Budget Insight please

[whalemama17]

Hi Mama's,

I would appreciate any help you could give me regarding my family's budget. A snapshot of our family is that I am finishing up grad school, my husband works full-time and earns about $28,440 after taxes, and we are expecting another baby in January. My husband was laid off from a higher-paying job in January and the loss of my income while in school has been challenging.

Rent: $1200/month

Car payment: $375/month (Can't be lowered-we made some mistakes, long story)

Car insurance:$300/year (Thought about raising deductibles but recently we had an accident and the $500 deductible felt like a lot)

Gas:$130/month

Oil change: $7/month budgeted

Excise tax: $135/year

Cell phones:$90/month (We currently have the lowest plan for minutes. Switching to lower priced option)

Utilities:$50/month

Life insurance:$100/month

Books/magazines/music/going to movies/going out:$16 every 3 months

Wine/beer:$Should be zero if DH really wants beer once in a while ok

Coffee shop:$10/month

Restaurants:$Should be zero

(I know this category should be lower)

Groceries: $50/month (We currently receive assistance and WIC)

Gifts: In theory $205/per year (Still too high)

Dentist:$20/month budgeted for two cleanings each per year

Doctor:

YMCA membership: $42.50/month

Pharmacy (Medicine, band-aids, etc): $8/month

Home supplies: $20/month

Home furnishings:$12/month (Not decorations-stuff like kitchen towels, bathroom towels)

Renter's insurance: $16/month

Baby supplies:$25/month

Books and toys: $100/year

Hair cuts: $15/month for husband $15 every 3 months for me

Toiletries: $15/month

Pet food and supplies: $20/month

DD's clothing: $25/month (Thrift stores, consignment stores, ebay)

DH's clothing: $25/month

Not necessarily buying clothing every month

My clothing: too high

Tailor: $35/year(I need to get pants shortened often)

Credit card payments:$150/month

Not included is any type of going out kid-related activities, gas and food for occasional vacations etc. Also not included is childcare which my mother is helping to pay for. This works out to a monthly budget of $3,218 which would be fine if we had two incomes. Revised to reflect more accurate spending patterns.

Edited by whalemama17 - 8/13/11 at 4:35pm

[cappuccinosmom]

First category I would look at is clothes.  That is a *lot* to spend on per month.  Is there some reason that everyone needs to add to their wardrobe every single month?  I'd also look hard at the furnishings category, even though it seems small. 

The other things I would think about cutting are the eating out, books/toys, YMCA, and gift category.  Find free alternatives, do some no-spend months, and eat at home.  These are very simple ways to save yourself a big chunk of money, though I know they are hard to give up.  As for gifts, other people's emotions should not be controlling your budget, and if you are in a tough spot, it is the relative's problem if they have "issues" with you not buying expensive gifts for them.  $90/month is way too much on your income.  It is just too much.

This is the hard thing about budgeting.  In order to live within your means, you have to be willing to give some things up.  And it is no fun to give things up, especially those things that contribute to physical and emotional comfort.  It sucks not being able to eat out, it sucks not being able to grab a great deal on shoes when you find it, it sucks not having the house look like you want it to because you can't afford the furniture and decor.  *But* weighing the strain of debt and financial sucks a lot more, IMO.  And it's worth going spartan temporarily in order to get that financial stress under control.

[nd_deadhead]

First of all, I want to compliment you on making a thorough and honest list.

As I see it, these items are fixed:

Rent: $1200/month

Car payment: $375/month

Car insurance:$25/month

Gas:$130/month

Oil change: $7/month budgeted

Excise tax: $41/month budgeted

Utilities:$50/month

Life insurance:$100/month

Groceries: $50/month (We currently receive assistance and WIC)

Dentist:$20/month budgeted for two cleanings each per year

Toiletries: $25/month

Renter's insurance: $16/month

Pet food and supplies: $30/month

Credit card payments:$150/month

Pharmacy (Medicine, band-aids, etc): $8/month

Home supplies: $20/month

These total $2247/month, and your income is $2370/month.  That leaves you $123 for everything listed below. Obviously you are going waaaay over now (I calculated $518.50 without even including your gift category). Where is that money coming from now?

There are other things below that you probably can't do without - I assume "baby supplies" includes diapers, for example, and doctor bills are going to come up, even if it's not a regular amount.

