Please analyze my budget

[Disnemama]

Please see our family budget below - let me know what you think we should be doing, could be doing, spending too much some where? Not enough?

DH and I both work full time and dont make much money but I think enough to not be living paycheck to paycheck! My goal is to start wiping out debt and create a savings. I want to start a steady and consistent deposit in our savings account.

I have a few questions - I am really trying to get it together here and be more responsible with our money. We have 2 kids ages 8 and 5

How many savings accounts do you have?
What are they for?
Do you buy your childrens clothes monthly or seasonally?
How often do you take a vacation?
Do you think we could afford a vacation with our income?
Can we afford a home?
How often do you grocery shop and how much do you spend for a family of 4?

Compared to I guess average Americans we do not have much debt DH has about $300 in unpaid medical bills I have about $4000 worth of credit card debt (all charge offs now I know I know bad mistake) I have about $25,000 in student loans which are paid on time every month. We do not own our own home (another goal) and have 1 vehicle with a loan of about $6000 left - payments are also current on this.

Take home pay for a regular month with 4 paychecks (well I get paid bi weekly but you know what I mean)
INCOME TOTAL (AFTER TAXES AND HEALTH INSURANCE)
$4040
BABYSITTING 80 (babysitter just gets the kids off the bus and waits with them for about an hour until I get home)
RENT 450
PROPANE 160 budgeted amount sometimes we have to pay a little more when its time to get our tank filled this varies
STUDENT LOAN 200
CELLPHONES 140
CABLE/INTERNET/PHONE 160
CAR PAYMENT 332
DEBT 100 ($50 on each of our credit cards one balance is $338 and the other is $1050)
CAR INS/RENTERS INS 120
ELECTRIC 100 (this varies and is sometimes less but I always pay $100 to make up for months that might be more)
FOOD $150 WEEK SO $600 A MONTH
GAS $40 A WEEK SO $160 A MONTH
KIDS ACTIVITIES $142
LEAVES $1296 a month if I calculated right
Every month this is what happens - I get lazy order pizza at least once a week, kids need something, DH wants something, stop at the store here and there and before we know it we're wishing it was payday again. What is wrong with us?
Right now we have no savings and it disgusts me that we blow $1200 a month! In all fairness up until a few months ago we were putting out another $600 a month in child care but now that the kids are starting school that expense is gone.

We are a little behind in our utilities but will be caught up with them by October (I have to also get the kids school clothes and supplies for 2 kids I was thinking $950 total)

 

[AshleyW]

Please see our family budget below - let me know what you think we should be doing, could be doing, spending too much some where? Not enough?

DH and I both work full time and dont make much money but I think enough to not be living paycheck to paycheck! My goal is to start wiping out debt and create a savings. I want to start a steady and consistent deposit in our savings account.

I have a few questions - I am really trying to get it together here and be more responsible with our money. We have 2 kids ages 8 and 5

How many savings accounts do you have?
What are they for?
Do you buy your childrens clothes monthly or seasonally?
How often do you take a vacation?
Do you think we could afford a vacation with our income?
Can we afford a home?
How often do you grocery shop and how much do you spend for a family of 4?

Compared to I guess average Americans we do not have much debt DH has about $300 in unpaid medical bills I have about $4000 worth of credit card debt (all charge offs now I know I know bad mistake) I have about $25,000 in student loans which are paid on time every month. We do not own our own home (another goal) and have 1 vehicle with a loan of about $6000 left - payments are also current on this.

Take home pay for a regular month with 4 paychecks (well I get paid bi weekly but you know what I mean)
INCOME TOTAL (AFTER TAXES AND HEALTH INSURANCE)
$4040
BABYSITTING 80 (babysitter just gets the kids off the bus and waits with them for about an hour until I get home)
RENT 450
PROPANE 160 budgeted amount sometimes we have to pay a little more when its time to get our tank filled this varies
STUDENT LOAN 200
CELLPHONES 140
CABLE/INTERNET/PHONE 160
CAR PAYMENT 332
DEBT 100 ($50 on each of our credit cards one balance is $338 and the other is $1050)
CAR INS/RENTERS INS 120
ELECTRIC 100 (this varies and is sometimes less but I always pay $100 to make up for months that might be more)
FOOD $150 WEEK SO $600 A MONTH
GAS $40 A WEEK SO $160 A MONTH
KIDS ACTIVITIES $142
LEAVES $1296 a month if I calculated right
Every month this is what happens - I get lazy order pizza at least once a week, kids need something, DH wants something, stop at the store here and there and before we know it we're wishing it was payday again. What is wrong with us?
Right now we have no savings and it disgusts me that we blow $1200 a month! In all fairness up until a few months ago we were putting out another $600 a month in child care but now that the kids are starting school that expense is gone.

