The Home 6 Budget

[The Home 6]

If any of you all remember me from the MSN boards, I was trying to figure out how to save $20,000 while the husband is deployed. He deployed a few months ago, got promoted ( ;D), and I took a trip to visit my folks (there was much shoe shopping involved). So it is time to rework my budget, and who better to help me than the fine folks from YM? Perhaps I can provide a bit of entertainment for you as well, though I doubt as much as Dark and Loop.

INCOME
Husband: 5905
Myself: 475
From rental house: 900

TOTAL: 7280

EXPENSES
Mortgage: 1450 (paying a bit extra)
Rent: 800
Church: 400 (need to move this up to tithe)
MIL: 300
Cable: 78
Netflix: 11
Internet: 20 (for me)
Internet: 60 (for husband)
Mutual funds and Life insurance: 67
Groceries: 350 (which includes household stuff)
Gas for cars: 125
Electric: 250 (a high estimate, I keep the house at 77 degrees)
Natural Gas: 25 (lots of baking)
Water, Sewer, and Trash: 40
Child care: 50 (a high estimate)
Car insurance: 80 (We pay every 6 months)
Bug guy: 30 (90 every 3 months)
USPS: 50
My 'allowance': 100
Husband's allowance: 100

TOTAL: 4316

Let me add in this: I am going to start school in the fall, which will necessarily add to the child care expenses. Unless I can convince the husband to let me put our older daughter in Pre-K. At the same time, I will be receiving $709 per month from the GI Bill, as well as any scholarship money I can get.

Have at it.

ETA: Internet for the husband, his discretionary spending, and car insurance. Serves me right for doing this before a full 6 cups of coffee.

[Regis]

If you're saving $3,200/month, you're doing really well.

On the income side, can you increase the rent on the rental property? It looks like there's no profit in it for you.

Are you comfortable with the emergency fund you currently have? I don't see anything going there or to retirement, future college expenses, etc.

You note that you're paying extra on the mortgage. Is the interest rate so high that you couldn't put the money in a good no-load mutual fund and have it make you more money?

Most people would be envious of you being able to save as much as you have shown us. Keep up the good work and check back in with us at the end of the year when you've got that $20,000!

[The Home 6]

And I forgot the cell phone. That's another $50 a month. (sorry...I'm as bad as doxie~ )

Regis~I don't really want to increase the rent on the rental property, because we REALLY like our renters. We know them and know that they are taking good care of our house. It is several states away, so it's not like we can just run down the road and check on it.

I think there is retirement money coming out of the husband's paycheck that doesn't even make it into the bank account. He told me that he signed up for the Thrift Savings Plan (and I saw the paperwork) before he left. However, I can't access his LES, so I don't know if this is true or not.

We are only paying about $100 extra on the mortgage, and it's at 5% interest, which I don't believe is too high.

We've got $6500 in our 'emergency fund' savings account, and just over $2300 in our '$20K' savings account. Also a CD floating around with $23K.

I want to start contributing to the husband's and my mutual fund again, and start one up for our younger daughter. The one we contribute to now is for our older daughter. Putting this all down visibly makes it seem like this is a doable idea.

[resolution]

I notice you have the mutual funds and life insurance lumped together as one expense. Is this a whole life policy? As a general rule of thumb you make more money splitting off the insurance from the investment and doing a term life insurance and spending the savings from the lower rate on a separate mutual fund. I would recommend that you set up automatic deposits each month to the mutual fund for yourself and your husband. Your budget looks good but the savings are more reliable if it is done automatically. (please note that I am a hypocrite because I still can't get my husband to change his whole life policy to term).

[Deleted]

I'm kind of wondering about the $300 to MIL, but that probably isn't something to change while DH is deployed. (It certainly seems like charity, so maybe you have already met your tithe goal? )

If DH was just promoted, is the extra $$ at the end of the month a new situation? (congrats to him by the way)

Your grocery budget seems pretty low for a family - I'd make sure you have some extra wiggle room there.

But there should still be some decent surplus. You should have no problem meeting the $20k savings goal.

You mentioned an older daughter - how many kids do you all have?

[8 Bit WWBG]

My questions after a quick review:

What is the $800 in rent for?

How many cars do you have that need gas while he is deployed?

Do you still need cable if you have Netflix?

Other than that, even if your "real" surplus is "only $2k/mo" you'll hit your goal in 10 months.

[phil5185]

What is WAGS? And what is an RR machine?

I would not pay an extra $100/m on a 5% 30 yr loan, that makes no financial sense - invest the $100/m into the mutual fund.

Same question a kari - what does life insurance and an investment fund have in common? (I hope the mutual fund isn't with a life insurance company - if so, fix that)

[The Home 6]

Kari~ I lump mutual funds and life insurance together just because they go to the same company and come out on the same day. I'm silly like that. It is a whole life policy for me, and I could stop paying on it, because I've been paying on it my whole life (ha ha). The mutual fund does come out automatically, BTW.

craftysarah~The husband has been giving money to my MIL for YEARS. It bumped up $100 because of the deployment and subsequent promotion. If I wanted to be really mean, I would only save $16,400 and tell him that I really WANTED to save $20K but I couldn't because of the money we sent to Mama. ;D But I won't.

