The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: MrD on January 08, 2015, 08:02:27 AM

Title: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 08:02:27 AM
Long time reader here and while my approach differs from most here I thought it would be helpful to have some critical eyes look at our budget. Below will be the detail of how my wife and I are planning to budget ALL of our money. Most of our friends are of the spend first think later variety so I truly have no one to discuss this with. I am going to be 100% honest with everything so feel free to give as much input as you would like no matter how blunt it may be.

Ages and Incomes

- Me: 25, 78k-82k
- Wife: 25, 42k-45k

Assets

- Home: worth about 250k, owe 180k
- Cars (I know they arenít truly assets but I include them here anyway just for info: 2011 Sonata owe about 3.5k, 2008 Xterra owe about 4k. The Sonata gets great MPG and has a 10 year warranty. My wife loves her Xterra no matter how much I want her to get rid of it. This is one of those I donít think I can win until it dies.
- 401ks: ~80k
- Roth IRAs: ~15k
- E-Fund: ~15k

Debts

- Home: 180k @ 3.5% interest
- Cars: 7.5k @ 2.4% interest
- Student loans: 5k @ 6% interest (these will be gone early this year because of the wifeís bonus/tax return)

Now to give you every detail I want to include exactly how the income is broken down.

My NI: 2993, this is the net after taxes and 21% of my GI goes to 401k which gets close to maxing it
Wifes NI: 2200, this is the net after taxes and 10% of her GI goes to 401k

Total Monthly NI: 5193

Budget Below (please donít kill me, okay maybe do):

- Mortgage 1360
- Internet 57
- Cable TV 116
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175

All of this comes out to 5096 a month so we have about 97 left over.

This budget is based so that even if we receive no bonuses or anything else throughout the year we will still be able to live comfortably. However, I get monthly bonuses that have been steady for 3 years and we also get a pretty good tax return (we are working to get this lower). I call these mini windfalls bumps.

Bumps
-   Tax Refund: 4000
-   My Extra Paychecks: 2993
-   Her Extra Paychecks: 2200
-   My lowest yearly bonus in 3 years: 4200

Total: 13393

We split these bumps like this:

-   40% of my bonus goes to IRA, 40% of my bonus goes to Big Ticket (used for furniture, vacations etc), and 20% goes to Misc
-   The roughly 9000 from the other bumps goes to: 1000 toward mortgage principle, 1000 toward e-fund, 1000 toward IRAs, and 6000 towards Big Ticket

In a total year our savings breakdown as:

GI: ~124k
NI: ~94k
Pre-Tax Savings (401k, 401k match, HSA): ~28k
Post-Tax Savings (E-fund, Mortgage P, IRA): ~12k
Total savings of: ~40k

Some notes:

- We have 500 going to "Cars" so that when we buy our next cars we can do so in cash and get her a much more fuel efficient and cost efficient car.
- Our Food/Alcohol is higher than it should be, we are working on this.
- Yes $50/month for security is a lot, but I travel a lot for work and it makes us both feel safer, it also kicks us back on our home insurance and helps with heating cost (automated thermostats)
- Our main priority in life is to travel as well as be with our friends. This is why so much money goes in to Big Ticket and food/alcohol as we truly value our weekend trips and vacations. We do this extremely frugally however because 90% of our hotels/airfares are free from my points. Last year we traveled to 7 cities and in total spent only spent $8200. Also note some of that F/A is from us hosting parties as we typically are the hosts.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MustachianAccountant on January 08, 2015, 08:14:16 AM
First thing that sticks out to me is:
Grocery/Costco/Food/Alcohol (so, Household Supplies/Food) is a facepunch worthy $775/month for two people.
Also, Internet/Cable is too high. Cut the cord already and drop that to just an Internet bill. Plenty of suggestions around here on "Cutting the Cord" if you search the forums. Should turn up several threads.

Also, electric + natural gas seems high. What's the gas for and what's the electric for? Which is for cooking/heating/hot water?
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: nereo on January 08, 2015, 08:17:09 AM
- Cable TV 116[/b]
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175
]- Mortgage 1360
- Internet 57
- Cable TV 116
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175
(http://- Mortgage 1360
- Internet 57
[b)

Hello there.  your budget is your priorities, and it is up to you to decide if this is how oyu want to spend your money.  Since this forum is dedicated to reaching FI, all decisions should be balanced on how happy they make you now and how they will effect your ability to become FI/RE.
The good:  Your are close to maxing out your 401(k)s, which will go a long way, and oyu have enough budgeted to partially fund your IRAs. 
The bad: you aren't quite maxing out your tax-deferred accounts and there's not much left over each month for other savings.