We are a little behind in our utilities but will be caught up with them by October (I have to also get the kids school clothes and supplies for 2 kids I was thinking $950 total)

How many lines do you have on your cell phone? My fiance & I have 2 lines and our bill is only about $90 a month with unlimited texting - so you could probably save some money if your bill is $140 a month. $160 a month also seems like a lot for phone/internet/cable, at least in my area. You could drop some channels if you really wanted, to save money there.

If you have $1300 left over after bills each month, you should allot some money for "entertainment" - whether it's ordering your pizza or buying new clothes or whatever. For example, my fiance and I have about $250 that we allot every month for entertainment - that includes eating out, snacks, buying clothes, going to the movies, etc. Once we spend that money, it's gone until next month. You should delegate all of of your money somewhere - whether how to spend it or where to send it for savings.

If you want some ideas: www.zacfields.com My fiance has a finance blog that talks about our budgets and the software we use to keep track of our money each month.

 

[aka-mad4themouse]

Just scanning your budget, I would say that it is incomplete. You don't have anything for entertainment, clothing, insurance, car repairs, unreimbursed medical costs or savings - just to name a few budget line items.

What you have is good start but as you can see, you're not accounting for all of your spending. Some DISers have had success with uneedabudget.com. They have a free trial download that you can try. It will give you a better idea of various budget categories that you need to make.

I also recommend that you use a notebook and track every dollar you spend right down to a pack of mints you buy at the convenience store when you drop in to buy milk. Do it for a month and you'll see where you're hemorrhaging money.

 

[Disnemama]

Hi all thanks for your input!

We have 2 lines through at&t unlimited text and unlimited internet - I'm afraid to get rid of the internet though because DH ran up a $450 bill one month using the internet on his phone OMG. The $160 a month for cable/internet/phone includes a DVR which I would never part with, a HD box (which DH would never part with lol) we dont have any extra packages like HBO or anything like that, it is pretty basic, phone is basic as it comes with call waiting and caller ID for free...not sure where we could cut back with this...maybe satellite would be cheaper?

I also think we should be budgeting all our money whether its spending or saving because now we just blow through that $1200/$1300 extra each month like its nothing and having nothing really big to show for it.

 

[ccgirl]

I am obsessed with our budget. I do budget (1) night out a week for dinner. We have gotten into the habit of making our own pizza as opposed to buying iit. As the PP stated, why is your cell phone bill so high? I have my BB and my husbands phone on the same plan with TMobile and it is only $80. You can definitely cut the cable/internet/phone bill as well since you already have cell phones. You didn't mention retirement either. Are you saving toward retirement? If not, you should do that. Also, what about your children's education? For lack of a better term, I have accounts all over the place for certain things. They are automatically deducted from our paychecks so we don't have the urge to splurge. We do have our own home and our mortgage is $1800 a month.

We have a vacation club that we put away $100 a month. That is $1200 for the year.

We also have a Christmas club that gets $75 a month.

We each have a 401K that we contribute $200 a month to (company matched)

We also have educational accounts for each of our children that $100 a month gets depsited to ($200 total).

We put $300 a month into a savings account. This is our "rainy day" "the car broke" fund so we don't need to charge things.

My food bill is also much less than yours. I can spend $300 a month for a family of 4. I buy meat in bulk when it is on sale ONLY then portion it into freezer bags and freeze. I also only buy frozen veggies when they are on sale. I buy extra bread when it is on sale and freeze that too.

We go on 1 Disney vacation (usually off site) a year plus one other vacation.

As far as my chidren's clothing, I do not purchase monthly or seasonally. That is going over board IMHO. They maybe get clothes once a year. $950 in school supplies and clothes??? I'm sure you could cut that in half if you tried. Use the other 1/2 to pay off some of the credit card debt.

It's such a rush when you pay off the debt and your savings account starts to climb.

Good luck, it is very doable with your budget. Also, as far as purchasing a house...my belief is to pay off the debt (inlcuding school loans) and save up at least 5% before you buy your home. You seem to have a very good price for rent. Take the chance to pay off the debt now while you have the extra money.

 

[Disnemama]

aka-made4themouse

I agree, we dont put aside a specific amount for any of those misc expenses that you dont expect but always have. What ends up happening is this, with my second check of the month say there is $700 left over money I'll take that and get the kids a bunch of clothes/sneakers at least 3 times a year, then I will literally have $5 to hold us over until the next week. Doing this I got us into quite a bit of trouble because we would need maybe a little more gas one week and not have enough. I know we dont make much but we certainly should be able to afford our necessities with our income right?

