Author Topic: Please Tear My Budget Apart  (Read 10623 times)

The Dutchman

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Please Tear My Budget Apart
« on: June 10, 2013, 02:52:37 PM »
My Gross Income is 82k.  I have 2 kids and we are planning to add a third in 2 years.  Wife stays at home.  Everything below will be listed monthly so you can chew on it a little easier. 

Income after taxes and benefits = 4,800

Spending –
552 – Groceries & Household Consumables
950 – House Payment (All In)
40 – Cell
40 – Internet
10 – Gym
8 – Netflix
120 – Car Insurance (2 cars owned)
200 – Fuel Car (2 sedans)
200 – Utilities (gas electric water sewer)
326 – School Loans (down to 22k)
367 – Tithing (not negotiable we are religious so this one stays)
SPENDING TOTAL = 2,813 or 58%

Save to Spend – (I call this saving but I treat this as expense.  I fully expect 100% of this to be spent; it is saving for future costs even though it sits in a savings account). 
109 – Gifts
87 – Healthcare (this is above and beyond my monthly contribution; it goes to co pays)
196 – Car Repair
110 – Home Repair
174 – Car Replacement
135 -Down payment
TOTAL SAVE TO SPEND = 811 or 17%

Investment
319 – Personal Roth IRA
300 – Employer Match 401k
500 – Additional Debt Pay Down - This is “investment” because I had nowhere else to put it.  (this is what got me to 0 credit card debt (from 6k); now it is working on the student loans) 
TOTAL INVESTMENT = 1,119 or 23%

So on the broad strokes I am saving 23% (the addition Debt Pay Down will become investment once I get rid of the 6% interest student loans (10k)) and spending 77%.  I want to get above 25% in the next year.  But my goal is to be up to 50% in the next 5 years.  What steps can I take to do this?  Thoughts?  Anything on my budget look out of wacky? 

As a side note all of my “save to spend” is obviously rolled over monthly and yearly .  If one of those pots of money gets to big then I will skim it off the top and put it too investments.  Also, once I have enough equity in my house I will abandon these “spend to save” accounts and use a Line of Credit for things like home and car repair.  I will then use the additional cash, from not saving, flow to pay off the line of credit when used or go into investment when I have not used my line of credit. 

Eric

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Re: Please Tear My Budget Apart
« Reply #1 on: June 10, 2013, 02:59:48 PM »
You look like you're running reasonably lean.  The only one that jumped out at me was the Car Insurance.

120 – Car Insurance (2 cars owned)

Is that full coverage on both cars?  Can you drop that down to liability only on one or both?

jpo

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Re: Please Tear My Budget Apart
« Reply #2 on: June 10, 2013, 03:14:26 PM »
What is the rate on your student loans? If it is higher than you can expect the market to pay, I would stop contributing to your Roth until you're out of debt.

I would stop just about all of the "Saving to Spend" categories. I used to do the exact same thing and have found that it is inefficient at best. If you have a decent-sized emergency fund and a reasonably high credit card limit that could absorb immediate emergencies, you can afford to throw all that cash savings into your student loans and then your investment accounts. You cash flow high enough that if you have an emergency above and beyond your emergency fund (extremely unlikely), you should be able to pay your credit card off quickly.

Then when you need to spend on your categories, just tap some of your investment fund.

Yes, there is a chance that you will have to sell low.

Note that I say this without 2 kids and a wife to support.

mushroom

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Re: Please Tear My Budget Apart
« Reply #3 on: June 10, 2013, 03:27:20 PM »
109/month for gifts seems like a lot. I agree with JPO on just having a decent sized emergency fund. When you separate out a "save to spend" category I think it can be easy to lose track of how much you're really spending in those areas. I think it's better to keep track of exactly what's going in and out and average out all the unexpected expenses over the year to get a sense of what your real monthly spending is. But that is a matter of personal preference.