I've bolded the categories above that I think need addressing.  1) Cable TV, Internet and Netflix.  With internet streaming and Netflix you have ton of stuff to watch (more than anyone should watch).  Yes, not everything you may want to see is on Netflix, but there's plenty to choose from - moe than you'll ever need.  I would cut the cable.
2) what's CPI? 
3) IRA - you should (almost) always max out both of oyur IRAs. If not you're looking money when you pay taxes.
4) what are you paying $28 for pests for? Is that suppposed to be "pets" - or do you have chronic ant infestations?
5) Fence? explain please?
6) $425 for food/costco is ok, but an added $350 for Food/Alcohol (prumably going out) is a lot.  You could easily save $200/month here.
7) "Fun Money" of $350/month.  That's a lot when you aren't maxing out your IRA.  Find free activities (there are plenty) and cut these at least in half.

Those are the big fish as I see them.  G'luck.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 08:18:04 AM
First thing that sticks out to me is:
Grocery/Costco/Food/Alcohol (so, Household Supplies/Food) is a facepunch worthy $775/month for two people.
Also, Internet/Cable is too high. Cut the cord already and drop that to just an Internet bill. Plenty of suggestions around here on "Cutting the Cord" if you search the forums. Should turn up several threads.

Our grocery/costco is for typical food and groceries while F/A is for dining out and drinking out. I agree it is way too high. Is $425 reasonable for grocery/costco for two people? Note that I am 6'2" and eat around 150g of protein a day as well as low calories, so this involves a lot of chicken and actual meats.

I will take a look around for cutting the cord, I have been trying to convince my wife for years, but so far I haven't found an alternative so that she still gets all of her "trash" tv shows that I hate.

Thanks for the tips!
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 08:26:08 AM
- Cable TV 116[/b]
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175
]- Mortgage 1360
- Internet 57
- Cable TV 116
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175
(http://- Mortgage 1360
- Internet 57
[b)

Hello there.  your budget is your priorities, and it is up to you to decide if this is how oyu want to spend your money.  Since this forum is dedicated to reaching FI, all decisions should be balanced on how happy they make you now and how they will effect your ability to become FI/RE.
The good:  Your are close to maxing out your 401(k)s, which will go a long way, and oyu have enough budgeted to partially fund your IRAs. 
The bad: you aren't quite maxing out your tax-deferred accounts and there's not much left over each month for other savings.

I've bolded the categories above that I think need addressing.  1) Cable TV, Internet and Netflix.  With internet streaming and Netflix you have ton of stuff to watch (more than anyone should watch).  Yes, not everything you may want to see is on Netflix, but there's plenty to choose from - moe than you'll ever need.  I would cut the cable.
2) what's CPI? 
3) IRA - you should (almost) always max out both of oyur IRAs. If not you're looking money when you pay taxes.
4) what are you paying $28 for pests for? Is that suppposed to be "pets" - or do you have chronic ant infestations?
5) Fence? explain please?
6) $425 for food/costco is ok, but an added $350 for Food/Alcohol (prumably going out) is a lot.  You could easily save $200/month here.
7) "Fun Money" of $350/month.  That's a lot when you aren't maxing out your IRA.  Find free activities (there are plenty) and cut these at least in half.

Those are the big fish as I see them.  G'luck.

First off you guys are awesome.

1. I agree and I am going to see if this is finally the year I can convince her to drop the TV. I personally only ever watch sports, but my antenna can get most anyways.
2. CPI is our security system, this is 100% worth the $50 a month to us.
4. We have a pest service that injects stuff into our walls to prevent bugs from getting in. Since we have moved in we have had 0 bugs inside our home. They also take car of any spot problems like ant hills in our lawn, wasps nests in the attic, snakes etc. This is something we could probably live without. We will talk this one over.
5. We have a pretty large fence that needs occasional repair. Generally when this account hits around $200 we stop putting money towards and use that $10 for savings (same with some other areas).
6. I think this may be our biggest pit fall, we will discuss this.
7. I have to admit I have a hard time not spending a good chunk of fun money here or there for hobbies like mountain biking and golf. This is the only one I don't think we could cut back on because I consider this my fitness/mental health category as well as stuff like going to the movies.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: GardenFun on January 08, 2015, 08:27:38 AM
From a cash flow standpoint, you are fine.  From a saving for retirement, you are doing better than 95% of the general population. 

