Look at my Budget

[Redraidernurse]

I posted a thread earlier about having anxiety about spending money (if anyone remembers that thread). I received lots of great advice which I was thankful for - one of which was to write down a budget. This is my first time sitting down and actually drawing out a budget, so I would appreciate any advice... I am mainly looking for advice on how much to set aside for fun/vacation and any other critiques. Here is our monthly budget for our family of 3:

Average Monthly Net take home pay between my husband and I: $6,998

Mortgage, House insurance, and property taxes: $1,031
Tithe: $700
Health Insurance for our family: $110
Two Cars Insurance: $113
House Cleaning: $100
Internet Cable Bill: $54
Gas/Electric: $150
Family Gifts: $50
Groceries: $500
Childcare: $400
Life Insurance: $99
Auto Gasoline: $150
Water: $70
ROTH IRA: $833
TOTAL monthly expenses: $4,361

Our eating out is minimum because we eat healthy from home usually. But our grocery bill seems high because we are admittedly "foodies" and like to enjoy nice cheeses, wine, fresh foods, etc. The housecleaning is necessary for my mental health and marriage well-being since I work full time and have a toddler running around. This budget doesn't have a slot for "fun/vacation money" yet, because I was unsure of how much money or what percentage of income to allow for that.
There also isn't a slot yet for "home improvements".

As far as retirement savings - we contribute the maximum to our Roth IRAs and I have a 401k at work that is not matched until I have been there 5 years (need 4 more years). We have $30,000 in an emergency fund. Other than that any extra money just kind of floats around between savings/checking with no real purpose.

Thanks for examining my budget if you made it this far.

[minnie1928]

I think you need some more categories...how about clothing, auto (maintenance/gas), personal care (haircuts, dr appts, meds, etc)?

I notice that you tithe, have a mortgage and childcare...I'm assuming you itemize with that many deductions. Do you usually get a refund? Is it large? If so, you should change your withholding rate to lower your refund.

[Redraidernurse]

I think you need some more categories...how about clothing, auto (maintenance/gas), personal care (haircuts, dr appts, meds, etc)?

I notice that you tithe, have a mortgage and childcare...I'm assuming you itemize with that many deductions. Do you usually get a refund? Is it large? If so, you should change your withholding rate to lower your refund.

I added in auto gas. I consider clothing part of "fun money" which I haven't added in yet, because I am unsure of how much I should allow for that? I only get a haircut maybe once a year and my husband every 3 months so it probably averages out to $100 a year.

We usually do not get a refund, we usually owe money.

[Seeker]

From your previous posting, you owe 70k on the mortgage, and are expecting a second child.

With your budget listed, you have a very nice 7k/month income and about 4.4k/month expenses. So in a major way, you already spend less than you earn.

With the house, set aside money to repair/replace stuff (depending on the age/condition of the home, that could be as little as $50/month or $100 or more). Same with the autos.

As far as fun money, that is pretty much an agreement between the two of you as to what you feel is fair. Sometimes the wife gets more, because she's buying stuff for the children. But, I would not include "vacation" in fun money.

Vacation is fun, yes (well sometimes), but that money needs to be set aside depending on needs, but it's the needs of the family as a whole. Savings for a vacation shouldn't have to come at a "giving up" of other fun!

That may not sound right, but I guess I see "fun" money as personal money, and "vacation" money as do-things-together money.

Definitely your anxiety is unwarranted. Since you have gotten together with your husband and defined your budget, I hope that you feel better about your situation.

[disneysteve]

I have a 401k at work that is not matched until I have been there 5 years

How much are you currently contributing to the 401k? Retirement savings should be 15% (or more) of your GROSS annual income. The 10K you put in the Roths probably only works out to about 9% of your gross right now.

As for vacations, it is tough for us to answer that but here are things to think about. What types of vacations do you like to take? Do you go camping and spend very little or do you stay at hotels, eat all meals out and do various activities? Maybe you like to take cruises. Think about how much you spend on a typical vacation. Also, how often do you take vacations? For us, we generally spend about $2,000 for a week and we usually take 3 weeks vacation, so we need $6,000/year or $500/month. Your number may be lower or higher.

[Redraidernurse]

How much are you currently contributing to the 401k? Retirement savings should be 15% (or more) of your GROSS annual income. The 10K you put in the Roths probably only works out to about 9% of your gross right now.

As for vacations, it is tough for us to answer that but here are things to think about. What types of vacations do you like to take? Do you go camping and spend very little or do you stay at hotels, eat all meals out and do various activities? Maybe you like to take cruises. Think about how much you spend on a typical vacation. Also, how often do you take vacations? For us, we generally spend about $2,000 for a week and we usually take 3 weeks vacation, so we need $6,000/year or $500/month. Your number may be lower or higher.

The automatic deduction out of my paycheck monthly for my 401K is approx $320 ($3,840 a year). I doubt I will be working here 5 years to have it matched so I hesitate to increase that amount when I could use the money in mutual funds or something else. Do you think I should increase the amount? Counting the 401k and Roth Contribution, if I did my math correctly I have us contributing 15.7% of our gross income to retirement. I'd be fine with increasing this to 20% but I am unsure of where - to add to 401k or do mutual funds.

Thanks for the advice about vacations. I love taking vacations/traveling and consider it very important so it is important to me to budget for it. We usually leave the country and have to pay costly plane tickets and do go out to eat so it does add up. I will chew on what you said and think about how many vacations and how much for each one.

[Redraidernurse]

From your previous posting, you owe 70k on the mortgage, and are expecting a second child.

With your budget listed, you have a very nice 7k/month income and about 4.4k/month expenses. So in a major way, you already spend less than you earn.