 

[Disnemama]

I forgot to mention 401k's because last year when ours started tanking we stoped contributing (against all expert advise I know) but with adding college and retirement I feel like we wont be able to enjoy our money ya know?

I do wish we could take a vacation every year, I just dont think with our income we could afford it.

I think we can reasonably pay off all the CC debt within the year if we really tried though.

 

[aka-mad4themouse]

aka-made4themouse

I agree, we dont put aside a specific amount for any of those misc expenses that you dont expect but always have. What ends up happening is this, with my second check of the month say there is $700 left over money I'll take that and get the kids a bunch of clothes/sneakers at least 3 times a year, then I will literally have $5 to hold us over until the next week. Doing this I got us into quite a bit of trouble because we would need maybe a little more gas one week and not have enough. I know we dont make much but we certainly should be able to afford our necessities with our income right?

This is exactly why you need to include those costs in your budget. Spending $700 every 4 months for clothing for the kids is the same as $175/month. And that doesn't account for clothing yourself or your DH. As you have seen, not budgeting in advance for those expenses can be devestating to your immediate budget.

ETA - Your childcare costs are not $80/month. You're spending $80/month for 9 months and $600/month for 3 months. Over a year's time, you're averaging $210/month on childcare. That's the amount that should be set aside in your monthly budget - $80 for the immediate monthl's cost and $130 to be save to cover the costs during the summer months.

 

[Disnemama]

CCgirl how much do you budget for your kids clothing? I should mention I buy my kids so many clothes I have been wearing the same 4 outfits everyweek and just alternate them for work. I really need new clothes.

 

[richmond282]

What you have listed is not a budget. It's a list of your bills. A budget should account for every single dollar you have coming in every month. And I agree with PPs that you have not accounted for some things.

In addition to my bills, we also have categories for the following:

Medical Dental expenses
Car Repair and Maintenance
Entertainment
Groceries
Eating Out (Yes, we make this seperate so we dont' spend grocery $ on restaurants)
Spending $ (My DH and I each get a set amount of $ each month to spend on whatever we want. When it's gone, it's gone. There is no putting it on the credit or debit card. If you give your kids an allowance, you should include that too)
Clothing
Debt Reduction
Savings

We use the envelope system. Every pay day I go to the bank and get cash and put it in envelopes for the above categories (Bills are paid online.) Then when we need $ for something, we get $ out of the correct envelope.

 

[ccgirl]

You so could afford a vacation every year with your budget, if you wanted. You just need to switch priorities around (if desired). By cutting some of the cell phones, the food bill, and the clothing allowance....there is your vacation. And...put the retirement back in. Even if you wait until you pay off the credit cards. It is so important. If you cut the clothing allowance by $400 (still $545 a year) and cut $125 from the food budget you could have a vacatin fund of $1650. Just a suggestion. It sounds like are are definitely living well with your means so that is a great thing. You just have to add some lines in your budget and move some things around and you should be able to accomplish all that you want. Good luck.

 

[pvalues]

It isn't how much you make, its how much you spend. You have to have the 'heart' and 'desire' to prioritize your present expenses. Not willing to part with DVRs and HD are probably poor choices. Becoming debt free should be your top priority once you have an emergency fund of about $1,000. Pay off the smallest debt first and work your way up to the largest. Each time you pay something off, roll that payment onto the next item and in about 2 to 3 years you should be totally debt free.

I would encourage you to visit Dave Ramsey's website. His advice is direct and tough. No pulling punches but it works. We used it to pay off all our debt except for our house in under 3 years. But, we went with very basic cable, we only went out to eat once a month...cheaply, and didn't take a vaction. We cut back on Christmas for the kids as well (we have 3 boys).

Hope everything works out well for you.

Dave

 

[Disnemama]

Richmond for your and your husbands spending money is this money also for your clothing? Or do you budget seperately for clothing for the entire family and just buy as needed?

I have 3 savings accounts (all with less than $1.00 in it...not funny I know!)
I'd like to do a vacation savings
misc savings - car emerg/broken appliances/ununexpected stuff etc.
long term savings - house

With our budget what would you recommend for each of these accounts monthly?

 

[delmar411]

you are bleeding money all over the place. $1200/mth is simply a TON of money to have no idea where it went to.

These are the budget categories we have and we budget to zero(no money is unaccounted for).

