Author Topic: Case Study - Where can I cut?  (Read 1180 times)

aaron.d.hess

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Case Study - Where can I cut?
« on: September 13, 2017, 10:34:08 AM »
Hi all,

long time lurker on MMM but now I need some help cutting expenses. We want to get financially independent!

Here's the situation:

Family of four, myself, wife, and 2 kids under 2 years old.  We live outside Philadelphia

Wife stays at home with kids

[edit] 
Assets:
Employer SEP: ~8k
Old Employer IRA: ~6.5k
Wife IRA: ~3k
Home Equity: 2k
Total: 19k

Debt: None but mortgage (-98k)

My Gross: $59800
Take Home/week: 830
[/edit]

No other regular income (my wife does do craft fairs and such which pay for once a year expenses like holiday travel/gifts etc)

House: bought for $73k.  Loan for $100k at 4% over 30yrs.  (extra 27k for renovations)  it was a HUD house and sat vacant for 6 years. 

I get paid weekly, and we structure our monthly budget with 4 weeks/month.  Leaves 4 "extra" paychecks a year which go towards saving for the emergency fund or other short term goals (like a new roof on the house)

Have a look at our current monthly budget attached and tell me where I can trim some fat.

The taxes line is for property taxes.  We have a privately owned mortgage and pay the municipality directly. 

First line of the budget is tithe.  we're Christ followers and give 10% of my gross to charities/church and isn't negotiable .


 The one line that's obvious is the blow line (not drugs haha)  $200 a month gives us each $25/week to spend on whatever we want.  Usually its food on the go.  I guess some planning could cut those costs down...


The gist of it is that we've done as much as we can do to shave down the necessary expenses (lines 1-11)  Recently gotten quotes from different insurance providers, were doing some work to seal up the house better and cut down on power costs, especially with winter coming.  No cable package, just internet access.  The phone bill is high, but I don't have a device compatible with google fi, so the cost of a new device would put us at around the same amount that we pay now. 

By the time we get past the hum drum expenses, we usually have around $500 left every month.  We want to save and put some in retirement, but it always gets eaten up by life!  This month for example, the wife needed dental work, we've got a fee for the craft fair she's getting ready for (of course that's covered by profits from the fair), and my kid has a birthday party.  Family is down in VA and she's going down there for a friend's baby shower (gift/travel costs/party food costs). 

We could be scrooges and not do anything enriching, thereby saving the $500, but I don't see how to get around this without living a miserable life....

Can yall give me some perspective?
« Last Edit: September 14, 2017, 08:57:08 AM by aaron.d.hess »

caracarn

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Re: Case Study - Where can I cut?
« Reply #1 on: September 13, 2017, 11:18:39 AM »
Wow you are eating everything up as you said.  I assume the $200 for Blow is not for your cocaine habit, but simply your word for discretionary spending.  It is your highest cost that is easiest to attack.  Next is $200 for birthday.  Unless that's mislabeled, you do not need $2,400/year for birthday/Xmas costs.  We do $100 per child for each event, so with two kids you can take that down to $400 so you get $2,000/year there.  If you are buying each other gifts maybe you up that a bit but you can save some there.  I'm Christian as well, but I'd suggest you tithe off the gross.  I understand lots of churches will encourage the net, but no Biblical back up for that.  We tithe as well.  That will give you another $150/month or so.  Even on 10% of net, it seems your match is off somewhere as you should be at $431 with the $830/week you list.  And that places you at $43K so maybe you meant gross on your income numbers. 

Beyond that, your challenge is your housing expenses as you are paying $5,400 in property taxes on a $73K house.  Ours is just over $5,000 in a $250K house so Philly is killing you there.  This is a tough one to make a change in especially since you owe more than your house is worth, so not sure you can do a lot there at this point, or if you want to.  Utilities are also eating away a lot especially your electric.  If you have electric oven and such that might be the issue, but examine what you can do there.  Groceries do not seem terrible.  We budget $600/month for 7-8 of us and we come under that almost every month so for 4 of you, you're about the same position. 

RidetheRain

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Re: Case Study - Where can I cut?
« Reply #2 on: September 13, 2017, 12:19:03 PM »
The last few lines make this very confusing to tease out where your money is going. Do you save 200 for your child's birthday every month or just this one? If it's just this month (I hope...) then do you have an expense of that cost every month?

