My budget- Feel I'm doing well but SO much higher than most here!

[kevj1085]

I have read through posts where people share their budgets, and yes they're typically single or newly married, but still seems insane how much we spend despite doing nothing that costs money. We have a 3 year old, 1 year old, both go to daycare (huge fee), and 2 dogs. So here is our breakdown...

Mortgage (15 year)- $1500 w taxes and hoa
Daycare (2 kids)- $1500
Groceries (diapers, wipes, etc. included)- $6-700
Internet + Netflix- $80
Electricity+Utilities- $210 avg
Gas- $75 average
Giving- $100
Auto insurance (Prius and F-150, truck literally only used when absolutely necessary, filled up once maybe every 2 months)- $140
Unexpected- $250 average, between signing our son up for sports classes and things that come up here and there, typically consisting of a need, not a want.

TOTAL- $4555
EARNINGS AFTER TAX (2 full time working teachers plus a rental that brings us $1200/mo, rental is paid off)- $6300
SAVINGS- $1745 or 28%

I am aware of the obvious high payment which is daycare, but my wife is pretty firm on this because she has seen most home care only sitting all day, not actually teaching. This fee WILL eventually dwindle down to either $0 or $300 depending on who can watch our kids before and after school, thus lowering our monthly payments to $3355, allowing us to save 47% of our income. From there, I'm taking all our extra income and putting it towards paying off the house in 6 years or less. Assuming that will give us back an extra $1200 a month, we will be down to $2155 a month spending, saving about 80% of our income. Of course, life will be more expensive by that point w 2 kids eating more and into more sports, so realistically probably saving around 50% a month.

Is this normal for most of you with things like daycare? I guess I see people spending $1500 a month for everything and am baffled that we spend so much. Notice also we spend NOTHING on eating out OR entertainment. We literally do everything for free that we can. I just don't see how no eating out or entertainment gets us so high so fast.

[bosspross]

I feel like you are doing well and are on the right track.  I see the 1500 monthly budgets as well on here and typically they are from people who have paid of their house and do not currently have a mortgage.  When looking at you budget and you exclude your mortgage and childcare you would be right at the 1500 mark.

[boarder42]

Mortgage should be 30 year it's better if you plan to stay 7+ years
Your internet could get lower 70 a month seems really high. We only watch Netflix etc and have 5mbps it's fine.
Your car insurance should be way lower. And if you're using a truck that little it should be sold. But if you keep it they should have a much reduced rate for something of that little use.

[doneby35]

You do contribute to any available tax-advantaged accounts right?
It seems that daycare is the biggest problem here. And then your mortgage payment is a little too high comparing to mine, but I guess that depends on where you live and how big your house is. I had a mortgage payment of $1500 w taxes and hoa, then I downsized and purchased another house with a mortgage payment of $850 with a 15 year term.
Everything else is pretty reasonable.

[spokey doke]

You are doing WAY better than we are...'normal,' even here in MMM land, is what you make of it.

[Abe]

Married with a baby, our budget is about the same as yours except more on house and we hired a nanny

[MrsPB]

We have a similar life situation, similar earnings, we have a 3 and 1 yr old in daycare for $1500 a month plus we have a large dog. We are in Canada but general spending is similar except we spend way more on gas (about $400/mth due to commuting for me and DH). Our mortgage and property taxes are 1300. We pay way more for internet (about $100/mth which is the lowest we can get here) and cell phones are pricey here too compared to similar services in US.
We don't go on vacations (one night away in the last 2.5 yrs and it was a 2 he drive away), we very rarely go out to eat, we never have sitters, we cut out drinking, the only activity our preschooler does is swimming lessons. A big chunk of our $$ goes to education savings and having two vehicles (one 2005 paid off car and a 2012 truck with 9 months left of payments but husband writes off some costs with his side hustle). Our dog adds up to around $150/month averaged over the year with pet insurance, food (midrange grocery store kibble), monthly worming meds and annual vaccinations.
I know what you mean when you look at your numbers! Daycare is huge but like you say, will start going down soon... just in time for other kids expenses, like food/footwear/sports,  to go up of course! Our savings rate is not as high as yours is, you are doing great for your situation.

[everinprogress]

Some things are really location-dependent, and child care is super expensive- We'll be paying about 2200 a month for 2 when I'm back to work in a month, which is entirely normal in our area. But bigger than our mortgage payment, lol. You've got a great savings rate, so good job!

[kevj1085]

He's not in rganized sports really, we just sign him up for 6-7 week classes that meet one day a week for about an hour. We only sign him up for one sport a season, and it's more just organized fun play. For example, he is in a 6 week class right now that cost $99 and they meet once a week for 45 minutes. 3 weeks soccer, 3 weeks basketball. He's not in a club sport, and we also sign him up for $5 balance bike races occasionally on Friday nights. I kind of question the point of the $99 6 week classes as he is so young and the classes might have 2-3 other kids in the class who just end up running amuck not doing anything. However, I believe there are a few things that are important in our children's upbringing that I want to make sure we set time for and value- God, edducation, health, and fitness. My wife loves him in the classes, I personally could go w out them until he is older but I figure they are good introductions to organized practices and such.