Pay Period:
Income:

SAVING~
Emergency Fund
House Downpayment
Kid 1 Allowance
Kid 2 Allowance
(Kid 3 and 4 don't get one yet)

HOUSING~
Rent
Repairs (we rent from family and do all repairs/maintenance)
Relacement (sinking fund for things like furniture or house things we know will be needed in a year)

UTILITIES~
cell phone
Electric
Gas
Cable/Int
Phone (I pre-pay at the beginning of the year so no monthly payment)
Water/Sewer
(trash is free through the city)

FOOD~
Household
Grocery
Restaurants

TRANSPORTATION~
Gasoline
Repairs/Tires/Oil Changes (sinking fund)
Car Insurance (renter insurance is included here)
License and Taxes (sinking fund)
Car Replacement (this is a sinking fund)

CLOTHING~
Adults (sinking fund)
Children (sinking fund)

PERSONAL~
Doctor/Dentist(this includes meds)

RECREATION~
YMCA (this includes the boys preschool)
Entertainment ~ we use this to fund yearly memberships
Gifts (Christmas/B-days) (sinking fund)
Vacation (sinking fund)

DEBT~
DVC

 

[Disnemama]

pvalues I agree those are luxuries but I'm sure you can tell from our budget that is the only luxury. So I dont feel we're being too loose with our money as far as our entertainment is concerned. Yes the $20 a month for HD and cable could help towards the debt reduction but I dont think that $20 a month is the reason we're living paycheck to paycheck know what I mean?

 

[lovemygoofy]

One thing I noticed is that you have only mentioned you wanting to save money and building this budget. If you can't get your household to participate then you aren't going to get far.

Does your husband really NEED phone internet? I mean really NEED it as it depends on work stuff or does it just keep him entertained? Are you using as many minutes as you are paying for on your plan? Could you downgrade that or even see if they would rework you a better offer?

How long have you had your cable? If it's been longer than a year, I would call and see if you can't get a better deal. I doubt that you can get that much of a better deal but it never hurts to try.

Do you just take money out of any ATM instead of bank specific? You can rack up big monies from ATM fees alone.

Do you and your husband bring lunch or eat lunch out? That needs to be budgeted. Try to bring lunch just twice a week and that can save you quite a bit and then slowly work on bringing it more if possible.

Do you budget milk money and snack money and lunch money for your children? I don't know how much this costs but I imagine it can add up quickly with two children.

I don't have children but buy children's clothing year round for my nieces and nephews. I buy at the end of the season for the next year. This year I bought 4 bags of winter clothing from The Children's Place to be given as gifts for Christmas. I paid almost $60 I think and saved over $250.

You mentioned your credit card debt and your payments. Is that just the minimum payment? Are you still using these cards while making the minimum? You'll never get these paid off unfournately if that's what is happening.

Do you really need to spend almost $1,000 on 2 kids for school supplies? Really? How much stuff does your kids need that you have to spend that much? Don't you have a walmart or target? I would think a few new warm weather outfits would be enough because soon it will be fall and winter anyways.

Sit down and have a discussion with your husband. Show him the extra money and ask him to write down every dollar that he spends for just a week. You do the same and then compare notes. You'd be suprised how fast the money flies out. Five bucks to starbucks and ten at mcdonalds and then twenty at pizza hut and five more to rent movies.

Do you keep some kind of grocery list or meal menu? That can really help you cut down on the groceries. Knowing what meals you are going to make and then making a specific list helps keep the "possible" meal items out of the cart.

I think you have more than enough to live on but you need to get everyone on board for this project and really see where your money is going.

 

[Disnemama]

delmar - that is an awesome budget! one question, what does sinking fund mean? and do you put the same amount in each "account" every payday? every month? How does this work and can you tell me what a reasonable amount of money would be for DH and I and 2 kids for clothing each year?

 

[ccgirl]

Sorry, I forgot to answer your question about how much I budget for clothing. I am one of those people that purchases clothing at the end of the season for the next year. I save A LOT of money doing this and will buy my children the next size up. I also learned (and try to teach my children) there is a big difference between need and want. They only need new clothing/shoes when they outgrow what they have. Same for myself and DH. As an example though, Old Navy has children't jeans on sale for $10 right now. Target has shirts for $7 and I have seen sweaters for $12. You can also get shoes for $15. Using this formula

(3) pairs of jeans = $30
(2) pairs of shoes = $30
(3) shirts = $21
(2) sweaters = $24
new underwear = $8
new socks = $8
new pajamas = $12

Clothing total = $133.

As I said, I purchase end of season for the next year though. I know a lot of people purchase more than this but, as I said, there is a difference between need and want.

