Author Topic: Need help with the budget  (Read 12790 times)

Simpli-Fi

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Re: Need help with the budget
« Reply #50 on: September 09, 2016, 01:18:46 PM »
forks over knives was an entertaining food documentary

Goldielocks

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Re: Need help with the budget
« Reply #51 on: September 09, 2016, 02:04:25 PM »
What would you do to reduce cost? Would you pick groceries first? sell car? a little of everything? Get more hours at work?

For starters, stop spending 1200 on groceries, 500 on medical costs, 300 on the baby, and 125 on presents.  And figure out what you are spending 200, then stop doing that.
x

Try an "Unbudget". This works very well!

Put $1200 cash into an envelope at the start of each month.  (or a weekly amount to begin with)

That money is only for food, eating out, clothing, baby, misc. shopping and presents.
(You may choose to have immediate family Christmas presents as a separate savings account, IDK)

Whatever you and your wife save on one area (groceries?), can be spent on another category (presents?).   But leave Credit Cards at home, so you are forced to put back extra groceries / bypass shopping until you have cash in hand.

Cash can also roll over for use into the next month.

---------  Minimal pain to save $500+ per month.  Poof! Done. ----------------

poppan

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Re: Need help with the budget
« Reply #52 on: September 10, 2016, 12:56:58 PM »
We've been in your shoes with the Whole Foods thing. I won't lie; it was a hard adjustment to make. We gradually stepped our grocery bill down from $2500/month to $1200/month (includes household products and paper goods, and occasional meals out). As kids grow they start to eat more, my 9 year old eats as much or more than us, so we're actually feeding more people on $1200/month now than we did on $2500/month five years ago.

The first cut was no more wine, fancy cheese, and the salami my husband liked to buy a lot of in tiny packages. And fewer nice cuts of meat, no more baby back ribs, cut down a lot on breakfast sausages and fancy packaged fish sticks the kids liked. That got us down to $400/week.

We stayed there a while, then decided to cut another 25% to $1200/month. To do this we had to change where we shopped. I now buy all our fruit, cheese, coffee and cereal at Costco. And some other things, like spaghetti sauce and the kids snacks for school. We also cut our meat consumption and are eating more affordable cuts. We still buy most of our meat and a bunch of other staples from WF but stick to their store brand, and only go there once a month instead of several times a week.

Two other things that helped were to make a shopping list and not buy things that are not on the list, and we opened a second bank account with just the grocery money in it -- when it's gone we have to stop buying until we fund the account again.

Edited to add: we are a family of 5 with older kids -- the kids eat as much as we do, sometimes more. I'm glad we worked on our food budget when we did because otherwise we'd have a much bigger problem on our hands now.
« Last Edit: September 10, 2016, 06:57:21 PM by poppan »

firepath

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Re: Need help with the budget
« Reply #53 on: September 16, 2016, 03:32:14 PM »
I'm going to join lucylu and make my first post to MMM to completely echo her comments.   

Any updates?  Hopefully a decision to slash your budget?  Ideally a viable plan to account for acceptable child care and contribute to an IRA/401k monthly?

I'd also recommend you look on this forum for the posts about convincing your significant other to be more mustachian.


You are in a HAIR ON FIRE emergency. Simply put, you (as a family) are living FAR above your means. You came asking to find $1000 for monthly daycare, but - you are not paying down existing credit DEBT and you are not saving anything toward emergency savings (let alone retirement). $1000 would not even last the amount of time to get another job, and get your first paycheck.  You are spending more than you make.

By choosing to do this, the current you are sacrificing financial stability, clean credit history, home ownership, and retirement from the future you. And for what? "A lot of high end baby clothes, organic treats, 4-5lbs of grass-fed beef a week(!)"?

As a family, you need to draw up a financial plan. Where do you want to be in 1 yr? 5 yrs? 25 yrs? More kids, pay for college, SAHM? Career plans, retire at ...? Medical insurance is very important in your situation; if you were not able to work does your wife's career path have medical ins to cover you?

The good news is that (for now) you bring in enough income to completely turn this situation around by acknowledging YOU CANNOT AFFORD THIS LIFESTYLE.

