Money Question that is related to Mortgage Question but a bit different

[Anonymous]

I'm really hoping somebody can help me figure this out. If any of you do this work professionally, I am willing to pay for it.

Here it is: I make 125K. My wife juggles with the kids and a writing career and is in charge of all the bills. Her income varies greatly from day today, and I am not really able to figure out a number that represents her monthly income. It's not a ton of money. Let's say it's 25K a year, a lot of which is written off aggressively (and then some). We have a part-time nanny. She costs $300.00 a week. Our mortgage is 2K a month. 5% of each paycheck goes to 401K. $10K is earmarked for an FSA (health and dependent care). We lease a car for $250/month. We own another one outright. We share a gym membership (basically, we cheat) that costs around $75/month. My wife goes to a yoga studio for $30.00/month.

Other than that, I really have no idea where our money is going. We have cable. Basic cell service. We take one vacation a year (not lavish). We have a dog. We eat groceries, usually purchased at Safeway. We do not often go out for dinner/entertainment (less than 1x/2 months). We subscribe to Netflix.

Before we get any further, let me state that my wife is a wonderful woman whom I trust completely. We agreed that she could take care of the bills because she has more time. But as I result and because of her flunctuating income, I just don't feel like I have a handle on the numbers. I'm trying to give as much information as possible in the hopes that someone can help me.

I do not know how much my wife spends on clothes. It does not appear excessive and it usually has been bought on sale.
I do not know how much I spend on clothes, because my wife buys them for me.
I do not know how much we spend on our childrens' clothes, because my wife buys them.
I do not know how much is spent on groceries each month, because my wife buys them.
I do know that everytime my wife goes to the salon it is about 300. She goes once every 2 months.
We have some chronic health problems that cause our medical bills to exceed that which is covered by insurance and FSA. I'm not sure how much.
I do not know how much is spent on sundry items. My wife buys them. Some drug store stuff, and some of the expensive woman type stuff.

My parents take care of pre-school. And college. I feel ashamed of this. But I want to get good advice so I have to give out accurate information.

We do not have credit card debt.

We also have no money in a savings account. No emergency fund. Nada. Zippo.

My wife tells me every day that we don't have any money and that we really need to be more careful. She seems very stressed out about bills and money. I don't like to see her so stressed out.

Is there anyone who can tell me how much we should be spending on the things listed above, given the variables I have listed as constant????

I want to understand why we never seem to have any money stashed away or why my wife has to pay bills on a rolling basis.

I should also say that while I am crazy about my wife and trust her completely, she is very, very bad at saving receipts.

I feel like an asshole here. Any help? I've met a lot of financial advisors that want to help me plan for retirement and college. That's not what I need, because of my parents' generousity and the inheritance that will inevitably come to me -- I hope in a very, very long time from now.

We need help with the day-to-day budgeting. And no one seems interested in working on that -- it's not a service I find offered anywhere. Financial advisors seem to think it is beneath them.

I want to feel responsible. I want to have an emergency fund and some savings.

Any constructive advice as to how to structure things or save here and there and very welcome.

[Anonymous]

Why don't you sit down with your wife and write up a monthly budget and then revisit it every month and see if you kept to it? There was another thread on how much people typically spend on groceries (about $500-800 a month, I think.)

A couple other quick reactions:
- $300 at the salon sounds very high.

- If you are stretched, maybe consider a nanny-share as a way to save money? $300 a week is a lot for part-time care.

- Look into how much you are spending on medical expenses. It sounds like that could be part of your budgeting problem, since medical expenses can be high and hard to plan for (and all the more reason to have savings!)

Good luck.

[Anonymous]

How can I tell my wife not to go to the salon? Once I asked her why it was always 300. She said the haircut is about 85; color is 110, and she also does something to her eyebrows --- ? Plus tax and a 20% tip. Is that really an obnoxious amount? I really do not want to be that kind of guy.

[Anonymous]

OP, there are other expenses you haven't mentioned: phone, electric/gas, water/sewer, car insurance, life insurance (hope you have it), gas, internet, tv, stuff like that. That's probably taking up a big chunk of your budget as well.

Anyway, off the top of my head, I think you're very fortunate not to have credit card debt. $150,000 a year really doesn't go all that far in DC. Sure, you can save more but you're not doing all that badly so far (but I'm not a professional so take it for what it's worth).

My recommendation is to read Michelle Singletary's columns in the Post. She is big on getting people to budget and save money. If you go to the WaPo on line and do a search on her name, that will get you started in the right direction.

I'm so glad you're worrying about these financial matters. I handle the bills in our household, which my husband resents, but he used to be such a spender I figured that at least I would make sure our bills got paid on time. We've managed to get out of our big black hole of debt but in part only because we started making more money. I would love it if he were as interested as you in putting money away. Good luck!

