Budget - How do you keep yours so low??

Patience

Dryer sheet aficionado
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This was hard to post. Feeling very exposed/vulnerable. After reading so many threads with incomes and savings rates, I'm left wondering what we are doing wrong with our monthly expenses. I've been tracking for several years and know where the biggest expenses are (INSURANCE!, Housing and Holidays). I just don't think we're prepared to fix it.

Me, DW and 4 kids still at home (elementary through high school). The kids are growing up so fast and inlaws are aging rapidly. We've already lost my parents early on, so we hate to cut the travel/holiday budget and sacrifice those memories. We do tend to do most of the holiday hosting and often pay majority of the bill when we are out dining with the whole family. Beyond that, is there anything particularly egregious or is this a typical budget for a family of 6 in our region? We've considered geographic arbitrage but work doesn't travel/relocate well.

$15,902 Total Monthly Expenses (Not including 401k contributions or income taxes)

$560 Utilities

$3,302 Housing

$1,252 Food

$498 Transportation

$3,464 Insurance

$478 Services

$1,094 Health Care

$551 Kids

$107 Clothing and Personal Care

$5 Household Supplies

$241 Pets

$100 Subscriptions

$256 Entertainment

$1,804 Holidays/Vacations

$551 Charity

$0 Debts

$1,639 Savings


[ Mod Edits]
 
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You might want to bold each category total as it really confused/alarmed me until I figured out your budget structure
 
You can either earn more or spend less, or a combo of both is even better. But there is a balance of living. The saying is everyone lives and dies, but not everyone lives. My sister passed at 47 and I started spending more on the kids, activities and vacations/experiences. The things we remember are the fun times with the people we care about.

I have some ways to earn a little extra so that has helped us have more frequent/better quality vacations.
 
Nice summary. Nothing obvious jumps out to cut for a big savings. If it were me, I'd do some trimming in the Subscriptions, Entertainment, Holiday areas.
 
You are able to save and are chipping at the mortgage while spending all that, so it's not really bad.

I'm wondering under Charity you have: "$200 College Scholarship Fund" is this for your kids ? Are you saving in a 529 (or similar) for their College costs ?
 
$550 Electricity [Mostly for electrical heat in winter? Ouch. Lower thermostat, better insulation, etc.]

$185 additional mortgage payment [Easy one to eliminate. Whether good or bad depends on the interest rate]
$301 Maintenance - paving/stone/soil/sand/paint [Because this is separate from repairs, also easy to eliminate]

$235 Whole Life (DW wants to keep) [Why? As in, "Why not term?"]

$71 CPA [Is this for a business you own?]
$280 Cell Phone (Family Plan) [Consider Red Pocket or other alternative? Also, do all the kids really need their own phones?]

$140 Massage with tip [Probably not part of most budgets ;)]
$208 Gym Membership/Personal Training (adults) [You could probably cut at least the personal trainer portion]
$188 Gym Membership/Personal Training/Functional Therapy (kids) [You could probably cut at least the personal trainer portion]

$96 DD athletics [travel or rec?]
$46 DS2 athletics [travel or rec?]
$91 Allowance [Purely optional]

$67 Arcade ($200 card/kid/year) [A library card would be $0]

$200 College Scholarship Fund [Most colleges are awash in money...]
Some areas to consider. Of course you won't take each category to $0 (some heat in a western NY winter will be needed, etc.) but other areas not mentioned could probably also be reduced. The numbers above represent ~$32K/yr.
 
You are able to save and are chipping at the mortgage while spending all that, so it's not really bad.

I'm wondering under Charity you have: "$200 College Scholarship Fund" is this for your kids ? Are you saving in a 529 (or similar) for their College costs ?
Contributing around $800 a month to the 529s. The "$200 college scholarship fund" is my way of paying it forward. I fund a scholarship and get to choose the terms under which it is granted (specific major, hardship, etc.) Without scholarships I never would have finished College, and college has served me well. I owe it to the next generation to look back and lend a hand.
 