It would probably be best if you grabbed your expenses for the last 6 months or year if you can and find reasonable categories for those types of expenses. I would even include the craft fair money in that because if she makes 5k and you then just spend it all on vacation we will absolutely give you face punches. It's income for your family saying that it covers certain things can hide room for improvement or shield a negative flow problem. Do you have an EF?

Google Fi does require specific phones, but my bill from them is under $40/mo and I'm a phone obsessed millennial. Take a look on ebay for the phone(s?) and you might be surprised how quickly you can make up the cost. I managed to make even on a very fancy pixel after 5 months.

aaron.d.hess

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Re: Case Study - Where can I cut?
« Reply #3 on: September 13, 2017, 12:41:28 PM »
Do you save 200 for your child's birthday every month or just this one?
One time allocation for the kid's party this year.  Includes gifts from us, food, decor for party.
I would even include the craft fair money in that because if she makes 5k and you then just spend it all on vacation we will absolutely give you face punches. It's income for your family saying that it covers certain things can hide room for improvement or shield a negative flow problem. Do you have an EF?
 
Ha yes it would deserve face punches.  This is only her second fair, last year at the first one she made 1k.  First time the boro had put on this fair so turnout was low.  Yes have an EF,  5k about to be drained because of mishandling our taxes from last year :-(

Google Fi does require specific phones, but my bill from them is under $40/mo and I'm a phone obsessed millennial. Take a look on ebay for the phone(s?) and you might be surprised how quickly you can make up the cost. I managed to make even on a very fancy pixel after 5 months.

I'll look on the second hand market for a phone.  see if I can re-crunch the numbers into looking a little better.  you pay $40 for just you? anyone else on the plan?

aaron.d.hess

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Re: Case Study - Where can I cut?
« Reply #4 on: September 13, 2017, 12:51:31 PM »

Beyond that, your challenge is your housing expenses as you are paying $5,400 in property taxes on a $73K house.  Ours is just over $5,000 in a $250K house so Philly is killing you there.  This is a tough one to make a change in especially since you owe more than your house is worth, so not sure you can do a lot there at this point, or if you want to.  Utilities are also eating away a lot especially your electric.  If you have electric oven and such that might be the issue, but examine what you can do there.  Groceries do not seem terrible.  We budget $600/month for 7-8 of us and we come under that almost every month so for 4 of you, you're about the same position.

We bought the house from HUD and put in 27k.  In it for 100k and based on comps in the area, conservatively its worth 115k. 
  4 bed/2.5 bath.  2100sq/ft. Detached garage.  All new everything: Electric, Plumbing, Furnace.  Finish is lacking haha.  We barely managed to get our occupancy before our lease on the apartment ended.  So lots of patching and painting left to do...

taxes are outrageous in the area, can't get lower taxes unless we bought way far away.  But then my transportation costs would go up... started biking to work last week.  I think I'm getting the peach fuzz of a mustache growing in...

Utilities are bad. We've got gas appliances and i've recently started a ductwork improvement project.  About every seam in my ducts is leaking air like a sieve.  Hopefully that bill will come down...

ixtap

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Re: Case Study - Where can I cut?
« Reply #5 on: September 13, 2017, 01:23:04 PM »
What is the tax appraisal on your house?

It looks like you have given us a snapshot, rather than a budget, this means that things are going to be hidden.

Even from your narrative, there are a few obvious options:
-Don't treat your wife's income as blow money. Budget for it or put it towards savings.
-Make your budget based on your full income and include savings (ie, pay yourself first).
-How much are you spending on vacations per year? Why not take the time to explore your local area, instead?



Laura33

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Re: Case Study - Where can I cut?
« Reply #6 on: September 13, 2017, 02:06:16 PM »
So you are doing some things right.  You don't have individual line-items that are massively out of whack.  You budget off 4 weeks so you have extra left.

But I would suggest a few changes in the way you think about money.  E.g., the things you spend the craft fair money and the extra 4 paychecks are not "extras" -- they are, in fact, expenses that you need to plan for.  They're not really optional, are they?  I mean, you're not going to forego the wedding or the birthday party or the dental work, right?  These are things you plan to do, so you should plan that spending into your monthly budget.  I mean, it's not a surprise that birthdays come every year, right?

