My budget...Have at it

[t-dog]

WWBG's attempt at Doxie's budget made me start thinking I should look at mine. Background - 42 year old widowed parent of an 8-year old DS.

Paid twice monthly - note my employer pays 100% of medical premium for both me and DS. Dental plan paid by employer covers 80% for me and DS.

DS survivor benes$742.00
Gross Pay: $8205.40
Fed Tax: $1267.64
Social Security $ 347.36
Medicare Tax $ 119.92
CA State Tax $ 517.48
CA SUI/SDI $ 99.26
LTD $ 65.00
Dental $ 21.70 (remaining 20% not paid by employer)

Net Income $6509.04

Insurance
Life $15.96
Auto $89.04
Home $65.07
PUP $12.06

401(k) contrib $500.00
EF $500.00 (current balance $13,450)
Mortgage $1131.11 (4.625% 29 years to go)
House repairs $400.00 (current balance $1,200)
Cable $62.00
Netflix $11.00
Internet $ 32.00
Stdt. Loan $403.00 (3.6%)
Cell Phone $104.00 (1 smart phone and moms basic cell)
Daycare $407.00 ($375 10 mo per year and $565 remaining 2)
Water $60.40
Sewer $20.00
garbage $34.48
gasoline $150.00
Gas (house) $75.00
Electric $125.00
Groceries $300.00 (includes personal care/meds)
DS Minor acct $250.00
entertain. $300.00 (includes gifts)

Net $1461.92 left at the end of the month.

Currently have following balances in accounts

Cash $999.96 (not the EF account, another cash account)
trad IRA $40,335.95
Roth IRa $45,503.32
401(K) $39,607.27
second IRA $1,236.15

Both grandparents have set up 529's for the DS and the balances are healthy, but I do not know the exact totals.
My car is paid off and I plan to keep it for a couple more years then pay cash for replacement. I put the car replacement money in with the EF.

Would you use the excess to bump up retirement savings or something else? Note I will also get a pension from my employer.

[april47]

Sounds great. I would up the EF to 6 months expenses and also take the kid to Disneyword. ;D

[yogiii]

Sorry for your loss.

I'd max 401k/roth, like daphne said, the pension could get cut down the line.
After that I'd just invest the money in a taxable account and save some/use some for fun/vacation.

[phil5185]

Would you use the excess to bump up retirement savings or something else?

I would open a taxable account at a no-load company (such as Vanguard or Fidelity) and invest $1000/m in an Index Fund. They grow tax-deferred, the earnings gets preferable capital gains treatment if you sell some - or the tax is never due if it is left to heirs. The money would be immediately available if needed (a fallback EF) and not tied to an age 59 1/2 govt subsidized retirement plan.

Your $125k of retirement plans w/ the $6000/yr input should be about $1M at age 60.

As for saving car money in your EF and paying cash - I would fully finance the car if <6% loans are still around, no need to pull cash out of a 10% to 12%/yr account to avoid paying 5% interest.

[Deleted]

May I ask why you have 12 months of Daycare allocated for a child that is 8 years old? Is this for after school care and then obviously summers?

Edit: Other than that, you're doing great. Like others said...max out retirement accounts. Good job.

[Deleted]

Jun 22, 2011 11:26:00 GMT -5 @financialtexan said:

May I ask why you have 12 months of Daycare allocated for a child that is 8 years old? Is this for after school care and then obviously summers?

I would think that's why she has it broken out between 10 months and 2 months. Is an 8 year old not supposed to need daycare?

[Deleted]

Jun 22, 2011 11:29:17 GMT -5 @singlemominmd said:

Jun 22, 2011 11:26:00 GMT -5 @financialtexan said:

May I ask why you have 12 months of Daycare allocated for a child that is 8 years old? Is this for after school care and then obviously summers?

I would think that's why she has it broken out between 10 months and 2 months. Is an 8 year old not supposed to need daycare?

Perhaps. I just know that when I was in grade school I was not in daycare and my mother worked 7am - 5pm.

