Author Topic: New Here, still learning the ropes  (Read 12347 times)

Mrs.FamilyFinances

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New Here, still learning the ropes
« on: October 09, 2013, 04:33:41 PM »
Hi all!

I've been a sidelines reader of MMM for a month or two now. I have been attempting to absorb all the information I can on idea of being FI.  The quick and dirty background is this; growing up we had plenty of money, then when my folks divorced, we suddenly didn't have any. My mom had good intentions, but she made a point to keep us in the dark about her/our finances. I knew only that we had our basics covered, and that asking/questioning her about money was not okay. Unfortunately as I became an adult and got married at 22, I chose to continue that mindset. I had no idea what my husband made during our marriage.  Had it not been for the divorce paperwork, I doubt I would have ever known. Now, I am 27, and remarried with 2 children. I feel like I am learning about money for the first time, and feel very overwhelmed by the amount of information available, and the choices that must be made with said information.

This is my first month of looking at our budget, income, debts, etc. My head is spinning! I can't tell if we are doing anything right!

Income: Husband earns 70k a year as an auto-tech for a large dealership. This number seems to rise 5k per year. Children receive $650 in child support. I'm a housewife.

Debts: Our home has a 15 year mortgage, with 13.5 years remaining. Owe 155k @ 3.25 % Payment is $1500 a month.
No credit card debt.
I have a student loan for 19k (3.3%) from a few years ago when I thought I wanted to be a nurse. Payment is $150 a month.
We have no auto loans.

Savings: 15k in credit union savings account. Husband contributes 10% to his 401(k) at work, and mentioned yesterday he wants to start contributing to our Roth that was set up for him by grandparents (current value is $6400).

I see all this information, and yet have no idea what to do with it. I'm lost to say the least.

 I know the student loan debt is bad, and would like to have it paid off in 2 years max. The likelihood of me ever working outside the home is slim to none, and I feel foolish having a debt that was largely wasted money.

What should our first steps be? Our goals are to be comfortable, and hubby retire early. Friends tell us that we are simple folks, and I suppose that is true. No plans for a larger home, newer cars or lavish trips.

Thanks in advance for your thoughts!



rubybeth

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Re: New Here, still learning the ropes
« Reply #1 on: October 09, 2013, 04:39:21 PM »
Welcome! I am also relatively new here but will get the ball rolling. :)

I think the most important thing to know is: how much money are you spending every month, and on what? Be as specific as you can. What is the exact take-home pay each month, from all sources? This will help you to see if there's any room to trim the budget and save more. And, there may be ways for you to earn money from home and still take care of your children. Around here they sometimes called "side hustles"--things that you can do without any startup funds. I encourage you to start thinking about this in order to pay off your debt.

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #2 on: October 09, 2013, 05:07:46 PM »
@ Rubybeth- thank you for the welcome message!

Here is the additional information that you suggested including.

Fixed Expenses
1) Mortgage 1500
2) Verizon 175
3) Stu. Loan 150
4)Comcast 110
5) YMCA 75
6) Nat. Gas 63
7) Electric 42
8) Water 25
9) Trash 25
TOTAL = $2,165

Variable
1)Gas 350
2) Grocery 350
3)Insurance 100
4) Lowe 100
5) Entertainment 75
6)Misc. 60
7) Kids 45
8) Clothing 45
9) Sundries 25
10)Co pays 30
Total = $1,180

Grand total is $3,345. This is our very first budget. The numbers above in the variable category are based on a review of the last 3 months. I'm learning from these forums that our Verizon/Comcast bills are much too high. I feel paralyzed by the numbers.

Income fluctuates wildly due to the nature of his job, but our average monthly take home pay (after 401(k), taxes and health ins) is $4,350. Now, that I am looking at this, it seems low considering he makes 70k a year. I'm not sure why though...

Kira

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Re: New Here, still learning the ropes
« Reply #3 on: October 09, 2013, 05:18:42 PM »
I know the student loan debt is bad, and would like to have it paid off in 2 years max. The likelihood of me ever working outside the home is slim to none, and I feel foolish having a debt that was largely wasted money.

Not to be pessimistic but I don't think a SAHM should plan on never working again if she is not already personally financially independent. While you may not want to work again, it could become necessary, and I strongly second the suggestion of developing some side hustles that give you skills you could use if you had to get a job again in the future. There are a lot of stories out there about women who stayed home and kept house and didn't know what their husbands made, and ended up without either a husband or a livelihood with which to support herself or her children, and you don't want to be one of those stories. It also strikes me as somewhat unfair to place the whole burden of retiring early on your husband's earning power when you will have many years where the kids are in school all day and you could be contributing to that goal of early retirement.

What should our first steps be? Our goals are to be comfortable, and hubby retire early. Friends tell us that we are simple folks, and I suppose that is true. No plans for a larger home, newer cars or lavish trips.

From the budget you posted, your husband could quite easily up his 401k contribution. The student loan debt is at a low interest rate, and you're also getting a tax break on it, so while I would encourage paying that off as quickly as possible, I would also encourage putting a little money aside to invest in getting a side hustle going, and also building up your savings. Since you are a one-income family, losing that one income could be potentially devastating if you don't have much in the bank, and $15k is only about 5 months of expenses for you.

The most important thing to do is SAVE YOUR MONEY. Once you HAVE some money saved, THEN you can start thinking about what to do with it! No need to stress about it now - you will not lose out on much by just working on reducing expenses and socking money away for a couple of months.

