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You guys, I'm just starting a budget for my family because we've just obtained our first "real" jobs and it looks like an absolute blood bath. How the gently caress are we drawing $15,500 in salary and projected to break even every single month?
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Sep 27, 2016 21:08
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| # ¿ May 11, 2024 16:06 |
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These are all projections, because we haven't OFFICIALLY closed the house yet. Double bonus points that we bought it as a zero down 5/1 ARM because we are future BWM poster children. Okay so: 2 incomes both totaling ($15,500) after maxed tax favorable (Roth VSP) and tax unfavorable (403b) retirement donations Expenses: Further $1000/month to 529 $2400 a month for MBA tuition $250 a month for diaper expenses $52 a month for miscellaneous entertainment (books and Netflix, chiefly) $600 a month for dining out $800 a month for groceries $400 a month for assorted charities $1800 a month for mortgage, homeowners and property tax $815 for utilities (water, sewer, electric, gas, garbage) $1000 a month for childcare $300 for internet and phones (3) $120 for personal care (gym, haircuts, toiletries) $200 a month for pet expenses $1500 for future debt payments yet to be incurred $1125 for current student loan payments (will balloon based on income based repayment plans) $350 a month for gas $150 a month for car insurance $110 a month for car registrations $100 a month budgeted for car upkeep $2100 a month for car payment and projected car payment So we're both docs, we both just got our first grown up attending jobs, we made some good decisions (pay yourself first, some money socked away for retirement) and some bad decisions (flossy new car). We still have like $15,000 in CC debt, we now have a car loan at 2% and a home mortgage at 3.25%. Unspeakably awfully we have a total of like $400,000 in student loan debt, but $270,000 of that is scheduled to be forgiven if my wife keeps making minimum payments. That's not the direct I saw myself going with that debt, but given that the Obama administration has codified it and that physicians are allowed to use that (we work for state institutions) I guess we should take advantage of it. Thus our net worth is pretty brilliantly bright red right now, but I'm most worried about how we're going to pay down these credit cards, assemble an emergency fund and claw ourselves forward.
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Sep 27, 2016 21:33
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These are some great insights. Fortunately, I do have a second car that is paid in full, it's just getting a little beat up at this point and is 13 years old. I think we can make it run another 2 years, but that might become an emergency if it doesn't. (Our new car is literally $1350, it makes me sick to think about that decision, having read some personal finance literature in the intervening weeks). I really enjoy it, and it's for my wife and the baby, but still. I should probably also add that I get quarterly "bonus payments" of approximately $15,000. These were going to cover some of the heavy lifting as far as drawing down our debt and improving our financial outlook, but they can't really be counted on or budgeted for because I've heard they can vary a bit based on departmental revenue.
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Sep 27, 2016 21:56
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Rurutia posted:I'm surprised at the $800 in utilities, esp if your mortgage is only $1800. I think $1400 for food is ridiculous, and it looks like you guys are spending like you make $$$$ when you really only make $$ once you take all the debt into consideration. I'd consider not getting that car that is the projected one for sure until your pay off your debt/MBA tuition. A lot of the spending on food is convenience based - we work terrible hours and so eat out a lot because we can't be assed. The $800 for utilities was just a guess, I've never been a homeowner before.
