Help! - Any perspective on budgeting?

[NYCMiniBee133]

Dear Mustachians,

I’ve been a longtime reader of the blog and have found myself slowly implementing the ideas on this blog. It has been fantastic! The challenge I have is I am hopefully nearing the endpoint and reaching independence, but as that target comes closer I find myself feeling the need to sharpen my ideas of the budget we have going forward.

I and my partner are in our late 20’s/early 30’s and we live in a major city. We have no idea how much it will cost to raise kids, how much a car costs with accompanying insurance and gas, no idea what health insurance costs especially as you age through your 30’s, 40’s, and 50’s. We’ve rented all our lives so we have no idea how much to budget for household maintenance or home insurance.

I have tried my best to research these topics one by one. Our thought is to use MM’s tip and relocate to a different area to raise the kiddos with good schools, but that adds yet another layer of complexity since we don’t know anyone there to tell us if we’re in the right zone with our budget! We are planning our expenses around Austin, TX or perhaps Bellingham/Seattle metro, WA. If any of you wise Mustachians could weigh in on how to think about this, that would be great:

Health insurance - $1500-1900 for two adults in late 40’s and two kids. That’s high deductible, so possibly another $10k a year if you actually hit your deductible for birth of kids, major illness, etc.
Car insurance: $150 a month
Gas: $50-100 a month? We hope we can ride bikes and such, but this is worst case
Home insurance: ??
Home maintenance: ??
Home Price/Rental Cost: I can do this part
Child costs (daycare? Clothing? Other kid stuff?): ??
Child enrichment activities (do you see how clueless we are?): ??
Food: $700-$900 a month for family of four

[Emilyngh]

Dear Mustachians,

I’ve been a longtime reader of the blog and have found myself slowly implementing the ideas on this blog. It has been fantastic! The challenge I have is I am hopefully nearing the endpoint and reaching independence, but as that target comes closer I find myself feeling the need to sharpen my ideas of the budget we have going forward.

I and my partner are in our late 20’s/early 30’s and we live in a major city. We have no idea how much it will cost to raise kids, how much a car costs with accompanying insurance and gas, no idea what health insurance costs especially as you age through your 30’s, 40’s, and 50’s. We’ve rented all our lives so we have no idea how much to budget for household maintenance or home insurance.

I have tried my best to research these topics one by one. Our thought is to use MM’s tip and relocate to a different area to raise the kiddos with good schools, but that adds yet another layer of complexity since we don’t know anyone there to tell us if we’re in the right zone with our budget! We are planning our expenses around Austin, TX or perhaps Bellingham/Seattle metro, WA. If any of you wise Mustachians could weigh in on how to think about this, that would be great:

Health insurance - $1500-1900 for two adults in late 40’s and two kids. That’s high deductible, so possibly another $10k a year if you actually hit your deductible for birth of kids, major illness, etc.
Car insurance: $150 a month
Gas: $50-100 a month? We hope we can ride bikes and such, but this is worst case
Home insurance: ??
Home maintenance: ??
Home Price/Rental Cost: I can do this part
Child costs (daycare? Clothing? Other kid stuff?): ??
Child enrichment activities (do you see how clueless we are?): ??
Food: $700-$900 a month for family of four

Here are my comments based on my experience:
-Why is your health insurance so high?   Have you checked out the ACA?    From my experience the rates there are half that for 4 people (and even that's assuming you don't qualify for a subsidy).   No chance of employer insurance?   

-Our home insurance is $75 a mo. on about $250,000.

-We spend no more than $100 a mo on house maintenance (but more on voluntary projects).

-kids: daycare depends on the area and if you are willing to do in-home.    In lower COL areas, you might be able to find something as low as $550 or $600/mo, but maybe $800 a mo is a good general estimate.   Other than that, if you have to use formula, that's $100 a mo for the first year or so, and disposable diapers are another $30-$50/mo (or cloth have a couple hundred startup but then practically free).   We have a $25/mo clothing budget for our daughter and she's very well-clothed.   Activities can range from free, to $100-$200 a year for inexpensive ones, to virtually an unlimited amount-it's all dependent on what you want to spend.   Don't forget the child tax credit and person exemption to offset some of this though.

[frugally]

Unless you are buying for expensive dietary needs, your food budget is too high.  With proper planning, getting that to around $500 should be relatively simple.

[anneinpdx]

Congrats on getting to the budgeting stage before having kids!  We waited until afterwards to get serious on finances which added a layer of complexity. 

On many of these areas it will be hard to come up with numbers because they are specific to the area you live.  Also, with kids, planning can be very difficult.  Our kids have been cheap to clothe, feed, entertain (hand-me-downs, cloth diapers, lots of free activities) but childcare costs were crazy for a year or two.  After my 2nd was born, our childcare situation fell through at the last minute.  We ended up with a nanny as we were unable to find a convenient daycare that also matched our schedule and low-car lifestyle.  Last year our childcare/preschool expenses were in the $2k range (for only 3 days/week) which was more than our mortgage.  Yikes! This year my older son went off to kindergarten and we were able to find another family to share our awesome nanny.   I don't regret the expenses because my boys love their nanny and I felt ok leaving the house each day but I would not have anticipated that kind of cost after having my second.  My oldest son went to a home daycare for ~400/month.

Right now for our family of 4 I budget in Portland:
$50/month for kid supplies, field trips, clothes, occasional sports/swim lessons but we keep this simple
$1000 for childcare for  2 year old and after school care for 5 yr old from nanny
$600/month for groceries.  Sometimes I can undercut this by $100 or so (mostly when the summer garden is producing) but after some experimentation I find this is my happy number for buying high quality meats, local produce, etc. 
$50/month for gas- got a cargo bike last year and now this is generous
$40/month for car insurance (2001 Subaru Outback)
$100/month home maintenance, although I budget separately for major anticipated repairs

I don't know about healthcare.  My husband has a government job with super cushy benefits so this is one area we don't currently worry about.

Honestly with friends, consignment stores, and a little creativity kids do not have to be so expensive.  The key is not to fall into the idea that your kids have to do every possible enrichment activity.  My boys mostly have a lot of open creative time and reading and the older one is thriving now at school.

[NYCMiniBee133]

Guys, just wanted to thank you all for the advice. Yeesh, kiddos! Really appreciate your insights as we felt really blind trying to guesstimate on our own!