So you either need to find an additional income source for $500/month, or cut out just about everything listed below. You flat out can't afford to eat out, or buy books or movies. The YMCA membership has to go, and DH is going to have to get by on the clothes he already has.

Cell phones:$90/month (We currently have the lowest plan for minutes. Trac phones?)

Tv: $7/month

Netflix:$12/month

Books/magazines/music/going to movies:$20/month

Wine/beer:$20/month

Coffee shop:$20/month

Restaurants:$45/month

Gifts: In theory $90/month budgeted to be divided among birthday gifts, random gifts, and around $250 on holiday gifts (This is  a tricky area-DH's family expects Xmas gifts etc)

Doctor:

YMCA membership: $42.50/month

Home furnishings:$12/month

Baby supplies:$50/month

Books and toys: $25/month

Hair cuts: $15/month for husband $15 every 3 months for me

DD's clothing: $50/month (Thrift stores, consignment stores, ebay)

DH's clothing: $100/month

My clothing: Embarassed

Tailor: $5/month budgeted (I need to get pants shortened often)

[whalemama17]

I think what is hard for me is finding the happy medium between feeling totally deprived and living in excess. I want to be able to grab a cup of coffee out once in a blue moon but I guess it has to be a very special, once in a while treat. I will explore the internet and library as an alternative for Netflix and tv.As for clothing, I need to cut wayyyy down and as for DH, I guess be very frugal about new clothing. Hard to find secondhand men's clothing and I've found stuff from Target wears out pretty quickly but places like Lands' End Canvas have super sales at the end of the season. Not sure how to save on diapers etc anymore since DD's school won't do cloth diapers I don't think. Haircuts, shave to get them done-when I've tried to do them myself it has been a disaster! Books and toys for my daughter will be something that I will be honest in asking my parents to get for her-she is the only grandchild and I think they are happy to buy her a well-made toy once in a while. Cutting out the YMCA feels sad because I love the community and it feels like our social world shrinks the less money we have-all of the social spaces except the library cost money :( Frugal gifts is something I need to be more creative about. Anyone willing to share their budgeted amounts for these categories? Thanks for all of the input.

Edited by whalemama17 - 8/10/11 at 2:22pm

[larablue]

Haircuts: Find someone else to do it for you while you do something for them (bake a cake for example)

Books/Toys/TV/Going to movies: Try to cut down- library, swap with friends etc.- Meet your friends at home and watch movies at home with homemade popcorn.

Toiletries: Why do you need so much? What is included?

Gifts, Coffeeshop, Restaurants/wine/beer: If you don´t have enough to cover it at the moment, cut it! I suggest you get another job and put the money down for these things.

Clothing: Why do you need so much? Have you tried getting hand-me-downs for the children?

How about moving to cut down on your rent?

I can understand that you feel you should be able to have a cup of coffee once in a while.

Why not make it a ritual at the end of the month, when money is usually tight? Put the money away in an envelope and really look forward to your special treat.

You will find that there is a certain satisfaction in not spending more than you earn. It might just take a while for you to adjust and come to see that perspective.

Or you need to make a compromise on another level- get a smaller and cheaper place to live for example. Than there will be enough money to spend on wine and beer.

[ilovemygirl]

I openly admit that I really couldn't care the slightest bit what is in fashion or not - not even for my dd. I mean we are always cleanly and properly dressed but that's my only criteria for clothes so maybe this might sound a bit harsh but ... 

Wow, your clothing budget is HUGE! What are you buying for your dd at consignment that is costing $50 a month? If you are paying more than $3 an item it's way too much and you should find a different thrift shop. Does your dd even truly need what you are buying? Is there anyone you can borrow things from or that would maybe be willing to just hand down some things for her? 

Does your dh need these clothes for work? If not, why do either of you need new clothes at all other than maybe some necessary items like socks, underwear, shoes and such - only when the ones you have wear out? 

I understand that you want to not feel deprived but you need to look at your list and see all the extras there. You have wine and beer and eating out and coffee and books and movies and extra clothes and the Y and toys and gifts and netflix and cell phones and on and on. When you add that all together that's a lot of extras. Then you can think about which ones are most important to you and keep a couple but then get rid of the rest. 