[Anonymous]

pp again -- whoops sorry you did mention cable tv and cell phone bills.

[Anonymous]

Thanks PP. To be honest, I do not carry life insurance. I would like to and may be able to get some in the future, but because of a pre-existing condition, I have not been able to get it.

As for the car insurance, gas, heat, electricity -- I just don't know. This is like a second career for my wife. She's amazing. The way she can maintain her writing, and take care of the kids half the day, and do all the bills. When I do ask for specifics, she either can't come up with them or gets a little defensive about being second-guessed. And then I feel unappreciative.

[Anonymous]

Anonymous wrote:How can I tell my wife not to go to the salon? Once I asked her why it was always 300. She said the haircut is about 85; color is 110, and she also does something to her eyebrows --- ? Plus tax and a 20% tip. Is that really an obnoxious amount? I really do not want to be that kind of guy.

I think it's good that you're not that kind of guy. Regular hair maintenance, especially the well-done color, is very important for middle-aged women. My father has always been that kind of guy, and he'll even top it all off with bitter barbs about my mother having let herself go, as if preservation can be accomplished without increasing expenses as women age. Anyway, good for you for being understanding about this even though you're the one who brings in the overwhelming bulk of the family income.

[Anonymous]

12:11 again -- I don't blame you for feeling a little anxious about it. This stuff is difficult for me and my husband, too. But if he asked me, I could give him a reasonable estimate of what everything costs. I'm not all that well organized but I've been doing this long enough that I have a general idea of what to expect. If your wife has been doing this for awhile, she should have seen patterns by now.

Here's what I do at the beginning of the month. I collect all the bills that have accumulated and list the amounts due and the dates they have to be paid by. I try to find out about those bills I haven't received yet or I estimate them and put them on the list. Recently I put a list of regular bills together on an excel sheet form so all I have to do is fill in the amounts and dates due.

I balance the checkbook and see how much we have in checking. I estimate what the paychecks for the month will be (I get paid twice a month, dh once) and the rent from the basement apartment we rent out. And then I figure out if we will have any problems paying anything. Sometimes I have to pay a utility bill a little late in order to wait for my second check of the month.

Maybe you and your wife could sit down at the beginning of the month and go through a process like that. Of course that's easy for me to say but I'm not so good at following my own advice. Dh and I are not so good at talking about these things.

But all I can say is that I personally need to know where my money is going and if I were in your situation I would be quite uncomfortable not knowing.

Good luck!

[Anonymous]

Track *all* your expenses for 2-3 months (to see a pattern) and then decide whether what you spend on each category is reasonable and where you can trim. Have your wife write down all the bills, purchases etc (same for you if you make payments or buy anything). If you pay cash for things, then write that down - carry a small pad and literally account for every dollar that you spend ($5 at Starbucks - goes on the list, $20 for lunch - on the list etc). I know it's a lot of work, especially initially, but it can really be an eye-opener. And again, once you figure out where your money goes, you can then decide whether to change your spending habits.

And, for the record, if you are having difficulties making ends meet, then $300 for hair is a lot of money. If your wife is stressed (as you say) about the bills, that would be one obvious place to cut. You can get a decent haircut for $50-60.

[Anonymous]

Sign up for mint.com

[Anonymous]

Use a debit card for all expenses and sign up to view the account online. Then you can get more of an idea where things are going.


I agree with the $300 being a bit excessive. I used to do that, but when my child was born, it was either that or day care. I chose day care. More than likely, money is being frittered away on little stuff like Starbucks each day, eating out (big one), books (does your writer wife have as bad a book habit as I do?), CDs, toys for kids, etc.

[Anonymous]

I think the childcare is killing you.

[Anonymous]

The childcare is expensive. But she's a very good nanny and the children love her. I don't think it is fair to my wife for her not to have any time to devote to her career. As soon as that happens, people start heading for divorce.

[Anonymous]

Get Quicken and figure out a budget.

[Anonymous]

Anonymous wrote:The childcare is expensive. But she's a very good nanny and the children love her. I don't think it is fair to my wife for her not to have any time to devote to her career. As soon as that happens, people start heading for divorce.

OP, I think you and your wife need to both get a handle on where your money is actually going, and then decide if that is what you value individually and as a couple.

No one has to give up anything, if they can afford it, but to simplify:

you want some savings
your wife wants her salon cut and hair coloring
you both want a good nanny for the kids so your wife can do some work
you both want some other stuff that probably didn't get mentioned.

So you are skimping on the savings for emergencies.

You can't afford everything - so you aren't funding your savings. Where on your list of priorities is "savings for emergencies"? Is it above or below salon cut and nanny for the kids?

I recommend a book called "Your Money Or Your Life" to help you really prioritize where you are spending your money, and whether that fits in what what you say you value. Do this as a couple and then make decisions about some of these expenses.