Peony

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Re: New Here, still learning the ropes
« Reply #4 on: October 09, 2013, 06:58:53 PM »
Welcome. I agree with Kira that it is important for *all adults* to have the means to support themselves. You just never know what curveballs life may throw at you. If you're a person who likes being at home and likes children, would providing daycare for a couple of extra kids be something you might consider? Or perhaps providing care before and after school for kids whose folks are both working? Yes, you should be able to reduce that cell bill. Many here like Ting, but there are other options as well. Can you lose the Comcast in favor of Hulu or something similar? Also, seems like you spend quite a bit on gas.

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #5 on: October 09, 2013, 09:31:18 PM »
Peony & Kira, thank you both for responding. It feels nice to interact with other people who are focused on finances! I'm enjoying all the learning opportunities!

My husband and I have had a few moments to discuss our plan moving forward. It seems that we have some immediate work to do on the cell phone and cable bill. I've heard of Hulu and Netflix, but have no experience with them. Does it require a DVD player (we don't own one) or just an internet connection?

The next step would be setting up a monthly contribution to the Roth IRA, and reviewing his W-2 to see if we are taking the proper deductions. I have a hunch that we are not.

At this point, I can only begin to consider any "side hustle" choices. It's never crossed my mind. Watching other children in home does seem like a really good idea! I love babies, and I know care for infants is expensive!

We both have very deep personal beliefs that I should be home with our children. I'm sure that many families are more comfortable having two working parents, but we would not feel comfortable with that right now. I'm feeling very positive that we can be FI, and keep our beliefs in tact, provided we plan and make wise choices.

As per the student loan, we have an idea. We can currently afford to pay $800 a month. I would like to have this paid off by my 30th birthday, so starting in Feb, that will be our new payment. That will give us exactly 2 years to pay it in full. This seems like the best use of our funds. Does that seem wise to everyone?

Again, I really appreciate the feedback we have received. I totally understand that our conservative lifestyle and beliefs are not for everyone. We are grateful to have a wide variety of people in our lives who we can learn from and hopefully they can learn from us.

N

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Re: New Here, still learning the ropes
« Reply #6 on: October 09, 2013, 10:48:16 PM »
Hi, welcome to the forums.
I am also a SAHM to two children.

A couple of things jump out- overall, not too bad! no cc debt? no car loan? that is a good position to be in.

Verizon-can be reduced for sure. if you are in a contract, there are calculators available to help you figure out how much switching or breaking it can save you, and how long it will be before you recoup any fines. its almost certainly worth it to find cheaper phone. MMM has a couple of posts on his site, and there is the communication superguide on the forum for guidance.


Comcast-if this is cable, for sure, reduce. netflix and hulu and even amazon prime need an internet connection. you can watch them on your computer or on your tv thru other devices, like a roku machine, wii game console, I think maybe xbox, tablets, iTouches, etc, and some SmartTVs. I think even redbox has begun a streaming service. Most often these services have tv shows and movies that you can watch for a monthly fee that is way less than cable.


Gasoline-that is pretty high, how can you cut back? MMM has several articles on this, too.

Insurance-this can probably be reduced.

With all your expenses, you will want to spend time researching the best price.

You will want to consider how you can reduce your need of it-lower your use of utilities, CFL lightbulbs, reduced usage, unplug stuff, cold water in the washing machine, lower your water temp on the furnace, etc. Lower your use of gas. Lower your use of disposable items.

Think of ways to barter or borrow for services or items. Trade. Thrift store shop. Clothes swaps. Food Swaps. CHildcare swaps. etc.

ONce you have lowered your expenses as much as you can, you will have the maximum amount to pay off your debts. Then you can set your priorities- emergency fund, new car fund, new computer fund, vacation fund, retirement savings, etc

Keep reading and posting and good luck!


Silvie

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Re: New Here, still learning the ropes
« Reply #7 on: October 10, 2013, 12:59:39 AM »
Can your husband bike to work? That would save a lot on gas.

A side hustle would be perfect for you, as you can do it at home, while still being with your kids. Working doesn't necessarily mean leaving the house.
I work from home. No commuting time or costs!

You mention you love babies, so babysitting/child care would be a good option. What else can you think of? Are you a good writer, cake baker, seamstress, are you creative? You could make your own Christmas card and sell them. Just some random ideas.

happy

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Re: New Here, still learning the ropes
« Reply #8 on: October 10, 2013, 05:48:50 AM »
Welcome Mrs Foutch.  You've already had a lot of good advice.

The  3 largest expenses are usually housing, transport and food, so looking for savings in these areas are usually helpful.

In the beginning also I would just go for the low hanging fruit: that is anything, that you are obviously overspending on that is easy for you to cut/reduce.

If you are a SAHM, this gives you the opportunity to be the household manager...making sure you and your family are getting the best out of every dollar spent. I also agree with finding ways to make some side income ( I hate the term side-hustle)...

If you are overwhelmed make a list of all the things that occur to you and work through it methodically. It doesn't have to be a race, slow sustainable change is better in the long run. Just make a start and be consistent and persistent.  It can take a few months  (or longer) to really figure out where all your money is going and what a good month looks like, and what a bad month looks like etc.