Yeah, ok, sure, you may not need massive dental work every year -- I hope! -- but you can still pretty much count on a kid to break an arm or get the flu or whatever.  The key is not to get caught up on the details, but set up categories like "medical" and "gifts" and "travel," so that you are setting aside money every month, in advance.  So when stuff like that comes up, you're not taken by surprise -- you've already got it sitting there.  For you, I'd actually recommend You Need a Budget -- it forces you to budget in advance like this.  And that kind of detailed tracking will give you much more insight into where the money actually goes.

And this planning needs to include savings -- off the top, not with what's leftover.  Period.  Just as non-negotiable as tithing.  Pay God first, sure, but then pay yourself second.  Don't let current you shortchange future you.

The other thing is I notice that you are paid weekly but have the tithing set monthly.  Is this "real" or is it an artifact of the spreadsheet?  If you actually pay over 10% every week after your paycheck comes in, you can ignore this -- but if you are making a monthly contribution of $485 each month, this is going to make things extra tight in the 4-paycheck months.  It might smooth the ride a bit if you do the tithing based on the amount you actually have in-hand every month.

Also, what's Liberty?

Otherwise, Verizon is ridiculous; groceries/takeout/sundries (almost $400) also may be able to be trimmed a bit; and perhaps some of the baby stuff as well; you're also doing the right thing with tackling the ductwork and trimming where you can.  But, yeah, you can't make money magically appear where there is none.  If your plan is to live off of 90% of a single less-than-$60K income, and live in a home that is close to work in Philly, then yes, you're not going to have a lot left over for other stuff.

To put it another way:  you have many, many options for bringing more breathing room into your budget -- your wife could work a regular job; you could live farther and commute; you could stop tithing; etc.  In effect, you have chosen to "spend" the foregone money on living according to your values -- the "luxuries" of a short commute and a SAHM.  And I think that is a good thing -- to my mind, living according to your values is more important than more "stuff" anyway. 

I know, not that that makes it any easier when you always feel so tight.  But it helps me to remind myself that I do have choices -- that I am living the life I am because it suits my values and priorities and family, and that the tradeoffs are sacrifices I willingly make for those more-important goals.  And if my lifestyle no longer suits, then I can just as easily make a different choice and trade one set of benefits and burdens for another.  FWIW.
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caracarn

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Re: Case Study - Where can I cut?
« Reply #7 on: September 13, 2017, 02:28:47 PM »
I assumed Liberty, was Liberty Healthshare (in place of traditional insurance).  Is what my wife uses right now and yes their fees are flat.



RidetheRain

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Re: Case Study - Where can I cut?
« Reply #8 on: September 13, 2017, 03:28:30 PM »

Google Fi does require specific phones, but my bill from them is under $40/mo and I'm a phone obsessed millennial. Take a look on ebay for the phone(s?) and you might be surprised how quickly you can make up the cost. I managed to make even on a very fancy pixel after 5 months.

I'll look on the second hand market for a phone.  see if I can re-crunch the numbers into looking a little better.  you pay $40 for just you? anyone else on the plan?

Yes the $40 is just for me using just under 2GB of data each month. General mindfulness can bring it as low as $32, but I don't like having to thing that much about data so I hover at about $40 ($20 for talk/text, and data is by the kB) group plans are $15 talk/text per person with same data plan. Little outdated, but this is MMM review: http://www.mrmoneymustache.com/2015/09/20/google-fi-review/

economista

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Re: Case Study - Where can I cut?
« Reply #9 on: September 13, 2017, 03:33:08 PM »
Google Fi does require specific phones, but my bill from them is under $40/mo and I'm a phone obsessed millennial. Take a look on ebay for the phone(s?) and you might be surprised how quickly you can make up the cost. I managed to make even on a very fancy pixel after 5 months.

I'll look on the second hand market for a phone.  see if I can re-crunch the numbers into looking a little better.  you pay $40 for just you? anyone else on the plan?

