Author Topic: feedback on my budget to finds ways to save  (Read 4476 times)

seannike

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feedback on my budget to finds ways to save
« on: March 27, 2015, 02:49:30 PM »
Hello everyone! I'm a newbie to this site and forum. Very interested in learning more on creating FI.  My dilemma is i'm trying to figure out ways to save to be able to max out wife's 401k, my 403b and my ira.  I would like to get some ways to save money in my budget and some direction to go forward.  So here is our budget:

my income                                     

1368 gross
40.44 hsa
161.79 health ins,dental vision
82.11 403b 6% up to match
183.58 taxes
900.51 biweekly net income

my spouse
1384 gross
109 401k profit match i think 2% or more??
271 taxes
982 biweekly net income   

expenses
958 mortgage-15 yr @ 3.75%
125 electric
68 gas
66 water qrtly
160 gasoline two cars
92 car insurance usaa son turned 18 on my ins. liability on my 2 cars, full on his
100 cell phone 4 lines me,wife, both kids no land lines service through crickett wireless
83 cable internet
800 groceries 4 person me, wife and both kids
60 dining
53 school lunches daughter
40 hairs ranges from month to month
71 life ins term
74 gym dues we go 6 days a week really only outlet we do
5 newspaper coupons
25 ing credit line- owe 700.00
95 weekly auto to emergency fund roughly 1000 balance now-380 a month
55 Christmas fund monthly-savings
135 car replacement monthly-savings
50 misc to fund school functions
45 supplements

3445 total expenses

3764 income
3445 expenses
319 left over

to explain some things in budget:
my wife income is usually the same at 982 per biweekly wk, and mine is same as 900 biweekly
I use to have an emergency fund of 10k, but due to me doing a career change, death in the family, and engine went out on one of my cars, we rebuilding some what.. I use to have Verizon and was paying 260 a month before cricket
i have two old cars which are paid for 1999 Toyota Camry which is on it last leg and now 2005 Honda accord for my wife and i. son is going to college and living at home which he is paying for, i try to help him with small expenses since he paying for his own schooling.
  I hope this makes so sense of budget..I'm trying to do several things build up EF fund, car replace, Christmas fund, but also need to max out retirement.

Would you continue to build EF first maybe quicker? or would you try to max out retirement?  while doing those other things as well??
need other insight to help me save more money and cut expenses


Thanks in advance for everyone's input!!!


4alpacas

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Re: feedback on my budget to finds ways to save
« Reply #1 on: March 27, 2015, 03:18:10 PM »
What are the interest rates on your ING credit line?

How much do you have in savings for Christmas, car replacement, and EF?  How much money do you have in your retirement accounts? 

NoWorries

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Re: feedback on my budget to finds ways to save
« Reply #2 on: March 27, 2015, 03:26:09 PM »
Hello everyone! I'm a newbie to this site and forum. Very interested in learning more on creating FI.  My dilemma is i'm trying to figure out ways to save to be able to max out wife's 401k, my 403b and my ira.  I would like to get some ways to save money in my budget and some direction to go forward.  So here is our budget:

my income                                     

1368 gross
40.44 hsa
161.79 health ins,dental vision
82.11 403b 6% up to match
183.58 taxes
900.51 biweekly net income

my spouse
1384 gross
109 401k profit match i think 2% or more??
271 taxes
982 biweekly net income   

expenses
958 mortgage-15 yr @ 3.75%
125 electric
68 gas
66 water qrtly
160 gasoline two cars
92 car insurance usaa son turned 18 on my ins. liability on my 2 cars, full on his
100 cell phone 4 lines me,wife, both kids no land lines service through crickett wireless
83 cable internet
800 groceries 4 person me, wife and both kids
60 dining
53 school lunches daughter
40 hairs ranges from month to month
71 life ins term
74 gym dues we go 6 days a week really only outlet we do
5 newspaper coupons
25 ing credit line- owe 700.00
95 weekly auto to emergency fund roughly 1000 balance now-380 a month
55 Christmas fund monthly-savings
135 car replacement monthly-savings
50 misc to fund school functions
45 supplements

3445 total expenses

3764 income
3445 expenses
319 left over

to explain some things in budget:
my wife income is usually the same at 982 per biweekly wk, and mine is same as 900 biweekly
I use to have an emergency fund of 10k, but due to me doing a career change, death in the family, and engine went out on one of my cars, we rebuilding some what.. I use to have Verizon and was paying 260 a month before cricket
i have two old cars which are paid for 1999 Toyota Camry which is on it last leg and now 2005 Honda accord for my wife and i. son is going to college and living at home which he is paying for, i try to help him with small expenses since he paying for his own schooling.
  I hope this makes so sense of budget..I'm trying to do several things build up EF fund, car replace, Christmas fund, but also need to max out retirement.

Would you continue to build EF first maybe quicker? or would you try to max out retirement?  while doing those other things as well??
need other insight to help me save more money and cut expenses


Thanks in advance for everyone's input!!!