A word about your debt:  you have debt, but the interest rate is low so its not a hair-on-fire, a million-killer-bees-stinging-you-to-death type of debt emergency. At this interest rate its a personal decision as to whether you put your savings into investments that would yield you more than 3.3% returns or pay off the debt faster. If you pay off the debt you are guaranteed to save yourself the interest i.e. 3.3%.  If you instead invest the money and acheive a 6 or 7% return, you are 3 or 4% ahead but there is some risk that you might not make the additional return.  So it depends how you feel about debt, risk and investing.


zarfus

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Re: New Here, still learning the ropes
« Reply #9 on: October 10, 2013, 02:37:07 PM »
Hi, welcome.

IMO all looks pretty good, a 40k annual budget including mortgage and loans isn't bad.  Here's what I would cut:
1) Cancel the YMCA, figure out how to work out at home (biking, running, yoga, whatever you wanna do)
2) Cut the phone bill, lots of forum posts about switching from the biggies to a small, cheap network.  Could easily be <$100.
3) Cut the cable. You don't need a DVD player for netflix or hulu, but there are tv-top boxes that make it convenient.  Like Google's chromecast, just plug it into HDMI slot on TV, and plug your internet into that: http://www.amazon.com/Google-Chromecast-Streaming-Media-Player/dp/B00DR0PDNE/ref=sr_1_1?ie=UTF8&qid=1381437337&sr=8-1&keywords=chromecast
This should cut that bill in half at least.
4) Gas is really high IMO (as others mentioned).  Figure out why this is so high (inefficient car? long commute? what is it??!!)

Keep up the good work!

avonlea

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Re: New Here, still learning the ropes
« Reply #10 on: October 10, 2013, 07:51:51 PM »
Income: Husband earns 70k a year as an auto-tech for a large dealership. This number seems to rise 5k per year. Children receive $650 in child support
Debts: Our home has a 15 year mortgage, with 13.5 years remaining. Owe 155k @ 3.25 % Payment is $1500 a month.

Savings: 15k in credit union savings account. Husband contributes 10% to his 401(k) at work, and mentioned yesterday he wants to start contributing to our Roth that was set up for him by grandparents (current value is $6400).

Hi, Mrs. Foutch.  I agree with zarfus that you and your husband are starting out pretty well.  If his take-home pay is $4350 a month and you are also getting $650 a month in child support (I'm assuming this is monthly), that's bringing in $5,000.  With your current expenses at $3345, you are saving $1655, plus the $600 that your husband contributes to the 401k. 

Savings of $2255 a month.   And if I'm wrong about the child support not being paid monthly, you're saving $1605.  Either way, you guys are on the right track! 

Previous posters have already pointed out areas where you can start cutting expenses. There are some good ideas in there. I just wanted to add that I think you are doing a wonderful job with groceries at $350 for a family of 4. 

As far as earning extra income, every family needs to determine for themselves what the division of labor will be in their household.   MMM and his wife hit FI before they had their son.  I think when people are trying to hit FI while raising children, it's a little more complicated than the MMM situation was.   Some of the people adamantly saying that you should have a side hustle do not have children of their own. And before I had kids myself, I had planned to work part-time when they were preschoolers and then work full-time when they were in elementary school.  Darn kids were not as easy to work around as I had originally thought. ;)

How you take care of your family is a personal decision that you and your husband need to make.  I think it's good to also consider what is best for your kids.  All children have different needs.  Some require more attention and help than others, while some are very social and would love to have extra playmates around.  Think about this if you are considering watching other children.  Your financial needs are not desperate, so you have the luxury of being able to work around what it best for your own little ones.   Some kids take long naps and that allows for a few hours of work to get done by a SAHM in the afternoon.  Some kids don't nap well at all--I was lucky and got two of those. :) I am a SAHM and I have had a couple of part-time gigs in the past (one was teaching ESL on the computer from 4:00am-7:00am because I just had to feel that I was doing something professionally).  I don't presently earn any money, but I am homeschooling one of my kids and also trying to be involved with the other's school and all of her activities, so I am quite honestly busy enough.  My husband has always thought I've contributed a lot to the family and is very committed.

By the way, your household income is good and looks like it provides a lot for the area of the country where you are living.  You are able to have a home loan that is only about 2x more than his annual income.  That's a good ratio.
« Last Edit: October 10, 2013, 09:13:48 PM by avonlea »

Peony

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Re: New Here, still learning the ropes
« Reply #11 on: October 10, 2013, 07:59:27 PM »
Mrs. Foutch, no judgment here at all on your decision to stay home. But it sounds as if you are a nurturing person (wants to be with the kids, considered being a nurse), so the childcare income possibility just jumped out at me. Plus, one thing I remember from when my boys were small was that it was actually so much less stressful for me when they had playmates around! The house got messy, but the kids were happy and engaged.
« Last Edit: October 10, 2013, 08:01:52 PM by Peony »

galliver

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Re: New Here, still learning the ropes
« Reply #12 on: October 10, 2013, 09:39:16 PM »
I don't think I have much to offer, but wanted to throw out there because no one had mentioned it:

Make sure you check local regulations on providing childcare; depending on how many children you take on, you may need a license. Also look into taxes before starting any business with significant income.

Regarding Hulu and Netflix:
Hulu+ (paid Hulu service) and Netflix both have free trials, and can stream to your computer (web browser). You can throw it up on the TV if you can connect the computer to the TV (this may require a converter of some kind). They can also stream to a number of TV "boxes," game consoles, etc.

