Case Study: Help Me Cut my Budget

[aes421]

I am trying to to lower my budget to be closer to what MMM uses, but this is the best I've got.   How do you guys suggest I improve? 

My monthly take home pay: 3542 (insurance has already been taken out plus 8% 401k contribution)
Husband's monthly take home pay: 2584 (nothing taken out)

Total take home: 6126

No kids.
2 cars: 1999 Toyota 4Runner and 2015 Toyota Corolla both bought used with cash.
No debt of any sort.
This is my first time budgeting since we both graduated this year and are working our first jobs.  My goal is to max both of our Roth IRA's and my 401k/husband's 403b.

Current budget:

Apartment Rent: 901
Utilities: 100 (typically around $80 but can fluctuate)
Cellphones: 60 (Cricket wireless, off contract phones)
Internet: 50
Gas: 150
Groceries: 300
Car Insurance: 160
Other expenses (new clothes/shoes, going out to eat, activities with friends, etc.): 100
"Fun" money: 100 each, 200 total (a lot of this is spent on language lessons)
Gifts: 50 (large family so we save every month for Christmas)
Unexpected (car maint, insurance deductible, etc.): 500 (our insurance has a $5000 deductible :/)

Total monthly spend: 2571
Leftover AFTER savings goals: 3555

Vacation savings account: 500
Car savings: 300
House savings: 1000

Left over AFTER savings goals: 1755


Annual left over: 21060
Goal: as close to 40000 as I can get

As you can see, I'm only halfway to where I want to be.  We were savings ALOT for a house every month because we thought we were going to buy one when our lease ran up this year, but the deal fell through.  Now we will definitely be in apartment for atleast 1 year, so maybe we could bring that number down.  We already have about $30,000 for a down payment already.



Thanks for all your help :)

[Vindicated]

Your budget is completely reasonable, and you probably can't milk much more out of it.

That said, you guys are in a great position.

To free up more money, the only thing you can really do is to wait.  Let that $500/mo of emergency fund build up to whatever your target emergency fund is, and stop contributing.  Build up your home down payment of $1000/mo to where you want it to be, and stop contributing.  Build up your car savings of $300/mo to where you want it to be, and stop contributing.  All of a sudden you have $1800/mo extra towards investments, or $21,600 extra.  This puts you above your $40k goal, without even cutting back on your vacation savings, which you could do as well.

To top it off, you guys will likely be increasing in income in the next few years, and I bet you can FIRE in less than 10 comfortably.

You've already won, you just have to play out the steps.  Good job :)

[spicykissa]

Your budget looks great! And no debt! You're doing awesome.

BUT please, please, please prioritize your tax-advantaged savings! You and your husband should max those 401ks/IRAs first, way before saving for vacations, at least. Unless your 1999 car is super unreliable and will need replacing very soon, I'd put the car savings money there too. My husband and I made this mistake when we first starting working. We have piles of money in taxable and savings accounts now, 5 years out, but we can't go back and refill the 401ks, and now we make too much for IRAs too. (Mustachian people problems, lol).

[zolotiyeruki]

That car insurance seems awful high.  $1920/year for two people and two cars, with a $5k deductible, is really expensive.  We also have two cars and two drivers, and pay roughly half that much, even with comprehensive on the newer (2006, but still) car.

Keep in mind that the $1000/mo house savings counts toward your NW, at least in my book.

Also, Vindicated is spot-on.  You're in a great spot, and on a great trajectory.