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Old 05-08-2015, 01:10 PM   #21
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I'm trying to figure out the $500/year for appliances and another $1000 in electronics? Is there overlap? If you buy good quality appliances, they should last for years. And the electronics - a computer or laptop should last a few years, as should a cellphone... what is in that category? Is it hobby stuff?

A couple other categories seem like they could move to discretionary: streaming services... that's a want/nice-to-have... not a need. (I have prime and tivo - so I pay for it too - but both would be cut if I needed to trim.)

$130/month for 2 cellphones seems really steep. I assume you've got some fully loaded plan with either Verizon or ATT - often you can keep their network, but pay a 3rd party much less. I'm on Ting (sprint network) and pay about $70/month for FOUR smart phones (one doesn't have data).

Daycare - that looks reasonable for the first few years but drops DRAMATICALLY when they get out of the infant rooms. (Each state's licensure is different, but the ratio of caregivers to babies is higher for the infant group than for 3-5 year olds.) It then drops even more when it's just after school programs. Make sure you take full advantage of any dependent care flexible spending accounts so you can use pre-tax dollars to pay for the daycare. Even highly compensated folks get a *little* bit of pretax money for this. (I had a year where a bonus pushed me into a group of less pre-tax benefit... but I still got some.)

It's just a matter of looking at the budget and saying "are there cheaper options for this item" and "can I make what I have (computer/appliance/clothes) last a little longer".
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Old 05-08-2015, 01:26 PM   #22
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Mid-30s DINKS as well, living in San Diego on roughly the same budget as you with 60% higher housing costs (between mortgage and HOA).

Others have said it, but I'll echo: the biggest that stand out to me are clothing, personal care, and gifts. We eat out a bit, but not $4,000/yr worth as well, and in the accumulation phase we donate ~$1000/yr to various charities. My wife and I total ~$400 for "hair and nails". The difference between a $10 barber and a $25 stylist for a guy is minimal and no one cares that much (I used to spend a lot more on stylists/products and not sure for what return!). The difference between the $50 stylist two or three times a year for DW and the $200 stylist more frequently is also negligible. DW gets a mani/pedi as a treat maybe 3 times a year, not a regular thing. She paints/files at home otherwise.

I can't even imagine what I'd spend $5000/yr on clothes. We'll spend less than half of that, including work clothes for both of us, this year. So much of the clothing and personal care expense boils down to "keeping up with the Joneses"... We each like how we look and how we present ourselves professionally and socially and we don't need to spend that much to keep it up, despite having friends who are into Thomas Pink and $2000 watches.

DW thinks I spend too much on groceries, and we're at about $650-700/month so she's probably right! Our biggest discretionary expense, and the first thing we'll cut when we need to is our wine habit (clubs and annual road trip to Paso Robles to restock). But we get close to a 50% savings rate as is so we allow that.

Your post has inspired me to go back and look at 2014 to see where we might be spending more than I realize. Thanks for posting!
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Old 05-08-2015, 01:44 PM   #23
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My Vietnamese barber charges me $12 for a 50 minute haircut, the best I have ever had. I try to go to Costco only once a month or less, and never buy anything that is not preplanned (paper goods etc) otherwise unnecessary stuff jumps into my cart. Easy to save money eating out, We find the more expensive the restaurant generally the worse the food. Scout out the locally owned hole-in-the-wall gems in your area. Besides it is fun to get to know the owners. Unless you really need dry cleaning for some work clothes it is a waste. Never buy what you can't throw in a washing machine. When my kids were young we found an grandmother type to stay in our house with them, good extra money for her and great for us. Appliances and clothes also seem large to me. Are the clothes a business expense? As others have said, try to trim or eliminate those recurring charges. They are insidious. We tend to splurge a bit on travel, but that is just us. Splurge on what really gives you pleasure, you can probably trim a lot of the rest and never miss it. I usually find that if there is something I really want, I wait a week, then usually find I don't want it anymore, better things to do with my time then spend it on that thing, whatever it was.
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Old 05-08-2015, 03:01 PM   #24
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going to be tough - how's that HCAD appraisal looking?



Harris County has some stinking ridiculous tax rates.

good job tracking stuff tho - I don't have any idea how much we spend on each of those categories, except the bigger ones.
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Old 05-08-2015, 03:18 PM   #25
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I really doubt you are wasting money in any category , it just comes down to lifestyle expectations. Want vs need.
+1
Excellent job knowing where your money is going. so now it's a matter of prioritizing.
You are spending almost 500 bucks a month on clothes That's must be an awesome wardrobe.

