Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 13:43:56 GMT -5
I know you guys are probably sick of hearing about my pay, but I've been nervous about it because a big expense came up, and the wife and I are starting to wonder if we need more income. She might have to cut back on the volunteer time and get a job, which is a real pain in the summer since we'd have to pay for daycare for the kids, or I need to find something in the evenings or weekends.
The problem is that my oldest daughter needs braces, and so do I. Out of pocket cost, with dental insurance, will be about 10-11k. My insurance doesn't cover ortho for adults at all, and it only covers up to $1,500 on my daughter. They'd put us on a 24 month payment plan, with no interest, but that means taking on a $450ish monthly commitment. On paper we can do that, but it leaves us hella tight. We can probably trim up the budget a little, but we like having some wiggle room, especially heading into summer with gas prices and food going up.
I could take a loan on my 401k to pay for the braces completely, sell some of our share of the family business (what I consider our EF, but the wife considers the kids college money) which would also pay for the braces completely, or cut back on my 401k contribution to make the monthly payment. Anyway, enough stalling, let's get to the budget. Please be brutally honest, and yes I'm totally prepared to eat massive amounts of crow on our grocery budget and lack of couponing.
Oh, one last quick thing. I get 26 paychecks a year, but I'm posting the numbers using only two checks a month. This year it works out that I'd get the "extra" two checks in September and December, so for most of the year we have two checks a month to work with and we'll have an extra 2,551.72 in Sep and Dec.
Gross Income $9,435.12 Wages 7681.60 Life Ins 3.70 Medical 744.48 Dental 51.88 401k match 307.26 Fed MED 102.98 Fed OASDI 543.22
Taxes $1,764.88 Fed Income 483.06 Fed MED 205.96 Fed OASDI 841.46 CA Income 149.18 CA SDI 85.22
Insurance $1,414.56 Medical 1260.48 Dental 95.88 Vision 24.06 Life 16.54 Disability 6.52 AD&D 11.08 (I don't even remember signing up for this one...)
Retirement $1,152.24 401k contribution 844.98 401k match 307.26
Net Income $5,103.44
Housing $2,392 Mortgage 1992 (includes insurance and taxes) Gas/Electric 200 (avg) Water 200 (avg)
Transportation $708 Gas 400 Auto Ins 128 Bike Loan 180 (2 months left, and I need to replace the battery and sell the stupid thing)
Food $800 Groceries 800
Entertainment $343 Cable 129 Tivo 13 Phone 140 (two cells with data plans) Netflix 11 Derby 50
Debt $257 Student Loan A 125 (don't know exact rates on these) Student Loan B 132 (total outstanding balance on both loans is around 15k)
Discretionary $603.44 (not bad right now, not great either, but subtract the $450 for braces and we're living paycheck to paycheck)
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 13:53:09 GMT -5
Oh, the gross, tax, and insurance numbers look a bit wonky because I changed my spreadsheet to account for what my employer pays in benefits (see my other thread). It doesn't affect the net number at all, and I'm too lazy to go in and change it back. Besides, I kind of like looking at it this way. Gives me a better idea of just how much of my potential pay I'm giving up in taxes and insurance.
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Deleted
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Post by Deleted on Apr 29, 2011 14:12:11 GMT -5
I am surprised for such a long time poster that there isn't any savings besides retirement. If I remember correctly, your ortho isn't an emergency, is there any way you could do dd's first and then yours?
As for things to cut, the bike loan will be paid in 2 months, so I would wait until that is paid off to start anything. Also I would cut back on the cable plan and ditch the Tivo, really for what you are paying you should be getting a DVR from your cable provider. You are spending a lot of money for movies/TV. Those 2 things should get you an additional $200 a month.
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Post by illinicheme on Apr 29, 2011 14:14:28 GMT -5
Do you have any way to carpool/vanpool to work? I also live in California and commute ~40 miles each way. Joining a vanpool took my commute expenses from ~$400/month to ~$50/month. (My employer supplies the $120/month commuter benefit that essentially off-sets my share of the monthly van rental cost.)