With the house, set aside money to repair/replace stuff (depending on the age/condition of the home, that could be as little as $50/month or $100 or more). Same with the autos.

As far as fun money, that is pretty much an agreement between the two of you as to what you feel is fair. Sometimes the wife gets more, because she's buying stuff for the children. But, I would not include "vacation" in fun money.

Vacation is fun, yes (well sometimes), but that money needs to be set aside depending on needs, but it's the needs of the family as a whole. Savings for a vacation shouldn't have to come at a "giving up" of other fun!

That may not sound right, but I guess I see "fun" money as personal money, and "vacation" money as do-things-together money.

Definitely your anxiety is unwarranted. Since you have gotten together with your husband and defined your budget, I hope that you feel better about your situation.

Thank you I do feel better now that we are more organized and can see exactly where our money is going. I understand what you are saying about how fun money and vacations should be separate. I suppose in my mind I would rather give up fun money in order to go on a vacation! "Oh, can't buy that watch, I've gotta save for vacation." So I will have to differentiate between the two. Thank you.

[skydivingchic]

You have a pretty good surplus to work with, so that's great. Its been mentioned, but you are missing an auto maintenance and a home maintenance category. I budget $150/month for maintenance for an 11 year old Toyota RAV with 168000 miles on it and a motorcycle. We live in a condo, so I don't really have a good sense of home maintenance costs. A few other categories which you may need to consider include any subscriptions you might have, personal care, toiletries, medical copays, and household goods such as paper towels and light bulbs.

As for the spending money, I give myself $250/month for that. It covers eating out, getting my nails done, and things like books or magazines. DS gave good advice about the vacation savings. Our vacation costs tend to vary wildly from year to year. We try to do one year out of the country - these tend to be long and to destinations with awesome wildlife. The last one was 4 weeks in Antarctica, next one is almost 4 weeks Kenya/Tanzania/Rwanda. The next year we go somewhere in the US. Our US vacations are typically 2 weeks to National Park type places with low end hotels and lots of hiking. So out of the country years for us are extremely pricey and US years are pretty cheap. I just set a large chunk of money aside each month (~18% of my take home pay) to save toward vacations, a new to me car, and other larger one off things like a new laptop or mattress. Because this money is separate from my retirement and my EF, I have no problem spending it, but it may work better for you to have a separate account just for vacation.

[Redraidernurse]

You have a pretty good surplus to work with, so that's great. Its been mentioned, but you are missing an auto maintenance and a home maintenance category. I budget $150/month for maintenance for an 11 year old Toyota RAV with 168000 miles on it and a motorcycle. We live in a condo, so I don't really have a good sense of home maintenance costs. A few other categories which you may need to consider include any subscriptions you might have, personal care, toiletries, medical copays, and household goods such as paper towels and light bulbs.

As for the spending money, I give myself $250/month for that. It covers eating out, getting my nails done, and things like books or magazines. DS gave good advice about the vacation savings. Our vacation costs tend to vary wildly from year to year. We try to do one year out of the country - these tend to be long and to destinations with awesome wildlife. The last one was 4 weeks in Antarctica, next one is almost 4 weeks Kenya/Tanzania/Rwanda. The next year we go somewhere in the US. Our US vacations are typically 2 weeks to National Park type places with low end hotels and lots of hiking. So out of the country years for us are extremely pricey and US years are pretty cheap. I just set a large chunk of money aside each month (~18% of my take home pay) to save toward vacations, a new to me car, and other larger one off things like a new laptop or mattress. Because this money is separate from my retirement and my EF, I have no problem spending it, but it may work better for you to have a separate account just for vacation.

Can I create a savings account that is for BOTH auto/home maintenance? Our home is around 35 years old and the thing I see needing replacing in the near future years is the air conditioner,which I can probably expect to cost 7k. Our autos (one is a 2008 and one is a 2002) have thankfully been very reliable to us thus far and maintenance has been little. *knock on wood* We maybe spend $250/year for the cars. We live in a small town and they get very low mileage.

Your vacations sound AMAZING! What an experience, and how wonderful to get to spend an extended time there. I see my future years being spent either pregnant, nursing a baby, or chasing a toddler so I could only dream of those exciting vacations. Maybe during our golden years.

[MonkeyMama]

Can I create a savings account that is for BOTH auto/home maintenance?

Yes. You can categorize everything to the 9th degree, or just set aside a lump sum for future expenses. (I prefer just to do a lump sum to keep it simple). Are you saving for car replacements in the future? I have found $5k/year is ample to set aside for future home maintenance and car replacements. (& any other large one-time expenses). I just call it "mid term savings." I save $1500/year for car maintenance, in addition. IF we don't use it - just gets applied somewhere else.

Vacation is very personal. Figure out how much you need to spend to be happy, and start setting the amount aside. If it works for you to put vacation money in the fun money, I'd go with that. I'm not much into the vacation thing so we don't put much aside for vacation.

[AmySL]

I would try switching to self cleaning if possible.

[MrPolarZero]

That one definitely looks great. However, you might want to adjust a few items in your budget in order for you to save more from it.

[CCCFree]

$4600 is a healthy amount of expenses to deal with every week I would try and taper some of that down!

[LuckyRobin]

What about telephone/cell phones? I'm assuming you have at least one. Also television service if you have it. What about medical to cover your co-pays and perscriptions?

[Redraidernurse]

What about telephone/cell phones? I'm assuming you have at least one. Also television service if you have it. What about medical to cover your co-pays and perscriptions?

We both have cell phones that our parents still pay for. We got on their family plans in college and have remained on them so, they are essentially free to us.

Our heath insurance is free through work. Because I work at a hospital, everything done at the hospital or local clinic is 100% covered. Neither of us take medications.