Well we (DH, myself, 2yo DD) don't budget anywhere near what you have in the Personal, Entertainment, Clothing and Going out categories. Those together equal $350/mo, we probably spend less than two months worth ($750) for all those categories in a year. Obviously that is a lifestyle choice, we don't go out much and we thrift/consignment for most of our clothing purchases, because me staying home is a higher priority for us. I realize that some people will really struggle with and/or resent making cuts in those areas, but when I look at your budget that is where I see the most potential for cutting back.
I definitely see your point. Honestly, in the clothing area we hardly spend anything, but I don't know what to put down for clothing because we'll go 3 months of spending less than 10 dollars (I mostly shop at consignment too) and then one month for whatever reason we'll end up spending more.
I also don't know how to decrease personal. The big problem there is that I count medical as part of personal. That ends up being the same idea with the fact that we don't go to the doctor for months, but if one of us gets sick we end up paying co-pay and extras for tests and x-rays and prescriptions. Then, of course, if one of us gets sicks, it's often all of us. In most of those situations we don't even go to the doctor, but when we all had the flu in Jan. DD and I both went in because she was the sickest she's ever been and it scared us and I ended up with pneumonia. We also count working out expenses (like my gym membership and my husband's money to get into the place he plays basketball) as personal.
As for going out and entertainment, we're still working on decreasing those. We used to spend a ton more in those two areas than we do now. Entertainment could definitely go down again because we haven't spent more than 30 for the past few months.
I also forgot to put my money that I get from going to school. I just did my refund that I get and divided it by 6 since I get it two times a year.
A couple things I thought of:
Health insurance premiums for the baby, after birth (if they're not going to be on gov't insurance)
Income taxes: you'll get the child tax credit and deduction for another child, and probably more Earned Income Tax Credit too. If you have income tax withheld from pay, you can run the IRS withholding calculator and see what your withholding should be. (You can adjust withholding before the baby is born, as long as you're willing to gamble that the baby will be born alive before the end of the year.)
You might qualify for WIC or some state assistance with medical care, if you care to pursue it. The income limits are pretty high in my state, and a pregnant woman counts as two people for family size purposes.
I don't have the medical insurance listed on the budget because it's taken out of my husband's paycheck before it even gets to us. I should probably have it noted somewhere. Honestly, I don't even know how much we pay. Good new though is that my husband asked his work and it doesn't matter if he has 1 child or 15, it's the same premium (though I cost 100 extra, so right now I'm on my parents' insurance for free since theirs works similar and they have to pay for my brothers anyway and that new law makes it so they can have me on until I'm 25 I think).
As for taxes, I have some questions. How much does another deduction amount to? Does it vary depending on your salary? Also, I thought the earned income credit was either you get it or don't, not a scale. Am I wrong? We did get it last year, but I'm not sure that we'll qualify this year with my husband working full-time the whole year (last year he had just graduated so there was a month of no job and lower salary than now besides that). I don't think right now we're going to be having our next by the end of this year (I'd have to be getting pregnant right now!), but it's still useful information for next year.
We used to qualify for WIC and other assistance, but since my husband got his new job we were too high. Maybe with adding another person we'll qualify again. I'll have to check into that. We were getting help with paying for DD's medical insurance from the government, but with his new job the deductible is too high and we can't change it, so we don't qualify.
A couple thing stick out. DH would stop basketball, there would be no going out, no eating out etc. I dont see any 'savings' in the budget. You have a mortgage but nothing saved if the house needs repairs, and yes even brand new homes need repairs.
What does your DD need for $100/month?
I would re-do your budget with some actual numbers from a working month. Keep reciepts, see where your money goes and what actually happens. Honestly your DH is going to need to cut his spending to make this happen as well.
I understand your logic. I will say though that I'm not going to make DH stop playing basketball. It's his way that he exercises and I consider that to be very important. He does try to play at a friend's church when it's available and that's free, but when it's not available they play in the rec center, which is where he spends the money. He probably ends up playing there 1-2 times a month which equates to 10-ish dollars.
As for savings, right now I have the extra money all put into a category for paying off things (student loans mostly). Some of that will likely go to savings too, but we haven't decided exact numbers on that yet. We also already have 1000 set away in our rainy day fund.
And with DD's 100 a month, I do need to sort out a better number for that. I've been keeping track of all of our spending since October, but it's hard to say what a good number is for making a budget. I need to redo all the numbers to more of an average. Maybe I'll do that now. Thanks!
Gym and basketball money can be eliminated by taking walks for exercise, and going to a local park with a basketball hoop. Most schools have hoops outside and let the public use them outside of school hours, too.
Can you see if you qualify for medicaid and drop yourself from the insurance? It would save at least temporarily. Talk to the midwife about sliding scale, or bartering for part or all of her fees. A local midwife has even taken baked goods and the like in trade for part of her fees. Most are willing to work with you.
Can you lower your internet to a cheaper tier that your dh could still use for work and just rent dvds from the library for a while? Or do the cheapest netflix for one dvd at a time?