Now, Hulu has a free service that is accessible by computer but not through "devices." It also has more limited content (typically just recent episodes of a current show, instead of full seasons, but it still has full seasons of older shows, and some movies).

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #13 on: October 15, 2013, 12:36:42 AM »
Wow, I'm indeed impressed with all the feedback and suggestions! This group is amazing! I feel like someday I will truly join the ranks....

Now that we have had more time to digest the info, look at our habits, goals, and shortcomings, I feel much better.

@galliver- you made a significant point.  I as now know, our state a very strict laws on providing daycare. It involves home studies, background checks, licensing, waiting periods, etc. Those are all GREAT things, but they do make me feel less ready to tackle that route. I introduced the idea of cutting cable out totally, and hubby seemed onboard with it, or at least with the IDEA of it... My plan is to test the waters of Hulu and Netflix to see if we should go cold turkey, or use those as alternatives to cable.

@Peony- thank you for clarifying. Its a sensitive subject for me. I have to be mindful of that.

@ Avonlea- yes, that $650 is monthly. I feel torn sometimes that the $650 is "their" money and it should go to a separate savings account or something like that. On the other hand, our FI will have a great impact on their lives, and how we use the money that our family unit has, shouldn't be based on the income source. I felt really positive reading your comment. It was encouraging and uplifting. We are in a good spot overall, and things could be much worse. You mentioned something important also, the needs of the kids. My boy is a low needs child for certain! His sister however, is an extremely high needs child, both emotionally and medically. I wasn't going to bring her medical/developmental issues up on here, but those things do certainly play a role in our choice to have me stay home. I find myself busy keeping up with her needs, and she's only 5! I also hadn't considered that our home loan is only 2x his salary! Thanks for the kudos on the grocery bill! I love to cook and bake, and I think that helps keep that bill low-ish. I've seen similar sized families say they spend double this, and I wonder what on earth they are eating!!

@ zarfus- I'm cancelling the YMCA tomorrow. While my exercise of choice is power lifting, I know that I can make do for now. Perhaps if I really miss it, I could piece together a home gym from craigslist.... Our gas bill is high( car gas, not house natural gas) but I'm still not sure why. I feel like my driving is almost all kid based, and hubby goes to work most days(20 mins each way) on his motorcycle. I'd prefer to bike the kids around, but my daughters disability prevents that from being an option. This month we are tracking the fuel purchases so we can identify the problem(s).

@Mom to 5 - good point!

@ happy - I'm relishing my new role as Queen of the Dollars. I have a little notebook now and a special pen. I'm on a mission to make this be tight ship! For us, the student loan debt FEELS like hair on fire debt. It keeps me up at night, and stands in the way of us saying we have nothing but mortgage debt. I don't like it one bit. Its currently enemy #1!

@startingfromthestart - Verizon and Comcast are my next victims, after YMCA gets the proverbial ax. They have always felt icky to me, even if I didn't understand why. I realized when I told friends and family about our high cell bills, they all agreed that it was normal. RED FLAG! I don't want that life! I was thinking our utilities were pretty good. The natural gas/electric/water/trash total less than $150. Is that still too high? We don't use paper products other than tp, wash in cold and have mostly CFL bulbs (even if they are ugly!) I'd love even more suggestions if you have them! Our fuel for cars is insane however. I'm working on finding the source right away.

Thanks everyone again! I plan on posting soon with our new 2 year plan. Its exciting and scary!

N

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Re: New Here, still learning the ropes
« Reply #14 on: October 15, 2013, 12:51:33 AM »
I think your utility bills sound pretty good, but occasionally doing an analysis can show you a way to reduce that you missed previously.

I am surprised by your gasoline spending- but Im sure you can figure out how to reduce it. More efficient car use planning.
I live in a very High cost of living city (chicago) where gas is pretty expensive-it fluctuates of course, but its been over 4.50/gal here this summer at times. I think its dropped some and the other day I thought I saw a station that had it for 3.75. I drove to cleveland in july to visit a friend, and gas was 75 c cheaper per gallon! so I know it depends where you live.

my husband takes the car twice a week for his 15 mil commute (commuter city traffic) and I use it the other 3 days, and of course, we share it on the weekends for family stuff. We spend about 120$ a month on gas. city mpg is about 19 in our car. I got 32 on our highway trip to cleveland!

so it also depends on how you drive and where. Im sure once you start looking, you will find ways to cut!

good luck!

farmstache

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Re: New Here, still learning the ropes
« Reply #15 on: October 15, 2013, 01:23:53 AM »
Mrs.Foutch!

For someone who was feeling paralyzed by the numbers, you're doing great! I got me eyes wet from seeing you changing from scared "never though about money" on the first post to engaged "wow, this is actually fun!" on the last ;)

From me, only two comments:

1. About extra income, throwing another idea: if you love cooking and can do it on a budget, then maybe you can offer occasional foodstuffs for other families at your kids schools for birthday parties and whatnot (I used to sell jams and cookies during college to my classmates for recess hours: fun, tasty, I saved on my own snacks, only downside was being too sweet for me - plus some of them ordered larger jam jars to gift to mothers and grandmas). You don't need to start it as a business right away. Do it some, see if you like it, then start going after regulations & all.

