Gah, where is our money going?
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Anonymous
| Our gross HHI is $255k. Our mortgage payment is $2700/month. I have a student loan payment of $250/month. We spend $1600/month on childcare. We have average utility, cable, Internet, etc. bills. No car payment. No major travel. We don't spend extravagantly, but we also don't penny pinch. It just seems like we should have a lot more money left over each month than we do. Given the expenses I've laid out, how much is reasonable to expect to be able to save each month? |
Anonymous
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Do you have a budget?
Do you track every penny? (You should) You need to be saving at least 15-20% of your income as far as I'm concerned. This really doesn't have to be difficult. Get out a pen and a piece of paper and create a zero-based budget. That is budget where you assign a purpose for every single dollar coming into your home. There should be no "extra" money when the budget is done. If it isn't going to expenses it goes into another category like "savings" or "investments". Assign a certain amount of money to each category of spending and stop spending when you reach it. Take out cash and use the envelope system if you have to but you can do it. You can have some control of your financial life but you have got to put a system in place. Once you start, you'll be fine. Good luck. |
Anonymous
| You should be able to save about 2k a month in addition to fully funded retirement. |
Anonymous
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How many days a week do you eat out for lunch?
How many dinners a week? How much money is saved for retirement through a 401K or similar plan - and how much are you contributing to college savings. Without this - I can't tell you if you should have more savings each month. |
Anonymous
+1 easily this much. We make $220k with similar expenses and save 2k a month which is allocated to 529 and general savings. |
Anonymous
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You don't penny pinch. That's a subjective statement, and that's where the problem lies.
What does budgeting mean for you? No impulse shopping, or as little of it as you possibly can. Do the grocery list as a function of what you planned for meals that week and then buy what's on the list or substitute for a sale item. This greatly reduces waste. No eating out all the time. It's not healthy anyway. No sending clothes out to dry-clean all the time (buy more cotton). I'm sure you can cut down on your multimedia apparatus (reduce cell phone plan, nix cable, less cinema more Netflix). Finally, save all receipts and statements and analyze your spending, averaged over a few months to take into account longer-term bills. Excel was made for that sort of thing. You'll be surprised. |
Anonymous
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sing up for mint.com, track your expenses for a while, just to get a sense of your spending patterns, then create a budget and stick to it.
Also, one of the strategies I've used - pay yourself first. Set aside some money every month, literally - open a brand new saving account, and transfer fixed amount every paycheck right away. Then create a zero-budget using the rest of the paycheck. |
Anonymous
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Here's some advice:
Don't save what you can after spending. Spend what you can after saving. |
Anonymous
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That's our HHI as well. We save $6k/month in various places -- college, retirement, and investment accounts. Our mortgage is $1,900, childcare is $1,700, and no other
to start the budgeting process, make an effort next month to put all expenses on 1 credit card, then analyze the statement at month-end to approximate what you're spending in each category. |
Anonymous
Impossible |
Anonymous
| Gah? |
Anonymous
Huh? Take home is about $12k/month. We spend $1k on basic food/household expenses. Phones, Internet, and health benefits are all paid by my employer. So that leaves us another $1k of fun money then $6k left over. |
Anonymous
still impossible where is your car insurance/gas (or other transportation)/home utilities? |
Anonymous
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I make just under 200K with a comparable mortgage ($2650/month) and save about $3500/month after maxing out 401k. Here are my average expenses (I track religiously). We are 1 adult and one elementary school-aged child. Take home is $9800/month
PITI: $2650 Household maintenance & repairs: $200 Electric, gas, water: $200 Cell phone & Internet: $150 Car insurance, gas & maintenance (car is paid off): $350 Health & medical: $300 Food (groceries, restaurants): $600 Child care (after school & summer camp) $600 Gifts: $250 Clothing, haircuts, grooming: $200 Entertainment (anything fun and non essential including travel, cable TV, recreation): $700 TOTAL: $6200 Leftover to save: $3600 |
Anonymous
You're right... Forgot car insurance... I guess that's $400 2x/year since we only need 1 car. Transportation is partially paid by our respective employers, otherwise included in the $1k basic expenses, as are utilities. Transportation is not a huge expense anyway as we both have a very short commute to work, living close-in on the orange line. House is pretty efficient, so electric runs $60-$100/ month. Water/sewer/trash is paid qtrly, but averages $60/month. Cable I consider to be a "fun money" expense, but we get the triple play bundle and are able to expense the phone line and Internet portions through my employer. Long story short, $6k is not typical for savings at a $250ish HHI, but we're able to run a lot of expenses through our employers. $4k seems reasonable to me though, even without penny-pinching, though dependent on the size of your mortgage. |