How are you looking in terms of total retirement savings? (I could go look in the other thread, but I'm too lazy). Do you have the discipline to reduce your 401k contribution during the 2 years you need to pay for braces and then resume once you're done?
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resolution
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Post by resolution on Apr 29, 2011 14:17:37 GMT -5
I notice you are subtracting your employer match out of your income. If you didn't add that into the gross that is another $300 that is available. Other than that I would focus on the two biggest expenses that you can impact, the house and insurance. What is your interest rate on the house? Is it possible to refinance and lower it? You are also paying some high insurance premiums for insurance that doesn't seem to cover a lot. Are there other plans available that might cover more? Have you looked at plans outside of your employer?
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qofcc
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Post by qofcc on Apr 29, 2011 14:18:18 GMT -5
Cable & phone... does the cable include high speed internet? Do you need that along with data on the phones? Between Tivo for local channels and all of the programming available through Netflix, you should easily be able to cut back the cable.
Housing - Your mortgage is high, but it's California and you just bought the place so not much you can do there. Utilities seem reasonable.
Transportation - I don't suppose there's anyone you could carpool with or public transportation? Your auto insurance seems high, when was the last time you shopped it? How much can you sell the bike for? Seems like the $180/mo plus whatever you could recoup from selling will go a long way towards the braces.
$800 for groceries? Sounds like Loop & the girls could spend a bit of time with some cooking-on-a-budget books this summer. One of you should start making an itemized list of every grocery item you buy over the next month and see what categories of groceries you spend the most on. Fresh fruit & veggies? Meat? Beverages? Cleaning & health & beauty products? Snacks?
$450-180 (bike) = 270 - 70 (cut back cable and/or phone) = $200 which you should easily be able to trim from the grocery budget.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:22:14 GMT -5
I am surprised for such a long time poster that there isn't any savings besides retirement. First we had to get our credit cards paid off, then we bought the house. We're just now getting to a point that we could start saving for something else. If I remember correctly, your ortho isn't an emergency, is there any way you could do dd's first and then yours? Neither of ours is an emergency per se, and we could take turns. My teeth are more damaged than hers, and get worse everyday, but I'd feel horrible not getting her braces when she needs them. I don't want her to be dealing with the damage later like I'm doing now. Also I would cut back on the cable plan and ditch the Tivo, really for what you are paying you should be getting a DVR from your cable provider. I haven't liked the cable plan since we got it. Never thought I'd miss Comcast. It's a bundled plan, internet and TV, and the TV part is just basic cable. The internet only plan was only $20 cheaper a month. There's only one cable provider here so it's not cheap.
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qofcc
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Post by qofcc on Apr 29, 2011 14:23:34 GMT -5
You are also paying some high insurance premiums for insurance that doesn't seem to cover a lot.
OMG - I skipped right over that. I pay less than $300 for BCBS HMO through my employer. They quoted me around $800 for a family plan to buy directly. Our dental insurance is kind of crappy, but it's only $15/mo. You should DEFINITELY shop for private insurance. You should be able to buy a dental discount plan to help with the cost on the adult braces.
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wodehouse
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Post by wodehouse on Apr 29, 2011 14:24:29 GMT -5
Do you need the data plans for the cell phones? Go with prepaid phones (no data) and you can probably save at least $100 a month. But then you may be locked into a plan already.
Does your work offer a health/medical savings plan? With these you can pay for care with pre-tax or untaxed dollars. Even better, the plan will write the check even before you have fully funded the account for the year. It worked for me.
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Angel!
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Post by Angel! on Apr 29, 2011 14:24:59 GMT -5
Once the bike loan is gone, then you are looking at discretionary of over $300. I would just try to find small cuts elsewhere until you reach a point where you are comfortable with the discretionary spending that will be available each month.
Some suggestions - try to cut $50 or $100 off groceries. Cut cable & tivo & watch TV by streaming over the internet & using an antenna. If neither of those options appeal to you, then I would consider cutting slightly back on your 401K contributions. I would avoid the 401K loan route though. Also, you could adjust your withholdings if you got a refund this year. Also, I am guessing that selling the bike would cover at least a portion of the braces, maybe you won't need to come up with $450/month.
