Author Topic: Need help with the budget  (Read 13450 times)

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Need help with the budget
« on: September 07, 2016, 07:17:47 AM »
hello i need some help with all this..

Debts:
Car: 15,000
Credit Card: 5500
Mortgage 228,000.

Savings: < 1000

Income Net pay: Wife 1600
Income Net pay: Hus. 4000

Monthly Payments:
Mortgage: 1660
Groceries: 1200
Gas/car: 115
health: 105
household item: 156
entertainment: 160
eating out: 55
medical: 500
clothing: 20
misc: 200
car: 299
water: 50
electric: 94
gas: 30
water/sewer: 70
internet: 50
insurance: 125
cell phone: 130
gifts: 125
charity: 40
life insurance: 50
baby: 300
« Last Edit: September 07, 2016, 07:21:10 AM by Grrrr »

Nick_Miller

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Need help with the budget
« Reply #1 on: September 07, 2016, 07:56:03 AM »
I'll address some of the biggest stuff...

hello i need some help with all this..

Debts:
Car: 15,000 - HOw much is it worth? Can you sell?
Credit Card: 5500 What is the interest rate?
Mortgage 228,000.

Savings: < 1000

Income Net pay: Wife 1600    Are both working full time?
Income Net pay: Hus. 4000


Monthly Payments:
Mortgage: 1660
Groceries: 1200 For just three people? This is VERY high. Could easily but cut back to $600
Gas/car: 115
health: 105
household item: 156   This is a very specific number. What's it based on?
entertainment: 160
eating out: 55
medical: 500 Is this insurance premiums?
clothing: 20
misc: 200 - What actually comes out of this? Try to plug any holes where you don't know where the money's going.
car: 299 - See above question about selling
water: 50
electric: 94
gas: 30
water/sewer: 70
internet: 50
insurance: 125
cell phone: 130
gifts: 125 - This seems to be a lot? Wedding presents? Saving for Christmas?
charity: 40
life insurance: 50
baby: 300 Is this for daycare? Something else?


« Last Edit: September 07, 2016, 07:58:06 AM by Nick_Miller »

MDM

  • Walrus Stache
  • *******
  • Posts: 9607
Re: Need help with the budget
« Reply #2 on: September 07, 2016, 09:40:30 AM »
Income Net pay: ...

See How To: Write a "Case Study" Topic.  It does make things easier for commenters (and you!) to understand the current situation if those details are included.

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #3 on: September 07, 2016, 10:44:57 AM »
we just bought the car.
2 full salaries
the credit card is zero percent interest.
groceries for 3 people; we shop at whole foods
household items, would be anything we need, such as repair materials, cleaning supplies
medical: would be doctor visits, medicine
misc: I don't even know what this is for, just random purchases
gifts; any type of present / bday party etc;
baby: clothing, toys, etc.
Quote
baby: 300 Is this for daycare? Something else?

Actually were going to have to start paying for daycare which is going to be around 1,000 a month. So we need to shave around 1000 off the above budget.
« Last Edit: September 07, 2016, 10:49:13 AM by Grrrr »

aFrugalFather

  • Stubble
  • **
  • Posts: 219
    • Life/Finance Blog
Re: Need help with the budget
« Reply #4 on: September 07, 2016, 10:49:15 AM »
What kind of help are you looking for exactly? 

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #5 on: September 07, 2016, 11:04:44 AM »
What would you do to reduce cost? Would you pick groceries first? sell car? a little of everything? Get more hours at work?

charis

  • Handlebar Stache
  • *****
  • Posts: 1738
Re: Need help with the budget
« Reply #6 on: September 07, 2016, 11:10:32 AM »
What would you do to reduce cost? Would you pick groceries first? sell car? a little of everything? Get more hours at work?

For starters, stop spending 1200 on groceries, 500 on medical costs, 300 on the baby, and 125 on presents.  And figure out what you are spending 200, then stop doing that.

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #7 on: September 07, 2016, 11:28:39 AM »
What would you do to reduce cost? Would you pick groceries first? sell car? a little of everything? Get more hours at work?

For starters, stop spending 1200 on groceries, 500 on medical costs, 300 on the baby, and 125 on presents.  And figure out what you are spending 200, then stop doing that.

If we cut each of those in half that would roughly pay for upcoming daycare, so that would work well.

My wife buys a lot of high end baby clothing and only shops at whole foods.

Kwill

  • Handlebar Stache
  • *****
  • Posts: 1439
Re: Need help with the budget
« Reply #8 on: September 07, 2016, 11:39:56 AM »
If we cut each of those in half that would roughly pay for upcoming daycare, so that would work well.
My wife buys a lot of high end baby clothing and only shops at whole foods.

They call it "Whole Paycheck" for a reason. But even at Whole Foods, you may be able to save by buying less ready-to-eat foods and more ingredients for cooking at home.

Among ready-to-eat foods, I've found ravioli or torteloni / tortellini plus sauce from a jar, frozen vegetables (except not the fancy mixes), frozen chicken nuggets, and frozen French fries to be relatively cheap to keep on hand for when there's no time to cook properly. Frozen chopped onions and frozen sliced peppers are handy for speeding up recipes but not necessarily more expensive than fresh onions.