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Sep 27, 2016 21:59
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It's my first time making a budget Ashcans, don't be an rear end in a top hat. I will try to clarify. The MBA comes with a guaranteed $20,000 a year pay raise. It positions me to be a departmental or hospital administrator, which is the job I want eventually. I've already scrapped the idea of the second car, part of this exercise was confirming for myself (and having others re-mediate for me) that it would be totally unreasonable. The utilities estimate is likely bananas because I've never had them all to myself before and I didn't want to get screwed one day to find out they were actually going to cost that much (I overestimated). The eating out thing is probably not that much of an overestimate; I've gone through three months and the average has been $400. It is clearly a place we can cut back. The $1350 car is a loaded Volvo XC-90. I really like it. It's the luxury that I get to enjoy. The line item for paying down the CC debt is the "$1500 of debt yet to be actualized" and the "windfall" money that I earn quarterly. The car registration was a projection, although my yearly registration is 1% per sticker price + 0.40 * gross weight. Which works out to like $50 a month for the XC. edit: I should say also thank you everyone so much for your insight into this. It's hard to believe *HURR SMART DOCTOR* but a lot of the path of training in medicine is about not really understanding adult responsibilities and delaying gratification. When you finally feel like you have the room to buy something without worrying that the money is going to run out "oh it's just a cash flow problem" it gets really dangerous. I'm truly grateful for your insight. You guys are masters at this, and I want to be better. EAT FASTER!!!!!! fucked around with this message at 22:22 on Sep 27, 2016 |
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Sep 27, 2016 22:18
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Sockser posted:Something that I do in my budget, since I get lots of work lunches at the local sandwich establishments, is to have a separate budget item for 'fast food'=poo poo lunches I'm buying at work and 'dining out'=taking my girlfriend out to a restaurant or ordering in some GrubHub or the like. This might be overkill for you, it might not. I like to track them independently. The top one is a GREAT idea, I'll share it with my wife (who also works at the same hospital that I do - we get to see each other for lunch sometimes it's actually really cute) and yeah, I'm coming from Pennsylvania, and a car older that 10 years you just pay $25 a year for but any car 1-3 years old is registered with that formula and it scales down to 10 years being basically nominal.
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Sep 27, 2016 23:00
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Peanut3141 posted:When I bought my Tacoma new in 2001 here in Arizona, it was about $300/yr to register it. 15 years later, I pay $200 for two years. It's probably worth roughly 1/3 of what it was new, so I assume they're working off some sort of KBB/Edmund's value estimator. A Tacoma is the car I shopped for the longest before my wife/MIL convinced me she had to have the Volvo. Heh. I am glad to hear yours is still running, I am looking at getting one used once I get this tuition paid (or the car breaks).
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Sep 27, 2016 23:01
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PhantomOfTheCopier posted:If you don't have time to be managing your money, your default position should be to not spend it, as opposed to dumping it all on restaurants and bling. As others have mentioned, the budget needs some more polishing; you have a few realities being masked by the categories you've chosen, which will make it more difficult to identify the silly. Yep, totally valid. There are only 3 of us, and the baby is 3 months old (breast milk is free!) so the food is pretty stupefying. Of course my MIL is of the mindset that it's all gotta be 100% organic, so the food really does add up. This is great advice, though, and I'm not trying to bicker I just feel powerless because we're subscribed to a lot of spending that feels out of my control. edit: the pages of negotiations I had to do just to get cable off this list go unheeded.
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Sep 27, 2016 23:34
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If it comes out pre-tax, is a sunk cost and you can't change it, why put it on your budget? It's not money you need to worry about. You're doing the right thing - paying yourself first - and you can basically ignore it.
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Sep 30, 2016 19:27
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Alright so I've toiled and hammered away at the October 16 here - all of this is after tax, after 403 and VSRP contributions have been taken out: I: Salary 1 - 6912 Salary 2 - 5284 E: 529 - 500 School - 2400 Baby Expenses - 250 Books & Netflix - 52 Dining Out - 200 Groceries - 600 (we found an Aldi nearby!) Electric - 200 Gas - 100 Waste, Water & Sewer - 45 Childcare - 600 Closing Costs - 3700 Internet - 50 Phones - 239 CC1 - 283 CC2 - 52 CC3 - 240 CC4 - 300 Student Loan 1 - 805 Student Loan 2 - None this month Medical - 400 Fuel - 420 Car Insurance - 150 Vehicle Payment - 1350 We end this month a thousand in the black even though we're paying like 2 times our normal mortgage for closing costs for the new house. Should we pay one of the credit cards or start our emergency fund first?
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Oct 4, 2016 03:04
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Sure, thanks. The good news is I get a $10,000 quarterly bonus next paycheck, and my wife goes to full salary so the second paycheck goes up. It sounds like you guys are in agreement that the first and most important priority is paying down the high APR credit cards (there are 2) and then savings, and then the 0% APR credit cards (there are 2)? We don't have substantial cash on hand, but because of the way our balances work we have several thousand dollars cash on hand until the very end of the month, when it is allocated to future large expenditures like tuition. The money in the black at the end of the month is going to go on to one of the cards or into a true income-independent emergency fund, so one of the payments will be larger than is indicated, I appreciate your help in prioritizing. EAT FASTER!!!!!! fucked around with this message at 14:31 on Oct 5, 2016 |
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Oct 5, 2016 14:28
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PhantomOfTheCopier posted:Agreed stash a little to cover the bills then burn the high interest cards to the ground. 10% simple interest on 10k is $83/mo, which is your Internet and half water/garbage. At 15%, interest charges literally eat your food for you. This... this is probably the best and most terrifying description of APR I've ever read. Thanks for this.