My only questions are why isn't there a savings category & do you have any actual money in savings?
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:26:45 GMT -5
What is your interest rate on the house? Is it possible to refinance and lower it? It's 5%, on a zero down VA loan. We bought about 10 months ago, so we don't have much if any equity, hell we might be a bit upside down right now. I have no idea if anyone would refinance at a lower rate than we are now given that.
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qofcc
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Post by qofcc on Apr 29, 2011 14:33:29 GMT -5
If neither of those options appeal to you, then I would consider cutting slightly back on your 401K contributions. I would avoid the 401K loan route though.
I would do the opposite. At your income, you're saving a ton in taxes by contributing. It's worth the small gamble that you'd be laid off and unable to pay the loan back and have to pay the taxes then. The 401K loan wouldn't be much more than the bike loan which will be gone.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:34:08 GMT -5
Several of you have mentioned carpooling, so I'll address that. I've looked into it before, it's been a while though, and there wasn't a car/van pool going the whole way. There were a couple that went about halfway, which would still save me a bit of gas, but my hours are a little wonky so it wasn't that convenient. There are signs all over the building about a carpooling workshop that's going to happen in a few weeks, they're really pushing it right now, so maybe something that's a better fit will open up. Even if I could carpool 3 days a week, when my hours are more normal, it would save me a good chunk.
The other option would be to start commuting on the bike again, but CA freeways and highways in the summer are a freaking nightmare. That's why I stopped riding in the first place. I've had my fill of close calls. I'd rather have the $2,000-2,500 I think I can sell the bike for.
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Deleted
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Post by Deleted on Apr 29, 2011 14:36:32 GMT -5
I haven't liked the cable plan since we got it. Never thought I'd miss Comcast. It's a bundled plan, internet and TV, and the TV part is just basic cable. The internet only plan was only $20 cheaper a month. There's only one cable provider here so it's not cheap. Sorry to hear that. Are there any other options for internet besides the cable provider, like the phone company. I don't have that option, but other people seem too. We have a dish for cable and it is cheap, but our internet is high because there is only one "high speed" option.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:40:10 GMT -5
My only questions are why isn't there a savings category & do you have any actual money in savings? There's no specific savings line because we aren't really saving for anything right now. Money in savings is more tricky. Well, we don't have any cash savings right now, other than the buffer we keep in checking (around $1,000). I consider the family business stock our EF, always have. Loop considers it the kid's college money, her retirement, and our emergency money. We have $35k worth. We used pretty much everything else to get into the house, buy appliances, some furniture, that whole thing.
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wodehouse
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Post by wodehouse on Apr 29, 2011 14:40:25 GMT -5
One thing to consider in your budget are home repairs. I don't know how new/old your house but it seems like they always need some repair...emergency or otherwise: hot water heater, plumbing repairs, roof leaks, hvac conks out. It might be tight now with the dental work but eventually you might think about setting up a "reserve fund" for these future repairs.
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Post by illinicheme on Apr 29, 2011 14:41:30 GMT -5
I'd probably try to further break out the discretionary spending. Are you routinely spending that entire $603 (or $900 - kari did have a good point there!)? What are you spending it on? Are you calling it "discrentionary" but it's really covering necessities like shoes for the girls, etc.? Or is it money that is getting piddled away and you're not sure where exactly it's going?