But what are you saving for? 

Do you want to FIRE and travel 8 months out of the year?  Do you like working?  Are children in the future - maybe combined with a reduction in the number of incomes? 

Your current income gives you numerous possibilities.  Your current level of spending inhibits some of those possibilities from becoming reality.  But it all depends on your goals. 

Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: midweststache on January 08, 2015, 08:28:04 AM
Quote
Budget Below (please donít kill me, okay maybe do):

- Mortgage 1360
- Internet 57
- Cable TV 116
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175

Yeah, between Amazon Prime Instant and Netflix, you really shouldn't need cable anymore. Cut it, and with the extra the next month get an antenna for local channels and upgrade (if you can't get what you need with streaming) to the DVD bonus on Netflix. Savings? +$100/month plus all the time spent needlessly vegging in front of said boob tube (or is that just me when I get around cable? Law and Order SVU is on? Where did those five hours go... thus, no cable for me!)

Also, what in the world is Life Events that isn't covered by Fun Money, Gifts, or any of the other things on here?
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 08:31:30 AM
From a cash flow standpoint, you are fine.  From a saving for retirement, you are doing better than 95% of the general population. 

But what are you saving for? 

Do you want to FIRE and travel 8 months out of the year?  Do you like working?  Are children in the future - maybe combined with a reduction in the number of incomes? 

Your current income gives you numerous possibilities.  Your current level of spending inhibits some of those possibilities from becoming reality.  But it all depends on your goals.

Very good points. These are things we are still iffy on, we are unsure if we want to have kids or not or how many. If we do not have kids we are to sell our current house and downsize by a lot. My main goal would be to do exactly what you said, spend the majority of the year traveling and working very little. The kids topic is just very complicated and I am not sure if we are going to be able to make a decision on that any time soon.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 08:33:15 AM
Quote
Budget Below (please donít kill me, okay maybe do):

- Mortgage 1360
- Internet 57
- Cable TV 116
- Electric 125
- Water 35
- Nat Gas 75
- Hosting 10
- CPI 50
- Netflix 10
- Cell Phones 62
- IRA 600
- Cars 500
- Medical 75
- Contacts 50
- Garbage 25
- HOA 67
- Home 100
- Car Insurance 102
- Gifts 50
- Car Tax 32
- Pest 28.5
- Fence 10
- Amazon Prime 8.5
- Grocery/Costco 425
- Churning 28
- Lawn 20
- Car Maint 50
- Food/Alcohol 350
- Trips 0
- Gas 175
- Clothes 50
- Life Events 50
- Misc 50
- Fun Money Me 175
- Fun Money Her 175

Yeah, between Amazon Prime Instant and Netflix, you really shouldn't need cable anymore. Cut it, and with the extra the next month get an antenna for local channels and upgrade (if you can't get what you need with streaming) to the DVD bonus on Netflix. Savings? +$100/month plus all the time spent needlessly vegging in front of said boob tube (or is that just me when I get around cable? Law and Order SVU is on? Where did those five hours go... thus, no cable for me!)

Also, what in the world is Life Events that isn't covered by Fun Money, Gifts, or any of the other things on here?

As I said above my main goal for 2015 will be to convince my wife to cut ties with cable, hopefully I can convince her. Although TV is one of her favorite things in the world. Life Events is a category because we are 25 and we are averaging 3-4 weddings a year. I have already been a best man twice and probably have two more coming, this adds up very quickly.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: SeŮora Savings on January 08, 2015, 08:47:22 AM
- Our main priority in life is to travel as well as be with our friends. This is why so much money goes in to Big Ticket and food/alcohol as we truly value our weekend trips and vacations. We do this extremely frugally however because 90% of our hotels/airfares are free from my points. Last year we traveled to 7 cities and in total spent only spent $8200. Also note some of that F/A is from us hosting parties as we typically are the hosts.

You should use this fact to evaluate your budget.  If something helps you achieve this, it stays; if it detracts from this, it goes.  If it's in between it gets further evaluation.

Some stray observations?