Take away the gift budget and instead focus on things you can make (we do baked goods for gifts a LOT, or an offer to clean, etc), cut going out in half and make do. What is the $100 for DD for? I'd say at least cut that in half unless its medical necessity, etc.
Temporary forebearance/deferrment for student loans? Have you looked into income based repayment as an option to reduce your payments?
Can't eliminate the gym because I'm on a contract. Basketball is played outside when possible, but in Utah part of the year it's very much not possible.
I'm actually already dropped from my husband's insurance. As I mentioned above, I'm lucky enough that I can be on my mother's insurance for free. I do still have to pay for things like co-pays, part of tests, and deductible (which is actually really low), but we're saving 100/month by me not being on with my husband's. I will definitely talk with my midwife about bartering though. That would be neat to do.
As for internet, we're definitely not decreasing that. I know it's kind of silly, but my husband is a big gamer. The game that he plays is free monthly (as opposed to WoW where we used to have to pay), but he needs good internet for it. Especially if I want to do anything on the internet at the same time. I know that's not the norm for every household, but that's his hobby (and honestly, used to be mine too when I had the time). I figure the extra that we pay a month for good internet is less than most men spend on their hobbies. We do actually get a lot of DVDs from the library, but that couldn't cover everything. Also doesn't cover the current shows that we watch on Hulu for free. We already get 1 DVD at a time from Netflix. That does make me realize though that if we're spending this much money on entertainment for at home, we probably don't need to spend as much for outside of the home.
I should do something about the gifts section. I just don't know what to do because some months it's a lot and others there's nothing. Right now we try as much as possible to make gifts be activities rather than things. For instance, I took my friend to lunch and paid for her as her gift. DD's birthday on the other hand, we went over that budget purely by buying her a tea set and putting money into her college fund. So I just don't know what to do in regards to that.
As for the 100 for DD, I should decrease that. I count all things regarding DD into it (e.g. clothes, diapers, activities). Her tumbling class costs 55/month by itself which I think is totally worth it, but we need to take advantage of the free-play time more so we get more for our money.
As for student loans, I don't really want to decrease our payments. Honestly, we're working on paying more than the monthly to those to pay them down faster. I don't think that we should attempt to put payments on hold so that we can have another baby. Seems bad in the long run.
Thanks for all your input!
The income based repayment wouldn't make you owe for longer. You get a payment amount based on your income, pay that off over 25 years or until it's paid off, and then you're done, even if you have some principal left. The Dept of Education has more information on their site. For us, the repayment amount was $0. I can definitely do $0/month for 25 years. ;)
Oh, I've never heard of that before. I'll have to look into it. Thanks!
$55 per month for a tumbling class for a 2-year-old is REALLY pricy! We're able to get annual family memberships to the local zoo, train museum, aquarium, and kids museum for half that (it costs $370 for all of those vs. $660 for the tumbling class!). We're at each of those places several times per month and they double as birthday/Christmas gifts. Are there other things you can join for much cheaper activities for your daughter?
We actually do have a membership to the children's museum and use it fairly frequently (it's $40 per year). As for the zoo and aquarium, we've had memberships in the past, but they're quite a drive away (about 80 miles round trip for the zoo and 100 miles round trip for the aquarium). I figured we'd use those memberships a lot because we could take the train up, but stupidly my state has a train that goes into the city, but the buses that go near the zoo and aquarium are few and far between! Since we weren't really making it up to the zoo and aquarium, we didn't renew those memberships.
I don't know though, I really like her class she's in. She really seems to enjoy it and I want to raise an active child. It is pretty spendy, but since we're doing that instead of our music class we used to do (which was also 80 miles round trip, but we could take a bus to that one luckily) it feels like we're saving money. Our music class was $185 for 10 weeks. We have to stick with this one for 2 months as par our contract, but I may look for other tumbling classes that are cheaper in the future. I think this place would definitely be worth it if we got some of the free play times in, but right now with my school schedule (for the next month until the semester is over) we can't really make it to any of the other times.
It's hard to balance wanting to help your child learn with the budget. We can do free things like story time at the library, but most other things cost money. Can't even get into museums without paying. Of course when it's warm outside we go to the park and what not, but for at least 5 months of the year we can't spend a ton of time outside (we live in Utah). Even when summer is around it gets ridiculously hot some days. Wish my state would make up its mind and either be freezing or sweating, not both!
Your budget looks fairly similar to mine. We also budget $100 for kids stuff. *However* we are not trying to cut down to barest bones. If I were trying to cut as much as possible, I would:
Stop tumbling class - she's 2. It's a release of energy, not training to be an olympic gymnast :). Find free things to do instead. Summer is coming and a run in the park would be just as good.
Rehome pet (very controversial, I know)
Limit DH's gaming/cut down internet cost
Eliminate Going out - that should come from personal spending
Can you cut down on gas?
Thanks for the input.
When I say that DD is in a tumbling class, that doesn't really explain it correctly. It's technically a gym class for toddlers. I know that I could find other things to do instead that are free, but she loves it and I'm loving how active she is (she keeps telling me "Mama, I so strong!" when she holds onto the bar and hangs from it!).