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #9 on: September 07, 2016, 11:42:21 AM »
One of our problems is we buy grass fed ground beef which i think is almost $10/lb and we eat easily it 4-5lbs of beef a week, and 2-3gals of milk a week is around $12/gal. Plus we spend a lot of various organic treats... We are having a hard time doing this. We tried to budget before but it didnt work.
my wife refuses to buy anything else... we tried before its a challenge.
« Last Edit: September 07, 2016, 11:45:21 AM by Grrrr »

tweezers

  • Stubble
  • **
  • Posts: 189
Re: Need help with the budget
« Reply #10 on: September 07, 2016, 11:51:47 AM »
We also eat grass-fed beef, but we buy half a cow for $4.25/lb.  Organic milk at our Safeway is <$5/gallon (although we buy organic milk at Costco for less than that).  If eating organic food is important to your family, there are far more reasonable options than Whole Foods.  I don't make groceries our budgetary hill to die on, but we shop at stores that have reasonably-priced options.

Kwill

  • Handlebar Stache
  • *****
  • Posts: 1439
Re: Need help with the budget
« Reply #11 on: September 07, 2016, 11:53:32 AM »
One of our problems is we bought grass fed ground beef which i think is almost $10/lb and we easily it 4-5lbs of beef a week, and 2-3gals of milk a week is around $12/gal. Plus we spend a lot of various organic treats... We are having a hard time doing this. We tried to budget before but it didnt work.

Why do you need the fanciest kind of meat and milk and treats? If this is making your life hard, couldn't you just buy ordinary beef and ordinary treats and milk? The nutritional value would be very similar, and you would still feel full. Your recipes would work the same way.

Failing that, I would either find a different store (Trader Joe's? organic section of your local supermarket) or try to change your diet.

See if your library has "More-with-Less." It's a cookbook that uses meat for flavor but tends to use more vegetables and beans and lentils. It has enough little anecdotes to be a nice read, too. https://en.wikipedia.org/wiki/More-with-Less_Cookbook

Nick_Miller

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Need help with the budget
« Reply #12 on: September 07, 2016, 12:01:39 PM »
No offense, but I'm just shooting straight.

If your wife works full time and only nets $1600 per month, and on top of that, buys "high end" baby clothes (I can't think of a more wasteful way to spend money - they freakin' wear most outfits like 2-3 times, tops!) and refuses to buy anything under $10/lb meat, I think there are some significant issues there.


tonysemail

  • Pencil Stache
  • ****
  • Posts: 725
  • Location: San Jose, CA
Re: Need help with the budget
« Reply #13 on: September 07, 2016, 12:08:36 PM »
hey, welcome to the forums :)

it's very easy to fall into the parenting trap which is buying the best stuff for baby.
If you've come to this site, then you should value your freedom more.
Practice mindful spending and have many conversations about freedom vs stuff.

maybe you guys can take turns doing grocery shopping.
are you competent enough to take care of one week of shopping and cooking at a time?

therethere

  • Pencil Stache
  • ****
  • Posts: 732
Re: Need help with the budget
« Reply #14 on: September 07, 2016, 12:10:36 PM »
Sounds like you need to either take over the grocery shopping yourself or go together and have a discussion while you shop. I'm not in the organic, grass fed grocery camp because I can't stomach the prices. But I only judge those people who buy that way and can't afford it... Which unfortunately sounds like your family. If you're wife "won't buy anything else" she's probably trying to pretend she is some fancy pants family that you are not.

I'm guessing by saying you tried a grocery budget and it didn't work you actually means that you set an unrealistic grocery budget number then shopped like you normally would and wallowed in defeat. Look at this in simple terms: 3/4 of her paycheck is being spent on food. The remaining 1/4 is being spent on fancy baby crap. So really, why is she working? If you could reign in these two areas your wife could quit working and you would have no daycare expense, lots of quality baby time, and save on some taxes!

Tiger Stache

  • Stubble
  • **
  • Posts: 114
  • Location: NOLA
Re: Need help with the budget
« Reply #15 on: September 07, 2016, 12:12:00 PM »
stop going to whole foods. stop buying grass fed beef. stop spending $300 a month on clothes and toys for one kid. if you're actually spending $300 a month, then you should be able to go a couple of months at least without spending ANYTHING on clothes and toys.

Simpli-Fi

  • 5 O'Clock Shadow
  • *
  • Posts: 98
Re: Need help with the budget
« Reply #16 on: September 07, 2016, 12:18:53 PM »
Wife can stay at home, save that $1000 and shop for toys at thift stores...and you can build forts and things with boxes from other things and your kid will have just as much fun, I promise.

I can't count how many videos I have of my daughter playing with boxes.

I just totaled your expenses, and you are $66 shy of your total income...red flag.

Cell phone can be lower, find cheaper service.  How many services are in entertainment?  Spotify, Netflix, etc?

Need to get the car paid off or sold, and your insurance can be cheaper too.

« Last Edit: September 07, 2016, 12:26:18 PM by Oil Patch Adams »

Kapiira

  • Stubble
  • **
  • Posts: 152
  • Location: Albuquerque, NM
Re: Need help with the budget
« Reply #17 on: September 07, 2016, 12:21:53 PM »
Look into a new cell phone plan when your contract is up.  I've been very happy with GoogleFi, though I don't use much data.  I pay around $25 a month.  There are a number of cheaper plans that people on the forum use and are happy with. 