Your budget is pretty darn good! Just needs a bit of tweaking.

-You said that "you think 2% or more" for the retirement account match. I'd find out for sure. Then I'd definitely, definitely max out the match for retirement accounts. Then start maxing out how much you put in total to your annual limit. Tweaking your budget should allow you to do that.
-Great job lowering the phones!
-Awesome that you have life insurance! So many people with kids don't. Hubby and I pay $45 monthly for 1.5 million of 20 year term. You might want to shop around for a better rate.
-Cable internet at $83 monthly might be able to be lowered. I call every 6 months or so when my rate is raised and tell them about competing offers from other companies that I can go with. I pay $30 monthly for cable internet now.
-Your dining out budget is wonderful! Groceries budget could be lowered, especially since one child eats at school. We spend $450-400 monthly on groceries. Do you have an Aldi near you? Just shopping at ----Aldi lowered our groceries $80 monthly! Also, deciding what to eat in advance and making a calendar is good. Meal planning.
-It doesn't say what the interest rate is on the ING credit line, but that might be worth paying off with your Christmas fund, then putting the monthly payment from the ING into a retirement fund. It would also save you the interest on the line of credit.
-Does your mortgage include PMI or have you reached 20% equity?
-How much was your income tax return this year? You may want to consider adjusting your withholding if you received a huge refund from overpayment.


If these were done:

+300 lower grocery bill
+50 cable internet lowered
+26 lower life insurance rate
+25 use cash reserves to pay off ING line of credit
$401 extra per month!

AN EXTRA $4,812 ANNUALLY!


MDM

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Re: feedback on my budget to finds ways to save
« Reply #3 on: March 27, 2015, 04:35:34 PM »
My dilemma is i'm trying to figure out ways to save to be able to max out wife's 401k, my 403b and my ira.
If you turn that around and increase 401k/403b contributions first, that can lead to significant tax savings and credits.

If you could cut $100/mo from spending (e.g., using some of NoWorries' suggestions), it appears* you could put an extra $1700/mo into 401k/403b and still be cash flow neutral - because your taxes will drop and you will become eligible for the Saver's and Earned Income credits.

*Based on the spreadsheet in the case study sticky - you might download that and verify the numbers.

kathrynd

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Re: feedback on my budget to finds ways to save
« Reply #4 on: March 27, 2015, 06:27:07 PM »
Grocery budget can easily be cut in half.You won't need to give up anything, maybe just change the frequency of some treat foods, change brands, reduce portions of expensive foods.

If you need specific suggestions,post your grocery receipts and we can give some alternatives.


Get rid of the supplements. If you are eating a varied diet, you don't need them.

Retired To Win

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Re: feedback on my budget to finds ways to save
« Reply #5 on: March 27, 2015, 09:45:21 PM »
My vote is for you rebuilding your emergency reserve fund first of all.  You can see how it saved your bacon to have it.  So now you need to do the smart thing and rebuild it as a priority.  Because unexpected emergencies are never foreseeable.

I have an emergency reserve fund with one year of basic living expenses in a savings account.  Some people opt for just 6 months of expenses.  So go for what feels right to you.

Good luck.

lhamo

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Re: feedback on my budget to finds ways to save
« Reply #6 on: March 27, 2015, 10:20:52 PM »
How old is your daughter?  If a teen, I would stop paying for the school lunches and let her pay that out of her own earnings.  Even if you add lunches for her, you can cut groceries quite a bit compared to many people here (and you are in OH, so you aren't dealing with the high cost of groceries on the coasts, so this should be doable).

Have you had a utility audit?  Electric bill seems high to me, maybe you can find a way to bring it down.

Ditch cable. 

What are the supplements you are buying?  Are they really needed?  Seems high cost to me.

Haircuts seem very high to me.  Go basic or get a hair cutter, at least for the guys.

Evaluate whether you are really getting your money back with the newspaper coupons.  If you have a printer or a smartphone, many of the coupons might be available on line.  Most national retailers post their weekly circulars on line these days. 

Try to reduce auto use to bring the gas bill down.  Carpool, combine trips, etc. 

Also, I don't know whether Ohio has an income tax or not, but if the taxes below are for federal taxes it looks like you are WAAAY overpaying.  If you subtract what you are putting in 403b/401k from your biweekly income, your taxable income is around $61461.  Subtract the standard deductible for married filing jointly from that (12,400 in 2014) and four exemptions (3950*4=15,800), and you get $33,261 in taxable income.  The federal income tax on that for married filing jointly is only $4084 in 2014.  But you are paying $10,909.  I guess maybe that also includes FICA?  Still seems very high given your income, and that is just with standard deductions.  If you are overpaying and getting a refund, you should adjust your withholding.  Also worth considering upping your contribution to retirement plans as you get your spending down/emergency fund in place, so that you can shield more of you income from taxes and start building a retirement stash.  Money in retirement accounts does not get counted as an asset on the FAFSA, so if your kids are college bound this is also a good way to ensure they will get better financial aid offers. 