It might also help to remember it's not forever. One day things will get better and you'll be working and be able to add all these things back if you want to. 

[nd_deadhead]

I agree with ilovemygirl - this is a temporary situation (though with a new baby coming, it might get worse before it gets better). You or your DH might have to find part-time work. Though I also think you need to become much more disciplined about spending.

I'm still curious - where does all the extra money come from now? Are you taking from savings or putting on a credit card every month?

Perhaps an envelope system would work for you - put your budgeted amounts in envelopes each payday, and once the envelope is empty, you're finished spending in that category until the next paycheck. It's HARD, but it definitely limits impulse spending, if you can stick to it!

Hopefully you can find a sense of satisfaction from saving instead of spending.

[whalemama17]

Just wanted to chime in that I don't think we have actually been spending that much on clothing every month-I just put down a high estimate for that category and eating out etc. I appreciate the constructive criticism-we have been depending on credit cards more than we should when it is not essential. Also, I think I have been spending too much on DD's clothing (though I don't think it has been $50/month) because when I have been finding good stuff in bigger sizes I've been buying it which financially has probably not been wise) Ok, humbling experience to expose my financial follies and weaknesses. I wish I were naturally more frugal but I am working hard to reform these habits and remind myself that I'm only screwing myself and my family by spending too much.

Edited by whalemama17 - 8/11/11 at 12:08pm

[phathui5]

Have you talked to the YMCA about the sliding scale memberships? Based on a $28,000 income, you would be paying less than $42/month for a family membership at our Y.

[whalemama17]

We do have the reduced rate for the YMCA-the figure I have used for the budget is our after-tax amount, so they calculated the membership fee with a higher number. I have been relieved to find after scouring my financial records on Mint.com that a lot of the budget categories I put down are higher than reality. DH and DD's clothing amounts have not been anywhere close to that amount and spending on gifts hasn't been either. My clothing budget needs to come wayyy down-the Salvation Army often has great things for women so I will start looking there when I need clothing. We transferred our credit card balance to a 0% rate for 18 months so that will eliminate some of the monthly charges and give us breathing room to pay it down. So-my main areas I am going to cut down are: Eating out/cafes/alcohol, my clothing, gifts, switching to tracphones, cutting Netflix and TV, home furnishings, buying books of any kind except occassionally from the thrift store, toys and gifts, and any going-out spending. I am going to try to babysit to earn money for the YMCA membership-it feels like a really important community space and encourages my husband and me to exercise regularly which has mental and physical benefits. Credit cards are also put away so it will force us to stick to the budget or we won't be able to pay rent!

[lilyka]

Originally Posted by whalemama17 

Rent: $1200/month

Is there any way you can find a cheaper place?  This sounds like a lot.  

Cell phones:$90/month (We currently have the lowest plan for minutes. Trac phones?)

I would definitely look into tracfones.  I made a small investment and it is saving huge over a plan.  I bought my kids a tracfone.  That thing is nicer than mine!  I got a texting phone, very cool, you can even take and send pictures.  It had minute doubling for the life of the phone and we bought a 400 (really 800) minute/1 year card.  The whole thing cost $140 or about $12 a month.    Next year all I will need to do is add the minutes so it will be about $8 a month.  So my phone is $45 (includes $8 a month in insurance because I am all kinds of clumsy.  I am on my 4th phone in 1 year without paying a dime for the new ones.....well worth the money) with unlimited texting and 400 minutes each month (which I never even come close to).  my kids add about $16 a month (two phones).  If someone calls them on the tracfone to chat they tell them they will call them back in just a minute from my phone.  Their phones are for texting and emergencies.  And because we don't have a land line.  Unless you guys are talkers I would get two tracfones.  Even if you add a second 800 minutes to each phone that will  bring you down to $40 a month for two phones.  And that would give you 400 texts a month EACH or 133 minutes of talk time EACH per MONTH.  or if you need more I would get a basic talk/text plan for one of you and a trac for the other.

Also check into Kitty Wireless.  I think that is what my boyfriend used and he had a smart phone with all kinds of bells and whistles for $35 a month.  He had to pay full price for his phone though.  But no contracts and cheap reliable service.  It is an online company.  I know there was another company he used but can't remember which one he liked.  