You mentioned having trouble with budgets in the past.  Was it budgeting as a whole or just groceries?  Is your wife on board with trying to cut back spending?  It seems like you guys can continue to shop ethically if you cut back on the extras, but it's going to be hard to make big changes if your wife isn't interested.  If that's the case you might want to check out this posting:  http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/


Lunasol

  • Stubble
  • **
  • Posts: 221
  • Location: MX
Re: Need help with the budget
« Reply #18 on: September 07, 2016, 12:22:26 PM »
I agree with everything else and just my pov: your mortgage is 30% of your total income, add $1000 for daycare and it's gonna be 47.5%, ouch.

Also realized that your internet fee is $50, but cellphone is $130?  Pretty sure you can find a better cellphone deal.

Car payment is also a lot $299+$115 = $414 (not sure if you're already counting car insurance or not), you don't *need* a $15000 car, you could easily find a $6000-$8000 one and the rest would cover at least 7 months of daycare.

Kapiira

  • Stubble
  • **
  • Posts: 152
  • Location: Albuquerque, NM
Re: Need help with the budget
« Reply #19 on: September 07, 2016, 12:31:58 PM »
Here is another blog you guys may want to look at for a family in the same life stage as you:  http://www.frugalwoods.com/

meandmyfamily

  • Stubble
  • **
  • Posts: 227
Re: Need help with the budget
« Reply #20 on: September 07, 2016, 01:11:58 PM »
Definitely start with the groceries.  We are a family of 6 and only spend $750-900 a month on groceries.  We avoid Whole Foods but shop TJs, Sprouts, Costco, etc.

I also suggest http://www.frugalwoods.com/

Your house payment is very high.  Get rid of misc. category.

Stop the $300 a month for baby!!!  Ask for clothes and toy for birthdays and Christmas.  Otherwise nothing is needed for the kids.  Hand me downs are awesome!

Why is medical so high?  Do you have an HSA?
« Last Edit: September 07, 2016, 01:17:48 PM by meandmyfamily »

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #21 on: September 07, 2016, 01:17:45 PM »
Thanx im learning a lot. Recommended cell phone plans? I live in the philadelphia area
Medical is high from prescription meds and doctors visits

id be willing to switch cell phone plans as long as i get service anywhere and have a data plan. (we use AT&T right now) and i still use my iPhone.
« Last Edit: September 07, 2016, 01:58:38 PM by Grrrr »

charis

  • Handlebar Stache
  • *****
  • Posts: 1738
Re: Need help with the budget
« Reply #22 on: September 07, 2016, 01:51:00 PM »
Thanx im learning a lot. Recommended cell phone plans? I live in the philadelphia area
Medical is high from prescription meds and doctors visits

id be willing to switch cell phone plans as long as i get service anywhere and have a data plan. (we use AT&T right now)

You spend $6K a year on visit co-pays and prescription medication?  Does one of you have a serious illness?

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #23 on: September 07, 2016, 01:58:23 PM »
Yes i have a serious illness, so between crappy insurance and the meds i have to take it gets costly.
physical therapy is included in that to
« Last Edit: September 07, 2016, 02:03:17 PM by Grrrr »

Kapiira

  • Stubble
  • **
  • Posts: 152
  • Location: Albuquerque, NM
Re: Need help with the budget
« Reply #24 on: September 07, 2016, 02:09:42 PM »
I don't know about Philadelphia in particular, but some plans to look in to include Google Fi, Republic Wireless, prepaid from t-mobile, and StraightTalk.  You can also look through the information at this link for more options, though some of the information on service providers is outdated: http://forum.mrmoneymustache.com/share-your-badassity/communications-tech-son-of-the-superguide!/

notactiveanymore

  • Stubble
  • **
  • Posts: 212
Re: Need help with the budget
« Reply #25 on: September 07, 2016, 02:36:18 PM »
The biggest thing, before everything else, is that you have to get on the same page as your spouse and you both need to be unified in your goals.

How involved is your wife in the financial planning? Does she know that you guys have less than $1000 in the bank and $5500 in credit card debt while you're spending nearly 100% of your takehome? Is she aware that with current spending you cannot afford childcare?

I would start with reverse planning. It's easier for someone to accept the reality of current financial choices you should be making if you know why you're making them. So start talking about where you want to be in 1 year, 5 years, 10 years, 20 years. Then ask, how can we get there?

From there, you've got to save an emergency fund and get rid of your credit card debt immediately. You guys are so close to catastrophe right now if you get hurt and can't work or that car gets totalled and you're underwater. You're spending right up to the edge, you bought a very expensive car on credit, your mortgage is on the high side for your income, and you have no liquid savings. Maybe the things you haven't shared (HSA?, 401k?, IRA?) would make this scenario sound less shaky...?

Maybe you and your wife can come to an agreement about drastically cutting the budget until you pay off the CC debt AND save 3-6 months of expenses in your emergency fund. Put a moratorium on any unnecessary spending until those goals are met.