Some areas to consider. Of course you won't take each category to $0 (some heat in a western NY winter will be needed, etc.) but other areas not mentioned could probably also be reduced. The numbers above represent ~$32K/yr.
Eck, electric bill pains me every month. It is our only source of power except for the propane backup generator.

consumption culprits:
4,000 sf house, electric geo thermal heat pump, a therapy pool, hot tub, a washer/dryer that runs almost every day doing 6 people's laundry, 2 refrigerators.

The pools add about $75 a month to the bill.

We've tried line drying clothes in the summer, but the clothes are stiff and itchy. We could line dry the towels. I don't mind if those are stiff.

The massages. Also eck. I know. But because of my medical condition I can't take muscle relaxers or anti-inflammatories. Massage is the next best thing for comfort. It is only comfort care. It's not NEEDED, so it could be cut, or at least reduced.

Cpa - yes there are businesses.

Sports - rec, no travel leagues yet

Arcade - we do the library as well. Their friends and cousins aren't hanging out at the library on a Saturday night. Doesn't justify splurging, it's just something we know they do, so we buy in bulk at a discount and it covers them all for the year to go hang out while we catch up with friends over a pop.

Cell phone - believe it or not, this is reduced from before. It was almost $100 more. Could look into the adults being on a good coverage plan for work and put the kids on something cheaper. We just want to know they have cell service if they need us while they are out.
 
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Well for starters, many folks your age don't have a handle on tracking ACTUAL expenses to this level, so that is a great start.
You are saving monies each year.
There are folks including me who spent more than yourself, but still LBYM and got to retire early. Have you performed any future calculations as to where you think your investments might be by age 55 as one example?
 
Well for starters, many folks your age don't have a handle on tracking ACTUAL expenses to this level, so that is a great start.
You are saving monies each year.
There are folks including me who spent more than yourself, but still LBYM and got to retire early. Have you performed any future calculations as to where you think your investments might be by age 55 as one example?
Thank you! Thats very reassuring to read.

If we stop contributing to retirement today and coastfire to age 55:

Ficalc there is a 75% success rate

Richbrokedead also a 75% success rate - at age 80 there is a 50% chance of being dead and only a 9% chance of being broke
 
You have a bad case of lifestyle creep. As your income increased, you took on additional spending and now that seems reasonable and even necessary, cutting back seems unthinkable.

The whole life policy is a poor investment, I would only consider keeping it if I could no longer pass medical underwriting. You mentioned that your wife wants that policy, but this is about money, not emotion - its investment portion will have a return like bonds minus some very high fees. Just buy term life and invest the rest in an index fund, you will come out much better.

Who needs a landline phone? You spend a ton on gym memberships. I think your spend on travel, holidays, activities, summer camps, etc. is astonishing. You could buy a massage gun or have your spouse give you a massage instead of paying for it. I've never had a mani-pedi and my hands and feet are still there. But you've already noted these and said you're not "prepared to fix it".

Will the physical disability of one of your children affect their ability to make a living? If so, I think you are making a mistake, I would be saving and setting up a trust to help that one in the future.

If your child will be fully employable despite the disability, then whether you need to "fix" your spending or not depends on your future job and health and those are unknowable. Your underlying assumption in your spending is that you will be able to work as long as needed to achieve financial security. If taking that risk works out, then you are doing great, giving yourself and the kids lots of experiences, time with extended family and generally living it up. If you are unable to work that long (either due to health or the job disappearing), you will regret the death of a thousand cuts that is the current budget - kids in loving homes do just fine, even without all the luxuries.
 
I don't think too many here have a family of 6 still under the roof so if you're comparing to us, you'll be over many of us. I'm solo with son out of the house, and I don't have a mortgage, much less insurance with my medical being subsidized, less on vacations, etc. I'm not going to compare by category because I only track total spending since I've always been under what my withdrawal plan allows.

Others have identified some things you could possibly do without. Up to you to decide.

I wouldn't feel guilty about $6600/year on charities while you have kids still at home.
 
Many good comments & I agree with all I've read. The one I'll comment on is housing. I grew up in a house of 6, but it was a 3/1.5 1000 sq ft home. Yes, definitely tight, but we didn’t notice as kids. 4,000 sq ft is a massive expense for maintenance, utilities, insurance and mortgage (typically). Maybe reduce your size by 50%?