[Deleted]

Jun 22, 2011 11:30:49 GMT -5 @financialtexan said:

Jun 22, 2011 11:29:17 GMT -5 @singlemominmd said:

I would think that's why she has it broken out between 10 months and 2 months. Is an 8 year old not supposed to need daycare?

Perhaps. I just know that when I was in grade school I was not in daycare and my mother worked 7am - 5pm.

I don't know too many people that would be comfortable these days having their 8 year old home alone after school for more than 15 minutes or so. and what did you do in the morning? I'm guessing school didn't start before your mother went to work.

[Deleted]

Jun 22, 2011 11:38:17 GMT -5 @singlemominmd said:

Jun 22, 2011 11:30:49 GMT -5 @financialtexan said:

Perhaps. I just know that when I was in grade school I was not in daycare and my mother worked 7am - 5pm.

I don't know too many people that would be comfortable these days having their 8 year old home alone after school for more than 15 minutes or so. and what did you do in the morning? I'm guessing school didn't start before your mother went to work.

The bus came around 6:30 so plenty of time for my mom to get to work in the morning. She didn't have to be there until 8, but she was the supervisor of that place so she got there early.

[Deleted]

Jun 22, 2011 11:40:52 GMT -5 @financialtexan said:

Jun 22, 2011 11:38:17 GMT -5 @singlemominmd said:

I don't know too many people that would be comfortable these days having their 8 year old home alone after school for more than 15 minutes or so. and what did you do in the morning? I'm guessing school didn't start before your mother went to work.

The bus came around 6:30 so plenty of time for my mom to get to work in the morning. She didn't have to be there until 8, but she was the supervisor of that place so she got there early.

if the bus came at 6:30 then you obviously got out of school fairly early and were home for several hours before your mother got home. Do you currently have kids? Did you or do you plan to leave them home alone at 8 years old?

[cronewitch]

Jun 22, 2011 0:25:29 GMT -5 t-dog said:

WWBG's attempt at Doxie's budget made me start thinking I should look at mine. Background - 42 year old widowed parent of an 8-year old DS.

Paid twice monthly - note my employer pays 100% of medical premium for both me and DS. Dental plan paid by employer covers 80% for me and DS.

DS survivor benes$742.00
Gross Pay: $8205.40
Fed Tax: $1267.64
Social Security $ 347.36
Medicare Tax $ 119.92
CA State Tax $ 517.48
CA SUI/SDI $ 99.26
LTD $ 65.00
Dental $ 21.70 (remaining 20% not paid by employer)

Net Income $6509.04

Insurance
Life $15.96
Auto $89.04
Home $65.07
PUP $12.06

401(k) contrib $500.00
EF $500.00 (current balance $13,450)
Mortgage $1131.11 (4.625% 29 years to go)
House repairs $400.00 (current balance $1,200)
Cable $62.00
Netflix $11.00
Internet $ 32.00
Stdt. Loan $403.00 (3.6%)
Cell Phone $104.00 (1 smart phone and moms basic cell)
Daycare $407.00 ($375 10 mo per year and $565 remaining 2)
Water $60.40
Sewer $20.00
garbage $34.48
gasoline $150.00
Gas (house) $75.00
Electric $125.00
Groceries $300.00 (includes personal care/meds)
DS Minor acct $250.00
entertain. $300.00 (includes gifts)

Net $1461.92 left at the end of the month.

Currently have following balances in accounts

Cash $999.96 (not the EF account, another cash account)
trad IRA $40,335.95
Roth IRa $45,503.32
401(K) $39,607.27
second IRA $1,236.15

Both grandparents have set up 529's for the DS and the balances are healthy, but I do not know the exact totals.
My car is paid off and I plan to keep it for a couple more years then pay cash for replacement. I put the car replacement money in with the EF.

Would you use the excess to bump up retirement savings or something else? Note I will also get a pension from my employer.