I think you can probably make the $450/month braces payments if you buckle down and watch your discretionary and grocery spending for the next two years. And perhaps trim some TV/phone expenses if possible.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:42:03 GMT -5
There's also DirecTV (satellite), and whatever the phone company has, but all the neighbors say the phone company internet is really slow.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:47:16 GMT -5
I'd probably try to further break out the discretionary spending. Are you routinely spending that entire $603 (or $900 - kari did have a good point there!)? What are you spending it on? Are you calling it "discrentionary" but it's really covering necessities like shoes for the girls, etc.? Or is it money that is getting piddled away and you're not sure where exactly it's going? It's only $600, as the 401k match was counted in my gross as well. It gets spent on whatever we need that month. The way we normally budget is this, all the insurance, taxes, and retirement come out of my check before I get it, then most of our bills are covered by automatic bill pay, Loop usually makes a big shopping trip the Saturday after I get paid, then pretty much whatever is left has to cover gas, entertainment, and whatever else comes up until the next payday. Some months that's clothes or shoes, some months it's an oil change or new tires on a car, activity fees for the girls, whatever. Some of it, of course, gets piddled away on eating out or going to the movies or something. That's why we like to have a certain amount of wiggle room in the budget, neither of us are anal enough to track all those one off and varying expenses.
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wodehouse
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Post by wodehouse on Apr 29, 2011 14:51:03 GMT -5
re: "one off and varying expenses". I got married at a late age, before then it was very easy for me to budget (just me to worry about), now i am very methodical about it. I have several "one off and varying expense" accounts in my budgeting (for car care, home repairs, medical, etc). These are areas that I don't really know how much they will be, or when they will be, but I know that they will certainly come up sometime. So I put away a bit out of each paycheck to cover these things as they come up. It has made all this really painless.
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Post by illinicheme on Apr 29, 2011 14:52:39 GMT -5
That's why we like to have a certain amount of wiggle room in the budget, neither of us are anal enough to track all those one off and varying expenses. I certainly understand that approach, because DH and I are the same way. But we're currently in a situation where our wiggle room is much bigger than yours. (We'll be feeling the squeeze if we successfully get pregnant and eventually end up needing to pay daycare.) I think you guys are facing a choice. Learn to be anal about the expenses for the next two years, or continue being a little more relaxed, but try to bring in more income. I think you can manage it without more income, but you'd be cutting it really close, and probably have to make a few lifestyle cutbacks.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 14:57:58 GMT -5
If you want instead of seeing $600 a month discretionary, look at it as $50 in car care, $150 in child related costs, $150 in clothes/shoes, $100 in house related expenses, and $150 for whatever.
That's what that money gets used for, we just don't label it up front. Some months we might not have to pay for signing up the kids for softball, some months we do. Some months we need an oil change, some months we don't. As long as we have the discretionary line in the budget it doesn't really matter.
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trytofindbalance
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Post by trytofindbalance on Apr 29, 2011 15:02:35 GMT -5
Hey Dark, I was looking over your budget and I actually think you're running a pretty tight ship. I disagree that you should cut the cable/tivo, I think in comparison to many things, it's pretty cheap entertainment and it doesn't look like you guys have tons of money left over for more expensive forms of "fun". I do think you guys could probably lower the grocery budget a little bit, but my monthly grocery bill averages about $700 (it includes 2 adults, 1 teenager, 2 dogs, a cat and any household/beauty products).
I also have a little over $600 per month for "extras" and we absolutely go over that number sometimes. $600 for clothes, entertainment, gifts, car repairs, house repairs, etc, etc, etc doesn't go as far as it used to. One big birthday month or an unexpected car issue and the money is gone (hence the need for an emergency fund).
Anyway, the good news is that the bike loan is almost done. I would consider selling the bike if I didn't really use it anymore, that would help offset the cost of the braces. Also, you say you have 2 extra checks a year, what are you currently using that money for? Couldn't that help pay down what you owe on the braces?
I'm not sure what your wife does, or if it makes sense for her to pick up a part time job and then have to pay for daycare. It seems that she may end up paying more for someone to watch the kids then she is making, but it is a possibility based on salaries/daycare costs in your area.
I also agree with Angel D, if you get a tax refund, then adjust your withholdings. I do it. I have an idea of what my annual tax burden will be, so I actually have a set amount coming out of my check every single week (as your HR dept, they should be able to do this for you). I used to get a fairly large refund that I would just sock away, but now I need that money for monthly expenditures.