Groceries: 1200 - This is INSANE for 2 people. Cut all prepackaged, convenience food. Buy truly "whole foods" (raw fruits, veggies) and prepare them yourself - no bags of "baby carrots" - just buy a bunch of organic carrots and peel them. Make meals in bulk, use your freezer (are you throwing food away?)  and only buy what is in season (http://www.sustainabletable.org/seasonalfoodguide/). Forget Whole Foods - you can't afford it. Shop Aldi, Trader Joe's. Beef is not the only protein around; chicken, pork, fish, legumes, eggs provide variety - which is healthier than eating the same diet every day anyway (no matter what grass those cows are eating). "Organic treats" - this is all marketing! Sugar and salt is sugar and salt no matter what the label says. It's really just a fancy version of McD junk.  Budget $550

health: 105 - What is this? If it's vitamins, shampoo,etc - buy in bulk, buy online - holy cow what are you spending that much $ a month on, separate from grocery AND Medical? Budget $25

household item: 156 - Cleaning supplies & toilet paper should never cost that much. Use vinegar and plain bleach (not together). Old tshirts are rags. No other items for your household. Budget $40

entertainment: 160 + eating out: 55 - Find outdoor concerts, free activities at the library, exercise together by walking/jogging with the baby. Have friends over. One date night a month. No more eating out because you didn't have something ready at home or from the freezer. *See Groceries*. Budget $75

misc: 200 - Use a budget app to track everything for both of you. YNAB Budget $0

car: 299 - How much is it worth? Can you sell it?

cell phone: 130 - Others have mentioned less expensive plans Budget $50

gifts: 125 - You can't afford pricey gifts for yourselves or others right now, and the good news is your baby doesn't care. Ask yourself why you feel compelled to do it anyway. Budget $25

baby: 300 - Babies don't cost this much. Until you have financial stability, diapers ONLY. Ask for baby clothes & toys for Christmas, birthdays. Shop 2nd hand stores like Once Upon a Child (some outfits will be new with tags!) Sell your fancy baby clothes and gear on FB sites to recoup some of the cost when outgrown. Budget $125

Potential savings: ~$1500
$1000 goes to daycare. $500 goes immediately to emergency fund until you have 6 months living expenses. Then start funding retirement, credit debt, etc based on your financial plan above.

This probably all sounds drastic, but it's really a shift in mindset. Instead of thinking "this $ is what I need/want", it's thinking "this is the BUDGET I need to fit our life plan; what can I fit in that bucket".  Choose your life plan, choose freedom & stability.

Tjat

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Re: Need help with the budget
« Reply #54 on: September 17, 2016, 07:06:28 AM »
Grrr, have you talked to your wife about any of this? I think it's clear your spending is more in line with someone making far more money than you both. It's time for a fundamental change in attitude

Shop at a discount grocery store
Buy/trade for used baby clothes. We haven't bought more than $30 of clothes for our kid because everyone keeps giving us stuff they don't need anymore
Get a prepaid cell phone plan. Go phone is what I have for my wife and she has an iPhone.
Sell your car. That was a big mistake... Live and learn


I do worry though, I have yet to see any of your responses indicate that you know you have a problem and are looking to commit to a solution. You're barely staying afloat man... But IT IS FIXABLE

Grrrr

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Re: Need help with the budget
« Reply #55 on: September 17, 2016, 09:00:30 AM »
Good news, wife took a different position at work and I am getting extra hours

Income Net pay: Wife 1600 -> 2600
Income Net pay: Hus. 4000 -> 4800

newelljack

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Re: Need help with the budget
« Reply #56 on: September 17, 2016, 11:25:47 AM »
Good news, wife took a different position at work and I am getting extra hours

Income Net pay: Wife 1600 -> 2600
Income Net pay: Hus. 4000 -> 4800

Yes, good news BUT that does not mean you get to spend more. Everything people said before still applies. You HAVE to cut down your spending in so many areas and have that very difficult conversation with your DW. I hope it all goes well!

newelljack

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Re: Need help with the budget
« Reply #57 on: September 17, 2016, 01:46:31 PM »
You know what, looking back at the OP and his later comments, I think we've been had. This has got to be a joke.

