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[quote=Anonymous]We have a similar income ($137K) and mortgage ($2800) but no daycare.  I'd say overall you are not spending recklessly or anything but small cuts in a few categories can make a big difference.

1. $1000 does seem awfully high for food.  Ours is about half, but I mostly cook all week. Are you getting a lot of prepared food? Take-out? Can you cook on weekends and freeze?  Should be able to cut back at least 20% on this category.

2. $1300 daycare. Are you using a FLEX plan for this or otherwise writing this off on your taxes as a childcare credit?

3. $400 for shopping/gifts seems pretty high. Can you cut back here.  Not sure why charity is lumped in with this category. But overall, can you knock off $50-$100 a month off this category?

3. $300 for health-related expenses.  Same question as childcare. Do you have a FLEX plan at work where you are using pre-tax money to pay for this? If not, you should.

Remember that every dollar you put toward your 401K is pretax so it reduces your tax liability, so even a $350 monthly savings on expenses can mean you can put maybe $500 more per month to your 401k.

When we do our finances, we like to max out retirement first and then we feel free to spend the rest.  I think a lot of people normally adjust to their income. Us included. So if we increase our 401k and IRA savings to the maximum, we feel we have permission to spend the rest as we like.  If we didn't maximize retirement, we'd still be tempted to spend everything we make.  So my advice is to try to see if increasing retirement savings off the top means that you can adjust your budgets naturally to what you left to work with.

Good luck!
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