I also don't see any travel, clothing, eating out, entertainment, etc. listed. Do you really never do any of that (e.g. ever fly anywhere) or are you not keeping track of everything you're spending?

Do you have life insurance for yourself?

The Bearded Bank Builder

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Re: Please Tear My Budget Apart
« Reply #4 on: June 10, 2013, 03:38:37 PM »
Nothing jumps out too much. Is there potential for savings on fuel? Could you bike or walk to work/the grocery store/gym?

What about groceries and utilities? Again, neither one is too egregious but you might be able to trim some fat there.

TLV

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Re: Please Tear My Budget Apart
« Reply #5 on: June 10, 2013, 03:40:32 PM »
What is the "down payment" category for, since you already have house payment and car replacement line-items?

I personally treat tithe the same as income tax (i.e. exclude it from net income) when calculating savings rate, since it's a % of income and will correspondingly be much lower in FI.

Housing and cars are your two big expenses. I don't know the area to say whether the housing expense is reasonable, but $700+ per month ear-marked for cars seems very high to me, especially given that your wife doesn't commute for work.

The Dutchman

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Re: Please Tear My Budget Apart
« Reply #6 on: June 10, 2013, 03:50:53 PM »
What is the rate on your student loans? If it is higher than you can expect the market to pay, I would stop contributing to your Roth until you're out of debt.

6% on about 10k.  Once I pay that down I will start investing aggressively. 

Is that full coverage on both cars?  Can you drop that down to liability only on one or both?

I live in MI which has crazy high insurance.  That is not bad I might be able to save 20 $/month if I really shopped around. 

I also don't see any travel, clothing, eating out, entertainment, etc. listed. Do you really never do any of that (e.g. ever fly anywhere) or are you not keeping track of everything you're spending?

Do you have life insurance for yourself?

Our budget does not include travel because we have a family lake house within 4 hours (we don't pay for it my grandmas).  As far as entertainment and eating out that is included in our grocery and consumables.  I am blessed with a wife who can get by with 80 $/week for a home cooked meal. 

I have life insurance on myself 500k my wife 40k and my kids 10k each. 

What is the "down payment" category for, since you already have house payment and car replacement line-items?

I personally treat tithe the same as income tax (i.e. exclude it from net income) when calculating savings rate, since it's a % of income and will correspondingly be much lower in FI.

We own a house but I want o buy land and build a house.  I know I should be content but it is something I have always dreamed of. 

smalllife

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Re: Please Tear My Budget Apart
« Reply #7 on: June 10, 2013, 04:23:48 PM »
Gifts seem really high to me (make your own, etc. It's been said around here before).

When do you expect to have to replace/repair a car?  You are saving $250/month for car related expenditures on top of gas and insurance.  Put two grand aside as a sinking repair/replace fund and shovel the rest towards your student loans.  That is plenty for a beater or a sizeable chunk of a good used car to be supplemented by your cash flow or credit card/loan.   In the meantime you can get rid of the student loan pronto.

*Personal Roth IRA takes 441/month to hit the max.  x2 since you can contribute for your wife.  Not sure why 319 is listed when you have extra money . . . .

homeymomma

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Re: Please Tear My Budget Apart
« Reply #8 on: June 10, 2013, 05:23:16 PM »
I hate to ask - but, where is your insurance? you should at least have life insurance for you, as the sole breadwinner. with a third baby on the way... ?

MakingSenseofCents

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Re: Please Tear My Budget Apart
« Reply #9 on: June 10, 2013, 07:14:37 PM »
I think your budget looks pretty good. Maybe the insurance should be looked at? Maybe you can lower your deductibles or switch to liability if your car isn't worth much.

Rebecca Stapler

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Re: Please Tear My Budget Apart
« Reply #10 on: June 10, 2013, 09:24:17 PM »

I have life insurance on myself 500k my wife 40k and my kids 10k each. 


