Anonymous
02/27/2017 16:33
Subject: $14k net HHI - Budget Input
Anonymous wrote:Anonymous wrote:We are struggling to not overspend each month on a take home HHI of $14k per month (after retirement/taxes). I feel like (i know) this is ridiculous, so I'm looking for input from those with similar incomes on where we are spending more than average. And would also love to know how you cut back to spend less in those areas.
The way our average spending is coming in now we're in the hole about $600 more than we take in each month without savings (other than automatic to retirement), travel and any unexpected expenses. So something has to give. Obviously I know we could cut out things like the house cleaner that are optional. But I feel there must be other areas we're spending more than the norm we need to cut back on to get things under control.
Here is our average monthly spending by category - What looks out of whack to you with HHI of $14k per month?
Nanny/PT Preschool for one child - $3k per month
Mortgage - $3100 per month
HOA Fee - $200 per month
Investment Property - $750 per month (what rent doesn't cover)
Home Insurance - $125 per month
Car Payments - $1200 per month (2 cars)
Car Insurance - $110 per month (2 cars)
Gas - $200 per month
Tolls - $35 per month
Groceries - $1k per month, family of 3 plus nanny (weekdays breakfast & lunch for her). Includes wine/beer and hello fresh for weeknight meals
Restaurants/Take Out - $500 per month (normally one 'nice' date night dinner and the rest inexpensive)
Home Supplies - $650 per month (all the basics like toilet paper, paper towels, cat food/litter, shampoo, OTC meds, cosmetics, diapers, baby supplies, blah blah)
Student Loans - $350 per month
Personal Care - $350 per month (hair cuts/color, waxing, nails)
House Cleaner - $300 per month
Lawn Care - $135 per month
Shopping (Clothing/Accessories/Home Decor) - $500 per month
Gifts - $200 per month
Work Lunch - $150 per month
Entertaining - $200 per month (having guests over/parties)
Kid's Activities/Lessons - $200 per month (swim class, music class, outings)
Doctor/Dentist - $150 per month
Pharmacy/Medications - $100 per month
Water Bill - $100 ($300 every 3 months)
Gas Bill - $140 (in winter, much less in summer months)
Electric Bill - $200
Cell Phones - $200
Pets - $100 earmarked per month for vet visits, meds etc every few months
Entertainment - $150 per month (going out for drinks/movies/etc)
Cash - $200
TOTAL ~ $14,600
The investment property seems like an obvious thing to cut but Husband wants to keep the investment property as we should be able to refinance that and charge more rent to have that monthly cost go away in the very near future. And all of that $$ we're paying is going towards principal on the mortgage for that property, and it's in a great location in arlington so will hold/increase value.
We bring in around $13k net after maxing retirement, so I fit the bill of people you're looking for responses from. The things that are out of whack, IMO, are bolded above.
The good news is, your mortgage is really a good amount for your income, and you make enough to cover almost anything you could want in life. But not everything-everything, which is where you seem to be running into problems. I know some people really like cars, but maybe cut back to one awesome car and one perfectly reasonable Honda/Toyota/not-luxury-boat? $1200/month on car notes is the craziest thing in your budget, as far as I can tell. You're spending a heck of a lot on take-out/restaurants for people who pay for HelloFresh for weeknight meals -- can you cut back to going out half as much? Additionally, you've got $1100/month earmarked as what amounts to "miscellaneous". You're not spending $650/month on toilet paper and soap, I promise. Nor do you need $500/month of home décor and clothes. This is going to be the easiest place for you to cut: instead of buying whatever catches your eye (no judgment; I've been there myself), consider putting it in your cart and switching to another screen. If you come back to it a couple of hours/days later and still feel like you want to make the purchase, go for it. Also, check your email because the store has probably sent a coupon to entice you into buying it. But much, much, much more often than you might believe, you will no longer care about whatever it is. Putting things on wishlists instead of buying when the urge strikes saves me thousands a month.
Your medical bills seem pretty high to me, but the fact that your prescription meds have a line item makes me think that might not be somewhere you can make changes.