Charitable monies imo starts with your future needs, especially with your one child. You know they will need it for education, living, etc. Give when you can afford it, unless it's to the big man upstairs. Cut 100% of this.

Activities & vacations, cut by 50% & find free things to enjoy.

Subscriptions, go to ad supported & cut out 50% of the ones you don't watch. Ad support HULU & Peacock are $20-25 annually, not monthly.

Definitely get the kids thinking about the expected good grades and scholarship work you expect them to do. You can't afford this expense 100%.

All the tiny things are just death by 1000 cuts. Definitely try to get the insurances to a reasonable level, if possible. Future car fund is a nice idea, but driving a car until it drops is better. I'd love to hear how much you are able to cut 1 year from now. Possibly a good example for future folks.
 
Nothing crazy. It can surprise how lots of small/moderate things add up to a really big total.
 
Insurance thru the ACA stands out, we are in our 50s, pay for it no subsidies and its $1100 for 2 adults. they are the low end bronze plans but when we looked at the "estimator" the plans you pay more for were not actually better out of pocket, you were just guaranteed to pay more thru premium.

I noticed Hulu/Disney plus (all the streaming services check out black Friday Deals, if you have AMEX, always check their cash back deals) we are running Hulu/Disney+ for $10.69-$7 credit from Amex so $3.69/month.

Have you had an energy assessment on your home, made sure the dryer vents are clean, is your dryer old and not energy efficient, etc as that is a whopping electric bill but I saw you had numerous other energy hogs but still on a monthly basis I'd take the time to see if there is something to bring that down.

The holidays/vacations would be the most obvious spot if you really want to make a cut. Starting by trimming even just one event a month/year. I grew up in a family of 8, we knew the multiplication factor was rather huge but I had so many great memories from the simple things.
 
It's small , but lots of things are.
Why have both netflix and hulu (and prime but maybe that's for delivery) at the same time.

We watch netflix until we have watched the shows we wanted, then cancel and sign up something else. Then after exhausting that, we switch to another, and at sometime end back at netflix. It remembers your setup so pretty easy.

We also cancel netflix if taking a long trip (and the month end of subscription lines up well enough). Then start it back up when we return.
 
OP picked the perfect forum for common sense advice. Most here are from a different generation. I look back at all the expenses that were added because we followed trends. As kids, gym memberships were unheard of. A bike, a football, and outdoor play gave us all the exercise we needed. TV entertainment, 3 channels, ABC, NBC, and CBS. This sounds ancient. Go for the cheap/free stuff to learn and grow. The library, free school activities (if they exist), downsize. It's easy to suggest but hard to change when you're used to the luxuries we have today.

We're RE, so we can spend (also 66+ yrs old ;)). You're still in a place where you can re-evaluate needs vs wants. Like taking candy from a baby. You have access to many sources that can help. Research how frugal people live. Read "The Millionaire Next Door", that book will change your outlook. The thrift store for kid's clothes is great. $200/month for kids birthdays? Mani-pedi? $400/month gym memberships? Is there a YMCA nearby?
 
The $550/month for electricity jumps out as outrageous. Our Vermont house electric bill is less than $100/month. Can you elaborate why it is so high... electric heat?

Also, $235/month for whole life insurace is crazy. Is there a particular reason for needing whole life? Most families don't. Whole life is best used for key-man life or estate tax situations but is rarely best for a family since the need for life insurance isn't permanent but evaporates as the family builds wealth. What is the face amount? I had a whole life insurance policy that I bought as a naive college graduate was $20/month. Look at buying a 20-year term policy with the same face amount and then dumping the whole life policy. (During my career I was chief accounting officer for a mutual life insurer whose main legacy product was whole life insurance so I know a bit about it).
 
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Thank you! Thats very reassuring to read.