As for what to cut...

Groceries = 1200 absurd. And is one of the three people a baby? You should be able to cut that in half. And still eat food that is good for you. Maybe don't eat so much grass-fed beef. Do some vegetarian meals and make more from scratch. We spend $340/month and our store brand flour works just as well as whole foods. Start scrutinizing what you're actually buying. How much of it is not just "We have to eat organic" but is really more about fancy snacks and drinks and convenience packaging with pre-cut veg, etc. [savings=600]

Entertainment + eating out = 215 could be cut at least in half and you guys could work harder at free entertainment [savings=105]

Household + misc = 350, is this because you bought a fixer upper or because you like to pick up pillows and candles from target whenever you feel like it? Cut it down or only budget for what you actually need. [savings=275]

Baby = 300 absurd. Clothes can be second hand or sales only and you don't really need to get new toys that often. does this include diapers? [savings 250, unless diapers are included in which case 150]

Gifts = 125 you can at least cut this during your spending moratorium until you get some savings and get rid of some debt. [savings=75]

Total Savings: 1205-1305

Grrrr

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Need help with the budget
« Reply #26 on: September 07, 2016, 04:55:37 PM »
We have no form of retirement savings.2 adults and a toddler
A total savings of 1200 would be perfect, im looking into the cricketwireless
« Last Edit: September 07, 2016, 05:02:16 PM by Grrrr »

wintersun

  • Bristles
  • ***
  • Posts: 327
Re: Need help with the budget
« Reply #27 on: September 08, 2016, 10:03:31 AM »
You are smart to be asking here for help.  I have gotten loads of good tips here and life changing information.

First of all get YNAB, it is a life saver and can turn your spending around.

With two people spending money in your household you can start with reducing the non food expenses and talking with your wife in a calm way about money.  Looking at the future is a great way to get inspired to save money. Do not expect her to make a 180 immediately. 

With so little room between your income and expenses and $20,000 in debt plus a mortgage you have some major decisions to make.  Good Luck. 


ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: Need help with the budget
« Reply #28 on: September 08, 2016, 10:19:35 AM »
You eat 4-5 POUNDS of beef a week? We are also a family of three (well, two more on the way) and we all like beef, and eating that much beef doesn't even sound appealing. Have you tried...chicken?

Those organic 'treats' are probably bad for you, and you can't afford them. Stop buying them.

Does your wife realize what deep shit your family is in?

Cwadda

  • Handlebar Stache
  • *****
  • Posts: 2182
  • Age: 25
Re: Need help with the budget
« Reply #29 on: September 08, 2016, 10:55:48 AM »
Thanx im learning a lot. Recommended cell phone plans? I live in the philadelphia area
Medical is high from prescription meds and doctors visits

id be willing to switch cell phone plans as long as i get service anywhere and have a data plan. (we use AT&T right now) and i still use my iPhone.

Are you still under contract with AT&T? I switched from AT&T to Airvoice and my phone bill went from $63/month to $30/month. And I still use my iPhone.

A lot of other posters have pointed out where you need to improve on expenses so I won't repeat. But you're in a hair on fire situation and it needs to change, especially if you have a severe illness. You have no savings and no retirement.

hoping2retire35

  • Handlebar Stache
  • *****
  • Posts: 1401
  • Location: UPCOUNTRY CAROLINA
  • just want to see where this appears
Re: Need help with the budget
« Reply #30 on: September 08, 2016, 12:51:48 PM »
Agree with everyone else. No more beef, beer, or other BS until you have a substantial emergency fund. At first glance doesn't look crazy until you consider you are living paycheck to paycheck with (virtually) no savings and any problem becomes a serious crisis.

Something else you may need to gently speak with your wife about is whether it is worth while for her to work. If her pay is only 1600 and she does not have employer provided insurance for your family, she will probably be making less than minimum wage after the childcare comes out of your budget.

I am a little unconventional around here about this but I would apply for several credits, like tonight. Credit card debt is awful but if it keeps you off the street and the lights on it is worth it. Hopefully you will never need them and they will jsut be left in a drawer but until that emergencyfund is dripping with cash you need backup.
« Last Edit: September 08, 2016, 02:35:58 PM by hoping2retire35 »

Kwill

  • Handlebar Stache
  • *****
  • Posts: 1439
Re: Need help with the budget
« Reply #31 on: September 08, 2016, 01:12:05 PM »
I am a little unconventional around here about this but I would apply for several credits, like tonight. Credit card debt is awful but if it keeps you off the street and the lights on it is worth it. Hopefully you will never need them and they will jsut be left in a drawer but until that emergency is dripping with cash you need backup.

Maybe not a bad idea, as long as you won't be tempted to spend more knowing the cards are there.