I don't see the life insurance line items in your budget. If you're still paying insurance premiums for your children, I would stop. You have a safety cushion if -- god forbid -- you needed to use it. You aren't depending on them for their income or services, like you're depending on your wife. On that note, with baby #3 planned, you might want to raise your wife's insurance. Daycare for 5 years (again, god forbid! But that's what life insurance is for) would probably cost more than $40k.

C40

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Re: Please Tear My Budget Apart
« Reply #11 on: June 10, 2013, 09:34:24 PM »
First - use the pareto principle.

 - Your house payment is fairly high. 15 or 30 year mortgage? Do you really need a house that big/expensive?
 - Could you lower your food spending? Do you eat enough staples like beans, rice, bananas, and cheap vegetables? Do you have a garden?

Others:
 - Utilities are high (high usage or inefficient home?)
 - Internet is a bit high. (Check if you can get DSL, AT&T is $20-$25 in my area)
 - Gas is high. (Do you really need to drive that much? Do you live a long ways from work?  Why? Does your car get poor mileage?)

What is the down payment savings for?



The Dutchman

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Re: Please Tear My Budget Apart
« Reply #12 on: June 11, 2013, 01:32:34 PM »
Gifts seem really high to me (make your own, etc. It's been said around here before).

When do you expect to have to replace/repair a car?  You are saving $250/month for car related expenditures on top of gas and insurance.  Put two grand aside as a sinking repair/replace fund and shovel the rest towards your student loans.  That is plenty for a beater or a sizeable chunk of a good used car to be supplemented by your cash flow or credit card/loan.   In the meantime you can get rid of the student loan pronto.

Gifts really are not too high when you consider that we both have large families.  We do make some of our own so this budget number is probably a little high.  Again if this gets to large I will skim some off the top to go to pay down debt. 

As far as car repair and replacement please remember this is for two cars.  Most people suggest 100 dollars per month per car for repairs.  I will say that I have come under that.  If this gets to high I will skim off the top and pay down debt.  But based on suggestions here I may create an emergency fund to cover car repair, health care, and home repair which will be less than the sum of the three i currently have.  I will pull from it for large repairs and replenish as needed. 

I don't see the life insurance line items in your budget. If you're still paying insurance premiums for your children, I would stop. You have a safety cushion if -- god forbid -- you needed to use it. You aren't depending on them for their income or services, like you're depending on your wife. On that note, with baby #3 planned, you might want to raise your wife's insurance. Daycare for 5 years (again, god forbid! But that's what life insurance is for) would probably cost more than $40k.

I didn't include it in the budget I call that part of my "Benefits" that I get since it is taken out prior to me seeing my paycheck.  I may up the insurance on my wife that is a good point. 

Really you don't have it on your kids?  10k costs me like $1.50 per month per kid.  I know they don't bring in any money.  However, if one does die, God forbid, I don't want to worry about where to get the money to pay for after death services.  10k is to cover funeral costs not to provide any money. 

Rebecca Stapler

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Re: Please Tear My Budget Apart
« Reply #13 on: June 11, 2013, 02:33:55 PM »

Really you don't have it on your kids?  10k costs me like $1.50 per month per kid.  I know they don't bring in any money.  However, if one does die, God forbid, I don't want to worry about where to get the money to pay for after death services.  10k is to cover funeral costs not to provide any money.

We don't have life insurance on our little one. We have an emergency fund that we can tap into if we need to. It looks like you have the funds to cover funeral expenses too. It's earmarked for something else, but it wouldn't be financially catastrophic. With 3 kids, their insurance will cost you $54/year. Sure, it doesn't break the bank to pay it, but it seems like an unnecessary expense when you have adequate savings.

The Dutchman

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Re: Please Tear My Budget Apart
« Reply #14 on: June 11, 2013, 02:57:40 PM »
Ok, so here is what I am getting from people (big picture).  Take some of my "save to spend" funds and put them into an "Oh Sh*t" / "Emergency" fund.  The funds I see being recommended are my car repair, house repair, healthcare, and gifts.  I take issue with this somewhat.  Because what I have created is a itemized "emergency" fund.  In fact there is no "Emergency" in my book.  I would just pull from one of my spend to saves to cover what ever cost may be there. 