2. Something people didn't mention yet, which are low budgets but always high on the "superfluous" scale, if you're looking for more places to cut: Entertainment 75, Misc 60, Kids 45, Clothes 45. What's the difference between these budgets? What's kids category? Toys? What's Misc? I think you can really look into these if you'd care to cut up to another $2700 a year. If you go to the Mini Money Mustaches posts there are a lot of great tips on how to spend less with the kids.

NinetyFour

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Re: New Here, still learning the ropes
« Reply #16 on: October 15, 2013, 10:27:54 AM »
It's so fun to see new folks start to enjoy the process of examining their budget and making positive changes!

One suggestion I have about the cable/Netflix/Hulu situation.  If you haven't already, go check out your local library.  It could be that they have a decent selection of DVDs either on their shelves or available through interlibrary loan.  And it's all free!  Also, if you have a college/university nearby, see if you can use their library as well.  My local college is small, but is part of a statewide consortium, and it is rare that I cannot get a book or DVD that I covet through that system. 

Also, there is a ton of free entertainment on the internet.  I can't even keep up with all the great stuff on the PBS website.  I love free (and high quality) entertainment!

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #17 on: October 15, 2013, 06:36:32 PM »
Mrs.Foutch!

For someone who was feeling paralyzed by the numbers, you're doing great! I got me eyes wet from seeing you changing from scared "never though about money" on the first post to engaged "wow, this is actually fun!" on the last ;)

From me, only two comments:

1. About extra income, throwing another idea: if you love cooking and can do it on a budget, then maybe you can offer occasional foodstuffs for other families at your kids schools for birthday parties and whatnot (I used to sell jams and cookies during college to my classmates for recess hours: fun, tasty, I saved on my own snacks, only downside was being too sweet for me - plus some of them ordered larger jam jars to gift to mothers and grandmas). You don't need to start it as a business right away. Do it some, see if you like it, then start going after regulations & all.

2. Something people didn't mention yet, which are low budgets but always high on the "superfluous" scale, if you're looking for more places to cut: Entertainment 75, Misc 60, Kids 45, Clothes 45. What's the difference between these budgets? What's kids category? Toys? What's Misc? I think you can really look into these if you'd care to cut up to another $2700 a year. If you go to the Mini Money Mustaches posts there are a lot of great tips on how to spend less with the kids.

Thanks for noticing! I'm feeling optimistic currently.  I have so much to learn, but that process is in motion 100%.  My personality very "full steam ahead!" so I know wont ever go back to being so CLUELESS about money! I love the idea of selling foodstuffs. I already can jams/jelly. enchilada sauce, apple sauce and butter,and bake goodies year-round, so making that a gradual switch to something profitable seems fitting. Great idea!

I couldn't tell you why I picked those categories, other than I looked at the last months spending and did some guess work . My though was that entertainment includes things like going to the pumpkin patch, seeing a local comedy show. Misc would be the stupid ticket my hubby got last month for not filing out his fishing catch record card the way the game warden wanted him to. I hope I don't have to make that a regular budget line! Kids includes their stuff, like Halloween costumes, classroom expenses and that type of thing. Clothing would be for all of us I guess, but really we need nothing at this point. I see lots of places we can cut the fat in the variable categories. I'm still in the phase of learning where we spend, so did so a little overboard in detailing. So far this month we have spent almost nothing in the variable column other than $70 groceries, some gas, and $12 on costumes at the goodwill!

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #18 on: November 13, 2013, 11:59:49 PM »
October came and went. Some good, some bad. Overall our spending categories were all under budget, minus Lowe's. Our dishwasher plug overheated and cause a small electrical fire. We replaced the dishwasher and hardwired it this time, something we should have done from day 1. This set us back $420. Such is life. No none  emergency trips to Lowe's for us until January. BOO, I so love home projects. We also had some unplanned expenses relating to my grandfather passing away. Minimal, but still.

The good news is we dropped cable, cold turkey. We don't have hulu or Netflix yet, still adjusting to this no tv phase. We of course had to keep internet, and that came in at $60. Our old bundle expired (I was comfortable justifying $110 a month) and the bill jumped to $176. Just the kick in the pants I needed. I still want to try playing the stupid Comcast deal chasing game to get a lower rate.

Switched from Allstate to Esurance. Same coverage levels, rate dropped from $830 for 6 months to $370 for six months. I'm happy about this big savings, but even more happy to be away from Allstate. I found them to be annoying. Constant contact from them about surveys, customer satisfaction, policy reviews blah blah blah.

Dropped the YMCA. Saved $75 a month.  Our gasoline expenses for October was $250. Still high, but $100 less than I expected.

Looking forward to moving into our goal of paying off my student loan in 2 years ($800 a month) and fully funding a ROTH for 2014.

We've reduced our expenses about 3k, and increasing our savings by 5.5k. 

I'm happy with this new direction. It feels more "us"

Peony

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Re: New Here, still learning the ropes
« Reply #19 on: November 14, 2013, 06:23:17 AM »
Go Mrs. Foutch! You've given yourselves quite a nice little raise.

avonlea

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Re: New Here, still learning the ropes
« Reply #20 on: November 14, 2013, 06:26:37 AM »
Yay, Mrs. Foutch!  Great job.

