Critique my budget, please

[Anonymous]

Anonymous wrote:OP here. Thanks for the input, especially for pointing out things like charitable giving, which I hadn't specifically considered, but I think I look at that almost as coming out of the $50K bonus. Mostly, we tend to support charities by donating stuff and donating our time. It's really only the church that we directly give money to.

I've worked through an alternate budget, which cuts down on gas, childcare, restaurants, activities, and miscellaneous purchases and I feel better about the situation. We'll have $90K liquid in an emergency fund to help get us through a job loss situation, and I think we'll only be drawing on that for $1-$2k/month if we can cut down on some of the "fun money" in our budget currently.

As far as other savings, we're behind on college funds (only $10K total), but we are OK on retirement, which comes out before the net income line. We're 30 and have about $200K saved there, mostly in ROTH form. I'm hoping to keep contributing the same amount, but I guess we could cut that temporarily if needed.

Thanks to the PP who suggested that kid costs will increase as they get older. Is it appropriate to assume that the increased food, activities, and clothing costs will offset the elimination of daycare?

And home maintenance... that could be a lot, for a SFH. Is it appropriate to budget $500/month knowing that it will be lumpy? For a lot of it, my DH and FIL are very handy, but it will be things like new HVAC or roof (both new in this house) that will be expensive when they hit.

Kid costs for elementary ages kids are the cost of food, clothing (esp. sneakers get expensive ($75+) once they're out of little kid sizes--around 2nd/3rd grade), aftercare (about $250/month per kid), and summer camps (figure $350-500/week for 9am -5pm camp per kid x 10 weeks per summer (minus any weeks you vacation)). Then there's the cost of activities. Piano or other instrument lessons are $30/lesson. Gymnastics/ice skating type stuff is also about $30-35/session (or week). Rec sports are $100/season/kid. But if your kid ends up wanting to do any sort of travel sport then it's about $3/K a year minimum. I never thought we'd be in this position but then my daughter turned out to be obsessed with (and good at) soccer and so here we are. So if your kid gets serious about any sport (swimming, soccer, ice hockey, lacrosse, gymnastics, ice skating, etc) expect to budget $3-5K/year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the input, especially for pointing out things like charitable giving, which I hadn't specifically considered, but I think I look at that almost as coming out of the $50K bonus. Mostly, we tend to support charities by donating stuff and donating our time. It's really only the church that we directly give money to.

I've worked through an alternate budget, which cuts down on gas, childcare, restaurants, activities, and miscellaneous purchases and I feel better about the situation. We'll have $90K liquid in an emergency fund to help get us through a job loss situation, and I think we'll only be drawing on that for $1-$2k/month if we can cut down on some of the "fun money" in our budget currently.

As far as other savings, we're behind on college funds (only $10K total), but we are OK on retirement, which comes out before the net income line. We're 30 and have about $200K saved there, mostly in ROTH form. I'm hoping to keep contributing the same amount, but I guess we could cut that temporarily if needed.

Thanks to the PP who suggested that kid costs will increase as they get older. Is it appropriate to assume that the increased food, activities, and clothing costs will offset the elimination of daycare?

And home maintenance... that could be a lot, for a SFH. Is it appropriate to budget $500/month knowing that it will be lumpy? For a lot of it, my DH and FIL are very handy, but it will be things like new HVAC or roof (both new in this house) that will be expensive when they hit.

Kid costs for elementary ages kids are the cost of food, clothing (esp. sneakers get expensive ($75+) once they're out of little kid sizes--around 2nd/3rd grade), aftercare (about $250/month per kid), and summer camps (figure $350-500/week for 9am -5pm camp per kid x 10 weeks per summer (minus any weeks you vacation)). Then there's the cost of activities. Piano or other instrument lessons are $30/lesson. Gymnastics/ice skating type stuff is also about $30-35/session (or week). Rec sports are $100/season/kid. But if your kid ends up wanting to do any sort of travel sport then it's about $3/K a year minimum. I never thought we'd be in this position but then my daughter turned out to be obsessed with (and good at) soccer and so here we are. So if your kid gets serious about any sport (swimming, soccer, ice hockey, lacrosse, gymnastics, ice skating, etc) expect to budget $3-5K/year.