I have been running my books like this for about 6 months. and I currently have approximately 3k in those particular "spend to save" accounts.  (This doesn't include my Down Payment and Car Replacment accounts which are really savings goals that will be spent).  If I had no issues for a year (unlikely) then I would have around 6k in those 4 accounts.  At that point I would siphon off and pay down debt or invest.   

I am not trying to be combative or too defensive.  However, I am looking at this and think that it is all the same in the end.  My emergency fund is not one large one but rather 4 smaller ones.  I would rather have the cash on hand to pay things and siphon off additional at the end in lieu of the suggested emergency fund/credit card being paid back after the expense and all additional being siphoned off in the front.  In the end I don't think the school's of thought are different it is just a difference in accounting. 

Do you guys agree or am I in left field with this one?

PS - I may, two years from now, decide to go with the credit card/em fund.  If I do that I could dump all my pots of money against my debt to pay it off and have that 326 $/m to further pad my monthly income.  Just thinking out loud.  I likely won't pay it all off because I have some that is at 2%.  But anything over 5% I want to get rid of.   

The Dutchman

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Re: Please Tear My Budget Apart
« Reply #15 on: June 11, 2013, 02:59:08 PM »
We don't have life insurance on our little one. We have an emergency fund that we can tap into if we need to. It looks like you have the funds to cover funeral expenses too. It's earmarked for something else, but it wouldn't be financially catastrophic. With 3 kids, their insurance will cost you $54/year. Sure, it doesn't break the bank to pay it, but it seems like an unnecessary expense when you have adequate savings.

Just curious what does your EM fund look like?  What all do you tap this for?

smalllife

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Re: Please Tear My Budget Apart
« Reply #16 on: June 11, 2013, 05:06:44 PM »
Ok, so here is what I am getting from people (big picture).  Take some of my "save to spend" funds and put them into an "Oh Sh*t" / "Emergency" fund.  The funds I see being recommended are my car repair, house repair, healthcare, and gifts.  I take issue with this somewhat.  Because what I have created is a itemized "emergency" fund.  In fact there is no "Emergency" in my book.  I would just pull from one of my spend to saves to cover what ever cost may be there. 

I have been running my books like this for about 6 months. and I currently have approximately 3k in those particular "spend to save" accounts.  (This doesn't include my Down Payment and Car Replacment accounts which are really savings goals that will be spent).  If I had no issues for a year (unlikely) then I would have around 6k in those 4 accounts.  At that point I would siphon off and pay down debt or invest.   

I am not trying to be combative or too defensive.  However, I am looking at this and think that it is all the same in the end.  My emergency fund is not one large one but rather 4 smaller ones.  I would rather have the cash on hand to pay things and siphon off additional at the end in lieu of the suggested emergency fund/credit card being paid back after the expense and all additional being siphoned off in the front.  In the end I don't think the school's of thought are different it is just a difference in accounting. 

Do you guys agree or am I in left field with this one?

Personally, I have my "EF" funds broken out for the exact reasons you mentioned.  I have most everything accounted for and would tap into the various ones for a job loss or medical catastrophe.  Where we differ is that I have 1k for car repairs (it's a fairly new car, to be replaced by a scooter most likely if it gets totaled for whatever reason) as opposed to your rapidly growing car fund - you'd hit 1k in four months and keep on going it sounds like.  Same for the house - 1k deductible for the home insurance, major repairs would be financed by a HELOC but unlikely since we just did a major renovation. 

Why are you saving for a down payment when you have student loans?  You will have to save a good chunk of change anyway, why leave it languishing in a savings account when you could cut down your interest expenditures now?  You would then be able to grow a down payment fairly quickly without the debt.  Just a thought. 

What is your target amount for car replacement/time frame?  I think we are questioning your amounts because they seem high if you are getting a 5-10k car.