Also, if you haven't already done it, I would apply for a checking line of credit / overdraft protection. It's like a loan that only goes into effect if you charge too much on your debit card or write a check that's too large. Instead of the check bouncing, you end up with a loan of the difference, so it could be helpful for protecting you from fees or problems on your credit history. Another option might be to arrange with the bank to automatically transfer money from savings to checking if needed to cover a charge or check. But again, this sort of thing should only be an emergency backup.

therethere

  • Pencil Stache
  • ****
  • Posts: 732
Re: Need help with the budget
« Reply #32 on: September 08, 2016, 01:48:25 PM »
No. No. No. I would not apply for credit cards that sounds crazy tempting. You already have credit card debt that is unpaid! And by the budget numbers you have given you are only paying the minimum. This makes it all too easy to charge "unexpected" or "emergency" (read: poorly planned) expenses and rack up a higher balance. With no cushion in their budget they would never be able to pay it off. Unfortunately, an oh-crap moment (such as how are we going to pay xxx bill) might be what they need to correct course and right the ship.

galliver

  • Handlebar Stache
  • *****
  • Posts: 1891
Re: Need help with the budget
« Reply #33 on: September 08, 2016, 01:59:57 PM »
Changing your phone plan is good, but the most you can possibly get out of changing that would be $130 (by canceling entirely, which you aren't going to do, so realistically something like $70-100). You need 10x that for daycare. You might be able to scrape that up by *completely* cutting out: household, entertainment, eating out, misc, gifts, charity, and baby categories. Given that there are legitimate "need" expenses in some of those, you'd still be very  much on the edge. Basically my point being: there is virtually no way to reach your goal without tackling the $1500 in groceries and "baby". You need to get your wife on board.

Other questions: why is water listed twice? Is one of those outdoor? How much lawn are you watering because that seems like a lot. Do full loads of laundry, take short showers, and only water outdoors half as often or less.

How is "health" different than "medical"?

I, for one, would love to see a grocery receipt. But based on what you've said about your eating habits, I think you could save a good chunk by varying your meats even if it's all organic, etc. The "treats" are probably not doing you any favors either; chips, bakery items, cereal, fruit snacks, etc are no more nutritious for being organic or from Whole Foods, they still have tons of salt and sugar. The one thing all nutritionists and programs agree on is that we need more fresh veg; most also agree fresh fruit is great, too. Grains, legumes, pastas,  and meats are more controversial but in general: way better than anything coming out of a box. Shop what's on sale and in season; squashes and apples are about to get really cheap and fresh berries even more expensive (psst you can just google "what is in season"). Consider using the Dirty Dozen and Clean Fifteen to guide your organic choices (*cough* even though organic doesn't mean pesticide-free and sometimes the organic pesticides are more toxic...and I'll stop now). Definitely visit some other stores together, particularly Trader Joes and ALDI which you should have in the area. Unfortunately I'm not familiar with other options, sometimes a local chain will be particularly good on organics/naturals as an alternative to WF.

I second questioning the need for your wife to work; I know some women want to work even for a net-zero paycheck just to keep up/move forward in their career. But at $1660 it rather sounds like she's working close to minimum wage. Seems like she can probably make more than $660/mo if she watches a few  kids for someone else while staying home with yours... or find a PT gig on hours opposite yours (nights/weekends)?

Summary: it sounds like your wife (and maybe you) wants to live a lifestyle of a family with an income of $200k+ per year on an income of <$80k. It is your responsibility as adults to scale back your lifestyle until you can not only make it month-to-month but provide your child with a secure environment, which means *savings*.

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: Need help with the budget
« Reply #34 on: September 08, 2016, 02:07:09 PM »
sometimes a local chain will be particularly good on organics/naturals as an alternative to WF.

Wegman's is a local option (depending where near Philadelphia you are) that has lots of store-brand "Food You Feel Good About"-branded stuff, which means it's "natural" without necessarily being "organic". Their basic groceries are also perfectly reasonable prices (at least in Allentown, I don't know what they charge elsewhere).

For the record I am an environmental consultant to the food industry and I see no reason to buy organic.

charis

  • Handlebar Stache
  • *****
  • Posts: 1738
Re: Need help with the budget
« Reply #35 on: September 08, 2016, 02:28:00 PM »
For the record I am an environmental consultant to the food industry and I see no reason to buy organic.

Ding ding ding.  Organic groceries, and all the other organic product lines, are a trend.  Whole foods is marketing. 

With This Herring

  • Handlebar Stache
  • *****
  • Posts: 1208
  • Location: New York STATE, not city
  • TANSTAAFL!
Re: Need help with the budget
« Reply #36 on: September 08, 2016, 04:46:20 PM »
We have no form of retirement savings.2 adults and a toddler
A total savings of 1200 would be perfect, im looking into the cricketwireless

A total savings of $1200 on the current budget is not enough if you are then going to be spending $1000 on daycare.  You guys are REALLY close to disaster.  Your spending right now is so close to your take-home that you can't pay down your credit card debt and build up emergency savings.

What are the chances of your illness getting worse and you being unable to work or needing to take weeks off of work?

I am going to disagree with everyone who is saying the wife should quit work.  I am all in favor of one parent staying home with the kids in general, but here the husband is already ill.  She needs to continue to bring in income and try to increase her wages in case something happens to him.  If not that, then would she be able to provide daycare to other children out of your home if she were to quit work?  Having an ill person be the sole source of income for a family with no savings is a very precarious position.

How much equity do you have in the current house?  Would you be able to sell the house and rent somewhere that is cheaper than your mortgage?  Or buy a cheaper house?  This would allow you guys some financial wiggle room.  The time to make big house moves is before your child gets into school and develops a friend group.