+1
This exactly. My mortgage is 4K, but we have one 2011 Honda that's fully paid for, no money losing investment property, no housecleaner, limited clothing expenses and far lower eating out budget, so we spend less than you do. And I have 2 small kids and a nanny and preschool expenses too. And our lawn expenses are 50$/month ($110 seems high--at that price, I'd do it myself).
Anonymous
02/27/2017 16:31
Subject: $14k net HHI - Budget Input
Anonymous wrote:Anonymous wrote:Anonymous wrote:What does this work out to be as gross income?
Just curious.
OP here- Our base without bonuses is $280k, works out to ~ $14k after retirement/taxes/etc
Here is a car reality check for you OP. My DH makes $250k and I don't work (so no childcare expenses.) He drives a 2011 Hyundai Sonata sedan and I drive a 2014 Honda Pilot. Both were purchased in full with cash. No plans to car shop anytime soon.
Your "peers" with fancy cars either make more than you or are losing money like you. Or they don't have an investment property, etc.
THANK YOU for saying this. OP really sounds like typical keeping up with the Joneses. My brother is a partner at E&Y and clears well over 500k a year. They have a paid off 2015 Mazda CX9 and a 2014 Hyundai Sonata.
Anonymous
02/27/2017 16:28
Subject: Re:$14k net HHI - Budget Input
OP, we take home $18K a month after maxing out retirement ($24K each, since we are both over 50).
We spend as follow:
$10K a month invested in 529 plans and taxable funds
$8K spent on property taxes, food, entertainment, insurance, personal care, gas
We still have two teenagers living at home. No mortgage or other debt. Your cars are killing you.
We spend as follow:
$10K a month invested in 529 plans and taxable funds
$8K spent on property taxes, food, entertainment, insurance, personal care, gas
We still have two teenagers living at home. No mortgage or other debt. Your cars are killing you.
Anonymous
02/27/2017 16:21
Subject: $14k net HHI - Budget Input
Lifestyle creep is serious and it slips into your life so quietly that you don't realize it until it's too late.
We recognized that we were spending too much and not saving enough (we don't make as much as you at about $10k per month, but we have no debt, no student loans, no childcare costs and don't have to save for college, etc), so I took simple steps to reign in our budget and cut costs. I would suggest canceling Hello Fresh immediately (we had to do this) and start re-using some of the recipes you've already acquired.
Next, I made a commitment to only cook food we already had in our freezer and pantry, and not buy anything but the absolute essentials at the grocery store. I downloaded a shopping app, and only allowed myself to buy exactly what was on the shopping list. I've noticed that with lifestyle creep, you start buying more in bulk, or buying stuff that you already have at home because you aren't being bothered with tracking and are coasting on the confidence of having that disposable income.
We saved $800 in one month alone from doing this. It isn't this much every month, but our grocery budget has decreased substantially.
Not sure why you need new clothes and such every month, but we put ourselves on a shopping ban, and didn't buy anything new for six months. I unsubscribed from all department store email so that I wouldn't be tempted by sales and stayed far away from shopping centers.
We have cleaners that come twice a month, and honestly OP, I pretty much stopped buying most of our cleaning supplies outside of basics. You need to look at the household stuff and reexamine whether or not you really need to be blowing $600 on all of that. If this is impulsive spending, start buying paper towels, toilet tissue, and laundry detergent online and through a subscription at Target or Amazon, where not only will you save a few dollars, but it will keep you out of the store and not give you a chance to shop impulsively.
All of the candles and special soaps and body washes in pretty bottles that you're tricked into buying, it all adds up. Remove all of that temptation and I guarantee you will be able to save.
We recognized that we were spending too much and not saving enough (we don't make as much as you at about $10k per month, but we have no debt, no student loans, no childcare costs and don't have to save for college, etc), so I took simple steps to reign in our budget and cut costs. I would suggest canceling Hello Fresh immediately (we had to do this) and start re-using some of the recipes you've already acquired.
Next, I made a commitment to only cook food we already had in our freezer and pantry, and not buy anything but the absolute essentials at the grocery store. I downloaded a shopping app, and only allowed myself to buy exactly what was on the shopping list. I've noticed that with lifestyle creep, you start buying more in bulk, or buying stuff that you already have at home because you aren't being bothered with tracking and are coasting on the confidence of having that disposable income.
