over and we have to feed them, or the car battery dies or whatever. I've tried to make sinking funds for everything but they won't free up discretionary money, but simply make us feel better when we have to cough up for something ("oh, the car battery died, but we do have $100 saved specifically for the car so that's fine").

Honestly, that $80 is not going into savings, it's getting spent and it just varies where it goes. Like the last medical bill payment is a little larger (I could have paid it off next month but I just wanted to get it gone). I'm trying to nail it all down though.

Ostensibly I'll have $150 extra, though. Maybe we could do retirement. But our emergency fund is woefully underfunded, and if we suffered a job loss we'd be screwed, like, immediately. We have only $1000 saved, and that's only 2 weeks of expenses and then we're on the street. I think the retirement will have to wait.

Not to mention, the sinking funds are not fully funded yet. We won't save enough to pay the entire life insurance bill at this rate. Home improvement should be a huge amount, like $10k by itself. I think roofs only last 10 years? Ours is 3 years old. So we're looking at a huge expense only 7ish years down the road. If you haven't guessed, I feel sort of panicky about this stuff. Or godforbid our car dies before its time, what will we have saved by then, a couple hundred bucks? Sigh. I think that $150 is going to have to go toward savings and sinking funds, and frankly it won't even go that far.

As for future plans for more income? No idea. I haven't had a raise in years. Three or four? And asking for one is out of the question - I'm lucky I have a job at all. The company finances are tanking. I have access to the books so it's not just a snow job I'm getting. The economy sucks. And inflation keeps going up, plus as DD grows she'll be more expensive no doubt. I could get another job and I probably should, but I just feel so damn wiped. I'm sorry if I sound whiny, I'm just trying to be responsible but some choices are really hard. I like working and am not afraid of working, but being a mom, it's different now. Before being a mom, I'd gladly pull double shifts or whatever, but now I just want to be with my daughter. Oh, and I'm homeschooling her and as it is I don't have a lot of time for it... Blah. I'm going to have to assume it's going to be like this for the long haul.

[seashells]

Forgot to say, when I say we won't have enough saved for the life insurance premium, I didn't mean to imply that we wouldn't be able to pay it. But just that we'd have, say, 75% of it saved up and the rest will just have to come out of our Catchall budget and we'll just take a hit for that month. I'm working to have all the funds fully funded, and have been actively working on it for about 6 months, but it's just going to take time.

[lishoprah]

What type of roof?  Asphalt is the most common where I live and they're supposed to last 15-20 years.

You're doing way better on your budget than I am :).

[mamaofprincesses]

Originally Posted by seashells 

 As for future plans for more income? No idea. I haven't had a raise in years. Three or four? And asking for one is out of the question - I'm lucky I have a job at all. The company finances are tanking. I have access to the books so it's not just a snow job I'm getting. The economy sucks. And inflation keeps going up, plus as DD grows she'll be more expensive no doubt. I could get another job and I probably should, but I just feel so damn wiped. I'm sorry if I sound whiny, I'm just trying to be responsible but some choices are really hard. I like working and am not afraid of working, but being a mom, it's different now. Before being a mom, I'd gladly pull double shifts or whatever, but now I just want to be with my daughter. Oh, and I'm homeschooling her and as it is I don't have a lot of time for it... Blah. I'm going to have to assume it's going to be like this for the long haul.

I don't mean to sound critical or discouraging; like I said, we're in similar financial situations. I just know that, for me, knowing it's going to get easier eventually is what helps me sleep at night. Does your DH work? In your shoes, I would be seriously searching for SOME way to generate extra income.
 

[NewBeginnings1]

Great budget. If you know where your money is going, then you're ahead of most. Two thoughts: 

1. Depending on your age and current retirement fund strategy, I'd throw any money left over at the debt (medical & student loans) first and once that's finished throw it towards retirement. The caveat being that you are attacking the debt aggressively and can begin to fully contribute to retirement in 2-3 years. At minimum, I'd split it 50/50. It's great that the medical loan is almost gone, but once you're rid of the student loan, you can start cooking with gas! 

2. I don't know if you spend money for birthdays or holidays other than Christmas, but I'd consider a sinking fund for it as well.

[Callimom]

It looks like you are doing great.

I think if it were me and I was wanting morein the emergency fund,  I would take all the "bits" of your budget (ie the $21 and $15 you are putting towards principal, and some of the smaller sinking fund amounts and your "float")  and work for say 6 months to build up your emergency fund. If you add in the $50 your electricity bill drops over the summer and work your grocery budget down 10% during the summer when it is often cheaper to buy food you could conceivably bank $180-200 plus $150 snowball from your medical bill every month and in 6 months that could give you an extra $2000 in your EF. 