If we stop contributing to retirement today and coastfire to age 55:

Ficalc there is a 75% success rate

Richbrokedead also a 75% success rate - at age 80 there is a 50% chance of being dead and only a 9% chance of being broke
Okay good you calculated the numbers as a starting point.
In general most folks on this site who use/used calculators as a form of retirement readiness, typically shoot for a 90%+ success rate.
However, your calculation is predicated on no more contributions which is not true currently and most likely won't be true as long as you are working.
Yes, there are some areas where you can do minor trimming and it will add up. Go through every expense line and see if there is room to trim.
 
It's been over a quarter century since I was married with two kids (not four) in the house.
I seem to recall finances being a bit snug at times but both parents worked and we did annual trips around the US.

And I had pre-tax money taken from my paycheck for my 403(b), though I didn't max it out.
It wasn't until the kids moved out that I had lots of extra income and maxed out retirement savings for about five years before retiring.

And I obviously don't recall any budgetary details from back then that would be meaningful for the OP...
 
It seems you have the income to support this budget, you are saving in a 401 monthly and paying extra on your mortgage monthly. That is great.
For a family of 6, a $250 /wk grocery bill seems reasonable.
Discretionary spend is where you can cut down, paying for everyones dinner when out with family, all of the holidays and vacations, kids sports, subscriptions, etc.

If you wish to save more, you have to make those decisions, even if difficult.
Ask your self "Is it truly necessary?" "Do I/we really want it?" for each item.
Best of Luck to you. Cutting spending once lifestyle creep has occurred is not easy, but can be done.
 
I hesitate to suggest cutting any particular expense though it would be fairly easy for me to do so in my particular situation (probably start with the entertainment stuff.) But, in general, I'd say almost anyone can cut 10% without a big change in life style.

BUT it does take extra effort if you cut 10%. For instance, I use 10 to 15% less fuel when I drive than DW. I do so by applying all the well-known fuel saving tactics (such as anticipating stops, smooth acceleration, slightly slower speeds, etc.) You have to actually "do" something to get the savings.

Same could be done by monitoring the heat/AC closely and set the thermostat for savings, etc. It's w*rk and you need to be willing to do it to gain savings. Are you willing to get up 15 minutes early to turn the thermostat up since you kept it cooler last night? That kind of thing.

I favor "savings" over finding more income. Savings are free of taxes and don't require nearly as much time as w*rking. The old adage of "A penny saved is a penny earned" should be "A penny saved is MORE (by the amount of taxes not paid) than a penny earned."

In reality, you need to decide what are the important goals. Is FIRE a major goal? If so, the goal of an easy/upper-middle-class life style may need to slip just a little bit. Only you and your family can decide. Oh, and be sure to let the kids in on what your goals are and ask them to help (at least turn off the TV and lights when not using them, etc.)

Sounds like you're actually in pretty good shape and small changes could make a big difference. Best of luck! Check back often with your progress. You've come to the right group of folks as we love FIRE and we love to help.
 
$15,902 Total Monthly Expenses (Not including 401k contributions or income taxes)

You're not going to like my post. But you asked for feedback. This monthly expenditure is way out of line, although I must credit you on your detail. It makes cutting so much easier! I can cut 20% of this amount without batting an eye, as you will see below. Charity at $551 a month? Yikes. Gym memberships? Banquets? Land lines? Massages? There is plenty here for my budget snipping scissors to cut.

Here are my cuts, as a first pass, and I am being very generous. I'd frankly cut a whole lot more but you have to start somewhere. This is just my first pass.

Disclaimer: This is my opinion, so don't bother providing reasons why you do not wish to cut a particular expense. My overarching point is frugal living will cut a huge chunk of this budget. It's your budget and I admit I don't know all the details of your situation. So of course I may be off base on some particular cut. But I feel very confident that large cuts are possible which, in the long run, will increase your wealth and financial security substantially.
$560 Utilities
$550 Electricity............CUT 15% ELIMINATE SUMMER A.C. (-$82.50)
$10 Propane
$0 Natural Gas
$0 Water
$0 Oil
$0 Wood