I definitely won't be rehoming any of our pets. That's a very important part of my life. That said, I can definitely decrease the budget for them. We certainly don't spend that much on them every month. I just don't know how to budget for things that aren't monthly because I'm new to budgeting. We buy their food in bulk, but will go 3-4 months between buying any food at all. I just need to figure out how much we spend over a year and divid I guess.
We could possibly cut down on internet a little. I'm not sure how that would effect his playing. I'm not going to ask him to decrease overall playing because he really doesn't play a ton (an hour or two after DD goes to bed) and that doesn't effect the internet cost. It's just the fact that he plays at all that makes us need higher internet and I'm not going to ask him to give up his one hobby.
I think you have the personal category confused. I know everyone has different terminology for things, but for us personal means medical bills, contacts, hair dye, contraceptives, etc. That kind of stuff. We are decreasing going out, but honestly 100 is a big decrease for us already (we used to be really bad). With time I'll cut it down more.
Gas I'm trying to decrease too. The big thing there will be next month my semester will be over and hopefully in the fall DD can go to the preschool on campus which will eliminate driving her to her grandparents' house and picking her up (and we may take the bus up from our house actually). Right now I'm recording all of my trips in hopes to decrease the amount of miles I drive.
Can you buy a $60 pair of glasses and stop with the contacts? Use henna, which supposedly lasts longer than hair dye or eliminate it all together? If you do highlights or a drastic change, dye it close to your natural color and leave it. I know this is hard- I'm a hair dye addict!- but it is really not a necessary expense in any sense of the word. What contraceptives are you using? Particularly if you'd like to TTC in the future, I'd suggest switching to NFP. A $10 thermometer and the 2 minutes it takes to record your temp are the only costs you have to spend.
For driving, it sounds like your commutes are farther than mine, but here's what I've done:
When I was in school, I did my errands before or after class since I was out anyway. I left the girls with someone who was fine keeping them for an extra hour or two while I ran errands.
If I couldn't fit two errands into a trip, I didn't make that trip. We may go three days without cheese, but that's on us for not thinking ahead last time we were out.
Do you cook from scratch? Making your week's meals, or at leas the base of those meals, on a weekend day at home will save time and money!
With your gym contract- how much do you pay per month? How many months are left? Add it up, you may still save money by cancelling, even with paying a termination fee.
I guess what it comes down to is if you and DH really want to cut the budget. How much convenience you want, how much comfort you want etc. Everyones level is different. When I look at your budget I seen many things that can be cut. But thats me, not you. AND your Dh needs to be on board too. The other reality is your wont be on your parents insurance forever so I would look at a budget with numbers where my household would be paying all the costs.
When my DS was 2 yrs old we lived at the library. We did story time several times a week. Sometimes we went to different branches/library locations for a bit of variety. There is no reason you cant go to the park when its cold outside. Obviously if the playland is buried in snow that makes things difficult but just cold shouldnt be a problem. Get a jacket, sweater, hat etc.
For socializtion DS and I joined a mommy group and for a few dollars a month we went to playgroup at someones house. The scheudle rotated.
You and DH need to really want to cut the budget. You both need to give things up. Maybe internet stays but then everyone gets at home haircuts. (just an example).
The first thing I would cut down on in your budget is groceries and the tumbling class. I agree with pp's in that the tumbling class is for her to get energy our, and there are multitudes of free ways to do that!!! She's two...I promise there will be NO permanent scarring if she doesn't do any organized activities until she is much older and can appreciate it (5 is a good age to start music...). Anyway, that's me, the lady who spent less than $750 TOTAL on all baby-related expenses ($350 of that was my cloth diaper stash). That excludes the homebirth expenses, which we paid up front but are getting reimbursed for by the insurance company. Groceries: for my husband and I (and I eat a lot since I'm lactating), we spend between $200 and $220 per month on groceries. 2 year olds don't eat that much more than 2 adults. However, I know that food costs depend a lot on your area, still there has to be a way to cut on food. We eat all whole foods, no junk or packaged foods, partly organic, raw milk, etc. Shop the perimeter of the grocery store, it is the cheapest food. I also pack dh a lunch every morning so he doesn't eat out either. Make a vegetarian dish 1-3 times a week and skip the meat, that will reduce the bill a lot. Make casseroles where there is just a little meat for flavor; cheaper than a huge steak and some mashed potatoes! Again, that's where I would cut down, you guys have to decide how important it is to you to have another baby and what you are willing to sacrifice. Also, since you are spending so much money on entertainment inside the home, I would definitely cut down your out-of-the-home entertainment costs.
The Earned Income Tax Credit is scaled based on income and number of children. Having a second child put us in a position to get quite a bit back through that.
This article summarizes most of the tax issues with children well. I would only add that the deduction of $3700 per dependent is not the amount of refund you get for them, it reduces your taxable income so your taxes are lower. Also, part of the $1000 tax credit per child (which is a tax refund) may come to you through the Additional Child Tax Credit, because of how the tax formulas are set up.