The cost for summer care quoted is high. While I haven't surveyed every county in the area, FFX Co., for example, is $255 per week for the first kid and $220 per week for the second at your income level. That's half of the high range quoted by PP.

http://www.fairfaxcounty.gov/ofc/saccsummerfee.htm

[Anonymous]

Anonymous wrote:I've worked through an alternate budget, which cuts down on gas, childcare, restaurants, activities, and miscellaneous purchases and I feel better about the situation.

OP if you type out your alternate budget people can comment on it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the input, especially for pointing out things like charitable giving, which I hadn't specifically considered, but I think I look at that almost as coming out of the $50K bonus. Mostly, we tend to support charities by donating stuff and donating our time. It's really only the church that we directly give money to.

I've worked through an alternate budget, which cuts down on gas, childcare, restaurants, activities, and miscellaneous purchases and I feel better about the situation. We'll have $90K liquid in an emergency fund to help get us through a job loss situation, and I think we'll only be drawing on that for $1-$2k/month if we can cut down on some of the "fun money" in our budget currently.

As far as other savings, we're behind on college funds (only $10K total), but we are OK on retirement, which comes out before the net income line. We're 30 and have about $200K saved there, mostly in ROTH form. I'm hoping to keep contributing the same amount, but I guess we could cut that temporarily if needed.

Thanks to the PP who suggested that kid costs will increase as they get older. Is it appropriate to assume that the increased food, activities, and clothing costs will offset the elimination of daycare?

And home maintenance... that could be a lot, for a SFH. Is it appropriate to budget $500/month knowing that it will be lumpy? For a lot of it, my DH and FIL are very handy, but it will be things like new HVAC or roof (both new in this house) that will be expensive when they hit.

Kid costs for elementary ages kids are the cost of food, clothing (esp. sneakers get expensive ($75+) once they're out of little kid sizes--around 2nd/3rd grade), aftercare (about $250/month per kid), and summer camps (figure $350-500/week for 9am -5pm camp per kid x 10 weeks per summer (minus any weeks you vacation)). Then there's the cost of activities. Piano or other instrument lessons are $30/lesson. Gymnastics/ice skating type stuff is also about $30-35/session (or week). Rec sports are $100/season/kid. But if your kid ends up wanting to do any sort of travel sport then it's about $3/K a year minimum. I never thought we'd be in this position but then my daughter turned out to be obsessed with (and good at) soccer and so here we are. So if your kid gets serious about any sport (swimming, soccer, ice hockey, lacrosse, gymnastics, ice skating, etc) expect to budget $3-5K/year.

The cost for summer care quoted is high. While I haven't surveyed every county in the area, FFX Co., for example, is $255 per week for the first kid and $220 per week for the second at your income level. That's half of the high range quoted by PP.

http://www.fairfaxcounty.gov/ofc/saccsummerfee.htm

yes, it's the quote is higher than some county camp options. But all the private camps (sports, arts and crafts, etc) in DC run $350-500/week. It's not always easy to tell your kid, "hey you can't do XX camp that all your friends are doing, we can only afford the county option". In our DC neighborhood ALL my kids' (I have 3) friends do the camps run by the local schools etc, and they're all $350-500K, minimum. (some even more).

[Anonymous]

$500 per month set aside should be ok for home maintenance. I found it helpful to list a life span and estimated cost for each item (roof, repointing, water heater, even down to minor stuff like the fridge, it adds up) and then divided to get a rough monthly guesstimate.

Are you planning on doing your own lawn care?

What about travel? Think about normal/discretionary travel as well as emergencies, if you have family members far away.

[Anonymous]

Anonymous wrote:$500 per month set aside should be ok for home maintenance. I found it helpful to list a life span and estimated cost for each item (roof, repointing, water heater, even down to minor stuff like the fridge, it adds up) and then divided to get a rough monthly guesstimate.