MissStache

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Re: New Here, still learning the ropes
« Reply #21 on: November 14, 2013, 07:49:10 AM »
Just wanted to pop in and give you major kudos and support!  You're doing an awesome job! 

thelamb

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Re: New Here, still learning the ropes
« Reply #22 on: November 14, 2013, 08:06:33 AM »
Amazing progress and attitude!  Also, great advice and suggestions across the board.  Don't think this has been mentioned, and frankly you seem so on the ball that it's probably superfluous, but I would recommend flexing your tracking/spreadsheet muscles. 

There was another forum post, somewhere, on all the different ways people track their finances, from the monthly budget to debt to assets.  If you're not already, you can start to formalize these, get really good month to month, and then the fun starts.  You can do projections.  What happens if I cut this a little bit?  What if the income here goes up a little bit?  Etc.  And then you can see where those different things put you in 6 months, 2 years, 5 years...  I personally find it really motivating to see how the small changes compound and where they get you.   

auntbecky

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Re: New Here, still learning the ropes
« Reply #23 on: November 14, 2013, 09:59:55 AM »
I've been just starting to pay attention to our finances.  Out of all of the posts, yours has been the most personally inspiring one.  Thank you for sharing!

frugaldrummer

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Re: New Here, still learning the ropes
« Reply #24 on: November 14, 2013, 12:09:27 PM »
I don't see a line in your budget for life insurance.  As a SAHM, you definitely NEED life insurance on your husband. 

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #25 on: November 14, 2013, 11:06:07 PM »
Peony, Avonlea, MissStache- thank you all for the support and encouragement! I really appreciate it!

@ thelamb- I've not worked with tracking or spread sheets. Right now all I do is in a little notebook and pen in my nightstand.  I should carve out some time to learn about those things, and see what works. I love idea of looking ahead and seeing the impact that even small changes have!

@Auntbecky- what a kind thing to say! I'm really flattered! Its a scary to to really start looking at finances. The good, the bad and ugly all come crashing in on you! I'm grateful for this little corner of the internet- I hope you receive the same support I've found! Do you have a journal?

@ frugaldrummer- Your bring up an excellent point. We need to make this priority. Should we both have life insurance?

Peony

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Re: New Here, still learning the ropes
« Reply #26 on: November 15, 2013, 05:14:03 AM »
I am going to make the pitch here for you to check out the wonderful YNAB (You Need a Budget) software. I've just started using it and I believe it is going to be just about as lifechanging for me as finding MMM and the rest of the personal finance community. Even if you pay the full $60 for the software (and there is usually some kind of cheaper deal floating around on this forum as well as a 30-day free trial at their website), I *guarantee* (not said lightly!) you will save at least that amount of money in the first month of using it. For a one-income family like yours, expenditures are key, and YNAB is *amazing* for getting a handle on that. It is also fun to use, expecially for those of us with slightly compulsive tendencies when it comes to personal finance, and is a great teaching tool for older kids and for less PF-aware partners. Based on how you're obviously taking to PF like a duck to water, I think you'd like it. Also, +1 on the life insurance.

Fletch

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Re: New Here, still learning the ropes
« Reply #27 on: November 15, 2013, 05:37:32 AM »
Depending on what your husband's child care options would be if you pass away and how much they cost, you should have life insurance too. Look at term policies for you (long enough to get your kids to an age where they can supervise themselves), and depending on what you would do employment wise if your husband passed away a much longer term and higher benefit. These are good questions to start with: http://www.thesimpledollar.com/how-much-life-insurance-do-you-really-need/

You're doing so well so soon after you started here!

avonlea

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Re: New Here, still learning the ropes
« Reply #28 on: November 15, 2013, 06:51:33 AM »
@ frugaldrummer- Your bring up an excellent point. We need to make this priority. Should we both have life insurance?

I hope you don't mind that I'm kind of butting in here.  I think it's good for you to have life insurance, too.  If you die, expenses will go up.  You may not get paid for what you do, but you provide a lot of services to your family.  Will someone need to be hired to assist your daughter?  Would you prefer that she be enrolled in a private school for children with special needs?  Will your kids need to be in afterschool care programs or perhaps be cared for by a part-time nanny?  Without your thrifty cooking, how much more will be spent on groceries?  I'm sure there are even more expenses that you should consider, but this will get you started thinking about what plans you want to have in place if you were to die before your children are grown.

Also, after the death of a parent, the kids are going to need a lot of emotional support.  If there's a cash cushion available, your husband could take a leave of absence from work (or quit work entirely) in order to give them plenty of time and attention.

ETA:  Whoops.  I didn't see that Fletch had already commented on the life insurance.  Sorry if I sounded kind of jerkish with the "I hope you don't mind me butting in." comment.  I wasn't trying to imply that you were, Fletch.  Thought I was the first to address the issue that was asked of frugaldrummer, that's all.
« Last Edit: November 15, 2013, 09:38:05 AM by avonlea »

auntbecky

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Re: New Here, still learning the ropes
« Reply #29 on: November 15, 2013, 08:04:35 AM »
I think it's good for you to have life insurance, too.  If you die, expenses will go up.  You may not get paid for what you do, but you provide a lot of services to your family.  Will someone need to be hired to assist your daughter?  Would you prefer that she be enrolled in a private school for children with special needs?  Will your kids need to be in afterschool care programs or perhaps be cared for by a part-time nanny?  Without your thrifty cooking, how much more will be spent on groceries?  I'm sure there are even more expenses that you should consider, but this will get you started thinking about what plans you want to have in place if you were to die before your children are grown.