What it your fun money for?  It's hard for me to think of anything that you haven't already budgeted, also you have miscellaneous, those categories should get combined.  I would also put Clothes, Life Events (what is that?), Gifts and Restaurants into fun money.

Cable+Netflix+Amazon Prime seems a bit much unless your primary goal is to stay caught up on TV.  If this is something your wife really wants and you don't, maybe it should come out of her fun money.

You spend 3 times what I do on groceries.  Is there a reason you eat lots of meat?  That would be a reasonable amount to spend if you had caviar every night... but in that case the issue would be eating an unreasonable amount of caviar.  Do you ever throw food away?
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 08:56:58 AM
- Our main priority in life is to travel as well as be with our friends. This is why so much money goes in to Big Ticket and food/alcohol as we truly value our weekend trips and vacations. We do this extremely frugally however because 90% of our hotels/airfares are free from my points. Last year we traveled to 7 cities and in total spent only spent $8200. Also note some of that F/A is from us hosting parties as we typically are the hosts.

You should use this fact to evaluate your budget.  If something helps you achieve this, it stays; if it detracts from this, it goes.  If it's in between it gets further evaluation.

Some stray observations?

What it your fun money for?  It's hard for me to think of anything that you haven't already budgeted, also you have miscellaneous, those categories should get combined.  I would also put Clothes, Life Events (what is that?), Gifts and Restaurants into fun money.

Cable+Netflix+Amazon Prime seems a bit much unless your primary goal is to stay caught up on TV.  If this is something your wife really wants and you don't, maybe it should come out of her fun money.

You spend 3 times what I do on groceries.  Is there a reason you eat lots of meat?  That would be a reasonable amount to spend if you had caviar every night... but in that case the issue would be eating an unreasonable amount of caviar.  Do you ever throw food away?

Fun money is for things we do outside of each other. If I go play a round of golf or need to repair my bike or need a new GPU because mine blew up this is where the money comes from. Or if we were to go out with friends by ourselves this is where it comes from.

Misc is used for things we 100% never expected to budget for, or if our budget was off, it gives us some breathing room. You are right however that it could fit somewhere else.

Life events is for weddings, bachelor parties, etc. This category will disappear once we get out of our 20s I would hope.

Gifts is solely for Birthdays, Mothers/Fathers Day, Xmas etc. So we budget it separately. We never buy each other gifts only others, we use our presents to each other to further our travel budget.

TV unfortunately is her favorite past time, it hurts my insides but if she truly loves it that much it is hard for me to make her cut ties with her DVR.

The reason my food is so expensive is because I eat so clean. Mainly only meats/veggies/fruit, all of which are expensive. I was once 285 lbs and am now down to 200 lbs due to my new eating habits. We may be able to cut this down some but with chicken being $4+/lb and most other meats $5+/lb it is hard to go less. As I need over a pound a day just to hit my protein goals.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: DoubleDown on January 08, 2015, 08:57:31 AM
Since you asked for feedback -- there's a ton of "luxury" and general squishy-ness/ambiguity in that budget. Soooooo many things you could eliminate or reduce if you're interested in saving more and gaining freedom and power.

Cable TV, lawn service, pest service, car payments, churning(???? what is that, like, butter?? Or buying/selling stocks?!), "food/alcohol" (completely over and above "Groceries/Costco"), "Life Events", "Fun Money", "Miscellaneous", contacts, .... If you want to free yourself from the chains of needing to work to support your lifestyle, then you're going to need to re-prioritize where your money goes. Right now it's mostly coming in from work, and going out in spending.

Don't take this the wrong way, but for two high earning individuals with no kids, you are saving/investing very little (at least by standards here). You're doing okay for mainstream standards of saving 10% and working until you are 65, and hoping nothing goes wrong along the way to upset things (like disability, layoffs, etc.). At your incomes, you could gain financial independence in just a few short years if you're serious about it.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: GardenFun on January 08, 2015, 09:13:48 AM
Have you ever made an "Early Retirement" Budget?  What items would stay vs. go? 

For example, if you travel a lot, would you look at renting vs. owning a house?  Or downsizing to a much smaller house? 

Would you live in a lower COL area where fences, pest control, CPI, etc. aren't necessary? 

Would you need two vehicles, or would one be sufficient?

It's a good exercise to help you realize what you are spending due to your current lifestyle vs. the lifestyle you are trying to achieve. 


Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: nereo on January 08, 2015, 09:21:13 AM
You've mentioned several times that TV is one sticking point between you and your wife.  Consider this:  Netflix has about almost 10,000 titles in the US, and if you really must you could get Hulu+ for another $8 a month giving you most of the major network's shows as well.  Plus there's YouTube, etc.
That should help with cutting the cord (saving you over $1,000/yr).
Paying for cable is among the biggest wastes of money.

I get that "fun-money" allows you to do the other things you think you want to do, but all of that comes with a cost of working longer.  you're spending $4,200/year.  Invested, in a decade that could easily be $62,000 or a full year of expenses.  If it's worth it to you, great.  But I would at least take a personal challenge of replacing one "fun-money" expense each month with something free and see how it goes.  Instead of a day of golfing, go on a scenic hike.  Less money, much better exercise - both your pocketbook and body win.  My guess is that you will soon find $100/month to be more than you need, and you will be happier and more fit.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: snshijuptr on January 08, 2015, 09:29:16 AM
For TV look into a SlingBox. They just added ESPN and Food Network.

You both are great candidates for reading Your Money or Your Life. There is a great exercise where you list for each budget category the amount of working hours it cost, whether this aligns with your goals or needs increase/decrease, and whether it will increase/decrease in retirement. It sounds like you spend a lot on items that you feel on a surface level are "important" but that don't align with you life goals (travel, socializing).

Finally, do a little shopping around to see if you can get cheaper meat. Sounds like you eat all organic, though if your goal is weight loss organic doesn't matter. Setup a craigslist alert for a deep/chest freezer and start buying your meat when it goes on super sale. Set a limit in your mind ($2/lb for chicken and $3/lb for meat or whatever) and when you see that price go hog wild buying meat. Just keep that freezer organized so you eat the oldest first.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: Hotstreak on January 08, 2015, 10:33:14 AM
Quote
- Mortgage 1360
- Electric 125
- Water 35
- Nat Gas 75
- CPI 50
- Garbage 25
- HOA 67
- Home 100
- Pest 28.5
- Fence 10
- Lawn 20
Housing 1900/mo
- Cell Phones 62
- Medical 75
- Contacts 50
- Grocery/Costco 425
- Clothes 50
Necessities 662/mo
- Internet 57
- Cable TV 116
- Hosting 10
- Netflix 10
- Amazon Prime 8.5
- Food/Alcohol 350
- Life Events 50
- Fun Money Me 175
- Fun Money Her 175
Entertainment 952/mo
- Cars 350
- Car Insurance 102
- Car Tax 32
- Car Maint 50
- Gas 175
Transportation 859/mo
- Gifts 50
- Churning 28
- Misc 50
Other 128/mo
- IRA 600
- Cars 150
Savings 750/mo

I tried to re-categorize your spending to make more sense of it.  The split in Cars expense is an estimate based on your statement that part of it goes to savings for new vehicles (the rest going to loan payments).  Additionally you spend about $600/month on Big Ticket (combined 40% of your bonus and 6000 from "other bumps").  I'm not clear on whether 20% of your bonus is included in the Misc in the budget above (both are $50), or if that needs to be added in.  Same with the 40% of bonus going to IRA, which would be an additional $100 per month.
 
Anyway, lets take a look at the categories as I've split them.  Housing is location dependent, but does seem high at first glance.  You are spending quite a bit on energy (Elec + Gas = $200) and there is $100 "home" floating out there.  If that's anything like cleaning supplies, household goods, etc., it should probably be classified as groceries (and reduced significantly).  I think you could cut these costs by $150/mo without much sacrifice.
 
Next for Necessities, you seem fine honestly.  Cheap phones, reasonable medical, low clothing.  Some would say your food is high for 2 people but based on what you describe of your diet choices it's not bad.  The only thing I would suggest is looking in to eating additional healthy fats and/or clean carbs as substitution for part of your meat eating.  150g of protein is a lot, even for a very active large guy.  You're probably on the top end of "even if I was a bodybuilder I would not benefit from eating additional protein", which is pretty extreme.  Might try slightly reducing portions and see how it goes for a month.  Cost cutting maybe $50/mo.
 