We have 2 kids, 4 and 2. Our 4 year old could go to Pre-K this fall, which would TOTALLY help me out with me going back to school, but the husband doesn't want her to.

WWBG~We have 2 vehicles. I drive the husband's truck 1 day out of the week, just to keep it operating. That might be silly, but there it is. We don't NEED cable since we have Netflix, but Netflix is currently being dumb with the PS3 and I can't watch ANYTHING. Also, I've got so many kids shows saved on the DVR I just love being able to pull them up immediately. The $800 in rent is what we pay for rent here. We have a house in another state that we are paying a mortgage on that we have renters in.

[Gardening Grandma]

Why doesn't your husband want the 4 yo to go to pre-k? (My youngest went to pre k and it was a great experience for him).

Have you read the "5 year old travelling" thread?

[midjd]

Home 6 - My DH is in school to become a mechanic, he says there's no need to actually drive the truck as long as it's started every day or two (something to do with the oil draining into the oil pan for a "dry start" if it's sitting too long).

Other than that, I don't have much - your budget looks much better than ours! ;D

Do you think at some point your DH will be comfortable reducing the contributions to his mom? Or could you perhaps put them into a separate account for her retirement? IIRC from your previous posts, your MIL is supporting a couple of her kids still, correct? I can understand his desire to help, but creating a retirement account might be more help to her than giving her cash to fritter away. $300 a month, invested properly, would be a healthy chunk of change in 15-20 years.

[phil5185]

he says there's no need to actually drive the truck as long as it's started every day or two (something to do with the oil draining into the oil pan for a "dry start" if it's sitting too long).

In the Army motorpool, we started the jeeps once a month and drove them ahead one car length. That turned the axles a full turn (lubricates), turned the driveshafts, turned the wheel bearings, and polished the rust from the clutch and brakes (sometimes a vehicle brakes rust 'on' - same with the clutch plates.) And exercised the engine.
I have an antique John Deere - if I don't run it for 3 or 4 months, I have to pop the clutch lose.

[The Home 6]

gardeninggrandma~He says he just doesn't feel comfortable with sending her to Pre-K. But it would either be Pre-K or daycare, honestly. And Pre-K is free.

Mid~we will be supporting MIL forEVER. She lives with her 2 children (who are old enough to live on their own, both over 21) and her 2 grandchildren. I would want to ensure that we are putting money away for OUR retirement before we start funding hers. Please don't read that in a mean voice! Also, is it bad that I kinda like driving the husband's truck once a week? I think I look cool in it.

[buster]

Jun 25, 2011 10:55:50 GMT -5 phil5185 said:

he says there's no need to actually drive the truck as long as it's started every day or two (something to do with the oil draining into the oil pan for a "dry start" if it's sitting too long).

In the Army motorpool, we started the jeeps once a month and drove them ahead one car length. That turned the axles a full turn (lubricates), turned the driveshafts, turned the wheel bearings, and polished the rust from the clutch and brakes (sometimes a vehicle brakes rust 'on' - same with the clutch plates.) And exercised the engine.
I have an antique John Deere - if I don't run it for 3 or 4 months, I have to pop the clutch lose.

Also, driving it once a week will prevent flat spots from being created on the tires. This along with the other items Phil stated I feel it's a good idea to drive the truck around the block once a week. Fortunately it doesn't need to be driven far.

[saveinla]

If supporting your MIL is a given , I would just account for that and not argue with hubby about it. We also support both of our parents and what we did was buy 2 rental properties and paid them off fast. The rental income goes to the parents and until they are alive, will be there to support them. HTH

[Gardening Grandma]

He says he just doesn't feel comfortable with sending her to Pre-K. But it would either be Pre-K or daycare, honestly. And Pre-K is free.

So is he comfortable with sending her to daycare? If so, does he have an explanation as to why one and not the other?

[Deleted]

I'm not sure I follow the pre-K concerns either. Is it the debate between K at 5 or at 6? Is she a "young" 4 or is she ready for "school"? But I'm not a parent, so whatever his concerns are, you all need to work those out and come up with a plan.

And I completely support driving the truck to "keep it operating" - or because it is fun to drive - ultimately, you will be driving either way, so changing out the cars isn't going to impact your gas budget much. May as well steal his toys while DH is away

[The Home 6]

That's all he tells me is that he doesn't feel comfortable sending her to Pre-K. I wonder sometimes if he doesn't like the kids being in day care so much (about 20 hours a month, give or take), but he never has mentioned anything to me about it. I know I feel bad when he calls and asks if we are home so we can Skype and I tell him, "No, the girls are at day care because I'm doing such and such."

And my 4 year old is just 2 weeks too young to start regular Kindergarten in the fall. I think she would do wonderfully at either Pre-K or regular K (or special K ;D), she is a very social girl.