We saved $800 in one month alone from doing this. It isn't this much every month, but our grocery budget has decreased substantially.
Not sure why you need new clothes and such every month, but we put ourselves on a shopping ban, and didn't buy anything new for six months. I unsubscribed from all department store email so that I wouldn't be tempted by sales and stayed far away from shopping centers.
We have cleaners that come twice a month, and honestly OP, I pretty much stopped buying most of our cleaning supplies outside of basics. You need to look at the household stuff and reexamine whether or not you really need to be blowing $600 on all of that. If this is impulsive spending, start buying paper towels, toilet tissue, and laundry detergent online and through a subscription at Target or Amazon, where not only will you save a few dollars, but it will keep you out of the store and not give you a chance to shop impulsively.
All of the candles and special soaps and body washes in pretty bottles that you're tricked into buying, it all adds up. Remove all of that temptation and I guarantee you will be able to save.
Anonymous
02/27/2017 16:14
Subject: $14k net HHI - Budget Input
OP, we have just about the same take home but we have a family of 4.
First, the cars are ridiculous. Absolutely out of control. We have two cars, both paid off, both over 100k miles but we do great maintenance on them (Toyota and Ford) and there is a lot of life left in the. One kid will start driving soon so these cars aren't going anywhere.
Your food spending is weird too. Hello Fresh? Can't even imagine wasting money on that. We both work and I have limited time to cook but we get by. Our grocery bill including wine is about $150 a week. We do order out once a week but it is pizza on Friday nights. That is it though. Maybe we go out for our anniversary but other than that we eat what we have.
Costco -- we buy all our household items there and maybe it is $200/mo. Maybe since we don't even go every month.
My hair is pricey ($180) every two months and I get my nails done regularly but with a gel manicure I go every 2-4 wks.
Clothing/household goods -- what the WHAT?!? No, really. Come on. I do Stitchfix every other month and keep 1-3 items so my bill is about $120 every two months. DH rarely buys new clothes. Kids get new clothes each season but nothing crazy.
There are sooooo many ways for you to cut your costs. It seems as though you are living way beyond your income level. The comment about your friend's cars makes me think you are trying to keep up with the Jones when you aren't a Jones!
First, the cars are ridiculous. Absolutely out of control. We have two cars, both paid off, both over 100k miles but we do great maintenance on them (Toyota and Ford) and there is a lot of life left in the. One kid will start driving soon so these cars aren't going anywhere.
Your food spending is weird too. Hello Fresh? Can't even imagine wasting money on that. We both work and I have limited time to cook but we get by. Our grocery bill including wine is about $150 a week. We do order out once a week but it is pizza on Friday nights. That is it though. Maybe we go out for our anniversary but other than that we eat what we have.
Costco -- we buy all our household items there and maybe it is $200/mo. Maybe since we don't even go every month.
My hair is pricey ($180) every two months and I get my nails done regularly but with a gel manicure I go every 2-4 wks.
Clothing/household goods -- what the WHAT?!? No, really. Come on. I do Stitchfix every other month and keep 1-3 items so my bill is about $120 every two months. DH rarely buys new clothes. Kids get new clothes each season but nothing crazy.
There are sooooo many ways for you to cut your costs. It seems as though you are living way beyond your income level. The comment about your friend's cars makes me think you are trying to keep up with the Jones when you aren't a Jones!
Anonymous
02/27/2017 16:07
Subject: $14k net HHI - Budget Input
Anonymous wrote:Anonymous wrote:What does this work out to be as gross income?
Just curious.
OP here- Our base without bonuses is $280k, works out to ~ $14k after retirement/taxes/etc
Here is a car reality check for you OP. My DH makes $250k and I don't work (so no childcare expenses.) He drives a 2011 Hyundai Sonata sedan and I drive a 2014 Honda Pilot. Both were purchased in full with cash. No plans to car shop anytime soon.
Your "peers" with fancy cars either make more than you or are losing money like you. Or they don't have an investment property, etc.
