Home > Budget Revamp

Budget Revamp

September 4th, 2020 at 06:11 pm

Okay so a budget revamp is due since DH is switching jobs in March 2021. Our budget I think will be done annually. It'll be easier. This is our tentative budget for 2 years. Right now the plan is to fund our Roth IRA @ $6k/year and 2 ESA @ $2k each.

Salary $180k
-$60k mortgage PITI
-$25636 Federal Taxes, SS, Medicare
-$6000 Medical (no idea just estimating)
-$3000 Auto Insurance/Umbrella
-$1800 Electric
-$1800 Water
-$1200 Internet
-$3120 Cleaner
-$1560 Yard Guy
-$1400 Life Insurance
-$2400 Gas (this is obviously down for 2020, but in past)
-$12000 Groceries
-$6000 Eating out
-$6000 Kids extracurriculars
-$12000 Roth IRA
-$4000 ESA Kids

=$148,516 spent

= $31484 Leftover

Here is the problem. That seems like a lot of leftover. Enough to cover saving for retirement at 15% = $27000. That means we need about $13k more than we were planning on saving. And it seems tight since $31k slush I think needs to cover our misc spending and travel and things that happen.

I'm thinking if we compromise and do 10% savings on $180k so $18k, so if we move $2k into savings cash or 529 then we'll hit 10% savings rate. Yikes.

Looking at a finer tooth comb for our spending historically we spent $115k last year not including the mortgage and $102k in 2018 and $88k in 2017. Lifestyle creep. We've gotta rein it in a lot I think.

I think we need to start with the basics. Tracking what we spend till the end of the year. Then we start living on the new salary. We are refinancing our mortgage and it will go down another $500/month. We just spend too much money. I am feeling it now looking at everything with a fine tooth comb. I'll probably post in January/Feb as we get closer to it in the forum for picking over.

3 Responses to “Budget Revamp”

  1. Amber Says:

    I admire how you’re able to set your budget so far in advance, I can barely do so two months out. I’d do the sacrifice and bump the savings.
    With the new job is it a bump in salary? If so I’d continue to budget using the current salary, saving the difference

  2. LivingAlmostLarge Says:

    No actually it's a severe cut in salary. And that's the big problem. Our mortgage is looking rather difficult to swallow at about 33% PITI gross. This is too high to comfortably live and save at a high rate. IF we save at 10% or 15% then it's a doable budget but it's not a good long term plan to feel so restricted and unable to truly save at the rate we're used to.

    But it's okay. It's for around 2 years with an evaluation of the situation at 1 year. So I don't know which way to go. But if we had bought our house with this income, we wouldn't have spent so much on it. I would have been uncomfortable with it. There isn't enough buffer and flexibility in the budget. Personally I think the mortgage shouldn't be more than 20-25% = $36000 - $45000. So our home is one of those things where if I post on SA forums the first thing I would tell the person is the house is too expensive.

    I agree. It's going to put the budget on the tight.

  3. rob62521 Says:

    I'm impressed you can do a budget like this. I will comment that I think we are all spending more money right now because prices are going up. We buy a little deli stuff and I noticed that the chicken breast that we have sliced went up $1 a pound from just a couple of weeks ago.

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