Supporting MIL is absolutely a given. I have given up the fight with this one. I swear the next time SIL asks to go in halvsies on a gift (a month AFTER the holiday, then I see a pic of her new tattoo on the Facebook), I am going to have to put my foot down and say NO. At least not til she starts paying us back the money we loaned her for the truck.

[Regis]

So your out-of-state house is costing you around $1,400 a month and you're getting $900 a month in rent for it? Are you planning to move back to it at some point?

[The Home 6]

Jun 25, 2011 16:30:38 GMT -5 Regis said:

So your out-of-state house is costing you around $1,400 a month and you're getting $900 a month in rent for it? Are you planning to move back to it at some point?

We are hopeful. The husband thinks that as soon as he gets back from the 'Stan, he will get orders moving him somewhere else, and it would be MARVELOUS if that somewhere else was where our house is. Based on his job, it is a very real possibility.

[❤ mollymouser ❤]

Is your husband deployed to where it's triggered the CZTE and special pays and entitlements? If so, are those reflected in the salary you've listed? (Hostile Fire/Imminent Danger Pay, Family Separation Pay, Combat Zone Tax Exclusion?)

Even if you don't have access to your husband's LES ... can you ask him how much he's putting into the TSP each pay check?

Is the life insurance for you, him, or both? Are you paying for Spouse SGLI insurance for you (it would be deducted from your husband's paychecks) ... it's a pretty good value for $100K in coverage.

[The Home 6]

Molly~the husband is getting all the benefits that you have listed, and they are reflected in the numbers I put up. (He's enlisted, it's a miracle that I'm able to stay at home).

The next time I talk to him, I will ask him if there is money coming out for the TSP. He needs to be putting money into the Savings Deposit Plan while he is over there, but he says finance people are hard to get a hold of.

The life insurance is for me. It is the same company that holds my our mutual funds, but is not tied to them in any way. For instance, if I died, the mutual funds wouldn't be depleted. I think it is for $50,000 in coverage. But like I said earlier, I could probably stop paying on it, since I've been paying on it for nearly 30 years. On my to-do list is to call the company, ask about restarting our mutal funds (for me and the husband), starting one for younger daughter, and questioning them about the life insurance.

[❤ mollymouser ❤]

You should definitely look into spouse SGLI coverage for $100,000 for yourself. (My premium is $13 per month, comes right out of my wonderful DH's mid-month LES.)

If he wants to take money out of his LES for TSP, he can actually do it rather simply through the MyPay website ... there's a pull-down menu for the Thrift Savings Plan, he just needs to select a percentage of his base pay. But he's right that he needs the finance people to deal with the SDP.

[The Home 6]

Thanks for the tips, Molly! There is a spot on his LES where I can just look and see if there is money coming out for the TSP, right? It's been so many years since I have looked at one, I can't even remember!

And I forgot to ask him yesterday about the TSP, we got into it about the Pre-K instead. He wanted to know why I wanted to push for it so much, and I said I didn't think I was pushing, just providing several good reasons for her to go, but the decision is ultimately in his hands. He will still think and pray about it, but I am not very optimistic.

[midjd]

Any way to suggest that maybe the daycare funds can come out of his mom's monthly check?

[phil5185]

But like I said earlier, I could probably stop paying on it, since I've been paying on it for nearly 30 years. On my to-do list is to call the company, ask about restarting our mutual funds (for me and the husband), starting one for younger daughter, and questioning them about the life insurance.

I would try to unravel this and move your funds to a no-load fund company that has nothing to do with selling life insurance and annuities.. And buy Term Life insurance separately. If you are combining insurance and investing, you are almost certainly getting the worst of both.

[The Home 6]

phil~Do you have any suggestions for companies? I am looking right now at USAA for Term Life for myself, and I am utterly clueless when it comes to mutual funds.

mid~I would suggest that, if I wanted to be sleeping on the couch for the next 5 years!

[phil5185]

and I am utterly clueless when it comes to mutual funds.

Vanguard - TR Price - Fidelity. Those are the three major no-load fund providers, they all have about the same products and prices (they have to, if one was noticeably better than the other two, they would quickly have all of the customers).

I don't have life insurance, can't help with that.

[SVT]

Just shop around for the life insurance. Get a quote from USAA and maybe 2 other companies.

[The Home 6]

Thanks, phil and SVT! I'm sorry it took me a while to say 'thanks'. Over on EE there is "An Anonymous Note" thread...things have been a bit upsetting for me.

[❤ mollymouser ❤]

Jun 28, 2011 4:58:52 GMT -5 The Home 6 said:

Thanks for the tips, Molly! There is a spot on his LES where I can just look and see if there is money coming out for the TSP, right? It's been so many years since I have looked at one, I can't even remember!

And I forgot to ask him yesterday about the TSP, we got into it about the Pre-K instead. He wanted to know why I wanted to push for it so much, and I said I didn't think I was pushing, just providing several good reasons for her to go, but the decision is ultimately in his hands. He will still think and pray about it, but I am not very optimistic.

YES. On the LES, there should be a dollar amount per LES (paycheck) showing how much is allocated to the TSP.