Anonymous
02/27/2017 16:06
Subject: $14k net HHI - Budget Input
Anonymous wrote:Anonymous wrote:You've gotten some good suggestions as to what to cut.
Once you cut them, start saving. Start an emergency fund. Start a 529 for your DD. Start a car fund so you can pay for your next car in cash.
Somewhere along the line you were lead to believe that debt is good. It's not good for you; it is good for the people lending you money! Yes, you can hold a reasonable mortgage and perhaps some student loans, but financing and leasing luxury cars is just ridiculous!
What is the plan for the investment property? Are you getting any benefit out of it whatsoever? Any though about selling it to cut your losses there?
Kudos to you for realizing that you are hemorrhaging money and trying to do something about it. Hunker down now while you have one young child. They only get more expensive! And then you have a second! Is your DH on board? You should be able to get things under control relatively quickly if you to a real spending diet for about 6 months and make some tough choices.
Appreciate the feedback. DH is on board for sure - I tend to be the spender. We have just been way too lax about where our money has been going and didn't start seeing the red flags until we added childcare into the mix as we were easily covering all before. I'm surprised how many people see the car expenses as so high, very much thought that was the norm as it seems to be with our friends. But that's exactly what I'm looking for here - What immediately seems unreasonable to someone with an outside perspective.
Investment Property can't be refinanced until we're under 75% LTV but as soon as we hit that mark, and current renters move out (time to increase rent) we should be able to get it back to being covered by rent. We like the idea of someone else paying into an investment for us. The mortgage went off an ARM last year which is why we are all of a sudden paying each month. In the past, it was always covered by rent. Definitely an area that needs to be addressed.
529 is on my to do list this week as grandparents are wanting to start putting funds in. Other savings are a top priority once we get a handle on things.
I don't understand what your friends' lifestyles have to do with your budget. . . Also you keep calling that second mortgage an investment but it seems like a liability.
Anonymous
02/27/2017 16:03
Subject: $14k net HHI - Budget Input
Anonymous wrote:Anonymous wrote:You've gotten some good suggestions as to what to cut.
Once you cut them, start saving. Start an emergency fund. Start a 529 for your DD. Start a car fund so you can pay for your next car in cash.
Somewhere along the line you were lead to believe that debt is good. It's not good for you; it is good for the people lending you money! Yes, you can hold a reasonable mortgage and perhaps some student loans, but financing and leasing luxury cars is just ridiculous!
What is the plan for the investment property? Are you getting any benefit out of it whatsoever? Any though about selling it to cut your losses there?
Kudos to you for realizing that you are hemorrhaging money and trying to do something about it. Hunker down now while you have one young child. They only get more expensive! And then you have a second! Is your DH on board? You should be able to get things under control relatively quickly if you to a real spending diet for about 6 months and make some tough choices.
Appreciate the feedback. DH is on board for sure - I tend to be the spender. We have just been way too lax about where our money has been going and didn't start seeing the red flags until we added childcare into the mix as we were easily covering all before. I'm surprised how many people see the car expenses as so high, very much thought that was the norm as it seems to be with our friends. But that's exactly what I'm looking for here - What immediately seems unreasonable to someone with an outside perspective.
Investment Property can't be refinanced until we're under 75% LTV but as soon as we hit that mark, and current renters move out (time to increase rent) we should be able to get it back to being covered by rent. We like the idea of someone else paying into an investment for us. The mortgage went off an ARM last year which is why we are all of a sudden paying each month. In the past, it was always covered by rent. Definitely an area that needs to be addressed.
529 is on my to do list this week as grandparents are wanting to start putting funds in. Other savings are a top priority once we get a handle on things.
Ok, OP, it sounds like you both want to make changes. Here's another approach:
Do a spending diet. Look at what it would take to break your car lease and get something MUCH cheaper. (Do you really need two cars?). Create good savings pots. Then add things back in at a much reduced rate -- skip the manicures but get your hair cut & colored, do pedis every 6 weeks or so in the summer. STOP buying clothes all together. If something wears out, then consider whether it needs to be replaced.
It doesn't matter what kind of cars your friends have. Maybe they pay cash for them? Likely the friends aren't spending out on an investment property.
