Current Monthly Spending:
Base Rent ($1,675.00) – annual lease with about 10 months remaining.
Electricity ($265.00) – Took the effort to change the retail provider about 40 days ago. Just received a bill for the first 30 days of service and the cost dropped all the way down to $33.94. Part of the drop is cooler temperatures which simply didn’t start until November, but expecting big savings here moving forward.
Water/Sewage ($30.00)
Mobile Phone ($96.00) – I have to have a smart phone for work purposes, and I need to keep my current number. I recently changed my plan to the lowest data plan available to see if this could get this number down. I haven’t been billed yet, but the website says the base charge will be $50 (but this is meaningless because wireless companies do not bill transparently). Does anyone know of any workarounds where I can keep my current telephone number and pay even less for cellular phone service?
Groceries ($900.00) – It looks like we’ve been spending about $900.00 a month on groceries. I think a lot of this is impulse purchases (like chips, etc.) or one time ingredients that we may or may not end up using. This also includes a lot of alcohol. I’ve been drinking way too much and need to cut back here. Not a lot to say, but we’re already trying to plan meals for the week and shop once a week. We always end up having trips sneak up on us though. Need to be much more disciplined. And cut out that booze!
Restaurants/Lunch ($300.00) – I’ve asked my wife to try and eat out only once a week. The problem is that we will get an invitation from friends or family who want to eat out. Then we end up eating out. Even at about 1x a week, this seems to end up being close to $75.00 a week. There are also smaller meals like $6-7 lunches maybe once every 2 weeks that add into this number.
Shopping/Travel ($500.00) – Looking over the budget, it looks like we’ve been making some big travel or consumer good purchases about every month. July: Trip + Anniversary gift (Waterford Crystal!); August: Clothes; Cricut Cutting Machine; September: Plane Tickets, Parking, Hotel, Rental Car; October: Vitamix Blender; November: Plane Tickets to distant relative’s house for an “away Thanksgiving” (not really sure how I even got talked into this).
Internet Service Provider ($73.00) – Interested in tips on how to get this down as well. There isn’t a lot of competition and these things are just expensive. I think we do rent a modem, but not really sure how much buying one would actually end up saving us in the long term.
Car Payment ($345.00) – I know. I know. The car is almost paid off (~$1,500.00 left) and has always been financed at 0.00% APR. It has about 84,000 miles and should continue to be a good car even after the note is over. I am not eager to go out and replace it. Our other car is paid off, and runs well for now, but may need to be replaced sooner rather than later. It’s a small super-compact, about 8 years old, 150,000 miles on it. We will look to purchase something used to keep our expenses down in the future. I’ll also add that this $1,500 is the only debt we have whatsoever. By prioritizing debt repayment (mostly student loans) over the last 4 years, we’ve come down from 6 figures of debt with annual carrying costs of $7,000-$8,000 to $1,500 with an annual cost of $0.
Car Insurance ($100.00) – We pay about $600.00 every six months for two cars and two drivers. I pay biannually because if you go monthly, they charge you a finance fee.
Car Maintenance ($62.50) – We do not get maintenance every month, but this is about what the monthly cost works out too overtime.
Car Registration ($11.00) – Not much to say about this.
Amazon Prime ($9.15) – Will probably try to get rid of this, I just keep forgetting and then I end up getting charged.
Medical/Pharmacy ($150.00) – This is expensive. I try not to ever go to the doctor, but my wife or I still end up having appointments form time to time.
Charitable Giving ($115.00) – We have a few charities that we give to throughout the year. I wouldn’t do this, but my wife insists and I don’t really have a good argument as for why we shouldn’t. We have an abundance so giving a little to church and PBS is just paying our share. In other words, I’d rather cut spending from other places rather than focusing on this.
Lawn Service ($75.00) – Our landlord requires us to have someone come and cut the grass and bushes and whatever. I work too much and do not have the gardening tools to do this myself. I also do not want to do this work because this is not my house and I don’t really care what it looks like.
Cosmetics/Personal Care ($225.00) – This is largely my wife’s spending. She buys a lot of things that seem expensive and I don’t really know what they are for. She gets an expensive haircut twice a year. She also goes and has someone pluck her eyebrows. All of this adds up. I have her cut my hair to save a little bit.
