Summary:
I’m 28, and I’m new to the Mustachian way. My husband, a contractor, let his last work contract run out due to an serious illness in the family, which was about three months ago. We just bought a house this year, so the timing wasn't great. Knowing we’d need to be more careful without the extra income, I got into YNAB, and found MMM a few weeks later… and a good thing too! I’d always thought I’d done pretty well, but after reading these forums a bit, it’s obvious that I need help.
INCOME
My salary: $60,000/year ($48,000 after taxes) or $4000 a month
CURRENT EXPENSES
Debt:
$ 90 Credit card 1
$1800 Mortgage
$ 15 Mortgage offset account fee
$ 5 Credit Card 1 monthly fee
Bills:
$ 70 two mobile phones
$ 167 electricity
$ 84 water
$ 105 gas
$ 200 council rates for the house
$ 70 data for iPads
$ 120 home internet + line rental (only used for the internet)
Transportation:
$ 190 transportation (I take the train to work)
$ 630 car loan payment
$ 300 petrol
Insurances:
$ 350 health insurance
$ 59 home and contents insurance
$ 130 car insurance
Everyday Expenses:
$ 160 entertainment and eating out
$ 400 groceries
$ 200 personal fun money ($100 each)
TOTAL EXPENSES: $5,145
ASSETS
$ 7,750 emergency fund/savings
$ 3,000 extra payments on the mortgage
$17,200 my superannuation investments
$52,000 his superannuation investments
$ 6,000 equity on car
$30,000 equity on house
LIABILITIES
$330,000 mortgage, 4.88% with 100% offset account
$ 22,000 car, 6% with an early termination fee of $1000
$ 2,600 student loans, interest-free, indexed annually
$ 2,400 Credit Card 1, interest-free, $5 monthly fee
$ +200 Credit Card 2 (positive balance), interest-free, no fee
Additional info:
- My husband will be looking for a job in the new year. He has typically been able to bring home around $9,300 net per month.
- I live 38 km away from work, which means I drive 8km to the train station and then take the train.
Things I know I can cut back on
1. The car - At this point we’re unwilling to go entirely without a car, but we CAN definitely reduce the amount we spend on petrol. I would love to get some bikes, but I don’t know anything about them and I’m afraid it’ll be too expensive. The other option is that I could walk to the bus stop and take the bus to the train station every day, and walk to and from the grocery store.
2. Mobiles - I could cut my mobile down by about $15, but even that would be stretching it. I could give it a try and see how it goes.
3. iPad data - This is under contract until January, after which we’ve already agreed we will cut this out for both of us.
4. Entertainment and personal fun money - I know this needs to be reduced… I’ve held off until now because when I first got into YNAB, I reduced the entertainment/eating out budget from $200/week and the personal fun money from $100/week each to the current levels. I was trying to break my husband into it as slowly as possible.
Some questions for you expert Mustachians:
- Where would you cut back if you were me?
- In what order should we be tackling our debt/retirement savings? (once my husband gets back to work and we have money to spare)
- Is it reasonable to bump up certain budget categories when we’re back to having two incomes? If so, by how much?
- How does a Mustachian travel? Our annual overseas trip to see my family is coming up (and I only see them once a year, so am unwilling to cancel), and although we’re staying with family, there’s always a lot of pressure to eat out. We also want to show our gratitude for my family putting us up, which usually translates to several tabs we pick up. How do you guys handle it?
Thanks in advance for your suggestions - I’m braced for some (hopefully constructive) face punches!