So why are you trying to reduce your cost?? retire early? If so it's a matter of choosing.


Same with home furnishings. seriously, 12k a year Are you redecorating every year, good quality furniture, drapes, etc will last years. in fact people hand down stuff and then they become antiques.
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Old 05-08-2015, 03:28 PM   #26
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I'm not sure what your objective is, ER or mom stay at home or just have a little more cushion month to month. Good to see you are actually able to say where your money goes. Personally I see a whole lot of fat in this budget. Of course I'm well past the advertiser's main demographic so I'm not into consuming on the level of a 30 year old.
  • I see cable, internet, streaming, entertainment, and cell phone bills that can all be trimmed, a couple even removed due to redundant functionality.
  • You are eating out way too much, of course most folks in Texas do as witnessed by all the packed restaurant parking lots I see every single day and night.
  • Why do you spend so much on appliances and electronics? Are you not buying quality or are you one of those that always has to have the latest and greatest whatever?
  • You home maintenance seems a little on the high side. Is this an older home or are you counting upgrades as maintenance?
  • Clothing seems to be off the charts, is there some skinny clothes/fat clothes thing going on there or do you guys just like to shop? Maybe just into the latest styles?
I'm sorry if this sounds harsh, and if you really think this is harsh head on over to Mr. Money Mustache and read some of the case studies there That will definitely open your eyes to how to really cut a budget.
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Old 05-08-2015, 03:53 PM   #27
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My wife and I lived the two-income lifestyle with kids and daycare too. You'll find that it is hard to stay away from the "convenience costs" because you will be running back and forth to work, daycare, after school activities, etc. Based on our experience, if you are in careers with opportunities for advancement, your savings rate will increase each year, provided you don't expand your expenses. We went from a 5% savings rate when the kids were infants to a 35% rate as they became teenagers.
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Old 05-08-2015, 04:16 PM   #28
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I would suggest a one year experiment. Cut discretionary to the bone, at least by 50% but 75% would be ideal. Like other people said I would also shop around rates of ins for your home and car. Last year I did this and it ended up cutting my bill in half with better coverage!

Tough it out for a full year, then sit down with your DW and reflect. Look at how much money you saved? Did you feel like you were totally deprived of a decent qol? I think you'd be surprised with the results. Good luck and great work tracking everything...the hard part is whacking everything. 😜
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Old 05-08-2015, 04:57 PM   #29
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Quote:
Originally Posted by Lakewood90712 View Post
I really doubt you are wasting money in any category , it just comes down to lifestyle expectations. Want vs need.

Lakewood, that was my initial thought also. Gumby had a money saver item, but only old curmudgeons like myself think that is a good way to save money. Most people would look at you like you have 3 eyeballs in your head if you mentioned cutting the budget there.
Rodi mentioned the easiest one that will happen in 5 years...Daycare goes away, unless private school is on the horizon. Take that down the road savings and dont let lifestyle creep eat that savings up. Dont people still get a nice tax break on daycare still? If so, some of that expense will be rebated back tax time.
If housing cost reductions are off limits, you are really left to the crumbs of clothes and eating out unless some nice near normal MC lifestyle comforts are cut.


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Old 05-08-2015, 06:08 PM   #30
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I try not to give advice.... Here's my comment from an older thread.

Quote:
Originally Posted by imoldernu View Post
Posting this here, as it's personal, and not either a recommendation or a request for validation... Just a bit more of "FRUGAL".

STUFF WE DON'T SPEND MONEY ON

Life Insurance
New Clothing
Haircuts
Hair styling
Pedicures/manicures
Beauty products
Movies
Concerts
Sporting events
Restaurants (more than $8 meal)
Books
Music
"New" Computers (since 2002)... all refurb or reclaim
Software... (Twice in lifetime.. total $30) all other "free"
Car maintenance labor... all DIY except 3 times for major repairs
Brand vs. Generic foods
Premium meat or fish
Financial Advisor
Lawyer
Chiro/Massage/Tan etc.
Tatoos...
New Home Decor.. (all resale)
Cars.. since 1998...
Car Wash and wax... since 1989
Premium TV channels
New Bikes or Exercise equipment
Sporting goods
Cruises (so far)
Group trips
Flying (Airlines)
Lodging (more than 3 star)
Premium Gasoline
Tools (already have more than I'll ever use, including welders etc.)
Housekeeper
Carpet Cleaning
Window/Gutter/Furnace etc. Cleaning... all DIY
Premium booze/wine...
Jewelry
Organic foods
Brand sodas
Painting, remodeling
Weapons
Subscriptions (AARP only)
Gambling
Banking or Credit Card Fees
Appliance or Electonics insurance
Eye Glasses... except for $1readers (since 2000... maybe eye test this year.)
Pets... (except bird feed)
Healthcare maintenance... exercise equipment, pool, advisor etc... (all included in our senior community membership. (no fees)
Pest control... DIY
Only "fee for" is Activities Association (FL).. $6/year