Grrrr

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Re: Need help with the budget
« Reply #58 on: September 17, 2016, 01:54:19 PM »
Ok that's nice... Each to their own.

« Last Edit: September 17, 2016, 02:04:47 PM by Grrrr »

charis

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Re: Need help with the budget
« Reply #59 on: September 18, 2016, 05:43:06 AM »
Ok that's nice... Each to their own.

No. "Each to their own" is not a response that fits this situation.  Your contributions to the thread read like trolling.  Do you have any news about how you or your wife have made efforts to change your out-of-control spending?  If you are not a troll and feel that your increased incomes make spending cuts unnecessary, you are in the wrong forum.

Grrrr

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Re: Need help with the budget
« Reply #60 on: September 18, 2016, 07:20:27 AM »
Ok sorry I'm trying to reduce things, were in the process of switching to cricket, we started shopping at Aldis ( half of the time ), we canceled our netflix DVD subscription, plus we got daycare down to $700 a month because we found out someone nearby has an inhome daycare which is affordable.

Zamboni

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Re: Need help with the budget
« Reply #61 on: September 18, 2016, 08:17:05 AM »
That's great that you are making some progress!

If you really want to get a budget going, I'll second (or third?) the recommendation for YNAB software. It is very popular here and they have a lot of great training classes and videos to help you get it set up and maximize its usefulness. Good luck!

poppan

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Re: Need help with the budget
« Reply #62 on: September 19, 2016, 12:40:14 AM »
Good job raising your incomes. In my opinion you still need to get your spending under control so you can save for the future (retirement, college, etc). I would approach the budget with these priorities:

1. Pay off the CC debt. Good that it's 0% but you spent more money than you earned. Buckle down and you can have this paid off in 6 months.
2. Build up an emergency fund. Enough to live on for 3-6 months.
3. Start contributing to your retirement. Do either of your employers offer a 401k? Do they do an employer match? Are you leaving money on the table by not contributing?

Here is how I would do your budget.

TOTAL INCOME   7400

DEBT   900
Mortgage   1660
Home upkeep   300
DAYCARE   1000
Medical   500
Car   299
Gas   100
Groceries   800
Short/medium term spending   600
Insurance / maintenance fund   400
EMERGENCY FUND 500

1. This gives you a little over $300 left over -- have it taken out of your paycheck first thing and put in a retirement account.
2. Your CC debt will be paid in 6 months. Once paid off, put that $900 as additional towards the emergency fund.
3. Once you get to 3 months expenses -- around 15k based on above budget -- increase retirement contribution and work on paying off the car (unless interest rate is very low, in which case I would argue for maxing retirement accounts instead)

Check out You Need A Budget app + software as mentioned above. I also like Every Dollar (free version not connected to bank accounts).

Grrrr

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Re: Need help with the budget
« Reply #63 on: September 19, 2016, 07:02:02 AM »
thanks poppan... No employee match, we both work for small business...
That budget seems like it would work really well
« Last Edit: September 19, 2016, 07:04:03 AM by Grrrr »

Tjat

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Re: Need help with the budget
« Reply #64 on: September 19, 2016, 10:16:26 AM »
Any opportunity like some have suggested to sell the car and get a cheaper one? Would a 5-6 year old Honda Accord for <$10K solve your transportation needs?

hoping2retire35

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Re: Need help with the budget
« Reply #65 on: September 20, 2016, 11:14:13 AM »
Keep at it Grrr. the reason a few of us were being suspsious is because we don't care to give advice if someone just wants to complain or learn an easy hack or whatever. It's like seeing a friend who is doing a destructive behavior and no matter the advice he just keeps going down that whole(this was a typo but left it for the pun ;)). It looks like you are beginning to turn things around though! GJ. You are in the fun part of mustachian muscle building and saving, that many of us have already experienced; enjoy it while it last. Now its the slow progress of maintaining our lifestyles for years as we build the 'stache. "I saved $10 more this year, yea...." its getting harder to find those big money savers/makers now.