Anonymous
02/27/2017 15:52
Subject: Re:$14k net HHI - Budget Input
Your spending sounds similar to ours (except we don't have an investment property, paid off our student loans, and our mortgage is way higher - $5500 a month).
But the difference is that our combined HHI is 400-500K annually. I think you're simply trying to punch above your weight class, OP.
But the difference is that our combined HHI is 400-500K annually. I think you're simply trying to punch above your weight class, OP.
Anonymous
02/27/2017 15:52
Subject: $14k net HHI - Budget Input
You cannot afford fancy cars like that OP. Not even close. I also feel like an "investment" property that costs you $750/month is not smart given what you are spending elsewhere.
People always come on her and write posts like this abut what they should cut but then have a justification for every single line item in their budget.
It's pretty simple, if you want to save more, you have to spend less. 1st grade subtraction principles.
People always come on her and write posts like this abut what they should cut but then have a justification for every single line item in their budget.
It's pretty simple, if you want to save more, you have to spend less. 1st grade subtraction principles.
Anonymous
02/27/2017 15:51
Subject: $14k net HHI - Budget Input
Anonymous wrote:You've gotten some good suggestions as to what to cut.
Once you cut them, start saving. Start an emergency fund. Start a 529 for your DD. Start a car fund so you can pay for your next car in cash.
Somewhere along the line you were lead to believe that debt is good. It's not good for you; it is good for the people lending you money! Yes, you can hold a reasonable mortgage and perhaps some student loans, but financing and leasing luxury cars is just ridiculous!
What is the plan for the investment property? Are you getting any benefit out of it whatsoever? Any though about selling it to cut your losses there?
Kudos to you for realizing that you are hemorrhaging money and trying to do something about it. Hunker down now while you have one young child. They only get more expensive! And then you have a second! Is your DH on board? You should be able to get things under control relatively quickly if you to a real spending diet for about 6 months and make some tough choices.
Appreciate the feedback. DH is on board for sure - I tend to be the spender. We have just been way too lax about where our money has been going and didn't start seeing the red flags until we added childcare into the mix as we were easily covering all before. I'm surprised how many people see the car expenses as so high, very much thought that was the norm as it seems to be with our friends. But that's exactly what I'm looking for here - What immediately seems unreasonable to someone with an outside perspective.
Investment Property can't be refinanced until we're under 75% LTV but as soon as we hit that mark, and current renters move out (time to increase rent) we should be able to get it back to being covered by rent. We like the idea of someone else paying into an investment for us. The mortgage went off an ARM last year which is why we are all of a sudden paying each month. In the past, it was always covered by rent. Definitely an area that needs to be addressed.
529 is on my to do list this week as grandparents are wanting to start putting funds in. Other savings are a top priority once we get a handle on things.
Anonymous
02/27/2017 15:42
Subject: $14k net HHI - Budget Input
You've gotten some good suggestions as to what to cut.
Once you cut them, start saving. Start an emergency fund. Start a 529 for your DD. Start a car fund so you can pay for your next car in cash.
Somewhere along the line you were lead to believe that debt is good. It's not good for you; it is good for the people lending you money! Yes, you can hold a reasonable mortgage and perhaps some student loans, but financing and leasing luxury cars is just ridiculous!
What is the plan for the investment property? Are you getting any benefit out of it whatsoever? Any though about selling it to cut your losses there?
Kudos to you for realizing that you are hemorrhaging money and trying to do something about it. Hunker down now while you have one young child. They only get more expensive! And then you have a second! Is your DH on board? You should be able to get things under control relatively quickly if you to a real spending diet for about 6 months and make some tough choices.
Once you cut them, start saving. Start an emergency fund. Start a 529 for your DD. Start a car fund so you can pay for your next car in cash.
Somewhere along the line you were lead to believe that debt is good. It's not good for you; it is good for the people lending you money! Yes, you can hold a reasonable mortgage and perhaps some student loans, but financing and leasing luxury cars is just ridiculous!
What is the plan for the investment property? Are you getting any benefit out of it whatsoever? Any though about selling it to cut your losses there?