Not sure what field you switched careers to but hope yours has room for income growth.  Assuming you are in your late 40s/early 50s given the age of your kids.  You don't have a whole lot of time to work with and you both are not earning great salaries.  Some real attention focused on the income side of things is probably going to help more than finding places to cut -- your budget is pretty lean, as it should be with that kind of income.  Hopefully you can find ways to bring in extra money, either by advancing in your new career or by taking on side work.


Bob W

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Re: feedback on my budget to finds ways to save
« Reply #7 on: March 28, 2015, 08:18:08 AM »
Food,   switch phones to republic.   Review every freaking category.    Gym. Would go as walking and working out is free.    Our Camry is an 01.  It has 390k.     So I doubt yours is done yet.

NoWorries

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Re: feedback on my budget to finds ways to save
« Reply #8 on: March 28, 2015, 06:55:58 PM »
Food,   switch phones to republic.   Review every freaking category.    Gym. Would go as walking and working out is free.    Our Camry is an 01.  It has 390k.     So I doubt yours is done yet.

No way on the gym. They go 6 days a week. Anything that makes you healthier, and that brings you that much joy, for only $74 monthly is a keeper in my book! I believe highly in value oriented spending. If it's high on your value list then it's important, and the gym membership is important to you. No question about keeping it.

seannike

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Re: feedback on my budget to finds ways to save
« Reply #9 on: March 28, 2015, 07:37:47 PM »
Thanks for all your responses and suggestions, I'll be posting my groceries receipts for next week for feedback on to cut in  area of groceries.  Also I will be focusing on those suggestions above and will let you the results.

Again thanks!

NoWorries

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Re: feedback on my budget to finds ways to save
« Reply #10 on: March 28, 2015, 08:31:19 PM »
Thanks for all your responses and suggestions, I'll be posting my groceries receipts for next week for feedback on to cut in  area of groceries.  Also I will be focusing on those suggestions above and will let you the results.

Again thanks!

Definitely post an update! I'd be interested in hearing how it works out.

Seņora Savings

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Re: feedback on my budget to finds ways to save
« Reply #11 on: March 29, 2015, 06:34:02 AM »
First, it's awesome that your son is paying for school and living at home.  He's got some good frugal habits.  Also, nice job keeping your budget reasonable.  What do you do with your two extra paychecks each year?  I would use them to fund EF, pay loans.  Once you've got that funded you can move that saving into retirement.

Since you want to save more, here are areas where I see room for improvement.

125 electric
68 gas
66 water qrtly
160 gasoline two cars
92 car insurance usaa son turned 18 on my ins. liability on my 2 cars, full on his
83 cable internet
800 groceries 4 person me, wife and both kids
60 dining
53 school lunches daughter
40 hairs ranges from month to month
74 gym dues we go 6 days a week really only outlet we do
5 newspaper coupons
55 Christmas fund monthly-savings
45 supplements

Utilities are high.  I spend most of my time working by natual light, nothing electronic running but my finances laptop; mine are a fraction of yours.

$160 gas.  Is this all too and from work?  Look for places to cut this.  Bike, combine trips, you know the deal.

Why do you have full insurance on your sons car?

913 on food.  You can do better.  Pack leftovers for your daughter, stop going out to eat, cut down on meat/packaged food/cereal and buy produce that's on sale.

Cut your own hair.

Gym is high, gas is high.  Replace both with bikes.

Coupons concerns me.  There is no room in your budget for buying random crap and I get grocery adds in the mail.  Either you are buying packaged goods you don't need or you buy your groceries at Target along with DVDs and cute outfits.  Or you enjoy sitting down with the Sunday paper.  That would be okay.

660 per year on Christmas?  I thought the gym was your only outlet, not a once a year spending frenzie.

Supplements: are you telling me $227 per person per month food doesn't even have the nutrients you need?

I would cut back in most of the suggested areas and then give the three of you each $20 per month allowance.  You don't have any fun money in there, but you have tons dedicated to not doing simple tasks, $40 so you don't have to cut your hair, $60 to avoid cooking twice a month, $72 for climate controlled exersice, $40 on a bet that your son is more irresponsible than the insurance companies think.  Once you start cutting, you won't miss a thing.


Melody

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Re: feedback on my budget to finds ways to save
« Reply #12 on: March 29, 2015, 05:16:49 PM »
The main thing that really jumps out here is groceries...
People have jumped on the "Christmas" spend but as you don't have clothing etc budgeted, I am wondering if a lot of your Christmas spend is really "needs" - as a kid shoes, new school bags and socks often appeared under the tree (we weren't that poor, it's just there are a lot of sales on at that time of year and it gave us more stuff to unwrap), my mum usually ended up with household stuff in her gift pile, so if this is the case then the Christmas spend doesn't seem to extravagant.
If not, you need to budget for these things...
Also what about text books?
There just seems to be  a lot of things not budgeted for which will mean you'll always be over budget.