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Oct 6, 2016 16:05
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After a couple of months on Financier - we absolutely love it. We are a car payment and a mortgage payment ahead, and have paid down approximately 40% of our credit card debt, with the rest anticipated to be gone before it's generating any interest. Our budget varies pretty dramatically because of our quarterly bonus cycle, but the breakdown we've achived so far looks a little like this: Listed as percentages of monthly net income (after 403B max, VSRP max, taxes, insurance, pre-tax gym fee) 15.4% current tuition for MBA (only 3 semesters left) 10.8% mortgage payment (only 29.9 years left) 8.7% car payment (only 4.5 years left) 8.7% child care expenses and discrete baby consumable goods (only 17 years left) 8.1% student loan service (only 4-6 years left for PSLF) (the vast majority of this is planned to become elligible for PSLF but is at pretty awful interest rates averaging 8% - there's a 0% interest in there we're letting ride and a 8% private loan we plan to pay soon) 4.2% food (2/3 groceries, 1/3 restaurants) 3.2% college savings account 3.2% additional emergency savings (emergency savings currently only about 1/2 a month ahead) 3.2% "furniture fund" 3.1% car maintenance, car replacement savings, car insurance 2.9% upcoming travel and vacation savings 2.2% medical copays, pharmacy spending, household goods, clothing, dog spending 2.2% gasoline 2.0% minimum service of consumer debt currently all @ 0 interest (plan to be clear of this by May) 2.0% cellular, internet and TV 1.9% trash, water, electricity (projected) and gas 1.3% gifts, Christmas savings, "special projects" 1.2% entertainment 0.6% "spending money" for unbudgeted miscellany remaining: roughly 14.4% of our salary each month. I think we should probably allocate this money to either 1) paying down CC debt, 2) paying off a private student loan inelligible for debt forgiveness and at something like 7% interest, 3) filling up our emergency fund tank ahead of schedule. The wrinkle here is that we get a bonus (of roughly 50% of the total take-home pay in a month) every 3 months, which has been doing a lot of the work of clearing bad debt. I think i could wait for that to hack down a CC which is going to come off grace period and then next the private loan. Should we race to pay down our credit cards at 0 interest? Should we stretch to pay off the private student loan? Or should we bolster our anemic emergency fund to be 3 months ahead of major capital expenditures instead of 1/2 a month ahead?
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Nov 10, 2016 15:22
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PhantomOfTheCopier posted:Pay down the student loans first IF they don't penalize for prepayment (unlikely) and if they don't advance your next payment due date. That is, if you pay Nov+Dec now, ensure that your next due is still Jan. This permits you to chomp off the interest accrual without losing your buffer. If you have an emergency, you'll have all those spare months to skip loan payments. Unfortunately this loan does not, it would advance our next payment due date and thus would deplete our buffer. Hence, instead, we've decided to buff our buffer. A follow up question about budgeting - when you folks consider "emergency fund" what percentage of your background spending are you considering in this bucket? Because while we budget quite a bit of income every month, we try to keep our honest to God make or break expenses as a much smaller fraction of that pool. It seems very unlikely that with two earners in the house we would have financial hardship substantial enough to put both of us out of work AND disqualify us from our paid short and long term disability insurance. So I look at things like 180 days of mortgage, 180 days of student loan payments, 180 days of car payment, 180 days of utilities, 180 days of food expenditure realizing that a lot of the stuff on top of that spending is discretionary. Ultimately it seems too conservative to have a lot more than 40-50k sitting around for emergencies, given that much more substantial money is available to us out of other accounts in an honest to God actual emergency, and that our level of consumption and discretionary spending could be reined in without any real difficulty.