The Entertainment budget is huge, and doesn't include the travel/big ticket.  Others have talked about Cable, but even if your wife keeps this you should be able to cut it in half.  From the amount I assume you're on premium channels.. if you go to expanded basic there are still a lot of popular shows.  Food/Alcohol just basic ideas to cut it, invite people over, drink less or drink before, volunteer to be DD, order appetizers instead of meals, order well vodka on the rocks instead of expensive cocktails.  Try cutting down Fun Money if you can.  Cheaper golf courses, taking less risks with the bike, etc., and applying the less costly going out principles as well.  Cost cutting about $400 as a start, and more if you can swing it/as you get used to doing things in a less costly way.
 
Transportation is pretty big as well.  You spend a lot on fuel and a lot on insurance as well (I recognize the insurance is likely required by your lender at this time).  Maybe combining trips a bit, shopping around the insurance, but most of the savings here will come when the loans are gone.  $25 cost cutting at this time, then a total of $400/mo when the loans are gone.
 
Other, I don't know what churning is!  Besides that this seems okay, although if Misc is truly $100 (with an additional $50 from the 20% of your monthly bonus) you might see if you can allocate some amount to a formal category.  Cost cutting, $0.
 
That's a total of $625/mo without significant lifestyle change, which would go up to $1000/mo when the cars are paid off.  That's already a lot!  Keep in mind though there may be a meta issue here, which is where you live vs. where you work.  You have high housing costs as well as high transportation costs.  Typically there are savings if you move closer to work, which also gives you more free time to deal with everything around the house.  I can't say how much you would save without details of how far your commutes are, what the housing market looks like, etc... but you may have huge savings by looking in to this.
Good luck! 
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: CU Tiger on January 08, 2015, 10:42:50 AM
I reorganized your list into some groups:

FOUR WALLS
Mortgage 1360
Grocery/Costco 425
Electric 125
Water 35
Nat Gas 75
Garbage 25
HOA 67
Home 100 (Is this home repair that you put aside or spend to fix things?)
Pest 28.5
Medical 75 (Is this insurance or actual medical costs?)
Hosting 10
CPI 50
Cell Phones 62 (You know that you can get this down, right?)

Not sure what these items are, but they donít seem too high.
Fence 10
Churning 28
Trips 0

CLOWN CAR HABIT
Cars 500 (Reading more carefully, this is actually going into savings??)
Car Maint 50
Car Tax 32
Car Insurance 102
Gas 175
Totals to drive cars:  $859 (WHOA!)


Retirement Savings:
- IRA 600
(Good that you save something, but if you get old and have to eat catfood, you can think fondly back at the days when you bought all the next stuff. I mean, hey, you may live in a box down by the river, but once upon a time you had CABLE TV, AMAZON PRIME AND NETFLIX, as well as your own personal $175 a month to spend on blow and hookers.)


Entertainment/Personal/Living the Sucka Consumer life
Food/Alcohol 350 (Is this eating out? Every month?  Food is a necessity, but eating outÖnot so much. As much as I like a drink, and I DO like a drink, alcohol is not a necessity.)
Internet 57
Cable TV 116 (sigh)
Amazon Prime 8.5
Netflix 10
Gifts 50
Life Events 50 (What is a Life Event?)
Misc 50
Fun Money Me 175
Fun Money Her 175
Clothes 50 (Do you really spend this every month or is it just there in case?)
Contacts 50
Lawn 20 (you canít do this yourself? You are paying so little that you must be paying a kid to do it once a month.)

Now, it's your money, you earned it and can do whatever you want with it, but if you want to be either Financially Independent or an Early Retiree, you need to look long and hard at everything on your list and ask yourself, is this going to help me FIRE?
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: ShoulderThingThatGoesUp on January 08, 2015, 10:51:36 AM
Things that jump out to me are:
1. Churning. What?
2. Lawn and Fence. If you're not happy to do your own lawn (and maintain the fence), you shouldn't own that lawn. I've been there, and I sold that damn lawn. And that huge driveway. Now I mow my lawn with a reel mower and it doesn't take nearly as long.
3. Pests. Maybe you had a pest problem when you moved in (there were a lot of centipedes in the foreclosure I bought), but I really doubt you need to pay out money every month for this. Much of my family lives in Houston and none of them have contracts with pest control companies. Do you really live someplace with that many more bugs than Houston?
4. Hosting. Do you need to have your own website? And are you leaving out the domain name registry cost?