Life insurance:$100/month

Yikes!!!  I have $500,000 term life and pay about $25 a month.  I could drop half of that and go down to $2.75 through my employer benefits (i have two policies and have not gotten around to canceling the first one)  You should really talk to a financial adviser about what you need for life insurance and get TERM life.  Not WHOLE life.

Wine/beer:$20/month

Coffee shop:$20/month

Restaurants:$45/month

(I know this category should be lower)

This seems a little high if you are struggling.  But if you can afford it I think it is well within reason.

Gifts: In theory $90/month budgeted to be divided among birthday gifts, random gifts, and around $250 on holiday gifts (This is  a tricky area-DH's family expects Xmas gifts etc)

$90 a month...or $1100 a year on gifts and you only have one child to buy for.   Do not let people bully you into getting them gifts.  I think this is a good area to cut.  When my husband left I stopped getting gifts for family.  I just can't afford it.  I get my mom a birthday present because her husband is a jerk.....but still, thats like $3 a month.  I spend about $100 each kid for birthday gifts for my kids and about $100 a year on gifts for their friends.  Christmas is covered by the money my parents send them and gifts from their dad.  They really only need so much.

YMCA membership: $42.50/month

Can you get a cheaper membership?  maybe somewhere else?  I know the best deal here is Planet Fitness.  A basic membership is $10 a month.  DO you maybe have something in your area like that?

Books and toys: $25/month

This sounds like a lot.  Use the library.  Scale back the toys.

Pet food and supplies: $30/month

Does this include Vet expenses?  Not a suggestion for cutting back but I did not see it and that might be something you want to add to the budget.

DD's clothing: $50/month (Thrift stores, consignment stores, ebay)

DH's clothing: $100/month

My clothing: Embarassed

Tailor: $5/month budgeted (I need to get pants shortened often)

This is insane!!  I would consider half of this high.  Shopping thrift and consignment  you should be able to get 6 months worth of clothes for $50.  easy.  And what does your husband need $100 a month worth of clothes for?  And are you really buying enough clothes each month that you have to budget monthly for tailoring.  I buy like 8 pairs of pants a year.  2 pairs of jeans, 2 pairs of capris and 4 pairs of work pants.  

I recommend against buying more than a season ahead.  You don't know what shape your daughter will take, what size she will be in each season, she may skip sizes, what she insists on wearing today may be the object of disdain tomorrow.  If there is a good deal today there will be a good deal a year from now.  You don't have to worry about missing a good deal.  

When I was a stay at home mom I spent maybe $200 a year on clothing for me and maybe $150 for each child.  Now that I am working and in management I do spend more.  My job is very hard on my clothes but I am expected to look professional as well groomed at all times.  I spend about $50 a month on clothes (man, that sucks, but $20 of that is for shoes.  I am on my feet walking 9 hours a day, 5 days a week.  I wore through the soles of doc martins in 6 months for crying out loud!  But good shoes make all the difference.) and understand that work clothes can get expensive.  But still, having a job is not licence to shop as a hobby. 

Credit card payments:$150/month

Edited by lilyka - 8/13/11 at 11:49am

[whalemama17]

Thanks for the feedback lilyka As I mentioned in my edit above the figures I had put down for clothing, gifts, and toiletries were way off. After looking through accurate Mint.com records, I saw that DH has spent $150 on clothing in 8 months which included replacing shoes and a worn-out winter jacket and that we have spent $50 on gifts in the past 8 months.We have spent $36 total int he past 8 months on toys and books for DD. Toiletries have averaged about $10/ month and I haven't had any clothing tailored-the $5/month figure is somewhat off too-Mint has a function that you can calculate when you will have an expense, say Xmas gifts and it tells you to set aside a certain about of $ every month until that date so, say the original figure I had put down for gifts was what they were telling me to save every month from now until Xmas, not the whole year. So we are in better shape financially than I originally reported with lots of room for improvement. Moving to a cheaper place is not realistic because the cost of living is high here and our rent is low for a 2 bedroom apartment. 

[lilyka]

Wow,when you said way off you were not kidding LOL

I would even consider a coat an expense unto itself, outside of clothing.  Because really how often do you by a winter coat?  Our coats get very heavy useage and the kids need to get replaced yearly (they get stained and filthy more than worn out so we just buy cheap ones)  but I don't sled down plow hills on my belly so mine lasts 3-5 years.  I wouldn't really consider it in the same catagory as clothes (although something that should be budgeted and saved for).