If you are gifting your son 250 a month I would stop that. Put that in your retirement accounts then when he outgrows daycare put that in retirement. If you need to help him when he grows up you can slow down retirement savings if needed. You don't know yet if he will even need help with college, he may have enough 529 and scholarships. The cost of having a child in daycare is high but when he is grown it will cost you too if you want to help him with college, first home, wedding and other start up cost of his life. Handing him a pile of money at 18 might see it go to things you don't approve of where if you have the control you can help when it does some good.

[8 Bit WWBG]

I am glad that even though Doxie chose not to avail herself of the help given here, that others did.

Unlike many of the people who post, you are pretty significantly in the black (or is it green). Your housing expense is very low given the typical area one has to live in to have your kind of income. You are also saving for "known-unknown" expenses like car and house repairs, which most people fail to do with any degree of consistency.

You spend very little on groceries, especially if it includes medication. You can definitely afford cable and a smartphone.

Do you stick to the $300 for entertainment? I know that I have $250 "budgeted" but it never actually happens that way. Then again, you can afford some overage without too much worry.

Are you saving for his college?

As far as what you should take away from this exercise? I think you are in a good place to plan your financial trajectory for the next few decades. Some here might say your retirement savings are a little low for age 42, but you seem to have the capital to bump those up quite a bit. Once daycare ends, another $400+ comes available, although as your son ages he will probably want more expensive activities.

When do you want to retire? Are you in a career that you can continue to do for 20 more years? Or is it a high stress position that you'll want to start scaling back when you hit your 50s? Will your income continue to increase, or are you almost maxed out in your field?

Do you want side businesses or income streams? Do you have any interest in investment properties, or trying to utilize some of your skills for extra money? Tutoring, proofreading, medical billing, translation...?

Where do you want to be when you are 52? Your DS will be about 18 and soon off to college. What do you want to have? Where do you want to live? Your actions today can help bring about your dreams tomorrow.

[Deleted]

Jun 22, 2011 11:42:11 GMT -5 @singlemominmd said:

Jun 22, 2011 11:40:52 GMT -5 @financialtexan said:

The bus came around 6:30 so plenty of time for my mom to get to work in the morning. She didn't have to be there until 8, but she was the supervisor of that place so she got there early.

if the bus came at 6:30 then you obviously got out of school fairly early and were home for several hours before your mother got home. Do you currently have kids? Did you or do you plan to leave them home alone at 8 years old?

I got out of school around 2:45. By the time I got dropped off at home it was about 3:45. My mom generally got home around 5:15 so not that long of a time to be by yourself. Don't currently have kids. That will depend on many factors whether they are left home alone around the age of 8. Quality of neighbors, friends or family that are close by. Ability to stay out of trouble for the child. (I was a good child who only needed a book).

Now having said this: Now, it's generally "against the law" to leave a child under the age of 11 or 12 at home by themselves. This was not the case when I was 8. I may be "forced" to find them daycare or potentially find myself in court for "child endangerment".

Edit: Sorry...don't mean to hijack the thread.

[t-dog]

Thanks all - I will respond to some of the questions:

property taxes are quite low thanks to prop 13, so they come out of the repair fund. The cash fund is just cash - the EF has about $13k in it. Daycare is before/after care as noted and no chance on the face of the earth that I am leaving an 8-year old home alone for any significant amount of time. Even if i wanted to I couldn't - its about a 2 mile walk home which I would never let him do even if he wanted to do it.

I took the boy to Disneyworld in January, we are off to Hawaii next week and I think a weekend in Legoland come August - so the $300 while not remotely close to spent most months does get used by years end in larger chunks. Otherwise our general entertainment is a movie here and there and letting the sports nut boy play all the various sports/leagues he wants to play.

I certainly have potential to continue gaining more income, not sure that there is a cap on attorney wages here. However, as WWBG noted, its a high stress job and I don't want to do it forever! I have considered using some money to put together a downpayment and buy a rental property - my area has continued to decline in value despite the properties being well kept up (older established neighborhood that is just starting to turn over due to original owners passing away).