These aren't huge costs, but combined they're almost $100/month, post-tax.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MustachianAccountant on January 08, 2015, 11:07:38 AM
Churning is churning credit card apps for point bonuses. That's why they were able to visit 7 cities and "only" spend $8,000 doing so. Still seems high to me, but travel is a priority, so whatever.
Here's the thing - churning should be at the very worst, cost neutral. If you're MSing, get yourself a cash back card to offset the points churn. You shouldn't be keeping cards with annual fees without a compelling reason.
I know $28/month is not a huge expense, but every little bit counts. On the other hand, as should now be obvious, you have bigger fish to fry first.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: ShoulderThingThatGoesUp on January 08, 2015, 11:18:18 AM
I can't get over the pests thing. It doesn't matter if you have ants in your yard, so that's not a value-added service (in fact most likely the service is just helping out the territories of ant nests in your neighbors' yards), and if you regularly have ants in your house, you have a problem with your house, most likely a rotted windowsill or other board. I had a rotted windowsill that was the cause of regular ant forays into my living room. Replaced it when replacing the window, no more ants.

Number of ants in the yard: almost certainly unchanged.

Also, even if you have a steady ant train to an ant buffet in your house (my sister had this to her kitchen rug when her little daughter was dropping a lot of food), you can kill off the ant chain once and it will take them a while to find the spot again, which hopefully you've also cleaned. I solved my sister's ant problem with one spray of Raid where they became visible when I happened to be there.
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: surfhb on January 08, 2015, 11:27:34 AM
Sure lots of glaring issues:

1.  You pay to much to use a vehicle.   Buy used cars, don't finance and use low cost insurance.  Better yet, don't use a car at all.   Note:   I Spend too much on transportation too.... Don't feel bad :)

2. Lawn?  Lol.   You lazy bastard

3. Food?   You both eat and drink too much.  At least you are aware of this.

4. Cable, Churning and CPI?   Jesus, Mary and Joesph!   That's $200 a month!   Especially your home security.....do you relize the odds of you being burglarized is just about nill??!!    Are you afraid of some non existant bogie man?   I suggest you both change your mind sets.   The home security business has got to be the biggest sham put on the American household in the last 20 years :).  Besides, there are many free DIY options in this area if you're not convinced

Pest, fence, Amazon prime?    Lol. cmon bro!    You can do it!
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: MrD on January 08, 2015, 11:49:42 AM
Hey guys first off thanks for all the advice, I stopped responding as I'm currently traveling home from a work trip.

Couple things I want to point out:

-canceling pest service
-churning is for credit cards, this $28 is covered by sign ups a lot of times
-the 20 for lawn is the cost for supplies as I do all the work myself
-I actually use about $30 of gas a month, we moved near my wife's workplace but they have since moved locations causing our has expense to go up quite a bit
-I will look at all the replies and make a larger response later thanks again!
Title: Re: Reader Case Study - Are there any glaring issues with out budget?
Post by: AlanStache on January 08, 2015, 12:35:59 PM
re cable: this bomb dropped the other day
http://about.dish.com/press-release/products-and-services/sling-tv-launch-live-over-top-service-20-month-watch-tvs-tablets (http://about.dish.com/press-release/products-and-services/sling-tv-launch-live-over-top-service-20-month-watch-tvs-tablets)

Given all the talk of food/meat, there has been no mention of a gym membership, is that in there somewhere or you workout at home?

You said you have the security in part for the remote thermostat, you can get this stand alone; google "nest thermostat"

Re cars: seems like you could make a lot of progress here if you decided to, between just cheaper vehicles and different insurance as you dont need as much with cheaper paid for cars.

Work travel: Do you do per-deim or actual expenses.  Do you get sloppy with money while on the road?  I know I cant fly unless I have a copy of Outside in my carry on.

When traveling for fun are you still careful about spending, anyway to bring some of your own food with you to cut costs there, or buy locally a bag of bagels for breakfast in the hotel room?  On the fun trips do you make an effort to stay in cheaper hotels, with the churning you may have fewer options.  Maybe look at this end-to-end, could be that going for more cash back rewards vs hotel points would be cheaper over all.  Dont know, you have not listed details on all this.  Those 'free' Marriott upgrades may not be as free as they seem.  Could you use some of your churning points to give gifts; Delta lets you buy consumer goods with miles-toasters are toasters after all.

edit:
Re utilities: is your home well sealed, no drafts?  CFL's and low flow showers/toilets etc?