And, agreeing with everyone -
You must get rid of that car.  If you really need a car, get something cheaper.  I bought my car for under $6K a few months ago, and it is in perfectly good order.
Please start tracking your spending.  You will find so many surprises.  Mint, YNAB, Quicken, Gnucash - all can help.  YNAB would probably be best for you guys.

Income Net pay: ...

See How To: Write a "Case Study" Topic.  It does make things easier for commenters (and you!) to understand the current situation if those details are included.

Seconding this.  When you follow the instructions in that "How to Write a Case Study" post, either edit your first post or create a link at the top of your first post to the new, proper case study post.


notactiveanymore

  • Stubble
  • **
  • Posts: 212
Re: Need help with the budget
« Reply #37 on: September 08, 2016, 07:20:47 PM »
A woman's salary does not equal her income minus childcare expenses. C'MON people.

They both have a child and they both work full time, so they require childcare. It's not the woman's job to cover that expense plus some magic amount or else stop working. If she's ever going to make more money, these are valuable years to develop her career and increase her salary and experience. While it is a perfectly good decision to stay home and maybe watch another young child, doing so could also distinctly affect her career options and trajectory after she rejoins the workforce.

How about we talk about ways she could maximize her earning potential through finding a better job or applying for internal positions or pursuing management or switching to a career with more options for moving up?

I'm going to add to my earlier comment and suggest that you and your wife attend Dave Ramsey's Financial Peace University. The investment stuff is admittedly not awesome, but 8/9ths of the class is about communicating about money, getting on a smart budget, and getting rid of debt. It would be a really good fit for your situation. You guys have the income right now to eliminate your CC debt and start building an emergency fund within 6 months and that's just by cutting the easy stuff. If you get rid of the car and downsize your house and your wife leans in to grow a real career, then you guys could be in great shape.

Shake things up. Get on the same page. You can do this.

vivophoenix

  • Bristles
  • ***
  • Posts: 430
Re: Need help with the budget
« Reply #38 on: September 08, 2016, 09:20:58 PM »
no one is talking about her staying home cause she is a woman. its cause she makes less money, >50%  less money, and the amount she brings in,  is also almost exactly the amount they would need to spend on day care. her staying home would probably reduce wear and tear on a vehicle, as well as gas. it  would also leave more time to plan meals, and reduce snacks/pre prepared meals. also how much would this affect his taxes? i am betting they would be lowered. she could also look at a weekend job only, or part time.

its math, not sexism.

she could look at earning more, but can she earn $1000 a month more ? doubt it. it would be easier if she stayed at home, and they reduced their groceries by half and eliminated cable. then they could have day care, pay off their debt, and start saving for emergencies.

i am not advocating for this option. i am just am annoyed that you think this is about her having ovaries.
« Last Edit: September 08, 2016, 09:39:15 PM by vivophoenix »

Bee21

  • Bristles
  • ***
  • Posts: 483
Re: Need help with the budget
« Reply #39 on: September 08, 2016, 09:47:20 PM »
Have a chat with your wife about your values and plans for the future. Ask her to keep track of the budget so that she sees where the money is going. You can't have it all unfortunately, either make more or spend less, it is ultimately your decision.

galliver

  • Handlebar Stache
  • *****
  • Posts: 1891
Re: Need help with the budget
« Reply #40 on: September 09, 2016, 01:03:07 AM »


A woman's salary does not equal her income minus childcare expenses. C'MON people.

They both have a child and they both work full time, so they require childcare. It's not the woman's job to cover that expense plus some magic amount or else stop working. If she's ever going to make more money, these are valuable years to develop her career and increase her salary and experience.

If one (or both) spouse's paycheck barely (or not at all) cover the cost of childcare, it's *worth questioning* whether there is a long term benefit to that spouse continuing to work, or if the short term benefits of having a SAHP outweigh that (in case of similar incomes, the choice of which spouse is no longer mathematical but driven by other factors). I once heard from a woman engineer recounting her youth...three kids and an entry level paycheck that barely covered the nanny. But, she had achieved the education to get to that point, loved what she did, and had ample opportunity for advancement. I think she was VP of something by the time she spoke at the event in question, and had picked up a master's along the way. But if someone (F or M) is working a job that doesn't require a degree or recent experience (eg retail, food), doesn't have much room to move up (or not soon), and isn't making much either, maybe the concrete short term benefits of staying home outweigh the possibility of *maybe* getting promoted to management, someday. And perhaps ss a SAHP they might find time to self study, or develop a hobby into a marketable skill (my mom read a lot, sewed, and took some free or cheap classes/workshops at times).

Obviously, we don't know the situation; all we had to go off of was the paycheck, $1660/mo or about $10/hr. To me, that didn't sound like a career, but who knows! All I'm saying is, it's worth asking the question.

pbkmaine

  • Walrus Stache
  • *******
  • Posts: 8358
  • Age: 63
  • Location: The Villages, Florida
Re: Need help with the budget
« Reply #41 on: September 09, 2016, 05:08:04 AM »
I think the most important change you can make, given that you have an illness, is to do whatever you can to make sure your family can live on one income. If that involves additional training for your wife, so be it. You need to have a very serious conversation with your wife about what could happen to her and the baby if you can't work.

