Let’s talk budgets
I am completely at awe of bloggers spending under $30-40k a year (with kids!) and still looking like they are living it up! For us, getting down from $100kish to that $75kish a year in expenses has been relatively easy (first year we hit that was last year), but I am not sure we
can want to go any lower right now without crossing the ‘this is not that fun anymore’ territory.
Yes I know I sound like a whiny-pants, but I am going to go ahead and own that because this is how I want to live my life as long as I can afford it. There.
For those of you on a similar journey, I am sharing the average monthly budget we follow (some months is more or less on each bucket, but generally it ends like this on average), in case it is helpful to you. Note that after following the below for a few more years, mainly to help us establish new spending habits from what we were used to, we will move to a budget that simply focuses on savings (first bucket), core fixed expenses (second bucket) and other (third bucket) to simplify things. Maybe that works better for you already – whatever works, just make sure you are checking that you are staying on track!
So with that, here goes…
|Mortgage||$1,600||Includes $250 extra for principal to pay off in 7 years|
|Utilities/cell phone||$400||Includes pest control and cell phones|
|Groceries||$550||Food outside restaurants|
|Extra||$600||Includes 1x month house cleaning, massage and netflix|
|Car expenses||$650||Car payment (4 years to go), registration and maintenance|
|Medical expenses||$50||Co-pays, my insurance is paid through employer pre tax|
|Insurance||$200||Life (x2) and car insurance|
|Vacation/travel||$1,000||The Travel Travel part of our life!|
|Kids||$500||School lunches, extra curricular classes, summer camps|
|Dog||$250||Vet, food and overnight stays when we vacation|
|Replacement fund||$150||Household things (attic fan, heater, etc)|
|Charity||$50||Excludes donations and time volunteering|
Yes, this is a cushy budget but I am finding this to be OUR number to maintain our perfect family balance between early retirement saving and fully living and enjoying the experiences we want today.
While last year we hit this budget for the first time (came a little under), this year we have already over spent a little, mainly because we added fancy stuff like massages and home cleaning 1x month (hey, don’t hate!), but also because of unfortunate things like our computer dying and need to cut some dangerous trees, and a few other random issues, boo!
If we continue at current spend levels we will end at around $78k – so let’s
hope plan so that we can reign it in and finish strong and avoid admitting public defeat!
What about savings?
With this level of spending, assuming we are both employed at current salary levels, we get to max our 401ks and HSA, and still put away around $6k (give or take) per month for our post tax brokerage account. Keep in mind we already front-loaded our 529s for as much as we wanted to add as of last year, so that has allowed us to put more money into our brokerage account and even add a little to our replacement fund.
Speaking of replacement funds – in 2018 we need to really trim things down on lux categories a little more or earn more money so that we can add a replacement vehicle fund (goal under $12k Leaf or something comparable in about 2-4 years to replace our older car).
First, we need to keep that spending down as I stated. Now, if we do go down to one income in a few months, we will temporarily trim the extra mortgage, the cleaning fee and, GASP a little bit on travel (down to $8k vs $12k per year). This would also mean instead of saving so aggressively, we would only be able to put away about $1,500 to brokerage per month or less, until we are able to replace that second income, though I could still max my pre-tax accounts. Still, not bad!
We are going to be monitoring kids expenses as they get older and may be interested in more classes or experiences, which may push budget higher. As for the opportunity areas, we should pay off our car in 4 years ($450 per month- 0% interest), and be in a better position to save more once the house is paid off (currently about $100k left in mortgage – with extra principal pay off is 7 years).
And no, we are not getting rid of our lovely rescue dog. She enhances our life so much and pushes us to be even more active. Once she passes though, we shall not get a new pet so this is it!
Tell me your dirty little secrets – what does your budget look like? Where do you splurge and what is hardest to cut?