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Dec 8, 2016 06:37
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FWIW it's really fun to move the money to different little piles and think about "well what would it be like if I spent $4000 on shoes this month?" "naaah, better put it in the emergency fund!" Just seeing the numbers move is really good reinforcement that these little things can and do add up.
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Dec 22, 2016 19:51
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Live with your parents, eat canned beans and save it all 
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Feb 14, 2017 23:07
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The pushback is because high rent is a stupid place to blow a lot of money. Are you looking at 2BRs? Look at 1BRs. Are you looking at 1BRs? Look at studios. Are you looking at studios? Look at efficiencies. Are you looking in Seattle? Look in Tacoma. Are you looking in Denver? Look in C. Springs. Your time isn't worth enough (and your money is worth too much) to let this be half of your monthly income. edit: just seen that you're looking in Toronto. This site tells me there are several neighborhoods in Toronto proper in which you can get a 1BR for < $1000. http://www.blogto.com/city/2016/01/the_top_5_neighbourhoods_for_cheap_rent_in_toronto/ As does http://www.padmapper.com EAT FASTER!!!!!! fucked around with this message at 14:18 on Feb 15, 2017 |
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Feb 15, 2017 14:11
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22 Eargesplitten posted:Let's not get crazy here. lol I think I meant Aurora here but no, no I am going to advocate that you commute an hour and ten minutes by car every day into some of the worst traffic in the US.
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Feb 19, 2017 01:36
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This is my favorite thread in the whole forums but nobody ever wants to make a budget. 
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Mar 28, 2017 14:33
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EVERYONE SHOULD MAKE A BUDGET, IT'S SO FUN!
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Mar 28, 2017 22:10
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Blinky2099 posted:What I think I could live happily on today: $2,000/mo I have the next 4 years of monthly budgets drafted. I'm sure some things will come up, but it's always a discussion in our house - this decision X today pushes back other, long-term goal Y.
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Mar 28, 2017 22:23
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I have 2 different flavors of budget, because there are 4 "bonus" months during the year, and 8 "normal" months. All of our taxes and maximum tax-advantaged retirement contributions come out ahead of any of this budgeting ("pay the government and then yourself.") Our budgeted spending in a "normal" month totals approximately 75% of our remaining take-home while the same spending in a bonus month totals roughly 50% of our take home, with the remainder (not on this list) used to accomplish long-term financial goals like savings and servicing debt above the level of scheduled minimum payments. They are line items on my budget and I recommend that they be on yours also, but I've pulled them off this budget because they vary so significantly. Those goals and objectives can be seen in the financial goals thread. So without further ado: My business school tuition is our single biggest line item, and represents 15.6% of a normal month take-home (NMTH) Our mortgage is 8.7% of NMTH Our student loan minimums are 8.3% of NMTH Our first car payment is 7% of NMTH Child care is 5.4% of NMTH Groceries average 3.1% of NMTH Our second car payment is 3.0% NMTH Our first child's 529 contribution is 2.8% of NMTH We allocate approximately 2.6% of NMTH to a furnishing our house We budget 2.1% of our NMTH to upcoming vacations We budget 2.1% of our NMTH to eating out at restaurants (including work lunch) Baby miscellany including diapers totals 1.6% NMTH at this time Gasoline totals 1.6% NMTH Cell phones and internet total 1.8% NMTH The dogs cost us roughly 1.3% NMTH Car insurance totals us 1.1% of NMTH Electricity, gas, trash and water total 1.1% Upcoming non-reimbursed travel budget represents roughly 1% of NMTH Entertainment discretionary (including Netflix) is a 0.8% NMTH line item Pharmacy, clothing, spending money, birthdays, Christmas, charity all get 0.5% line items Subscriptions total represent less than 0.3% of NMTH. I usually catch all the categories going like this, at least all of them that reoccur! something always comes up
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Mar 29, 2017 16:32
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my summer at fat camp posted:How do you spend almost $1,000 on groceries monthly About $200 at a time, usually.
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Apr 1, 2017 19:30
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Punkbob posted:
Your budget doesn't contain any line item for transit, which makes me worry you're not taking the "looking at expenses" aspect of this seriously. Do you have any subscriptions? These are monthly, recurring expenses. Any savings for medical/dental expenses? Even $20 a month will cover your copays. No pets? No savings for gifts or special occasions? It looks like you've - on a lark - donated to "charitable" causes in the past, but you could also budget for this. We need a clearer picture.