$3,302 Housing
$1787 Mortgage
$894 Taxes
$21 Geothermal Maintenance Plan
$185 additional mortgage payment......................................................CUT. Put the money in some other investment. -$185
$301 Maintenance - paving/stone/soil/sand/paint......................(I am not cutting but bet there are savings to be had)
$115 Repairs
$0 HOA
$0 Mortgage Insurance (PMI)

$1,252 Food
$1,084 Groceries ($250/wk)..............................seems reasonable, but bet there is some trimming possible.
$60 Restaurants (6 annually beyond holidays/birthdays/special occasions).................CUT -$60
$108 Takeout/fastfood/coffee (2 monthly)...................................................................................CUT -$108
$0 Alcohol

$498 Transportation
$3 Bicycle Repair
$241 Gas (work pays for my gas)
$167 Maintenance (oil change, inspections, tire change)
$26 Repairs/Tires.........................................................................are tires possibly double counted?
$0 Insurance (Bundled with House - see insurance)
$14 AAA roadside assistance.......................................................................................CUT -$14
$13 Highway Pass
$23 Car wash (12 annually)..........................................................................................CUT -$23
$8 Vehicle Registration
$3 Golf Cart Registration................................................................................................CUT -$3
$0 Public Transportation
$0 Parking Fees
$0 DMV Fees
$0 Taxi/Uber/Lyft

$3,464 Insurance
$2,198 Medical - Parents medical (through the exchange - no subsidy)............................SEE NOTE BELOW
$0 Dental
$747 Kids Medical (through the childrens exchange - no subsidy).......................................SEE NOTE BELOW
$235 Whole Life (DW wants to keep).................................................................................................CUT -$235
$21 Term Life (about 20 years remaining)
$0 Pet
$0 Property
$0 Renters
$160 Auto...........................seems pretty good, actually
$103 House

$478 Services
$0 Lawn Care
$0 Window Cleaning
$0 Snow Removal
$71 CPA
$9 Ring Security
$28 Garbage Collection
$0 Internet/Cable ($239 Paid by In-Laws)
$39 Landline................................................................................................................................CUT -$39
$280 Cell Phone (Family Plan)
$15 USPS
$21 Pest Control
$0 Sewer Maintenance
$15 Well Maintenance - Annual testing and weekly testing strips

$1,094 Health Care
$167 Orthodontia (this will taper off after about 3 years)
$50 Primary Care Co-Pay (adults only)
$7 Screening Copay
$15 Chiropractic Copay (6 annually - 3 per adult)
$0 Dental CoPay
$5 Vision Copay
$0 Physical Therapy Copay (currently not in use)
$140 Massage with tip (Some of these are gifted, but included in the budget to show frequency).....................CUT -$140
$180 Dental out of pocket
$13 Medical out of pocket
$8 Prescriptions
$7 Urgent Care
$0 Medical Devices (Orthotic) - Currently not in use
$89 Therapy Pool Supplies/Maintenance
$17 Eyeglasses
$208 Gym Membership/Personal Training (adults)...............................................................CUT -$208
$188 Gym Membership/Personal Training/Functional Therapy (kids)...........................CUT -$188

$551 Kids
$12 School Supplies (calculators, protectors, binders/folders, etc.)
$0 School Lunch (Currently paid for by school COVID funding)
$12 School Pictures...................................................CUT -$12
$0 After School Program
$7 DS1 athletics.......................................................CUT -$7
$96 DD athletics......................................................CUT -$96
$46 DS2 athletics.....................................................CUT -$46
$8 Instrument repairs
$21 Banquets...............................................................CUT -$21
$131 Band/Sports/Class Trips................................CUT -$131
$28 Band.........................................................................CUT -$28
$50 Summer Camp (not covered by fundraising)...........CUT -$50
$91 Allowance..................................................................................CUT -$91
$0 Tutoring
$0 Babysitter
$0 Daycare
$49 Kids car insurance (half).............................................................CUT -$49
$0 Child Support

$107 Clothing and Personal Care
$0 Adult clothes - during vacations/gifts/xmas
$7 Kids Clothes - Thrift store back to school
$46 Shoes - Concert/School/Gym/Sports
$24 Snowboots/Snow gear - sometimes a xmas gift
$10 Hair cuts (3 annually - 1 per boy)
$20 Mani/Pedi (2 annually per adult - typically gifted but included to show frequency)................................CUT -$20