You weren't asking me but I'll weigh in on this one.  My husband and I are on google fi and our combined bill has been averaging $45 per month since we switched.  He was using upward of 10 gb of data per month before the switch, when he was on a T-mobile unlimited plan, and it took me over a year of gentle nudging to get him to switch.  In reality we are almost always somewhere that has wifi, so we keep our data turned off on our phones and only switch it on if we are without wifi and really need to use data.  We plan ahead by downloading podcasts and such when we are on wifi.  After 4 months we still haven't had a month where we used 1 gb combined, and we really don't feel like we are depriving ourselves at all. 

Also, I bought each of us a Nexus 6P to start out with because we had T-mobile iphones. He had a 6+ and I had a 6s+ and the resale value of each of those covered the cost of buying the Nexus phones new from google.
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caracarn

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Re: Case Study - Where can I cut?
« Reply #10 on: September 13, 2017, 04:33:18 PM »
Nexus, OP made it pretty clear that the tithe was not something he was willing to change and while you offhandedly indicated you got it you spent 4 paragraphs explaining how it would help him if he negotiated it away in his head.  I get that for those who are not dedicated tithers it seems like these other options are options, but they are not so as someone else who tithes I just wanted to comment that it's not really helpful to lead someone down a path that will cause them guilt and discomfort if they follow it because to you it makes no sense.   Volunteering time does not replace a monetary tithe.  Delaying and tracking it is a common incorrect approach too.  We all clearly get we may be delaying FI, but those who believe are not living for the world.  It's a "trade" in your terms of time for what we believe and OP saying it is what it is is an acknowledgement of that.  Not that you are interested, but since you shared your ideas when OP said he was not, I'll share this.  For those of us who follow tithing it is an acknowledgement that everything we make is given to us by God and we are simply stewards.  It is not our money.  As such as a sign of respect we give 10% back to His use through the church.   Whether or not we tithe has nothing to do with admission to the kingdom.  That would be works based and that's not how you "get in".  Nothing we can do does that. 

Let's not debate the topic.  It's clear you find it stupid, and that's OK.  Just supporting the OP clear indication that this is not up for debate. 
« Last Edit: September 13, 2017, 04:38:16 PM by caracarn »

RidetheRain

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Re: Case Study - Where can I cut?
« Reply #11 on: September 13, 2017, 04:50:04 PM »
+1 to caracarn

Just to put into perspective what you asked OP to do:

To a kosher-eating person: Just eat the bacon, you can take a shower later.

More secular: It's ok to triple park as long as you promise not to go back to that parking lot

Maybe you own a house: You can break and enter to steal people stuff if you promise to give it back when you have more stuff.

I don't tithe, but I certainly don't do every single thing in my own interest at the expense of others. Respect peoples religion, beliefs, and charity.

ejacobson

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Re: Case Study - Where can I cut?
« Reply #12 on: September 13, 2017, 07:29:15 PM »
Greater Philadelphia is not exactly a high cost living area but it is higher than many others. You can shave a bit off your costs (maybe telephone and electric) but there isn't a lot of room there. I don't see a near-term path to FI short of your household growing its income or you moving to a low-cost part of the country. If you are willing to share what you do you might get some career-specific advice.

MDM

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Re: Case Study - Where can I cut?
« Reply #13 on: September 13, 2017, 08:53:50 PM »
Family of four, myself, wife, and 2 kids under 2 years old.  We live outside Philadelphia
...
My Gross: $59800
...
Can yall give me some perspective?
Assuming no other income or pre-tax deductions, except for $2K to your 401k and $2K to your wife's tIRA, it appears you should have over $4,000/mo for all expenses.  If you are spending $3300/mo, all should be well.  I'm probably missing something - but what?

CategoryMonthly
Comments
Annual
Salary/Wages for earner #1$4,983$59,800
Traditional IRA$167Room to increase?$2,000
401(k) / 403(b) / TSP / etc.$167Room to increase?$2,000
Subtotal 1$4,650$55,800
Federal Total Income (for IRS tax)$4,650$55,800
Federal tax$592017 rates, MFJ, stand. ded., 4 exempt.$703
State/City tax$143PA state calc'n$1,713
Soc. Sec. tax$309Assumes 1 earner paying$3,708
Medicare tax$72$867
Total income taxes$583$6,990
Income before other expenses  $4,067$48,810

Rufus.T.Firefly

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Re: Case Study - Where can I cut?
« Reply #14 on: September 14, 2017, 07:28:31 AM »
Family of four, myself, wife, and 2 kids under 2 years old.  We live outside Philadelphia
...
My Gross: $59800
...
Can yall give me some perspective?
Assuming no other income or pre-tax deductions, except for $2K to your 401k and $2K to your wife's tIRA, it appears you should have over $4,000/mo for all expenses.  If you are spending $3300/mo, all should be well.  I'm probably missing something - but what?