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Apr 2, 2017 16:26
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PhantomOfTheCopier posted:The extremes are given in the two previous approaches, either a lump sum plan it having to flop around stuff every four weeks as you changing your mind about how to waste your money. There is, fortunately, a very convenient way to achieve this with percentage budgeting and saving ahead in individual categories. See the first few pages of the thread. I don't think Kyoon was specifically asking for advice on this point, and while you're right that many of us can and do choose to budget for this, I'm sure his way works fine and takes less agony than does my micromanaging "entertainment" to < 0.5% of PTPRTHP.
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Apr 4, 2017 15:55
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KYOON GRIFFEY JR posted:yeah basically what i am doing is allocating a big chunk of money and making sure that i don't stray outside of it. if it's a big purchase i fund it from elsewhere. i will be tracking my variable spending in a bit more detail to see how it actually ends up but if i look back on it i'm usually spending well under that in a month So I gently caress ants  I really like this expression, actually, but part of it is that we were bad spenders for a long time and have a huge potential for consumption creep so having a really clear budget even for the "small stuff" helps out in our house immensely. I would not recommend it for everyone, certainly not people who are 1) high earning, 2) pay themselves first and 3) have no problem with consumption or debt.
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Apr 4, 2017 19:49
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potatoducks posted:You guys planning on keeping a strict budget forever? Yes but it's not like an unpleasant state to occupy - I can still go out and splurge like anyone else but ultimately I know when we shouldn't. It's just a way to keep ourselves pointed toward our short-term goals, our intermediate goals and our long-term goals. Like this might sound insane but we have talked about the possibility of retiring outside the United States. To be able to do that we will need a really clear plan for our finances. It's not like I don't buy the occasional iced coffee at work (especially when I'm feeling prosperous), but knowing that I shouldn't be spending more than $X a month on "treats" gives me a compass so I don't let my inflated feeling of prosperity carry me away from the goal of having however much money in the bank we'll need to retire comfortably and be able to travel back and forth without drama.
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Apr 4, 2017 21:50
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Europe is hard for me to really understand, because if you were in the US I would tell you that you're dramatically under-saving for old age.
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Apr 21, 2017 16:50
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Posting a REAL NUMBER budget was immensely helpful for us to get some perspective on our financial struggles coming into the beginning of July 2016, and the insight we received put us on the right track toward sustained change for the positive. Updates I do in the form of percentages, but nothing beats the real bottom line.
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Sep 6, 2017 15:11
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Here's our monthly spending having pulled out all our retirement and 529, after taxes. Basically in order of magnitude: Subsidies in pursuit of indefensibly high levels of consumption: Student Loan Payment 8.8% Mortgage 7.3% Car Payment 1 5.9% House Cleaning 4.8% Groceries 2.8% Car Payment 2 2.5% Car Insurance 0.5% Daycare 2.2% poo poo MMM would HATE: Furniture Fund 2.2% Restos 1.7% Gasoline 1.5% Lawn Care 1.3% Phone Plans 1.1% Upcoming Travel 1.1% Household Maintenace 0.9% Gym Memberships 0.9% Vacation Savings 0.8% Other creatures in our house: Baby Stuff 1% Dog Stuff 0.7% Regular old utilities: Internet 0.5% Netflix 0% Electricity 0.3% Water, Trash, Recycling, Sewage 0.6% Natural Gas 0.3% Miscellaneous Crap: HOA Fee 0% Car Registration 0.3% Spending Money 0.4% Copays 0% Household Goods 0.4% Entertainment 0.4% Pharmacy 0.2% Car Maintenance Savings 0.2% Birthdays and Gifts 0.4% Christmas Savings 0.4% Charity 0.4% What's nice is that we have basically half our monthly take-home for long term financial goals.
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Sep 12, 2017 16:17
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| # ¿ May 11, 2024 16:06 |
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Yeah somewhat disingenuously "house cleaning" subsidizes a family member to be able to provide part time childcare, daycare is a second line item and "Baby Stuff" is quite literally just STUFF for the baby - clothes, toys, diapers, wipes. Kids are expensive.
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Sep 12, 2017 16:30
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