I know you said you didn't want to cut your grocery bill further - which I can totally understand if it already feels like you aren't getting enough. Can you research other options for increasing your purchasing power and perhaps gardening? Where I live there are co-ops that hook up people with land (ie back yards) with people who want to garden. They share the space/costs, the "renter" does the work and they split the harvest. Even if you could get land to grow tomatoes, beans, zuchini etc to freeze for winter you could probably get a fair amount for the cost of a few packs of seeds. There are gleaning organizations here as well where you can hook up with people who have fruit trees which won't be harvested - what you pick is yours to keep. A couple of bushels of apples only takes an hour to pick and can keep us in apple sauce for the year for free. We scored a few litres of wild blackberries and elderberries  this year as well which we have been baking into muffins, oatmeal etc. Do you have anything like that? 

Can you bake your own bread/tortillias, make your own yogurt/pasta etc so you are maintaining quality and increasing your quantity? I know you said you live in a place where the cost of food is high - are there any programs like Good Food Boxes that could help you?  There was a good thread recently about stretching a food budget - you might get some good tips there to make sure you aren't going hungry and aren't feeling deprived. I can't say enough about getting a good pantry/freezer system put together and preserving foods in season. I'm amazed at how little it costs us to eat well when I use my pantry/freezer. It also gives me a sense of security to know I have that food and that I can make it work hard for us.

Do you have spaces to grow even a little? A rhurbarb plant tucked into a corner can yield a surprising amount which can get frozen and baked into muffins or stewed and added to oatmeal to perk up a winter breakfast etc. You can often get free rhubarb plants from a friend who is dividing theirs.  A few pots of basil and some cherry tomatoes started from seed can grow in tight spaces and can turn into inexpensive pesto and sundried tomato pasta in January. We just had some for dinner the other day - the pesto we made cost us $1 per jar because we bought the olive oil and walnuts on sale, the tomatoes were from a plant we grew from seed (basically free) and the pasta we bought at a case sale. Dinner for 6 cost me $1.50 for the pasta, $3 for a fresh spinach and carrot salad, and $2 for peach pie, which for our family works out to $1 a person with leftovers for lunch for DH. Small bits like yummy pesto or homecanned peaches that taste like fresh, can make a big difference in that feeling of luxury and "fullness".

Also - ask around for canning supplies - canning is a dying art and I often come across jars for free just by mentioning that we can. 

Good luck!

Karen

[GirlBoyGirl]

What about doing something like Angel Food Ministries for some cheap food?

[MidwifeErika]

If your student loans are stafford, have you looked into the Income Based Repayment? That may work for you and free up a bit more money.

[mnnice]

First I think you budget is very comprehensive, organized, and thoughtful.  From that stand point you are doing great.  I think working toward paying you  car insurance payment in full each cycle (you don't say if you are billed every six months or every year) is a very worthwhile project.

However, in my opinion you are spending a pretty hefty precentage of you take home pay in housing (especially if you include your water, trash electricity and home heating in the total).  I think I would be looking at how to decrease it as a total precentage (more income, housemates, moving to cheaper a place all could work).

I wouldn't bother with the extra principle toward debt right now, but would instead work on beefing up the emergency fund. If you are going to put a token amount towards a long term goal I would start an IRA or contribute to a 401 or 403 if you have access to either of those.   

[happysmileylady]

Overall I think your budget looks pretty good.

On the groceries, in general, I don't think your number looks too bad.  Could you save more there, probably.  But, given what you have posted, I don't think you need to.  HOWEVER, I will say, stop "eating less to save money."  That small amount of calories ins't really healthy...it could be less healthy than eating the manufactured foods you are trying to avoid.  If you arent' loosing weight on only 1200 calories a day, then you are likely not getting a healthy level of activity.  If you ARE getting a healthy level of activity and you aren't losing weight, then you might be underestimating the number of calories you are consuming. 

As for coupons, there's plenty of coupons for healthy stuff, it's not just frozen pizzas and campbells soups.  There's coupons for things like Aunt Millies Whole Grain breads (No HFCS either!) and then when you combine those with things like a buy one get one free sale, you could end up getting them a cheaper than the cheapest white bread.  And, you can look for deals on stuff you DO buy, that give you coupons back for anything.  Plenty of stores run deals where, for example, you buy say 2 pks of toilet paper, get $2 off your next shopping trip.  You can then use that $2 to buy say organic fresh salad mix or something.  And, if organic isn't that big of a deal, you can do even better.  You mentioned sour cream, there's a 55c coupon out for Breakstones Sour cream.  If you have stores that double those coupons, that works out to $1.10, and if you buy several, with several coupons, when it's on sale around you, you could save quite a bit of money.   There are coupons out for cheese, milk (Deans has put out a few these first two months of the year.) OJ, (minute maid and prairie farms) and even meats, like ham, turkey and sausage right now.  Pastas if you eat them, regularly have coupons out.  Whole wheat pastas even.  Ronzoni has $1 coupons out right now, at Walmart that's making the Garden Delights versions free and the Healthy Harvest versions only 50c a box.  And when you get into coupons for toiletries, there's TONS.  Razors, toothpastes, toilet paper, shampoo etc etc etc.  I haven't paid for toothpaste at all in 6 months, same with tooth brushes and razors. 

BUT, like I said, overall, I don't think your $450 number is all that terrible.