Give it to me straight, folks

[snshijuptr]

Since your budget is brand new, I will warn you that you need to have line items for things that come up once a year or every few months. For example car maintenance (tires, oil change), gifts and major holidays, memberships (AAA, professional society, magazines, club dues), family stuff (holidays, reunions, weddings), insurance premiums (sometimes saves you money to pay these up front), new phones, new cars, etc. These things will ruin your month or your budget when they occur if you haven't set aside money. Personally I put away $250 a month just for these Budget Breakers. You will find it much easier to stick to your budget if you take these into account. Go back through credit card and bank statements and make a list of expenses then set aside money month after month for these items.

Otherwise follow everyone's great advice.

[BMEPhDinCO]

Since your budget is brand new, I will warn you that you need to have line items for things that come up once a year or every few months. For example car maintenance (tires, oil change), gifts and major holidays, memberships (AAA, professional society, magazines, club dues), family stuff (holidays, reunions, weddings), insurance premiums (sometimes saves you money to pay these up front), new phones, new cars, etc. These things will ruin your month or your budget when they occur if you haven't set aside money. Personally I put away $250 a month just for these Budget Breakers. You will find it much easier to stick to your budget if you take these into account. Go back through credit card and bank statements and make a list of expenses then set aside money month after month for these items.

Otherwise follow everyone's great advice.

THIS!!! I thought we had a perfect budget, but I had forgotten the car, the cat's vet stuff, memberships, holidays, phones, and so forth mentioned above. When added up, it's a lot!! So I second the above, you should add up all those, add 10% for "extra" and then divide by 12 and put that amount into a "Yearly Expenses" fund...super important!

I do think that you should save up the $1,200 or so you have left (After doing the above) for the rest of the year, as that'll give you around $6,000 in your EF and then you can pay the bike loan off AND already have a good EF started for the new year.

Good luck on your venture into good money handling!

[NuggetBrain]

Riverwed - I see, that makes sense. We could trim the fat on dining out and pocket money, but because our debt is fairly low and our jobs are fairly stable (and I think we could knock out the debt and have a halfway decent EF within 6-8 months) I think the psychological effect of it would be kind of hard on my husband and I. I will try it for a month and see how it goes though, you can't knock it until you try it right?

Snsh - Those are things that we have a harder time figuring out how to save for. Luckily we just renewed our phones through our providers "New every two years" program so we're set on that for a while. But the yearly things will have to be budgeted as well.

[Eric80]

Not bad guys - keep going!

[sandrark]

So we're just recently starting to take a hard look at our finances and start getting ourselves in order. My husband and I are both 30 with no kids and none planned, in good health and pretty stable jobs.


So, here's the question - how are we doing? My husband is going to bump his retirement up to 6 percent to take advantage of the full match, and I'm going to start contributing to a Roth IRA (we're planning to take his bonus each January and put it in, and then make up any difference between that and the 5k max over the year).

We're planning on getting a 6 month EF (which would be about 17k) and then start dividing our savings into short-term (vacations, new car, etc) and longer term (another Roth IRA for him, maybe some CDs). Other than that, we have an extra $472 every paycheck that we're not sure where to put. I'm leaning towards throwing it into savings until it's built up to a decent EF, while he wants to throw it towards his student loan to get rid of it ASAP.

I agree with other posters - stretch to pay off the motorcycle loan and student loans ASAP. Then get in the habit of using the bonus each year to contribute $2500 each to a Roth, and contribute $200 each per month to a Roth on auto-deposit (total of $4900 each year that you can top off to $5K).

Where I think you're sloppy, especially since you're 30 and don't yet have a DP set for a house:


Netflix & Hulu Plus: $24
Internet: $68
Cell Phones: $150

Total: $242 on TV/Computers/Phones

My hair: $50-$100 (depending if I get a relaxer or not)

Groceries: $300
Dining Out: $250

Total: $550 on food

My hair: $50-$100 (depending if I get a relaxer or not)
Pocket Money (personal entertainment i.e. casino, Kindle books, liquor store, etc): $400

Total: $500 on more frittering, personal care and STUFF. How much does your DH spend on getting his hair cut? What about clothing? Main/pedis with the girlfriends? Gifts? Travel? Work lunches? Car repairs? Registration? Insurance for the car and motorcycle? Vet bills? Furniture upgrades?

I think you're under-estimating how much you're used to spending whatever you want on what you want. I predict that the first couple of months on this budget are going to be MUCH harder than writing it down and calling it "done" seems to be.

To that end, I think your best strategy is to actually use CASH for each of these predicted categories for the next 3 months. See how you do, and where you struggle.

You have the potential to get food/dining/personal care/media costs down by a significant fraction. And really start accounting for all the costs that we know you have, but that you have not included in your budget.

It takes time. It takes practice. It takes both of you on board. If your husband is annoyed by reducing his dining out, then he really needs to learn this at 30, so you won't be your mom at 60.

Good luck!

Sandi

[Frugal]

I would also go after the highest interest loan and pay it off first. That being said, you are fortunate you have so much leftover each month. It looks like you aren't doing that badly.