.... for starters...
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Old 05-08-2015, 06:29 PM   #31
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You might want to look at it from a different angle. Take your priority - which is savings, off the top of your income. Then learn to live on what's left over. If you don't have the money your expenses/needs won't expand to cover non essentials. We were a double income, but we made ourselves live on one income and saved the other.
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Old 05-08-2015, 07:26 PM   #32
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Originally Posted by Throwdownmyaceinthehole View Post
You might want to look at it from a different angle. Take your priority - which is savings, off the top of your income. Then learn to live on what's left over. If you don't have the money your expenses/needs won't expand to cover non essentials. We were a double income, but we made ourselves live on one income and saved the other.
This is a great idea and what DW and I do. I projected what I wanted to have saved by 42, and worked backwards assuming 3% real growth between now and then. Then we figured out how to save the goal amount. In fact, we're doing better than we planned in terms of savings rate (and the return is cooperating - subject to change at any moment...)
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Old 05-08-2015, 07:33 PM   #33
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You're discretionary expenses seem very high. I live in a high cost of living area in the Northeast, have no kids and when my wife and I were working full time, our discretionary expenses were $16K less per year than yours. Also, your groceries expense is 35% higher than mine. What is the $3500 Costco expense?
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Old 05-08-2015, 08:45 PM   #34
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We're basically living on one income, but I still think we could do better.

Donations - We give less than 1% of our income away so I'm not too fussed about this as long as we're both employed.

House - We bought it in the low $400s. There's not much that's significantly cheaper in Houston that works for both of our commutes. I don't see us moving until DS starts school, at the earliest. And yes, HCAD sucks.

Furnishings - We're not re-decorating for style, we're young enough that we're still accumulating furniture for the house. E.g. a couple of the bedrooms have beds but no dressers or nightstands in them. That is not a priority, but eventually we want to have a couple of pieces of furniture in there. And for this year I just bought a crib and changing table.

Maintenance - I estimated 1% of the houses purchase price. Won't be that much every year, the next major thing to go will probably be the AC/furnace which will be a couple grand.

Appliances - Ours are new so don't expect any repairs/replacement in the near term but I figure eventually they'll start to need work.

Groceries - I know this is too high but can't figure out where the money is being wasted. Most of our shopping is at Wal-Mart.

Costco - I started a separate thread a few months ago and most of the replies said my Costco bill wasn't out of line. Coffee beans, paper products, steaks, fish, wine ($10-15/btl), beer, fruit, sparkling water, nuts, cheese, etc. But yeah, you go in there and can't get out for less than $150 per trip.

Daycare - The nannies we've looked at have been +$2k/mo versus $1,300 for daycare, so doesn't make sense for only one kiddo. I'm sure there are cheaper nannies if you don't pay taxes or ask questions about immigration status.

Clothing - More DW's spending than mine, though I do buy dress shirts and slacks for the office as stuff wears out. DW has to wear suits which cost more. Jeans/polos not allowed for either of us at work. But yeah, we could cut here if we tried.

Personal care - I get a $15 haircut once a month. The rest is DW. I have offered to cut/color her hair but she has declined.

Dining out - We could cut here if we packed our own lunches during the week. We don't always have time for this with work but could definitely do it a few times a week.

Gifts - This is 80% DW. She comes from a very large family and there is always a wedding, baby shower, graduation, birthday, etc.

Cell phone - We both "need" smartphones with data for our jobs (no, our jobs don't reimburse us for them). Of course, if I didn't want the latest and greatest iphone, this could be lower.

Insurance - We just switched carriers and saved +$1k/year. But I don't see it getting any cheaper in the near term.

Electronics - This is all me. I love my computers/gadgets. And digital cameras are a hobby of mine.

Cable/internet - This is just internet service for $50/mo + taxes. We don't have cable TV, just Netflix/Hulu.

