how to get started- so overwhelmed and need a good face punching!

[PlayOutside]

hi - My husband and I are both in our 40s with 4 kids under 9. He makes a lot of money, but we are living paycheck to paycheck. I'm so frustrated that we are in the same place we were 10 years ago- carrying $1500 on a credit card, and having $2500 in the bank. We do have 401k & 403 B with combined $175K, so we are saving a little bit, but just not nearly enough- and I am not sure where to start.
My husband is the primary bread winner- drives 45 minutes to work (before you punch me for that- I know it stinks!- but, he will be getting transferred to another project in a year, so that will hopefully be closer to home). He brings home $2500 every two weeks. I work a couple evenings and make about $800 every 2 weeks. Yes, I could go back to work full time, but that is still a couple years away bc our kids are little. We own our home- it's worth about $350K and we owe $250K. We have 2 cars- van is paid off and a commuter car that we owe $15K on.

I guess my frustration is that I feel like we are already frugal- we pack lunches, we cook at home, I shop at the good will, I sell stuff on ebay on the side, but we still aren't getting anywhere.

Any suggestions? Do I need to post more specific numbers? Can you punch me, please.

[mpbaker22]

I do think we'll need more specific numbers to offer any good advice.  Definitely, no one can help you drop your expenses without knowing the expenses.  From your post, I can only offer one piece of advice, and even that I need more info on.  What is the commuter car exactly?  A commuter car likely shouldn't cost $15K to begin with, let alone be the amount you owe on it.

Also, are these incomes before or after tax?  Saying 'brings home' makes me think actual take home.

If you have $2500 in the bank and $1500 on CC, I would pay off the credit card.  Sure you'll have less for emergencies.  But if you have an emergency, what will happen?  You'll put it on the credit card and owe the interest you're already paying now.

If these are pre-tax numbers I would say you're home is too expensive (I think it's too expensive either way), but that also depends a great deal on your location.

[gooki]

*** Face Punch ***

You have a major leak (or more likely a lot of little leaks), if your burning through $6,600.00 a month with modest debt levels.

Post up some actual numbers, or if you don't have them start tracking your money with mint.com

[TrulyStashin]

*** Face Punch ***

You have a major leak (or more likely a lot of little leaks), if your burning through $6,600.00 a month with modest debt levels.

Post up some actual numbers, or if you don't have them start tracking your money with mint.com

+1

I found this blog in May and since then have made radical changes to my budget.  Dropped:  gym membership, DirectTV, Verizon Wireless, paid parking at work, eating out, and toll roads.  The thermostat on my water heater went down, thermostat on A/C went up, stopped using my dryer 90% of the time.  In short, I examined EVERY corner of my budget and found a ton of little to medium sized leaks that were costing me upwards of $700 per month.  In April, I used 70% of my take home pay for living expenses.

This month it is below 40%.  Next month, it should be below 35%.  If it doesn't keep you fed, sheltered or clothed, find a way to cut it.

You should also check out MMM's blog today (and last week) on jobs that pay $50k a year without a degree. Without doubt there is something on there that you can do around the kids' needs to add to your household income.

[jezter6]

I think a lot of this is an issue between your income and the house.

Doing a quick guesstimate on a mortgage for $350k, assuming you put little down and live in a modest property tax area, I'm coming up with payments around $2150-2200/mo. That's a straight 1/3 of your income gone just to have a roof.

Under most budget situations, 1/3 of your income to just the home is unsustainable unless you're super frugal in every other area. But having 4 kids, even being "frugal" on groceries can cost a bundle. Even if you can get your food costs down to like $150/person, you're still at $900/mo, nearing 14% of income.

So that's 47% likely gone right there. Add another 10% in utilities, 10% in vehicle costs (not including the loan), 2/3 of your income is gone before you budget any real spending like clothes, recreation/fun, health copays, etc.

High commute costs + high housing + large family = budget busted.

[willn]

Get rid of the car loan, either by selling it and getting something cheaper, or by getting seriously intense about throwing money at your debts.

Debt should be considered an emergency.  I'd reduce 401k to the match (at least) in order to slam the debt. That's not popular advice on MMM but debt is crushing your monthly cash flow.  Once it is gone ramp up your retirement savings again.

Do you have a monthly written budget that you stick to? Really stick to?  Takes most people 3 months to work the kinks out of the budget.

You have cable TV?  Gone.  Expensive cell plans?  Start optimizing these items. 

Not a fan of computerized budgets.  Lots of people use them effectively, but writing it is a form of commitment.  And they usually cost money.  Budgeting is simple math, doesn't even take a spreadsheet.

Longer term, you've got equity, can you move closer to work?

[Rebecca Stapler]

Welcome! We can help you shave down your budget if you post specific numbers. Like TrulyStashin, I found this forum in May and since then have slashed a lot of little things, which added up to big savings. Based on what you've said, I have two thoughts:

First and foremost: A car that you owe $15k on should be sold if you are not underwater on the loan. Take the proceeds, and buy a more economical car with cash. Make sure to prioritize high MPGs. MMM has a blog post on his car recs.

Second: I understand that you want to be home with your kids while they're young, and maybe the cost of daycare is more than you will make working. I am still reading Lean In, but one of the things she mentions is that taking time off for childcare because you can't "afford" to work can damage your future earnings because it sets you behind your peers. Even though working FT is a few years in the future, I encourage you to think about your re-entry now, and how best you can position yourself for it -- by volunteering, learning / improving skills, making networking connections, etc.

[PlayOutside]

thanks for all of the encouragement! I saw the Journals section and will post specific numbers there tomorrow...

Yes, my husband drives a long distance- he is a project manager and his current project is about 45 min away- that will change in 6-9 mos, but it's unfortunate for us all right now! He's up early and home late and my kids and I all miss him greatly-  it stinks!

I do work in my field 2 evenings per week and am considering going back part or full time, but probably next fall when all the little children will be in school.

Our food is crazy expensive-  we eat Gluten Free for medical reasons (this is within the last 6 months) and I am just starting to get a handle on how to cook when you can't just make a pot of good ole mac n cheese.

And yes, the house - our mortgage payment is $1960- we have a 30 yr at 3.25% - we live on the East coast. I'd like to move to somewhere (anywhere!) with lower taxes, but our house is not ready to sell yet- we are doing some big projects. (now that I think about it, that's probably why we have no money- for the past few months our "home improvement" budget has been busted!... that and all the weird certified GF foods we have been eating...)

Anyway, thanks again and I will post more tomorrow when I am fresh!
Kind regards, Mustachios!!

[snshijuptr]

Check out http://onceamonthmom.com/ for Gluten Free recipes on a budget. Extra points if you actually cook all your food in one day. I keep meaning to try this, but I feel like I need a deep freezer first.