What do the others of you think of Crone's suggestion to stop saving $250 of the boy's survivors benefits and apply those to my retirement until the time he outgrows the need for daycare?

Thanks all -

[Deleted]

Jun 22, 2011 12:55:32 GMT -5 t-dog said:

Thanks all - I will respond to some of the questions:

property taxes are quite low thanks to prop 13, so they come out of the repair fund. The cash fund is just cash - the EF has about $13k in it. Daycare is before/after care as noted and no chance on the face of the earth that I am leaving an 8-year old home alone for any significant amount of time. Even if i wanted to I couldn't - its about a 2 mile walk home which I would never let him do even if he wanted to do it.

I took the boy to Disneyworld in January, we are off to Hawaii next week and I think a weekend in Legoland come August - so the $300 while not remotely close to spent most months does get used by years end in larger chunks. Otherwise our general entertainment is a movie here and there and letting the sports nut boy play all the various sports/leagues he wants to play.

I certainly have potential to continue gaining more income, not sure that there is a cap on attorney wages here. However, as WWBG noted, its a high stress job and I don't want to do it forever! I have considered using some money to put together a downpayment and buy a rental property - my area has continued to decline in value despite the properties being well kept up (older established neighborhood that is just starting to turn over due to original owners passing away).

What do the others of you think of Crone's suggestion to stop saving $250 of the boy's survivors benefits and apply those to my retirement until the time he outgrows the need for daycare?

Thanks all -

I would continue to put the money in his account. You can always use it later if you need to.

[Wisconsin Beth]

Jun 22, 2011 11:44:00 GMT -5 8 Bit WWBG said:

I am glad that even though Doxie chose not to avail herself of the help given here, that others did.

WWBG (and anyone else who's wondering), I will not be posting our budget anytime soon. DH isn't comfortable with the idea of it being online. Plus right now the biggest hole in the budget is due to the food/supplements/occasional gadget bought to aid in getting DH's health issues to go away.

[Small Biz Owner]

Looks good, but 29 more years to go on mortgage = age 71 at payoff. Maybe future inflated dollars will cover that.

[qofcc]

I would stop saving money in his name and save it in your name so you have control over it. Whether you save it for him or use it for your retirement with the thought you would be giving him gifts along the way is your choice. You might want to buy him a car or put a down payment on his first house or something, but it should be a decision you two make jointly. A young person with money in his own name might spend it on something you wouldn't approve of and there's nothing you could do about it. At 250/mo for 10 more years, that's $30k. IMHO an 18 year old with access to $30k has a lot more options for doing things you don't approve of than might necessarily be good for him.

[Deleted]

I think it may be more complicated than "stop saving money" in his name. He is getting SS survivor benefits, and I believe she has to account for how she spends it. Certainly, she can justify childcare, food, and clothing plus the difference in insurance costs. But are you guys really suggesting she start "charging" her own child rent?

Nothing wrong with the savings account in his name. He is only 8. He will need braces, play sports, want to go to expensive camps, etc. If she needs money, she can find a way to use it. But I think SS actually requires any "excess" to be saved in his name.

[t-dog]

I do have to account for how much I spend, but there is not any great detail required. I just have to say I spent $X on his support during the calendar year. SS does require excess to be saved in an account for him.

[qofcc]

She didn't say she was setting it aside to spend on expenses, she said she's setting it aside to give to him later.

She's receiving $9k/yr. There should not be any trouble justifying spending that to raise a child and yes a portion of the costs to run the household are acceptable costs for SS purposes, there should be no trouble putting the money aside in her own name. I think it's great that she wants to keep some of the money for him. I'm just saying that if she keeps it in his name and just lets it accumulate and doesn't spend it, there is going to be more than $30K in a savings account that he can just go to the bank and access at any time without her permission.