$5 Household Supplies
$0 Cleaning Supplies - in groceries
$0 Paper Products - in groceries
$0 Furniture/Patio
$5 Small Appliances (Bike Rack)

$241 Pets
$0 Food (in groceries)
$10 Dog Supplies
$40 Grooming - 6 annually + tip........................................................................CUT -$40 (do it yourself)
$84 Vet Visits
$45 Medication - Flea meds, heart worm, vitamin
$0 Training
$62 Farm Feed...................................I am not cutting this but I don't know what this expense is.

$100 Subscription

(I'd cut at least one service)

$25 Hulu........................................................CUT -$25
$0 Disney +
$22 Netflix
$0 Xbox Live
$12 Amazon Prime
$6 Amazon Kids
$4 Nintendo
$0 Bark (Device Monitoring)
$5 Onedrive
$0 Coffee
$18 Microsoft
$8 Amazon Music
$0 Dropbox
$0 Magazine/News
$0 Software (quickbooks)

$256 Entertainment
$12 Hockey/Baseball Game (includes food)
$20 Books/Bookfair/Scholastic
$67 Arcade ($200 card/kid/year)....................................................................CUT -$67
$35 Local festival...................................................................................................CUT -$35
$49 Outtings - Comedy club/beach/ice cream
$0 Hobbies (garden)
$15 Small Electronics - xbox controller, (2) random game purchases/year
$20 Theater/Concert/Ballet
$8 Movie Rental
$30 Movie Theater - Twice/year plus food

$1,804 Holidays/Vacations
$9 Halloween
$57 Mothers/Fathers day - Gifts, Dinner for 10 people, Cemetary flowers, Garden supplies
$375 Christmas (christmas bonus)......................................................................................................................CUT -$375
$30 Easter - baskets and host dinner
$250 Thanksgiving - Travel to see family - free lodging
$250 Camping.........................................................................................................CUT -$250
$300 Spring Break Trip.........................................................................................CUT -$300
$250 Winter Break Trip.........................................................................................CUT -$250
$200 Birthday (kids - $600 each - food/gifts/party)
$32 Birthday (Parents - (4) $25 gifts/$31 breakfast/$59 Dinner each)
$51 Birthday (Friends/Family) 6 family members $87 each, kids friends birthdays (youngest only) $20/quarter max.

$551 Charity (I'm embarrassed by this. It should be more)......................................CUT EVERY PENNY OF THIS -$551
$30 School Fundraisers
$77 Music Boosters
$74 Scouts
$200 College Scholarship Fund
$0 SPCA
$150 Childrens Hospital
$20 Random (salvation army, community fundraisers, etc.)

$0 Debts

$1,639 Savings

$800 Vehicle Replacement Fund (anticipate needing new vehicle in 2-5 years)
$0 Emergency Fund (1 year expenses fully funded)
$0 Roth IRA (ineligible).....................................................................................LOOK INTO A BACKDOOR ROTH
$839 529s (maximum tax deductible amount)
$0 Brokerage Investment Account - Discretionary

Automatically deducted from paychecks
$3,833 401ks........................................................................................................MAXIMIZE, SEE BELOW
$885 401k Employer Contribution

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The total amounts of my cuts, excluding medical, comes to $3,589.50. That is a 22.5% cut from your topline number. And this excludes insurance savings.

MEDICAL: The above amount saved doesn't include your medical insurance costs. You need to figure out a way to cut this amount, by a lot. Your paying (ballpark) 3K/month in insurance costs.
Be sure to cut your taxable income as much as possible, which is why maximizing your 401 K to lower your income is so important. You must cut this cost, it is huge. Your paying an accountant, so see if the accountant can come up with something.

INSURANCE: Have you looked at disability insurance? What if you or your spouse are unable to work? Income disruption, I should add, is another reason to drastically cut these monthly expenses. You need to "build the arc before it starts raining."

Good luck.
 
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