Are you planning on doing your own lawn care?

What about travel? Think about normal/discretionary travel as well as emergencies, if you have family members far away.

$500 per month for home maintenance seems really high. To put it in perspective, that's $6,000 per year, $60,000 over ten years and $120,000 over 20 years. If you're not doing your own lawn care (mowing, landscaping, etc.) and if you have a cleaning service that might be more accurate.

[Anonymous]

Our utilities are $600 for a 2400 SFH. Old townhouse.

[Anonymous]

$600 a month for food? There is no way I could feed us on that.

[Anonymous]

Anonymous wrote:$600 a month for food? There is no way I could feed us on that.

they spent $300 on eating out, and their kids are small...

But yeah, I want to cry too, I'm lucky if I can keep it under $1000 for the 4 of as
and kids activity - $150 a month, another $1k for 2 kids here too. Maybe I overdoing it with sport ($150-200), music ($160) and language & art ($400) activities, not to mention countless birthday parties.

Anyway,
OP, I think your numbers are low on food, kids activities and childcare as many pps pointed out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$500 per month set aside should be ok for home maintenance. I found it helpful to list a life span and estimated cost for each item (roof, repointing, water heater, even down to minor stuff like the fridge, it adds up) and then divided to get a rough monthly guesstimate.

Are you planning on doing your own lawn care?

What about travel? Think about normal/discretionary travel as well as emergencies, if you have family members far away.

$500 per month for home maintenance seems really high. To put it in perspective, that's $6,000 per year, $60,000 over ten years and $120,000 over 20 years. If you're not doing your own lawn care (mowing, landscaping, etc.) and if you have a cleaning service that might be more accurate.

Nope, not high at all unless you have a new build.
We're budgeting $10K per year for various home projects. Like this year we replaced windows (11k), bunch of small projects.
Next year we need to paint outside, water heater is about to go as well as w/d (another 1,5-2k), driveway resurface (no idea), and we need to set aside money to replace roof sometime in the future ( hopefully we'll have at least 2 years).

Oh, and don't get me even started on plumber costs. Emergency call for clogged pipe is $300-$400

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$500 per month set aside should be ok for home maintenance. I found it helpful to list a life span and estimated cost for each item (roof, repointing, water heater, even down to minor stuff like the fridge, it adds up) and then divided to get a rough monthly guesstimate.

Are you planning on doing your own lawn care?

What about travel? Think about normal/discretionary travel as well as emergencies, if you have family members far away.

$500 per month for home maintenance seems really high. To put it in perspective, that's $6,000 per year, $60,000 over ten years and $120,000 over 20 years. If you're not doing your own lawn care (mowing, landscaping, etc.) and if you have a cleaning service that might be more accurate.

Nope, not high at all unless you have a new build.
We're budgeting $10K per year for various home projects. Like this year we replaced windows (11k), bunch of small projects.
Next year we need to paint outside, water heater is about to go as well as w/d (another 1,5-2k), driveway resurface (no idea), and we need to set aside money to replace roof sometime in the future ( hopefully we'll have at least 2 years).

Oh, and don't get me even started on plumber costs. Emergency call for clogged pipe is $300-$400

I don't think it's too high. In a given month you might spend $100-$400 on projects and emergencies, and set aside the remainder for long-term stuff. Things do come up-- plumbers are ghastly expensive, plus downed trees, basement flooding, cleanup after a break-in, what about mold, termites, etc? Insurance may cover some of this but you might need to pay out of pocket and be reimbursed, so it's good to have a stash.

Is there a garage to maintain as well?
What is your homeowners insurance deductible?
Is there a HOA and what are the dues?

[Anonymous]

Anonymous wrote:

Anonymous wrote:$600 a month for food? There is no way I could feed us on that.

they spent $300 on eating out, and their kids are small...