Basenji

  • Handlebar Stache
  • *****
  • Posts: 1036
  • Location: D.C.-ish

MoonLiteNite

  • Bristles
  • ***
  • Posts: 413
Re: Need help with the budget
« Reply #43 on: September 09, 2016, 05:58:00 AM »
Car - kinda pricey, possibly worth selling if you can. And get the hooptie!
Car ins - looks like you have full coverage? Just get liablity if you can, although if you have a loan from a bank, you most likely can't
Groceries - how are spending that much? Think that can be cut back almost no  matter what. Less sodas, no candy, no chips.
Medical - if you have medical needs, maybe you could find cheaper drugs on the market? Or maybe from a near by country. Alot of people just blindly pay for the overpriced pills, when you can just drive across a boarder, or buy them on the black market for much cheaper.
Baby - Babies don't cost that much, that cost is going to an adult who THINKS the baby needs his toys and fancy diapers. Go cloth, and buy used clothes and toys for em
Cell phone - cut the data and "unlimited" You can get a decent 500min/250txt and 250mb data plan for under 20$/mo with lots of little 3rd party companies. Cricket, virgan mobile, Republic wireless, etc...


handsnhearts

  • Bristles
  • ***
  • Posts: 273
Re: Need help with the budget
« Reply #44 on: September 09, 2016, 07:19:26 AM »

 also how much would this affect his taxes?

its math, not sexism.

she could look at earning more, but can she earn $1000 a month more ? doubt it.

i am not advocating for this option. i am just am annoyed that you think this is about her having ovaries.


I have selectively pulled out some comments, but this is clearly sexist. I hear that this maybe was not the intent, but that post drips with it in underlying assumptions.

"his taxes"?  Come on!  It is their taxes, their income.



We have no idea if she could earn $1000 easily or not as we have never discussed what field she is in, or whether she is working part or full time.

It may or may not make sense for one of them to stay home, but usually it is a luxury to have one parent not work. More income is usually generated by both people working. What their goals are for work vs childcare, seems like they both want to be working, if we look at the original post.


Sent from my iPhone using Tapatalk

tonysemail

  • Pencil Stache
  • ****
  • Posts: 725
  • Location: San Jose, CA
Re: Need help with the budget
« Reply #45 on: September 09, 2016, 07:21:33 AM »
Medical - if you have medical needs, maybe you could find cheaper drugs on the market? Or maybe from a near by country. Alot of people just blindly pay for the overpriced pills, when you can just drive across a boarder, or buy them on the black market for much cheaper.

That seems just crazy to me. 

notactiveanymore

  • Stubble
  • **
  • Posts: 212
Re: Need help with the budget
« Reply #46 on: September 09, 2016, 07:43:53 AM »
no one is talking about her staying home cause she is a woman. its cause she makes less money, >50%  less money, and the amount she brings in,  is also almost exactly the amount they would need to spend on day care. her staying home would probably reduce wear and tear on a vehicle, as well as gas. it  would also leave more time to plan meals, and reduce snacks/pre prepared meals. also how much would this affect his taxes? i am betting they would be lowered. she could also look at a weekend job only, or part time.

its math, not sexism.

she could look at earning more, but can she earn $1000 a month more ? doubt it. it would be easier if she stayed at home, and they reduced their groceries by half and eliminated cable. then they could have day care, pay off their debt, and start saving for emergencies.

i am not advocating for this option. i am just am annoyed that you think this is about her having ovaries.

This:

Quote
I know some women want to work even for a net-zero paycheck just to keep up/move forward in their career.

Women, not people. Also "just to."

ETA: Also, she doesn't make almost exactly the amount they would need to bring in to cover day care, she makes 160% of that amount. That is not insignificant.
« Last Edit: September 09, 2016, 07:46:57 AM by theotherelise »

lucylu

  • 5 O'Clock Shadow
  • *
  • Posts: 6
Re: Need help with the budget
« Reply #47 on: September 09, 2016, 07:47:05 AM »
You are in a HAIR ON FIRE emergency. Simply put, you (as a family) are living FAR above your means. You came asking to find $1000 for monthly daycare, but - you are not paying down existing credit DEBT and you are not saving anything toward emergency savings (let alone retirement). $1000 would not even last the amount of time to get another job, and get your first paycheck.  You are spending more than you make.

By choosing to do this, the current you are sacrificing financial stability, clean credit history, home ownership, and retirement from the future you. And for what? "A lot of high end baby clothes, organic treats, 4-5lbs of grass-fed beef a week(!)"?

As a family, you need to draw up a financial plan. Where do you want to be in 1 yr? 5 yrs? 25 yrs? More kids, pay for college, SAHM? Career plans, retire at ...? Medical insurance is very important in your situation; if you were not able to work does your wife's career path have medical ins to cover you?

The good news is that (for now) you bring in enough income to completely turn this situation around by acknowledging YOU CANNOT AFFORD THIS LIFESTYLE.