[kevj1085]

Yeah I should have clarified the sports. We sign him up for maybe 4 classes a year, all 4 cost between $60-$100 and last 6-7 weeks. We also sign him up for 2, 4 week swim classes in June and July. All said maybe it's $500 a year. He gets tons of exercise outside of that with us too, and once a week on a Saturday morning makes it not so bad.

[boarder42]

So what's in the other 2500 dollars a year

[kevj1085]

Well we take 3 trips a year from Arizona to San Diego where we stay in our cheap used pop-up camper for about $30-$50 a night to see the beach and go to sea world for free through our work, then christmas, my wife loves to spend around $100-$200 on each child's birthdays, and occasionally something that comes up unexpectedly with the rental we have or an auto repair or oil change. The 3 vacations we take probably add up to $1000 a year.

[boarder42]

When trying to decide how and where to cut money you need to know where each dollar is going then evaluate if it's providing you more value there vs saving.  Also look into travel hacking. We spent 10 days in Hawaii in 5 star resorts with first class flights and a jeep rental car for free

[kevj1085]

I have already accepted that I won't retire early as I can commit to biking locally, giving up cable, and spending 90% of our time doing free stuff, but I enjoy taking our kids to see the beach a few times a year, plus our jobs are very meaningful to us so it's not something we even desire to quit unless something more meaningful were to come along.

[boarder42]

So to be blunt then what was the point of the post. If you're going to write off suggestions as I don't wanna I'm happy where I am.

[kevj1085]

Lol I was thinking the same thing, sorry I guess my mind was just thinking out loud and I realized same as you, maybe I was just verbalizing thoughts iny head. Sorry lol

[boarder42]

There is probably close to 6k in your budget annually that could be optimized with very little effect on quality of life

[boarder42]

Actually more BC going to a 30 year mortgage alone frees that up to be invested

[kevj1085]

I switched from a 30 at 3.75 to a 15 at 2.875. as far as that goes to be honest I'm just not good w risk and the idea of no mortgage just sits well with me. I've heard it time and again that it's too low of a rate to worry about but I just can't get around it.

[boarder42]

As long as you understand the opportunity cost risk as well as increased jobloss risk creating a lost house you're taking on with that as well as the tax load risk you're taking on by not maxing your 401ks. I guess that's OK but risk is a two way street.

[The beatles]

We have a similar life situation, similar earnings, we have a 3 and 1 yr old in daycare for $1500 a month plus we have a large dog. We are in Canada but general spending is similar except we spend way more on gas (about $400/mth due to commuting for me and DH). Our mortgage and property taxes are 1300. We pay way more for internet (about $100/mth which is the lowest we can get here) and cell phones are pricey here too compared to similar services in US.
We don't go on vacations (one night away in the last 2.5 yrs and it was a 2 he drive away), we very rarely go out to eat, we never have sitters, we cut out drinking, the only activity our preschooler does is swimming lessons. A big chunk of our $$ goes to education savings and having two vehicles (one 2005 paid off car and a 2012 truck with 9 months left of payments but husband writes off some costs with his side hustle). Our dog adds up to around $150/month averaged over the year with pet insurance, food (midrange grocery store kibble), monthly worming meds and annual vaccinations.
I know what you mean when you look at your numbers! Daycare is huge but like you say, will start going down soon... just in time for other kids expenses, like food/footwear/sports,  to go up of course! Our savings rate is not as high as yours is, you are doing great for your situation.

Pet insurance?

That's a thing?

[The beatles]

Also look into travel hacking. We spent 10 days in Hawaii in 5 star resorts with first class flights and a jeep rental car for free

WHAT!?!?

[Laura33]

You can't compare the $ without comparing the life situation.  Many folks with the lower budgets have paid-off homes and either don't have kids yet or are empty-nesters (or have chosen to give up one income for a SAHP).  You can't expect the same bottom line when you are at a different place in life. 

Are there things you can optimize here or there if you choose?  Of course.  Use that as an incentive.  But don't get caught up in the competitiveness of comparing yourself to everyone else here -- it's maybe not as bad as competing over who has the nicer SUV :-), but it is just as useless an exercise.  The real questions are (1) are you on track to be where you want to be, when you want to be there? And (2) are you enjoying your life now while you're on your way?  If the answers to both questions are yes, then that's all that matters.

[leftcoastenvy]

I don't think that is too unreasonable with daycare. We have 3 young kids and pay ~$21,000 per year in daycare. It is an expense that will decrease as the years go by.

[meandmyfamily]

It looks great to me!  Living in Arizona I know you could get that daycare cheaper by going to a good in home but that is all I see.  $1000 a month for sure.  I wouldn't change your house to a 30 year mortgage.

[boarder42]

Also look into travel hacking. We spent 10 days in Hawaii in 5 star resorts with first class flights and a jeep rental car for free

WHAT!?!?

Yep and. 14 day European cruise with booze in a balcony cabin and drinks and excursions. For around 1500 for 2 including flights. Better planning could have made this 0 too

[alsoknownasDean]

I think you're doing well enough. Take out the mortgage and daycare and it's quite inexpensive, and those two won't last forever. $210 a lot is a lot for electricity though, how much do you use?