Money is power and a teenager with access to a huge amount of cash can get himself into trouble. On the other hand, a teen who knows that a parent has set aside money and plans to give him a large sum of money or a car or whatever as a gift if he behaves, does well in school, etc., is motivated to stay out of trouble.

[Plain Old Petunia]

<< Now having said this: Now, it's generally "against the law" to leave a child under the age of 11 or 12 at home by themselves. This was not the case when I was 8. I may be "forced" to find them daycare or potentially find myself in court for "child endangerment". >>

That's right, it would be illegal to leave a child of 8 home alone. CPS would step in and you could lose your child. Therefore, why bring it up? Surely you aren't suggesting she leave her 8 year old home alone after school and all day during the summer?

[Plain Old Petunia]

Jenr, in all honesty, I feel strongly that if a child is receiving SS survivor benefits, then the money should be set aside for the child.

[Plain Old Petunia]

I think you're doing very well. If I were in your shoes, I would want to save/invest my surplus in order to reach the point I no longer had to work for a living. Once you get to that point, you can do whatever you like with your time.

[t-dog]

Petunia - that is why I was saving a portion of the benefits for him - I use a chunk to pay for the daycare and sports, but kinda figure the rest should be his.

[constanz22]

Jun 22, 2011 17:06:01 GMT -5 Plain Old Petunia said:

<< Now having said this: Now, it's generally "against the law" to leave a child under the age of 11 or 12 at home by themselves. This was not the case when I was 8. I may be "forced" to find them daycare or potentially find myself in court for "child endangerment". >>

That's right, it would be illegal to leave a child of 8 home alone. CPS would step in and you could lose your child. Therefore, why bring it up? Surely you aren't suggesting she leave her 8 year old home alone after school and all day during the summer?

Not true. Depends on the state. Many states do not have a "magic" age when a child can legally be left home alone. I'm a social worker and when I worked in CPS, this was THE most frequent question people called to ask. It is usually dependant on the maturity of the child, the situation (how often, for how long), if the home/neighborhood is safe (does grandma live 3 houses away?) etc. It is definitely not "illegal" as you say, to leave an 8 year old home alone. I am not advocating doing so in many circumstances, but, you do not have the facts of the "law". Typically, it is not an issue with CPS unless or until something bad happens.

[constanz22]

This message has been deleted.

[constanz22]

Jun 22, 2011 17:08:49 GMT -5 Plain Old Petunia said:

Jenr, in all honesty, I feel strongly that if a child is receiving SS survivor benefits, then the money should be set aside for the child.

Again, I have to disagree with you. SSI survivors benefits are to help with the expenses of raising the child, including, but not limited to, housing, utilities, food, clothing, transportation, extra-curricular activites, etc. The money is not the child's money. It is for the surviving parent to meet the needs of the child.

[Plain Old Petunia]

Constanz, according to the California Penal Code, failing to provide adequate supervision to a minor constitutes neglect, even if no injury has resulted. I think you would be hard-pressed to convince a judge that leaving an 8 year old home alone is somehow providing adequate supervision.

CALIFORNIA CODES PENAL CODE SECTION 11165.2(b)
"General neglect" means the negligent failure of a person having the
care or custody of a child to provide adequate food, clothing,
shelter, medical care, or supervision where no physical injury to the
child has occurred.”

Further, the law defines a minor as any person under the age of 18 (section 11165). With an older child, you could make a legitimate case that calling to check in or having a neighbor keep an eye does constitute adequate supervision. But an 8 year old?

[Plain Old Petunia]

<< Again, I have to disagree with you. SSI survivors benefits are to help with the expenses of raising the child, including, but not limited to, housing, utilities, food, clothing, transportation, extra-curricular activites, etc. The money is not the child's money. It is for the surviving parent to meet the needs of the child >>

You are free to disagree, Constanz. A parent is legally required to provide basic necessities for their minor child. A minor is not legally required to provide for themselves. Those are facts. My opinion is that benefits paid to a surviving spouse are one thing, benefits paid to a surving child are something else.