Sometimes things just happen. My DH had to have emergency dental work to the tune of $4,000. It was a true emergency and we don't have dental insurance. It took me about 18 months to pay it off. Soon after I ended up having 2 unexpected surgeries. Cost us $6000 out of pocket. I used my emergency fund for that. Then the truck needed over $5,000 in major repairs. I charged it and transferred it to a zero percent card. Although I had the cash, I really needed to make sure I had a lot of extra money in my emergency fund. I'm just paying it off as I can and I'll make sure to have it paid in full before the zero percent offer is up.
So I would probably focus on my daughters braces first. Sell the bike and use some of that money to pay down the bill. I would probably throw part of my extra checks towards it as well. I would try to free up some cash, lowering my grocery budget a little bit. I would wait to see how the new payment affected my current budget, before I did my braces. If it really was a necessity to get my own teeth done, I would do it. Is there anyway that they can give you x amount of time to pay down the bill ,but leave the payments more flexible. Say you pay $250 a month toward the braces and at the end of the term, you charge the balance to a zero percent credit card offer? It might buy you some more time, even if it isn't the ideal situation. Hopefully over the next 24 months, you'll get a raise or your wife can work part time while the kids are in school, so you won't have a daycare expense too.
Just my thoughts.
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Deleted
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Post by Deleted on Apr 29, 2011 15:03:39 GMT -5
Since you both have data plans on your phones could you just tether your lines to your computers for internet? We gave up our home internet a few months ago and just do that. Works better actually!
The groceries bill is insane unless you're including everything with that like toiletries and cleaning supplies and such. Even then it still seems really high. We spend about $350/month on groceries alone.
Is that health insurance a company plan or private?
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Deleted
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Post by Deleted on Apr 29, 2011 15:05:24 GMT -5
That's what that money gets used for, we just don't label it up front. Some months we might not have to pay for signing up the kids for softball, some months we do. Some months we need an oil change, some months we don't. As long as we have the discretionary line in the budget it doesn't really matter. I understand exactly what you mean. We budget the same way, which is why we need a good bit left over from our budgeted expense. I think putting a $450 into the mix is going to make things tight. We were in your position about 7 years ago, after we bought our house. It was doable, but tight. I am a SAHM and we debated me going back to work, but the #'s never really supported it. There was even a bike that got sold, when we really needed some cash and music equipment and a Jeep.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 15:09:27 GMT -5
Is that health insurance a company plan or private? All the insurance is through my company. It's also including the part my employer pays. I'll go edit the gross salary info to make it clearer.
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alabamagal
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Post by alabamagal on Apr 29, 2011 15:10:59 GMT -5
When my boys had braces a couple years ago, they were getting up above $4000 and we are in LCOL area, so the total amount does not seem too out of whack. Two things I would consider:
It sounds like the braces for you might be more urgent. I would ask the orthodontist about delaying on your daughter, expecially if she is in early teens. I think many people are getting them younger and younger, but I am not sure waiting until mid-teens is all that bad.
I would strongly consider the 401k loan. I know many advise against this. But as long as you are planning on staying in your job, you are basically paying the interest back to yourself, although you loose out on gains in the funds while the money is out. You probably get a discount from the orthodontist by paying up front.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 15:13:11 GMT -5
My daughter is 10, so we probably could delay them a bit. I'd feel really horrible about it though.
I would get a 5% discount if I pay up front.
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Bob Ross
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Post by Bob Ross on Apr 29, 2011 15:14:32 GMT -5
Is that health insurance a company plan or private? All the insurance is through my company. It's also including the part my employer pays. I'll go edit the gross salary info to make it clearer. I'm surprised you look at the insurance that way. Your employer pays what they pay, and it's not like they're going to hand over that money to you if you declined coverage, correct? I'd think it would do little more than make one disgruntled to think their insurance is costing $1400+ a month rather than the (I'm guessing) few hundred a month you actually pay out of pocket for it. It's all just a matter of perspective, but still.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 29, 2011 15:17:36 GMT -5
If more Americans looked at the numbers they way I do, and saw how much they pay every month for insurance that seems to cover less and less every year, maybe we'd actually get some decent reform.
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