Online Yoga Subscription ($18.00) – This seems expensive to me, but she wants to have this available to her.
Hobbies ($100.00) – I don’t really have much of a hobby, but my wife does. She spends about $100.00. I think that this is all money well spent because she really enjoys it and it gives her the opportunity to hang out with friends and others. It’s very positive for her. Also, not a ridiculous amount of money to spend given how much time she puts into it.
Clothing ($200.00) – Don’t spend this every month, but this is probably what our clothing outlays end up being when you consider the entire year. Need to have a lot of professional clothes. Also, have outgrown a lot of things due to weight gain. Need to get that in check obviously.
Miscellaneous Expenses ($100.00) – This is a residual category to capture random expenses that come up from time to time.
Total Spending: $5,380.00
Income
Paycheck 1: $1,160.00
Paycheck 2: $1,160.00
Paycheck 3: $5,875.00
Total Paychecks: $8,195.00
Left Over Each Month After Expenses: About $2,815.00
Retirement Savings
401(k) 1: $1,458.33 monthly ($17,500.00)
401(k) 2: $750.00 bi-monthly ($17,500.00)
401(k) employer Contributions: ~$6,500.00 to both (annually-difficult to tell because these are based on numerous factors and come at 2 times during the year).
Roth IRA 1 – Fully funded for 2013/2014 ($11,000), will pay for 2015 on/about January 2nd with Bonus money
Roth IRA 2 – Fully funded for 2013/2014 ($11,000), will pay for 2015 on/about January 2nd with Bonus money
Checking Account/EF:
Currently have about 7 months of spending in cash. (~$38,000.00). Expect to get a lot more cash as bonuses will be paid within the next 45 days. Hesitant to open a brokerage or taxable account. I also haven’t opened an online savings account to at least get a little interest on our money. Will probably work on doing this so that we don’t have SO much sitting in our checking account earning virtually nothing, but I’m not going to beat inflation at 1%, so I haven’t really been all that motivated to move the money around. I know that that is something that I should do though, because it would mean something like $25 extra a month after taxes for doing nothing.
Future Goals:
Save for retirement and, if possible, early retirement.
Purchase a single family home.
Have children.
Questions:
Budget Related: What areas should I work on cutting first? What are tips for keeping at cutting the budget month after month? Assuming you and your spouse both work, what are tips for dealing with things like child care expenses once children come along? It seems like that alone would pretty much nearly eliminate our monthly surplus.
Lifestyle Related: I feel like I’ve been trying to get healthier for forever. I always end up getting nowhere. I’ve tried to establish habits and write down goals, but I end up never getting anything done. What kinds of motivational tricks have worked for others? Has anyone here successfully ever gotten up early for exercise before work and made that a long-term habit? As time goes on, I feel like that is probably the only way, but man is it hard to plan around getting up at 4:30 in the morning to go run or bike or swim or do pushups or whatever.
Investing: Any tips on how to dive into taxable account investing? I’m really clueless when it comes to this. I guess I could always just buy VTSAX and worry about the rest of our asset allocation in our tax advantaged retirement accounts, but I’ve been nervous to make this jump.
Housing: I feel like house prices are extremely over-inflated in my area. To have a chance at a house that we would want to buy, we’d need to put together a $150,000 to $200,000. That’s not only going to take a really long time, but then there’s the issue of how to save all of that or whether that should even be our goal at this stage.
Jobs/Job Security: Neither of us really like our jobs all that much. There’s also the issue of whether we will continue to be paid so well in the future. If something happens, we will need to be in a position to scale back immediately and be prepared to endure a prolonged period of unemployment in the event that we need to change careers for some reason, can’t find work, can’t work because of disability or medical, etc. It seems like this is another concern that lends itself toward focusing on taxable account investing versus trying to get into a house.
One final note. My wife and I are both 26 years old. We would like to start having kids in the next 5 years or so (probably earlier than that, truth be told). A house is not necessary for that, and really not necessary at all, but its always seemed like something that we should do. It’s kind of hard to give that lifelong dream/aspiration up.