New to this, HELP!

[FarleyBomb]

Hi all,

I've been mostly a lurker up to this point.  However, I think I'm finally at my wits end and ready for some honest feedback to get me on track. 

The long and short of it is that despite my efforts, I still feel like I'm living paycheck to paycheck.  I work a job about 45 minutes from home (will be 20 min) by end of year, making about $65-70 K per year, and we rent the top two floors of our house for a rental income of $20,700/year.  In total, my income becomes appx $85 K pre tax when all is said and done.  We bought a bit high a few years back, so the rental income only pays our mortgage.  My wife is a stay at home Mom, with our two kids and a 3rd due about a month from now.  We have the typical student loan debt, totaling about $30K, and credit card debt of about $2 K.  Below is a list of what I put away monthly. I try to put away a little extra in each category, for varying costs.  Please give me some honest advice on how I can start saving. 

Heat                         250
Auto Insurance              106
Life Insurance         78
Cable/Internet         136
Electricity                  90
EZ Pass (Tolls)         50
Gas                         340
Grocery                 660
Cash                         400 * For extra costs that come up during the month, to avoid debit use
Cell Phones         100
Student Loans         252
CoPay/Med                 60
Terminex                 42
Gym                         10
Streaming (Netflix etc)   26
Trash                         36
X-Mas                 100 *Set aside for birthday/XMAS spending at end of year
Car Payment         200

[Raenia]

First off, welcome!  And congrats on taking the plunge to get feedback :)

For more detailed advice, I'd recommend taking a look at the Case Studies board and the How to Write a Case Study thread.

Some preliminary suggestions based on the budget you've posted:

Heat - This looks very high to me, what is the climate where you live?  And does this cover your renter's heat or just your own portion?  You might be able to get an energy audit from your local utility company, which might suggest some fixes to bring this down.  Leaking window/door frames are a big one, or you might be able to improve insulation in certain areas.
Cable/Internet - Do you really need cable?  Or can you persuade the family to manage with Netflix/Hulu/Amazon Video, which I see is already in your budget?  Shop around for cheaper internet options, depending on your location you should be able to do better than this.
Gas - This is a lot, but should go down once your commute is shorter
Grocery - This isn't too bad for a family of 4 (btw, congrats on the soon-to-be 5th!), but could possibly be cut further by careful shopping if your wife is on board.
Cash - Figure out what this money is actually going toward.  Clothes?  Toys for the kids?  Travel?  Hard to know if it's too much without knowing what it's being spent on.
Gym - How often do you go to the gym?  Can you replace this with a set of hand weights and runs outdoors?
Car Payment - This is a big one.  What kind of car, how much do you owe, and what is it worth now?  Can you sell it and buy an older/smaller car to replace it?  Preferably one with better gas mileage, too ;)

Best of luck!

[Bracken_Joy]

Sorry to hear you're at your wit's end! But the good side, you've come to the right place. You may come out of the advice a little bruised, but if you can pull through and implement some of the advice, you'll be on the right path.

I second the advice of using the template.

A big first step is making sure these numbers are not estimates, but are real numbers. If you aren't tracking spending, you need to be- this includes cash! Every transaction, no matter how small. This will undoubtedly require getting your wife on board. I recommend an aggregate service like mint.com.

Raenia did a great line-by-line of the budget categories you've given us. I would add that streaming services, at most you need netflix and that's only once you cancel your cable =)

We really need to see the interest rates for your debts. This includes the numbers on the mortgage, but also the CCs and the student loans. A classic MMM post if you haven't seen it: http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

[MDM]

This is a duplicate of the https://forum.mrmoneymustache.com/ask-a-mustachian/budget-help/ thread. 

[KungfuRabbit]

More details needed.

However I don't understand your month to month comment.

Your total spending is $35,000 / year, your take home pay after taxes should be more than $45,000, and the mortgage / renter cancel out.

Unless I'm missing something you should be able to pay off credit card debt in one month. Then the question of investing vs student loans needs more info on interest rates.

If you trim the budget (cable TV AND Netflix....I live in Minnesota in a larger house and I maybe hit $240 for heat on a really cold January - year average would be like $50 - unless you live in the Artic Circle something is wrong.....) by $500 / month or so I don't see why you couldn't have the student loan and credit card debt gone AND a $10k buffer in the bank within 2-3 years

[Cwadda]

OP may be paying the heat for the entire house (other tenants) if it isn't separately metered. This may be why it's so high.

[Tetsuya Hondo]

Terminex for $42/mo!

Holy hat. Unless you're renter is Edgar from Men in Black, that's outrageous. Can you DIY that?
Cable and internet and phone expenses are too high. Lots of threads on here about how to get cheaper options.
As others have said, you need to crack the black box of the cash fund. Where exactly is it going.

And zap that $2k card debt now if you can.

If you feel overwhelmed, no worries. Many of us have been there before. This is were it starts to get better. Once you get rid of your debts the burden really starts to lift and you stash snowball starts to grow. That's a great feeling.

[ysette9]

Good lord, between $250 for heat and $90 a month in electricity you are spending a tremendous amount on utilities. Are you heating the outdoors? Can you get an energy audit and see if there are some simple fixes you can do to lower those numbers dramatically? For example, when my parents first moved into the house I grew up in as a kid, they got an energy audit done after the first cold winter and found, among other things, that the heating duct work under the house was partially disconnected so the hot air from the furnace was just blowing into the crawl space under the kitchen instead of going out through the heater registers inside the house.

I second what others say: Go back through your actual bank statements for the past month or two and write down in detail where your money went exactly. Personally I would advocate for getting rid of the cash all together and putting everything on a debit card to make it easier to track. The alternative is to write down every single time you purchase anything with cash and compile that with your bank statements so you have a complete picture. You can't get a handle on your money until you know where it is going.