SunshineGirl

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Re: Please Tear My Budget Apart
« Reply #17 on: June 11, 2013, 06:32:18 PM »
I would momentarily stop putting money in the car replacement and the down payment fund and put whatever you've already got in there plus the $300 you are allocating for it monthly and direct it toward the loan.

You seem to need a larger stash of cash psychologically. Just get rid of the loan.

Also, what's your mortgage information?

Rebecca Stapler

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Re: Please Tear My Budget Apart
« Reply #18 on: June 11, 2013, 07:05:25 PM »
We don't have life insurance on our little one. We have an emergency fund that we can tap into if we need to. It looks like you have the funds to cover funeral expenses too. It's earmarked for something else, but it wouldn't be financially catastrophic. With 3 kids, their insurance will cost you $54/year. Sure, it doesn't break the bank to pay it, but it seems like an unnecessary expense when you have adequate savings.

Just curious what does your EM fund look like?  What all do you tap this for?

It's 3 months' expenses. We don't tap it for anything. It's sole purpose is for peace of mind if anyone loses a job, etc. But it's there if we ever really need it. We also consider our Roth IRAs our extraordinary emergency stash. I can't imagine what would be so dire for us to tap into it, but it's there.

Also consider that you have a monthly savings amount. If you have an emergency and don't have the cash, you have your monthly savings amount to divert to the emergency before you need to tap the E Fund.

jpo

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Re: Please Tear My Budget Apart
« Reply #19 on: June 12, 2013, 06:15:00 AM »
I have been running my books like this for about 6 months. and I currently have approximately 3k in those particular "spend to save" accounts.  (This doesn't include my Down Payment and Car Replacment accounts which are really savings goals that will be spent).  If I had no issues for a year (unlikely) then I would have around 6k in those 4 accounts.  At that point I would siphon off and pay down debt or invest.
I completely understand - I did this myself for quite a while.

The thing is, the likelihood that you'll need to empty all those accounts within a short period of time is (hopefully) low. So why not invest in the meantime?

samustache

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Re: Please Tear My Budget Apart
« Reply #20 on: June 12, 2013, 04:27:35 PM »
couple of suggestions for comparing your savings rate: principle portion of loan repayments are saving. And don't consider tithe "spending", your net should be be after tax/tithe for an apples to apples comparison with heathens. See, didn't have to change anything and you're doing way better already!

Eric

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Re: Please Tear My Budget Apart
« Reply #21 on: June 12, 2013, 05:55:24 PM »
Of course the tithe is an expense.  Pretending that it's not is either disingenuous or just bad math.  It's money they're choosing to spend on an optional expense.  It can be easily justified as worth it, but it's still an optional expense.

Fletch

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Re: Please Tear My Budget Apart
« Reply #22 on: June 12, 2013, 06:18:43 PM »
I get why you have separate emergency categories, as opposed to one big fund: when it rains it tends to pour and it is nice to know you are covered for everything.

That being said, I personally would not keep separate buckets of car repair and replacement (take this with a grain of salt, I don't own a car). If they are combined, every major and expensive car repair sets back your car replacement fund x dollars, but if the repair won't keep the car going long enough to replenish x dollars in the replacement fund then isn't that a good indication it might be replacement time?

Obviously routine maintenance is different, but maybe include the $25/month (? That's a guess) for oil changes etc. in with fuel costs?

samustache

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Re: Please Tear My Budget Apart
« Reply #23 on: June 12, 2013, 07:04:12 PM »
Of course the tithe is an expense.  Pretending that it's not is either disingenuous or just bad math.  It's money they're choosing to spend on an optional expense.  It can be easily justified as worth it, but it's still an optional expense.

Even so, for this exercise I'd net it out. He can re-check the rule book when he enters the saver Olympics, but right now he's minimizing expenses. I don't think he should feel he has to minimize them that much below someone who doesn't tithe.