Vacation - We're not exactly staying at the Ritz in London but yeah, could be cheaper.
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Old 05-08-2015, 09:07 PM   #35
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Quote:
Originally Posted by soupcxan View Post
Code:
Discretionary
 1500  Clothing
 1000  Dining Out
 500  Donations
 600  Personal Care (hair, nails)
 1000  Gifts
 500  Entertainment
 5,000  Travel/Vacation
 500  Electronics
 500  Home Furnishings
9,600  Subtotal
Code:
Semi-fixed
   300  Appliances
   600  Cable/Internet
 800  Cell Phone
 1,500  Electricity
   250  HOA Dues
   600  Natural Gas
   200  Streaming services
 1,400  Water & Sewer
   750  Dry Cleaning
 2,500  Gasoline
 5000  Groceries & supplies
 2000  Costco
15,900  Subtotal
Code:
Fixed
14,424  Mortgage (P&I only)
 4,000  House Maintenance
 8,500  Property Tax
15,600  Daycare
   500  Car Maintenance
   250  Car Registration
   200  Car Tolls and parking
 1,400  Insurance Auto
   400  Insurance Flood
 3,000  Insurance Health
   500  Insurance Dental
 2,400  Insurance Homeowner's
   200  Insurance Umbrella
   200  Dentist
 1,000  Doctor
   200  Prescriptions
52,774  Subtotal
 
78274 Grand Total
Here's my proposed budget for you!

Discretionary expenses were easy to cut. Semi-fixed less so, and I didn't do anything to the fixed expenses since I'm assuming there's not much wiggle room without changing the housing situation. There's probably a lot of fat you could cut there, since you're at ~$2500/month or $30,000/yr on housing alone.

I took out a little over $20,000. It shouldn't be crazy deprivation, but will require adjusting to a new normal (clothes, dining out, hair/nails, etc).

I also noticed you neglected a sinking fund or depreciation amount for periodic auto replacement. Maybe your cars are brand new so you will keep them forever (or a decade or two at least)?
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Old 05-08-2015, 09:08 PM   #36
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Cell phone - We both "need" smartphones with data for our jobs.
I'll respond, since this is an issue I brought up. And my response is "really?" Let me suggest that none of us is as indispensable as we assume. We do not need to be constantly connected.

I am still working. I am available all day long on my office computer. When I leave my office and spend an hour driving home, I am unavailable, and rightly so -- it is dangerous and illegal to use a cell phone while you are driving. When I get home, I check my email again and usually check it again a few times over the course of an evening. It is almost never the case that something can't wait until the morning. And if it can't, well there I am on my fully equipped home computer.
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Old 05-08-2015, 09:12 PM   #37
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I'll respond, since this is an issue I brought up. And my response is "really?" Let me suggest that none of us is as indispensable as we assume. We do not need to be constantly connected.

I am still working. I am available all day long on my office computer. When I leave my office and spend an hour driving home, I am unavailable, and rightly so -- it is dangerous and illegal to use a cell phone while you are driving. When I get home, I check my email again and usually check it again a few times over the course of an evening. It is almost never the case that something can't wait until the morning. And if it can't, well there I am on my fully equipped home computer.
Disagree, I am in IT, we use smart phones for system access 7/24.
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Old 05-08-2015, 09:21 PM   #38
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For a two-income family in their 30's, the ideal situation is to have jobs with advancement potential. If so, your savings rate can increase over the years as long as you keep your expenses in check. You can keep your cell phones and cable tv, etc. If your jobs don't have advancement potential, and raises only keep your head barely above inflation, then you will need to cut your expenses as others suggest.
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Old 05-08-2015, 09:32 PM   #39
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One thing we have started doing is attending estate sales. It allows us to enjoy spending a little but getting a lot of value for our money. Case in point, with all the rain here is Tx we are seeing a lot of mosquito problems and found a working mosquito magnet for $10. Sure beats spending $300 or so.
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Old 05-08-2015, 09:36 PM   #40
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Cell phone - We both "need" smartphones with data for our jobs (no, our jobs don't reimburse us for them). Of course, if I didn't want the latest and greatest iphone, this could be lower.

Electronics - This is all me. I love my computers/gadgets. And digital cameras are a hobby of mine
Question, does the monthly cellphone bill include subsidies for your phones? If so, $130 sounds about normal. If not, consider prepaid plans such as Cricket Wireless. Cricket is a subsidiary of AT&T so you get pretty good coverage. For 2.5GB each phone per month, it's $70 total. For 5GB each, it's $90 total.

I hear you on the electronics. My yearly budget for that is $1-2K and I've had years where it went up to $5K (usually when I have lots of overtime). I'll forgo vacations but not my tech.

My yearly clothing budget is $0 and hair cut is just $50 a year. I did spend quite a bit on a new wardrobe last year though because of a promotion. Prior to that, it's just old jeans and shirts.
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