Also, after the death of a parent, the kids are going to need a lot of emotional support.  If there's a cash cushion available, your husband could take a leave of absence from work (or quit work entirely) in order to give them plenty of time and attention.

I whole heartedly second this opinion.  This is not a fun topic to have a discussion about, but sit down and really discuss what life would look like if either of you weren't in the picture.  Getting to where you and your spouse can feel comfortable with a few different what-if scenarios is very important.  Term policies are very very inexpensive (most cases), and can often be added through employers as well as independent insurance agents.  In my own very personal opinion, I don't see any need for any life insurance other than term.  Term policies can cover you both until your kids need less support (financially, emotionally, daycare, etc.) and until your family is financially independent enough to not need the policies any longer.  Also, if you are sitting down and talking about it, get it out of the way and look at wills, living wills, and powers of atty.  There is a whole different peace of mind in place when you spend a couple of weeks to get it all taken care of.  Revisit every few years afterwards to see if policies are still financial needed, need to be adjusted up or down, and/or if your situations have changed to warrant updates to your documents and wills.  We did this about 3 years ago before going on a trip out of the country without our kids.  We really should have done it 10 years ago.

Also, having this discussion really allows you to research costs to cover what you do for your family.  It will be emotional, but it is important to know what it would cost to manage and care for your family without you.  It might even make you feel really good about the $ value you add.

@Auntbecky- what a kind thing to say! I'm really flattered! Its a scary to to really start looking at finances. The good, the bad and ugly all come crashing in on you! I'm grateful for this little corner of the internet- I hope you receive the same support I've found! Do you have a journal?

Off of my passionate soap box, I am working on tracking my expenses for a couple of months more to get averages.  I'm going to be setting up a journal soon.  All of 2010 was a series of bad decisions that add up to me essentially having to start over with paying off a bunch of debt.  I don't have a good idea yet of my income since my spouse just got a new job with a very significant pay increase, and I also just scored a raise.  Also, there are outstanding school loans that are very vague and I need to track them down.  We are both going back to school to finish our degrees and those are deferred at the moment.  Sadly, since I don't have to pay them yet, I've been ignoring them.  I am pretty sure with the increase in income, the semesters going forward will not need additional loans.  Gathering all of my threads to see what the whole tapestry looks like.

SunshineGirl

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Re: New Here, still learning the ropes
« Reply #30 on: November 15, 2013, 08:29:42 AM »
I am going to make the pitch here for you to check out the wonderful YNAB (You Need a Budget) software. I've just started using it and I believe it is going to be just about as lifechanging for me as finding MMM and the rest of the personal finance community. Even if you pay the full $60 for the software (and there is usually some kind of cheaper deal floating around on this forum as well as a 30-day free trial at their website), I *guarantee* (not said lightly!) you will save at least that amount of money in the first month of using it. For a one-income family like yours, expenditures are key, and YNAB is *amazing* for getting a handle on that. It is also fun to use, expecially for those of us with slightly compulsive tendencies when it comes to personal finance, and is a great teaching tool for older kids and for less PF-aware partners. Based on how you're obviously taking to PF like a duck to water, I think you'd like it. Also, +1 on the life insurance.

I agree, I'm a HUGE fan of YNAB. I've been using it for nearly six months now, and love, love, love it. Definitely try the free month.

SunshineGirl

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Re: New Here, still learning the ropes
« Reply #31 on: November 15, 2013, 08:35:22 AM »
I have a suggestion as well about life insurance. At your age, the right idea is to lock in a term policy for as long a time period as possible. We bought 30-year level term policiies at about your age which cover us until we're in our early sixties. When you buy young, your premiums are low. This is above what our jobs offered.

If you feel you need to be covered more now while you have a growing family, you can buy policies of varying lengths. For instance, get a 30-year level term policy from a very highly rated company for X amount, then a 10 or 20 year policy, which would provide additional income while you're younger and still raising kids. The reason I suggest this is that at some point, as your assets grow, your insurance needs will decrease, but as you age, the cost to initiate insurance increases.

huadpe

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Re: New Here, still learning the ropes
« Reply #32 on: November 15, 2013, 09:16:42 AM »
One thing with life insurance, do not count on insurance through work.  If, for example, your husband got an illness which made him unable to work and which was life threatening, he would lose his insurance and be totally unable to get a new policy.  Sometimes people die in a very sudden fashion, but the reality is most of the time it's a drawn out process.  It's not a particularly pleasant topic, but it's important.  You need to have enough insurance independent of anything provided by work for your needs.

auntbecky

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Re: New Here, still learning the ropes
« Reply #33 on: November 15, 2013, 09:19:03 AM »
One thing with life insurance, do not count on insurance through work.  If, for example, your husband got an illness which made him unable to work and which was life threatening, he would lose his insurance and be totally unable to get a new policy.  Sometimes people die in a very sudden fashion, but the reality is most of the time it's a drawn out process.  It's not a particularly pleasant topic, but it's important.  You need to have enough insurance independent of anything provided by work for your needs.

Very nicely pointed out.  What is the general consensus around here on disability policies?

footenote

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Re: New Here, still learning the ropes
« Reply #34 on: November 15, 2013, 10:00:20 AM »
I carried an independent-from-workplace disability policy for many years. (I've dropped independent disability and life insurance recently because they are now unnecessary.)

huadpe

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Re: New Here, still learning the ropes
« Reply #35 on: November 15, 2013, 11:16:41 AM »
One thing with life insurance, do not count on insurance through work.  If, for example, your husband got an illness which made him unable to work and which was life threatening, he would lose his insurance and be totally unable to get a new policy.  Sometimes people die in a very sudden fashion, but the reality is most of the time it's a drawn out process.  It's not a particularly pleasant topic, but it's important.  You need to have enough insurance independent of anything provided by work for your needs.