Kudos to you for realizing that you are hemorrhaging money and trying to do something about it. Hunker down now while you have one young child. They only get more expensive! And then you have a second! Is your DH on board? You should be able to get things under control relatively quickly if you to a real spending diet for about 6 months and make some tough choices.
Anonymous
02/27/2017 15:26
Subject: $14k net HHI - Budget Input
Why do you owe money on a car that is 6 years old?
Anonymous
02/27/2017 15:18
Subject: Re:$14k net HHI - Budget Input
PP here, we also have no student loans.
I would immediately cut out Kid's Activities, Entertaining and scale back Personal Care and Cleaning. You can't afford these things if you are going $600 negative each month. It's not worth it to go into debt because of these items.
Then I would refi the investment property, max out retirement, and then reconfigure your budget based on your adjusted net HHI.
I would immediately cut out Kid's Activities, Entertaining and scale back Personal Care and Cleaning. You can't afford these things if you are going $600 negative each month. It's not worth it to go into debt because of these items.
Then I would refi the investment property, max out retirement, and then reconfigure your budget based on your adjusted net HHI.
Anonymous
02/27/2017 15:14
Subject: $14k net HHI - Budget Input
Anonymous wrote:We are struggling to not overspend each month on a take home HHI of $14k per month (after retirement/taxes). I feel like (i know) this is ridiculous, so I'm looking for input from those with similar incomes on where we are spending more than average. And would also love to know how you cut back to spend less in those areas.
The way our average spending is coming in now we're in the hole about $600 more than we take in each month without savings (other than automatic to retirement), travel and any unexpected expenses. So something has to give. Obviously I know we could cut out things like the house cleaner that are optional. But I feel there must be other areas we're spending more than the norm we need to cut back on to get things under control.
Here is our average monthly spending by category - What looks out of whack to you with HHI of $14k per month?
Nanny/PT Preschool for one child - $3k per month
Mortgage - $3100 per month
HOA Fee - $200 per month
Investment Property - $750 per month (what rent doesn't cover)
Home Insurance - $125 per month
Car Payments - $1200 per month (2 cars)
Car Insurance - $110 per month (2 cars)
Gas - $200 per month
Tolls - $35 per month
Groceries - $1k per month, family of 3 plus nanny (weekdays breakfast & lunch for her). Includes wine/beer and hello fresh for weeknight meals
Restaurants/Take Out - $500 per month (normally one 'nice' date night dinner and the rest inexpensive)
Home Supplies - $650 per month (all the basics like toilet paper, paper towels, cat food/litter, shampoo, OTC meds, cosmetics, diapers, baby supplies, blah blah)
Student Loans - $350 per month
Personal Care - $350 per month (hair cuts/color, waxing, nails)
House Cleaner - $300 per month
Lawn Care - $135 per month
Shopping (Clothing/Accessories/Home Decor) - $500 per month
Gifts - $200 per month
Work Lunch - $150 per month
Entertaining - $200 per month (having guests over/parties)
Kid's Activities/Lessons - $200 per month (swim class, music class, outings)
Doctor/Dentist - $150 per month
Pharmacy/Medications - $100 per month
Water Bill - $100 ($300 every 3 months)
Gas Bill - $140 (in winter, much less in summer months)
Electric Bill - $200
Cell Phones - $200
Pets - $100 earmarked per month for vet visits, meds etc every few months
Entertainment - $150 per month (going out for drinks/movies/etc)
Cash - $200
TOTAL ~ $14,600
The investment property seems like an obvious thing to cut but Husband wants to keep the investment property as we should be able to refinance that and charge more rent to have that monthly cost go away in the very near future. And all of that $$ we're paying is going towards principal on the mortgage for that property, and it's in a great location in arlington so will hold/increase value.
Our HHI is nearly identical. We save $8k a month from our $14k net. Big differences are: we have no childcare expenses, no investment property, our mortgage (plus HOA and insurance) is $2,000/mo, we spend about same on groceries an eating out (but the groceries total includes most of the household supplies). That accounts for about $5,500 of the difference. You spend a few hundred more in each category for personal care, lawn, cleaning, medications, cash. We have the same car expenses.