 

[Disnemama]

I would respond to your post but it wont let me - let me answer a few questions
One thing I noticed is that you have only mentioned you wanting to save money and building this budget. If you can't get your household to participate then you aren't going to get far.

I am the only one that controls the bills/money/banking etc. honestly he pretty much just spends what I tell him he can spend

Does your husband really NEED phone internet? I mean really NEED it as it depends on work stuff or does it just keep him entertained? Are you using as many minutes as you are paying for on your plan? Could you downgrade that or even see if they would rework you a better offer?

Nope he doesn't NEED internet on his phone but it is $10 a month for unlimited, it is strictly used for games/browsing etc. We dont use nearly as many minutes as we have but do have the lowest plan At&t offers. We actually just got this bill down $20 a month when we renewed our 2 yr contract, we text ALOT so the unlimited is worth it I think.
How long have you had your cable? If it's been longer than a year, I would call and see if you can't get a better deal. I doubt that you can get that much of a better deal but it never hurts to try.

Do you just take money out of any ATM instead of bank specific? You can rack up big monies from ATM fees alone.

We do only use Bank of America ATM's unless it's really necessary and we're no where near a BOA, I got sick of the $2.00 fees here and there

Do you and your husband bring lunch or eat lunch out? That needs to be budgeted. Try to bring lunch just twice a week and that can save you quite a bit and then slowly work on bringing it more if possible.

We buy lunch maybe once a month, bring our lunch everyday!

Do you budget milk money and snack money and lunch money for your children? I don't know how much this costs but I imagine it can add up quickly with two children.

no again this is part of my $1200 wasting of money each month. Last year DD bought her lunch each day and that was $6.75 a week, I'm not sure if the youngest will also be buying this year or not if so, I will include this in our food budget!

I don't have children but buy children's clothing year round for my nieces and nephews. I buy at the end of the season for the next year. This year I bought 4 bags of winter clothing from The Children's Place to be given as gifts for Christmas. I paid almost $60 I think and saved over $250.

That is an awesome savings and I have wrote down that idea as well! thanks!

You mentioned your credit card debt and your payments. Is that just the minimum payment? Are you still using these cards while making the minimum? You'll never get these paid off unfournately if that's what is happening.
Well the 2 cards we are paying on have min payments of $30 a month I think so we are putting an extra $20 towards each card.

Do you really need to spend almost $1,000 on 2 kids for school supplies? Really? How much stuff does your kids need that you have to spend that much? Don't you have a walmart or target? I would think a few new warm weather outfits would be enough because soon it will be fall and winter anyways.

Nope the $1000 is for $200 for school supplies (total including backpacks for each kid) and the other $800 or $400 a piece is actually their fall/winter wardrobe - not including boots/coats though. Their summer clothes are still newish looking (just ought end of May) so that will get them through September, temps drop come October so we buy our winter clothes early.

Sit down and have a discussion with your husband. Show him the extra money and ask him to write down every dollar that he spends for just a week. You do the same and then compare notes. You'd be suprised how fast the money flies out. Five bucks to starbucks and ten at mcdonalds and then twenty at pizza hut and five more to rent movies.

I know I will get flammed for this but DH takes $20 a week for himself (again not in the budget so part of our $1200 down the toilet fund) and thats it. He doesn't ask for more/less

Do you keep some kind of grocery list or meal menu? That can really help you cut down on the groceries. Knowing what meals you are going to make and then making a specific list helps keep the "possible" meal items out of the cart.

this we do have - every month I write out our meals for the month so I know what I need to buy each week, we are almost always on budget with our food bill - this is about the only thing that is consistent.

I think you have more than enough to live on but you need to get everyone on board for this project and really see where your money is going.

Thank you so much! Any ideas what where the extra 1200 a month should be going?

 

[pvalues]

pvalues I agree those are luxuries but I'm sure you can tell from our budget that is the only luxury. So I dont feel we're being too loose with our money as far as our entertainment is concerned. Yes the $20 a month for HD and cable could help towards the debt reduction but I dont think that $20 a month is the reason we're living paycheck to paycheck know what I mean?

I just used these as general examples. The point was the whole heart and mind process. BTW $20 per month for 30 years in a 401k with an annual average return of 10% = $7,224 towards retirement. I'm certainly not perfect and don't claim to have all the answers. Budgeting is a great first step. I agree with the other posters as well that you have to ensure you are accounting for ALL the categories. We used the cash into envelope strategy to help us. We paid our utilities, debts, etc out of the checking account each payday first. Then we took out cash and put it into various envelopes. $200 for food (this included any and all food including eating out). $100 for fuel for the cars. $50 for clothing. Etc. etc. etc.

Dave