It's not a consumerist line item, and all it it takes him is 3 years longer to hit 1000000 @6%, but he wouldn't have to work much during those years anyway since the money's doing most of the heavy lifting :).


The Dutchman

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Re: Please Tear My Budget Apart
« Reply #24 on: June 13, 2013, 06:59:13 AM »
That being said, I personally would not keep separate buckets of car repair and replacement (take this with a grain of salt, I don't own a car). If they are combined, every major and expensive car repair sets back your car replacement fund x dollars, but if the repair won't keep the car going long enough to replenish x dollars in the replacement fund then isn't that a good indication it might be replacement time?

Obviously routine maintenance is different, but maybe include the $25/month (? That's a guess) for oil changes etc. in with fuel costs?

I somewhat agree with the combined fund for car repair and replacement.  Really I do treat it like this because I fully believe I will use some of my repair fund (if I have a surplus) to purchase a car. 

Routine maintenance is included in my car repair fund. 

Of course the tithe is an expense.  Pretending that it's not is either disingenuous or just bad math.  It's money they're choosing to spend on an optional expense.  It can be easily justified as worth it, but it's still an optional expense.

Even so, for this exercise I'd net it out. He can re-check the rule book when he enters the saver Olympics, but right now he's minimizing expenses. I don't think he should feel he has to minimize them that much below someone who doesn't tithe.

It's not a consumerist line item, and all it it takes him is 3 years longer to hit 1000000 @6%, but he wouldn't have to work much during those years anyway since the money's doing most of the heavy lifting :).

Hmm.  Interesting debate.  I would agree it is not "spending" in the mind of someone who tithes.  It is comparable to taxes it is something you SHOULD be paying thus it is not really optional. 

If we really want to get into the theological discussion the 10% tithing is a contrived number based on OT doctrine and the money was intended for the Levites (who were the priests).  Nowhere in the NT does it mention any certain number.  Basically tithing is something that is, and should be, up to one's own discretion.  It also is not required to be monetary; it can be time and/or talents.  10% is basically a fictional number based on tradition which people like because they have (and in most cases want) a "color by numbers" relationship with their faith.  They want to be told what to do and they will do the minimum to get into heaven.  I have done a fair amount of research on this being a "color by numbers" Christian in the past. 

Readers of MMM will find this interesting:  Furthermore if you actually look at the OT and read how tithing is explained it is not calculated on the gross.  In-Fact it is not even on the net!  10% tithing is actually calculated on the current amount you have at the time of collection.

samustache

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Re: Please Tear My Budget Apart
« Reply #25 on: June 13, 2013, 04:07:41 PM »
Hmm.  Interesting debate.  I would agree it is not "spending" in the mind of someone who tithes.  It is comparable to taxes it is something you SHOULD be paying thus it is not really optional. 

If we really want to get into the theological discussion the 10% tithing is a contrived number based on OT doctrine and the money was intended for the Levites (who were the priests).  Nowhere in the NT does it mention any certain number.  Basically tithing is something that is, and should be, up to one's own discretion.  It also is not required to be monetary; it can be time and/or talents.  10% is basically a fictional number based on tradition which people like because they have (and in most cases want) a "color by numbers" relationship with their faith.  They want to be told what to do and they will do the minimum to get into heaven.  I have done a fair amount of research on this being a "color by numbers" Christian in the past. 

Readers of MMM will find this interesting:  Furthermore if you actually look at the OT and read how tithing is explained it is not calculated on the gross.  In-Fact it is not even on the net!  10% tithing is actually calculated on the current amount you have at the time of collection.


Not being a 10%er either I have to agree.  My rule is give til it hurts a little, then a smidge more.

But you bring up the larger point that being charitable in your FI stage doesn't necessarily need an expense line even in the strictest sense. It may be doing free financial counseling or maintaining a finance advice website that pays you a much reduced salary than you could otherwise have made.