Do two FT teachers only make $5100 net a month there? Hmm. Any way to increase that?

Is buying a second rental house one of your plans?

[meandmyfamily]

$210 is electric and utilities in Arizona.  That isn't bad at all!

[kevj1085]

I think you're doing well enough. Take out the mortgage and daycare and it's quite inexpensive, and those two won't last forever. $210 a lot is a lot for electricity though, how much do you use?

Do two FT teachers only make $5100 net a month there? Hmm. Any way to increase that?

Is buying a second rental house one of your plans?

Lol yeah after taxes I make $1300 bi weekly with a bachelor's and master's in education and my wife makes $1200 bi weekly after taxes w just a bachelor's. Our health care is also $500/month but that gets deducted same time as taxes. We also have money taken directly out for state retirement. My wife and I can both technically retire a full career at 50 because we began at 22, so not too horrible or great. No way to raise it at all lol!

And yes $210 avg is both utities and water. This is my first year go at trying my best to consciously reduce this. Just doing little things like using outside air more, fans or space heaters more, less laundry, and showers lasting under 1 min lol

[kevj1085]

2 more points to answer...

1- I have highly considered a 2nd rental around the time we pay this house off in 5 years, which would essentially give us a whole extra $8-1200 a month, thus giving us around $2400 a month before working pay. I have been extremely pleased with our current rental as it has rented out see tenant the last 3 years straight. We use renters warehouse to help us and they have been more than easy to work with.

2- So far we are thrilled about our savings and tbe direction we are headed. We have really embraced the idea of not looking at money as a means to happiness, but rather to be happy regardless of our situation. I personally enjoy the safety having things paid off brings, but I also enjoy knowing I don't need stuff to make us happy. I do however value experiences for my son and daughter, thus why I find it fair to take them to see the ocean a few times a year in a cheap pop-up camper. I'm all for saving money and living simple but I think the way we vacation reflects that. We much prefer a simple old popup over a 5 star hotel, just saying. Way more funny stories to look back on!

[human]

I feel like you are doing well and are on the right track.  I see the 1500 monthly budgets as well on here and typically they are from people who have paid of their house and do not currently have a mortgage.  When looking at you budget and you exclude your mortgage and childcare you would be right at the 1500 mark.

This +1, you don't seem to be doing all that bad, take out childcare and mortgage and your spending less than mustache guy per month.

[MrsPB]

We have a similar life situation, similar earnings, we have a 3 and 1 yr old in daycare for $1500 a month plus we have a large dog. We are in Canada but general spending is similar except we spend way more on gas (about $400/mth due to commuting for me and DH). Our mortgage and property taxes are 1300. We pay way more for internet (about $100/mth which is the lowest we can get here) and cell phones are pricey here too compared to similar services in US.
We don't go on vacations (one night away in the last 2.5 yrs and it was a 2 he drive away), we very rarely go out to eat, we never have sitters, we cut out drinking, the only activity our preschooler does is swimming lessons. A big chunk of our $$ goes to education savings and having two vehicles (one 2005 paid off car and a 2012 truck with 9 months left of payments but husband writes off some costs with his side hustle). Our dog adds up to around $150/month averaged over the year with pet insurance, food (midrange grocery store kibble), monthly worming meds and annual vaccinations.
I know what you mean when you look at your numbers! Daycare is huge but like you say, will start going down soon... just in time for other kids expenses, like food/footwear/sports,  to go up of course! Our savings rate is not as high as yours is, you are doing great for your situation.

Pet insurance?

That's a thing?

Haha, yup! We have a lab retriever so he's a good size at 85lb. Labs are known for bounciness and eating all kinds of non edible stuff. The cost for a major surgery could be $5-$10k. We got him insured from puppy age so we locked in a good rate with no exclusions. We thought about self insuring but it would take years to build up a decent fund and we decided in the end to go the insurance route. We have a very low deductible with mid range coverage.

[Ebrat]

What do you use the truck for? Would it be cheaper in the long run to rent something (e.g., a pickup, van, or bigger truck from U-Haul) when you need a truck?  That would save you insurance and registration plus free up whatever the truck is worth.

[EscapeVelocity2020]

2- So far we are thrilled about our savings and tbe direction we are headed. We have really embraced the idea of not looking at money as a means to happiness, but rather to be happy regardless of our situation. I personally enjoy the safety having things paid off brings, but I also enjoy knowing I don't need stuff to make us happy. I do however value experiences for my son and daughter, thus why I find it fair to take them to see the ocean a few times a year in a cheap pop-up camper. I'm all for saving money and living simple but I think the way we vacation reflects that. We much prefer a simple old popup over a 5 star hotel, just saying. Way more funny stories to look back on!

Sounds like a guy that should retire and start a blog!

[NoStacheOhio]

Our numbers are pretty close to yours for a family of three. Obviously, day care is way less, and we spend slightly less on the house, but we're in a 2 bedroom condo.

You're doing fine. It's a marathon, and I know it can be frustrating seeing how little progress you're making day-to-day, but you're still making progress.