Groceries: 1200 - This is INSANE for 2 people. Cut all prepackaged, convenience food. Buy truly "whole foods" (raw fruits, veggies) and prepare them yourself - no bags of "baby carrots" - just buy a bunch of organic carrots and peel them. Make meals in bulk, use your freezer (are you throwing food away?)  and only buy what is in season (http://www.sustainabletable.org/seasonalfoodguide/). Forget Whole Foods - you can't afford it. Shop Aldi, Trader Joe's. Beef is not the only protein around; chicken, pork, fish, legumes, eggs provide variety - which is healthier than eating the same diet every day anyway (no matter what grass those cows are eating). "Organic treats" - this is all marketing! Sugar and salt is sugar and salt no matter what the label says. It's really just a fancy version of McD junk.  Budget $550

health: 105 - What is this? If it's vitamins, shampoo,etc - buy in bulk, buy online - holy cow what are you spending that much $ a month on, separate from grocery AND Medical? Budget $25

household item: 156 - Cleaning supplies & toilet paper should never cost that much. Use vinegar and plain bleach (not together). Old tshirts are rags. No other items for your household. Budget $40

entertainment: 160 + eating out: 55 - Find outdoor concerts, free activities at the library, exercise together by walking/jogging with the baby. Have friends over. One date night a month. No more eating out because you didn't have something ready at home or from the freezer. *See Groceries*. Budget $75

misc: 200 - Use a budget app to track everything for both of you. YNAB Budget $0

car: 299 - How much is it worth? Can you sell it?

cell phone: 130 - Others have mentioned less expensive plans Budget $50

gifts: 125 - You can't afford pricey gifts for yourselves or others right now, and the good news is your baby doesn't care. Ask yourself why you feel compelled to do it anyway. Budget $25

baby: 300 - Babies don't cost this much. Until you have financial stability, diapers ONLY. Ask for baby clothes & toys for Christmas, birthdays. Shop 2nd hand stores like Once Upon a Child (some outfits will be new with tags!) Sell your fancy baby clothes and gear on FB sites to recoup some of the cost when outgrown. Budget $125

Potential savings: ~$1500
$1000 goes to daycare. $500 goes immediately to emergency fund until you have 6 months living expenses. Then start funding retirement, credit debt, etc based on your financial plan above.

This probably all sounds drastic, but it's really a shift in mindset. Instead of thinking "this $ is what I need/want", it's thinking "this is the BUDGET I need to fit our life plan; what can I fit in that bucket".  Choose your life plan, choose freedom & stability.


« Last Edit: September 09, 2016, 07:53:18 AM by lucylu »

charis

  • Handlebar Stache
  • *****
  • Posts: 1738
Re: Need help with the budget
« Reply #48 on: September 09, 2016, 07:55:30 AM »
no one is talking about her staying home cause she is a woman. its cause she makes less money, >50%  less money, and the amount she brings in,  is also almost exactly the amount they would need to spend on day care. her staying home would probably reduce wear and tear on a vehicle, as well as gas. it  would also leave more time to plan meals, and reduce snacks/pre prepared meals. also how much would this affect his taxes? i am betting they would be lowered. she could also look at a weekend job only, or part time.

its math, not sexism.

she could look at earning more, but can she earn $1000 a month more ? doubt it. it would be easier if she stayed at home, and they reduced their groceries by half and eliminated cable. then they could have day care, pay off their debt, and start saving for emergencies.

i am not advocating for this option. i am just am annoyed that you think this is about her having ovaries.

This:

Quote
I know some women want to work even for a net-zero paycheck just to keep up/move forward in their career.

Women, not people. Also "just to."
There is rarely a time when in the middle of trying to establish one's career that it would make sense to stay home.  No one has even asked about her career or whether she can make more before suggesting that she basically quit and stay home.  That's problematic.  Her take home pay is well above the cost of daycare and it will be even more if they contribute to a tax-free dependent care FSA.  Also, her job is not even remotely the problem, so this is one big fat red herring anyway.


J_Stache

  • Stubble
  • **
  • Posts: 106
Re: Need help with the budget
« Reply #49 on: September 09, 2016, 08:24:18 AM »
One of our problems is we buy grass fed ground beef which i think is almost $10/lb and we eat easily it 4-5lbs of beef a week, and 2-3gals of milk a week is around $12/gal. Plus we spend a lot of various organic treats... We are having a hard time doing this. We tried to budget before but it didnt work.
my wife refuses to buy anything else... we tried before its a challenge.

In the Philly area there are plenty of less expensive, but equally organic/healthy options.  Trader Joes, Wegmans, Costco (especially if you keep up the grass fed beef habit). 

I would be interested in knowing more about the grocery bill.  4-5 LBS of beef per week for a family of 3 (one baby) is not responsible from an environmental or health perspective (two main reasons people cite for organic).  I'm not judging you, just seems a bit at odds.  My fiance has always been an organics food person, but this year I finally convinced her that consuming lots of meat (even when organic) is much less healthy than consuming some meat and LOTS OF VEGETABLES.  Still haven't fully convinced her that the organic label doesn't really mean much anymore [1].  What did help her was reading In Defense of Food [2], but you really only have to read the cover "Eat food. Not too much. Mostly plants."


[1] https://gimletmedia.com/episode/5-organic-food/
[2] https://www.amazon.com/Defense-Food-Eaters-Manifesto/dp/0143114964/