Very nicely pointed out.  What is the general consensus around here on disability policies?

I am a fan of long term disability policies.  What you want to get a good deal is a long exclusion period.  That means that the policy won't start paying til about 3-6 months after you become disabled.  It pushes down the rate quite a lot, since insurers can be more confident of not getting fraudulent claims, and it reduces the number of claims for stuff that puts people out of work only temporarily.  Avoid short term disability stuff like AFLAC though.  That's a ripoff for people who don't have emergency savings.

Mrs.FamilyFinances

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Re: New Here, still learning the ropes
« Reply #36 on: November 16, 2013, 11:07:48 PM »
One thing with life insurance, do not count on insurance through work.  If, for example, your husband got an illness which made him unable to work and which was life threatening, he would lose his insurance and be totally unable to get a new policy.  Sometimes people die in a very sudden fashion, but the reality is most of the time it's a drawn out process.  It's not a particularly pleasant topic, but it's important.  You need to have enough insurance independent of anything provided by work for your needs.

Very nicely pointed out.  What is the general consensus around here on disability policies?

I am a fan of long term disability policies.  What you want to get a good deal is a long exclusion period.  That means that the policy won't start paying til about 3-6 months after you become disabled.  It pushes down the rate quite a lot, since insurers can be more confident of not getting fraudulent claims, and it reduces the number of claims for stuff that puts people out of work only temporarily.  Avoid short term disability stuff like AFLAC though.  That's a ripoff for people who don't have emergency savings.


I'm unfamiliar with that type of policy, but will certainly look into it. With our current savings/spending, we could go 6 months with no income coming in, so Aflac has no real appeal.  I attempted to get some life ins. quotes yesterday, but everything needed our contact info,  so I pushed it back for another day. I just wanted a ball park idea! Our children are 6 and 4, so I was thinking a 15 year policy should cover us for this phase of life.

Any tips on whom we should get our quote through?

huadpe

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Re: New Here, still learning the ropes
« Reply #37 on: November 17, 2013, 07:46:37 AM »
One thing with life insurance, do not count on insurance through work.  If, for example, your husband got an illness which made him unable to work and which was life threatening, he would lose his insurance and be totally unable to get a new policy.  Sometimes people die in a very sudden fashion, but the reality is most of the time it's a drawn out process.  It's not a particularly pleasant topic, but it's important.  You need to have enough insurance independent of anything provided by work for your needs.

Very nicely pointed out.  What is the general consensus around here on disability policies?

I am a fan of long term disability policies.  What you want to get a good deal is a long exclusion period.  That means that the policy won't start paying til about 3-6 months after you become disabled.  It pushes down the rate quite a lot, since insurers can be more confident of not getting fraudulent claims, and it reduces the number of claims for stuff that puts people out of work only temporarily.  Avoid short term disability stuff like AFLAC though.  That's a ripoff for people who don't have emergency savings.


I'm unfamiliar with that type of policy, but will certainly look into it. With our current savings/spending, we could go 6 months with no income coming in, so Aflac has no real appeal.  I attempted to get some life ins. quotes yesterday, but everything needed our contact info,  so I pushed it back for another day. I just wanted a ball park idea! Our children are 6 and 4, so I was thinking a 15 year policy should cover us for this phase of life.

Any tips on whom we should get our quote through?

Freelancers union has a lot of hoops to jump through to actually buy through them, but they do have a nice age-based table you can look at to see about what these sort of premiums run:

https://www.freelancersunion.org/benefits/plans/guardian-disability/2012/disability/#disability-90-day-2-tab

Edit to add: if you want to get quotes for life/disability without getting a gazillion sales pitches mailed to you, your best bet is probably to make a phone call to a broker.  Just be careful when calling that you no-way no-how let them talk you into anything other than level term insurance.  Whole life, universal life, and anything else other than term is a ripoff.
« Last Edit: November 17, 2013, 07:52:34 AM by huadpe »

Free_at_50

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Re: New Here, still learning the ropes
« Reply #38 on: November 17, 2013, 08:11:43 AM »
Wanted to reinforce cable, internet, phone scenario.  We cut everything about a year ago except our wireless and use that for internet acces as well as the library and honestly haven't felt like we have missed a thing.  Actually getting rid of cable was the best thing we have ever done.  I avoid letting hours of my life slip by watching mindless programming.  And by the way over the air digital tv is pretty good.  I figure we are saving almost 2k per year not to mention the time we recovered.  Cheers!

auntbecky

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Re: New Here, still learning the ropes
« Reply #39 on: November 18, 2013, 10:21:04 AM »
@Auntbecky- what a kind thing to say! I'm really flattered! Its a scary to to really start looking at finances. The good, the bad and ugly all come crashing in on you! I'm grateful for this little corner of the internet- I hope you receive the same support I've found! Do you have a journal?

Still have a few numbers to nail down, but I finally posted a journal.  http://www.mrmoneymustache.com/forum/journals/gathering-my-threads-to-complete-a-tapestry/