[mamarhu]

Just wanted to throw in that I am in the same financial boat as the OP - same income, same rent, same need for the occassional glass of wine. After I downsized and pruned off all the extras, the $$$ still didn't add up. I love my job, so although I could probably make more somewhere else, I won't leave. I am looking to tutor in the evenings - that could bring in a little help, but can't start for a few months. I am always looking for new frugal tricks to save a buck or 2, but really just wanted to add a note of support - it is rough when you feel like you are pedalling as fast as you can, and still not getting anywhere. Hugs.

[JudiAU]

I'd try and find a less expensive place to live. That is a very high rent for your income. And let go of the tv/netflix/cell phones. You can't afford the phones in particular.

But I'd increase the beer and wine budget a bit. =)

[Wolfcat]

Originally Posted by whalemama17 

Rent: $1200/month

Any way you can move to a lower rent home/area? I would seriously look at this. Even if it means sucking in the stomachs for a bit.

Car payment: $375/month (Can't be lowered-we made some mistakes, long story)

Car insurance:$300/year (Thought about raising deductibles but recently we had an accident and the $500 deductible felt like a lot)

$500 deductible feels like a lot... in the very rare occasions that you get into an accident. You don't want to shoot yourselves in the financial foot because of a fear, no matter how reasonable this fear seems at the time.

Gas:$130/month

Oil change: $7/month budgeted

How often do you get your oil changed? It really only needs to be every 6 months based on the most recent information, unless you are putting serious miles on your car.

Excise tax: $135/year

Are you making enough on what you produce to make this worth it?

Cell phones:$90/month (We currently have the lowest plan for minutes. Switching to lower priced option)

Utilities:$50/month

Life insurance:$100/month

Books/magazines/music/going to movies/going out:$16 every 3 months

Wine/beer:$Should be zero if DH really wants beer once in a while ok

Coffee shop:$10/month

Why are you spending money on something you can get at home?

Restaurants:$Should be zero

(I know this category should be lower)

Groceries: $50/month (We currently receive assistance and WIC)

Gifts: In theory $205/per year (Still too high)

This is holidays and birthdays and everything? If so, good job keeping it low!

Dentist:$20/month budgeted for two cleanings each per year

Doctor:

YMCA membership: $42.50/month

Walking is free... just saying.

Pharmacy (Medicine, band-aids, etc): $8/month

Home supplies: $20/month

Home furnishings:$12/month (Not decorations-stuff like kitchen towels, bathroom towels)

Renter's insurance: $16/month

Baby supplies:$25/month

Books and toys: $100/year

Wow, this should be about half that... if. Books and toys can be gotten at thrift stores for pennies... and really, how much do they NEED?

Hair cuts: $15/month for husband $15 every 3 months for me

For the cost of two months worth of haircuts, you can get a pair of hair clippers with the different attachments for length. A little practice and all male haircuts are free and still look good (maybe not cutting edge fashion, but good). Scissors and, again, some practice and little girl haircuts are good for YEARS.

Toiletries: $15/month

This seems a little high to me... but then I use family cloth so I'm not always buying paper products.

Pet food and supplies: $20/month

DD's clothing: $25/month (Thrift stores, consignment stores, ebay)

DH's clothing: $25/month

Not necessarily buying clothing every month

My clothing: too high

Tailor: $35/year(I need to get pants shortened often)

A little instruction, some practice and a half hour a night and you can hem your own pants by hand. You don't even need a machine - just get some pins and manipulate the fabric until you like what you got (try them on and check your placement). The great thing about hemming by hand is that you can easily undo and redo the hem as necessary. I've gotten gorgeous dresses that were too long in the shoulder straps... It took me about 15 minutes per dress to fix it and they fit wonderfully.

Credit card payments:$150/month

Are you still charging to the card? If you are and you aren't doing it specifically to build credit, consider cutting up the card and lowering the payment by a little less than the amount you charge each month.

Not included is any type of going out kid-related activities, gas and food for occasional vacations etc. Also not included is childcare which my mother is helping to pay for. This works out to a monthly budget of $3,218 which would be fine if we had two incomes. Revised to reflect more accurate spending patterns.