But yeah, I want to cry too, I'm lucky if I can keep it under $1000 for the 4 of as
and kids activity - $150 a month, another $1k for 2 kids here too. Maybe I overdoing it with sport ($150-200), music ($160) and language & art ($400) activities, not to mention countless birthday parties.

Anyway,
OP, I think your numbers are low on food, kids activities and childcare as many pps pointed out.

It's little kids. Wait until they are a few years older and the cost of food and clothing is through the roof.

[Anonymous]

Anonymous wrote:$500 per month set aside should be ok for home maintenance. I found it helpful to list a life span and estimated cost for each item (roof, repointing, water heater, even down to minor stuff like the fridge, it adds up) and then divided to get a rough monthly guesstimate.

Are you planning on doing your own lawn care?

What about travel? Think about normal/discretionary travel as well as emergencies, if you have family members far away.

Thanks. OP here and this helped me a lot. We're lucky in that the sellers recently replaced the roof, the HVAC, washer/dryer, windows and re-sealed the driveway. The water heater looked like it might need replacing sooner rather than later though. Best add that to the budget for Year 1.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$600 a month for food? There is no way I could feed us on that.

they spent $300 on eating out, and their kids are small...

But yeah, I want to cry too, I'm lucky if I can keep it under $1000 for the 4 of as
and kids activity - $150 a month, another $1k for 2 kids here too. Maybe I overdoing it with sport ($150-200), music ($160) and language & art ($400) activities, not to mention countless birthday parties.

Anyway,
OP, I think your numbers are low on food, kids activities and childcare as many pps pointed out.

Thanks to you and others for pointing these out. These categories are based on our actual spending history, but here is why I think they are a bit lower than average:

The grocery budget is lower than many would expect because DH and I have employers who feed us lunch It sounds great until you realize that you've been at your desk for 10 hours straight some days. I'm also great at shopping the sales, buying in bulk, and stocking up in a chest freezer. Investing in a chest freezer (originally for breastmilk) was the best thing that ever happened to my grocery bill.

I agree kids activities could go up, but DD has tried soccer, gymnastics, mandarin, and ballet in the last year. Only ballet has stuck, and it's not very expensive for the 5yo age group. I lump recital expenses into the "miscellaneous" category because it does tend to be lumpy and a bit frivolous at this point.

For childcare, we have an amazing setup with a close friend who is a SAHM, so it's not anywhere close to "market". The kids are close friends and play well together too, so it works great. We also have grandparents as backup, so we definitely got lucky in that department. We'll be moving the 1yo to preschool in another year or so, and will have to re-look at expenses then.

[Anonymous]

Anonymous wrote:We're thinking about buying a new house, and I'm a little freaked out by the size of the potential new mortgage. We've never really lived on a budget before, but it might be a good time for us to start paying more attention to our expenses, so please let me know how our budget stacks up and also any categories where we should consider cutting back if we need to. We are a family of 4. Kids are 1 and 5. Here is the projected budget giving effect to the new home purchase:

Monthly net income: $13,500
Mortgage: $4,000
Childcare: $1,200
Grocery: $600
Restaurants: $300
Car payment: $300
Car insurance: $100
Utilities: $400? How much does it cost to heat/cool a 3,000 sq ft house?
Cable/Internet: $75 (internet is reimbursed by my employer)
Cell phones: none (reimbursed by employer)
Kids activities: $150
Gas: $250
Miscellaneous expenses: $1000

That gets me to $5,200 left over each month, although that doesn't include things like vacations and several weeks of summer camp for our older child. We also have annual bonuses totaling about $50K after taxes, so that gives us an additional cushion, but of course, that isn't guaranteed and only happens once a year so I don't like to count on it.

My biggest concern when I look at our budget is that we'll likely be cash flow negative if either one of us loses our jobs. We make about the same amount. Financially savvy folks, how did you approach that issue when determining the price range for a home purchase? Am I being overly risk averse?

Food is too low, kids activities are also low, you don't account for clothes, what about gas or travel to work, 529?