CategoryMonthly
Comments
Annual
Salary/Wages for earner #1$4,983$59,800
Traditional IRA$167Room to increase?$2,000
401(k) / 403(b) / TSP / etc.$167Room to increase?$2,000
Subtotal 1$4,650$55,800
Federal Total Income (for IRS tax)$4,650$55,800
Federal tax$592017 rates, MFJ, stand. ded., 4 exempt.$703
State/City tax$143PA state calc'n$1,713
Soc. Sec. tax$309Assumes 1 earner paying$3,708
Medicare tax$72$867
Total income taxes$583$6,990
Income before other expenses  $4,067$48,810

Agreed. Perhaps OP is not taking any exemptions?
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aaron.d.hess

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Re: Case Study - Where can I cut?
« Reply #15 on: September 14, 2017, 08:54:02 AM »
Wow, thanks for all the input.  Everyone's got opinions about faith and values, and this is a money forum, so I won't delve in too much.  Just want to say that I don't believe my income is mine.  It's not going with me when I die.  It didn't go with the richest pharaohs.  Its mine to manage wisely.  That's what I'm trying to do.  I don't have as much as the 100k+ earners, but there are people who have less than me, and they need a hand right now.  So I'm going to put my green employees to work helping them, in accordance with my faith.

Nuff about that.  Now to answer questions:

I'll update original post about assets/debts.  Short answer is no debt but the mortgage, modest retirement accounts for my 27 yr old self and wife.

Regarding withholdings:  I get paid 1150/week.  I get home with 830.  See attachment of pay stub for breakdown.

The Liberty budget line is our home insurance, paid monthly cause I hate quarterly charges.

Enough people have said positive things about Fi so I definitely need to look into that again and do some more research.

I guess I wasn't too clear about my wife's income.  We have a rule that any "extra" (sporadic) income doesn't go toward our hum drum monthly expenses.  We've use the 4 "extra" checks per year and some of her other income to fund things that haven't fit into the monthly budget.  Examples include: Funding the e-fund, helping out a friend who was having a rough year, funding house improvement projects etc etc.  I broke my hand a while back and it took care of those bills for the most part.  So its not being frittered away. 

But I do hear you.  We need to prioritize saving and live on less.  right now our monthly expenses are about 85% of my take home.  I wish I could save the remaining 15%, but the odd things that pop up (dentist/vet for the dog/birthdays) eat it all up.  People are saying to write a line for those things and throw a couple bucks at it each month.  But the math is still the same, just spread out over the year.  Am I making sense?

As for moving to a lower cost part of the country...we just moved.  Lived in dirt cheap birmingham alabama for 2 years.  low cost but consequently low pay.  Hated the area and we were a 12 hour drive from family in VA.  I went searching for a new job and found this one outside Philly.  2.5 hours from family/better pay vs cost of living ratio/more opportunity for growth in skill set.  It was a no brainer. 

I work in live entertainment.  Went to school for technical theater, the job in Alabama was as a technical director for a small producing theater company.  New job in Philly is in a scene shop as a foreman.  So my options are pretty limited in terms of geography.  The jobs in my field that pay a wage I can support my family on are in the cities... and cities are expensive.  Anyone have some perspective on this?

Seems like I need to boost my income, or batten down, save more, and accept less each month for the misc. things. 

caracarn

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Re: Case Study - Where can I cut?
« Reply #16 on: September 14, 2017, 09:02:45 AM »
Wow, thanks for all the input.  Everyone's got opinions about faith and values, and this is a money forum, so I won't delve in too much.  Just want to say that I don't believe my income is mine.  It's not going with me when I die.  It didn't go with the richest pharaohs.  Its mine to manage wisely.  That's what I'm trying to do.  I don't have as much as the 100k+ earners, but there are people who have less than me, and they need a hand right now.  So I'm going to put my green employees to work helping them, in accordance with my faith.