Riceman

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Re: Please Tear My Budget Apart
« Reply #26 on: June 13, 2013, 06:15:51 PM »
I have been running my books like this for about 6 months. and I currently have approximately 3k in those particular "spend to save" accounts.  (This doesn't include my Down Payment and Car Replacment accounts which are really savings goals that will be spent).  If I had no issues for a year (unlikely) then I would have around 6k in those 4 accounts.  At that point I would siphon off and pay down debt or invest.
I completely understand - I did this myself for quite a while.

The thing is, the likelihood that you'll need to empty all those accounts within a short period of time is (hopefully) low. So why not invest in the meantime?

Here's my emergency fund: a credit card with a 20k limit and taxable mutual fund investments in excess of 20,000 dollars.  I only keep enough cash deposits to comfortably pay off the balance of my credit card each month, so around ~2000 dollars.  This pays the credit card and then gets replenished by my salary.  If my credit card bill were lower, I would keep less cash deposits.

If I have an emergency that requires say, 10,000 dollars, I would put it on my credit card (I can't think of an emergency above, say, 100 dollars, where the person I need to pay immediately doesn't take credit).  I would then sell enough mutual funds to pay off the credit card.  I would have 1+ month to pay off the card, but the cash would hit my account in a couple business days. 

This is why I also recommend dropping insurance on your children--in the event of a tragedy, it would be a hassle compared to selling off investments, and overall it will be a small money drain for most people.

Koshka

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Re: Please Tear My Budget Apart
« Reply #27 on: June 13, 2013, 08:59:29 PM »
How old are your kids? Are they in school or will they attend school?

As for your Save to Spend category, I see this as something different from an emergency fund.

I used YNAB for budgeting and find it helpful to conceptualize spending in various ways.  I'm not saying you make categories of each of these but it helps me:

1.  Monthly bills - both fixed and variable. Take mortgage or electric bill for example.  You can usually forecast these with a fair amount of precision.

2.  Irregular expenses that are fixed or are not all that variable.  For me, we pay garbage quarterly and it is a fixed amount.  Property Taxes, annual insurance, etc.   Automobile maintenance (not repairs) also fit in here.

3.  Expenses that are irregular and very variable in amount and you expect you will have them at some point but don't know how often.  This is what you have mostly in your save to spend category.  For example, I might in one year have a couple of thousand dollars in auto repairs and have none the next year.  The point is that these are highly variable.  Some people look back at past spending and come up with an average annual amount and then set aside 1/12 of that each month.

What I do instead of doing this by each expense is I have set aside an irregular expense fund.  I basically set that aside to cover all the irregular expenses that might occur during the year or might not.   If I don't have all of them this year then I usually role it over (you can set a maximum for it).

4.  Major things you want to save up for.  Car replacement, new roof, etc.  The one that I wondered about on your budget was down payment since you say you already have a house.

So I would still keep set asides for irregular expenses but you might combine some of them into a single fund.  This is different from your emergency fund.

Now - having said all of that - I wonder about your budget.  You have very little spending in some categories particularly for people with children.  You used I always did pie in the sky budget that were based upon nothing ever going wrong and they were more aspirational than realistic.

I notice you have no child related expenses.  No clothes, no toys, no books, nothing.  As a parent of 3, I have found that kids particularly as they get older do cost something to raise.  Even without being extravagant most parents will want their children to have some toys, some books and will find that their children grow and need clothes or shoes or underwear or socks. 

Once children are in school (whether in a physical school or homeschool) there are school supplies, school projects, and other expenses.  Some kids play sports or take lessons.  Again, not saying you need to be extravagant but your budget looks like you don't even have any children.

Also, what about clothes for you and your wife?  Again, not saying a lot of clothes are necessary but most people will need to sometimes buy shoes, underwear, a coat, and other clothing.

Personal care?  What about haircuts?  Makeup? 

I assume you have a computer or two since you have internet.  What about software and budgeting for a computer replacement?  Paper for your printer?  Ink? Postage for mailing stuff?