Nuff about that.  Now to answer questions:

I'll update original post about assets/debts.  Short answer is no debt but the mortgage, modest retirement accounts for my 27 yr old self and wife.

Regarding withholdings:  I get paid 1150/week.  I get home with 830.  See attachment of pay stub for breakdown.

The Liberty budget line is our home insurance, paid monthly cause I hate quarterly charges.

Enough people have said positive things about Fi so I definitely need to look into that again and do some more research.

I guess I wasn't too clear about my wife's income.  We have a rule that any "extra" (sporadic) income doesn't go toward our hum drum monthly expenses.  We've use the 4 "extra" checks per year and some of her other income to fund things that haven't fit into the monthly budget.  Examples include: Funding the e-fund, helping out a friend who was having a rough year, funding house improvement projects etc etc.  I broke my hand a while back and it took care of those bills for the most part.  So its not being frittered away. 

But I do hear you.  We need to prioritize saving and live on less.  right now our monthly expenses are about 85% of my take home.  I wish I could save the remaining 15%, but the odd things that pop up (dentist/vet for the dog/birthdays) eat it all up.  People are saying to write a line for those things and throw a couple bucks at it each month.  But the math is still the same, just spread out over the year.  Am I making sense?

As for moving to a lower cost part of the country...we just moved.  Lived in dirt cheap birmingham alabama for 2 years.  low cost but consequently low pay.  Hated the area and we were a 12 hour drive from family in VA.  I went searching for a new job and found this one outside Philly.  2.5 hours from family/better pay vs cost of living ratio/more opportunity for growth in skill set.  It was a no brainer. 

I work in live entertainment.  Went to school for technical theater, the job in Alabama was as a technical director for a small producing theater company.  New job in Philly is in a scene shop as a foreman.  So my options are pretty limited in terms of geography.  The jobs in my field that pay a wage I can support my family on are in the cities... and cities are expensive.  Anyone have some perspective on this?

Seems like I need to boost my income, or batten down, save more, and accept less each month for the misc. things.
So little known fact.  Largest theater district outside NYC?  Playhouse Square in Cleveland.  We hold the record for season ticket holders.  Much lower cost of living the NYC or Philly and would give your opportunities in your field.  Might want to keep that in mind.

Laura33

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Re: Case Study - Where can I cut?
« Reply #17 on: September 14, 2017, 10:49:43 AM »
I wish I could save the remaining 15%, but the odd things that pop up (dentist/vet for the dog/birthdays) eat it all up.  People are saying to write a line for those things and throw a couple bucks at it each month.  But the math is still the same, just spread out over the year.  Am I making sense?

Yes.  The difference is whether you control your money or your money controls you.

If you budget for these various categories, and put that money aside in the bank regularly, then when it happens it's still annoying, but it's not a surprise, so you pay it and go on with life; it doesn't affect your plans, either psychologically or financially.  And, of course, since you have a monthly line-item for "savings" in that budget, these periodic events also do not get in the way of your savings -- because budgeting for everything in advance forces you to limit your lifestyle to what you can afford after saving.

OTOH, when you do it the way you are doing it, "something always comes up" -- every month, you start out with great plans, and a nice gap between what you make and what you spend, and so, boy, this month, you're really going to make progress on that EF, or IRA, or whatever.  And then these predictable things happen, and you get to the end of the month, and there's nothing left.  And then you feel like you failed, because you didn't accomplish what you planned to; and when that happens month after month, you get frustrated because you feel like you can never get ahead, and you're not sure why.  Meanwhile, because you put savings as an "extra" item instead of part of the budget, you never get around to it because these expected "unexpected" events sucked up all that money; that perception that you had extra money at the beginning of the month allowed you to say yes to things that you may not have if you had realized that money was already fully committed to a bigger goal.

Look at it this way:  you plan for the things that matter to you, yes?  That tithe is the first thing that comes off your paycheck, isn't it -- before mortgage, food, taxes, anything else.  You are honoring God by putting Him first.  So how about honoring your family's safety and future right after that?  Do you want your family to be taken care of if you get laid off or injured for a few months?  Then you need an EF.  Do you want your wife to be financially comfortable when she is 85 and you are gone -- able to pay for the medications she needs, maybe even hire a home health aide for an hour or two to help her do the things that are difficult?  Then you need retirement savings.  Right now, you are saying that these future needs are less important than getting takeout, or traveling to a wedding, or paying $200 for a kid's birthday party/gift. 

FWIW, I don't think that is actually who you are at all -- you come across as someone who is extremely responsible and honors his commitments above all else.  But that's not what your current approach to budgeting is actually doing. 

Tl;dr:  all a budget does is help you align your spending with your true priorities.  The more you exclude from the budget -- the more you choose not to plan for in advance -- the easier it is for chance to distract you from your long-term goals with bright shiny immediate temptations.
Laugh while you can, monkey-boy

RidetheRain

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Re: Case Study - Where can I cut?
« Reply #18 on: September 14, 2017, 10:59:19 AM »
Another note along the lines of Laura33's excellent advice:

If you have a mystery amount for some of the bigger repairs then you are more likely to accidentally overspend. For example, the doctor. You probably know roughly how much money it costs to go to the doctor for a standard checkup for your kid. If we see that line item and it says $50/mo for a doctor check up we are going to scream for you to get a new doctor or negotiate a price or complain to your insurance.

These things feel non-negotiable sometimes, but the prices can be misleading. We might look at all those one time expenses and say that if that is the cost where you live you might want to consider moving. The math is the same, but our ability to give you advice is stunted and your ability to know how your money is being spent is equally stunted.

MDM

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Re: Case Study - Where can I cut?
« Reply #19 on: September 14, 2017, 11:02:21 AM »
Regarding withholdings:  I get paid 1150/week.  I get home with 830.  See attachment of pay stub for breakdown.
You are having too much federal tax withheld because the withholding system doesn't know about the $2000 Child Tax Credit (CTC) you should get when you file.  Consider using the IRS Withholding Calculator | Internal Revenue Service, including your expected CTC, to see how you might adjust your W-4 now to increase cash flow for the rest of the year.

Then do a new W-4 at the beginning of 2018, because you'll probably need to increase withholding for a "clean" year.

Didn't see the $594/mo medical insurance (that is what "MED 125" is, correct?) in the OP.  Including that, the "...time we get past the hum drum expenses, we usually have around $500 left every month" seems about right.  For many, spending expands to use the money available in the checking account. 

Consider having your wife put $2K/yr into a tIRA while you have $4K/yr going into a t401k.  That could provide a $400 saver's credit and ~$400 Earned Income Credit (EIC), meaning the IRS would owe you ~$1,000 for the year instead of you paying them.  Check using commercial tax software (e.g., Schedule A Tax Modeling for 2017 >age65 - Bogleheads.org if you have TurboTax, or similar for TaxAct, etc.), or try the case study spreadsheet using your numbers.

aaron.d.hess

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Re: Case Study - Where can I cut?
« Reply #20 on: September 14, 2017, 11:52:13 AM »

You are having too much federal tax withheld because the withholding system doesn't know about the $2000 Child Tax Credit (CTC) you should get when you file.  Consider using the IRS Withholding Calculator | Internal Revenue Service, including your expected CTC, to see how you might adjust your W-4 now to increase cash flow for the rest of the year.

Then do a new W-4 at the beginning of 2018, because you'll probably need to increase withholding for a "clean" year.

Didn't see the $594/mo medical insurance (that is what "MED 125" is, correct?) in the OP.  Including that, the "...time we get past the hum drum expenses, we usually have around $500 left every month" seems about right.  For many, spending expands to use the money available in the checking account. 

Consider having your wife put $2K/yr into a tIRA while you have $4K/yr going into a t401k.  That could provide a $400 saver's credit and ~$400 Earned Income Credit (EIC), meaning the IRS would owe you ~$1,000 for the year instead of you paying them.  Check using commercial tax software (e.g., Schedule A Tax Modeling for 2017 >age65 - Bogleheads.org if you have TurboTax, or similar for TaxAct, etc.), or try the case study spreadsheet using your numbers.

Have not considered the tax angle.  Didn't know about a credit for saving, and we just had the second kid this year and I haven't adjusted my withholdings...

and  Laura33  thanks for that.  helps to have a different set of eyeballs looking at it.  We've been pouring money into the house for the past year to get it livable and lost track of the future it seems