The M1 and M2 values are the mortgage, we have a 80/20 loan. We also have Sallie Mae living with us, that's the wife's student loan. I still need to add credit card payments, gas and groceries. I don't understand how people do envelopes, that seems to be more work. We usually end the month with close to $200 left in our account so at least we are not living paycheck to paycheck but the credit cards do tend to get abused. We probably need to adjust our lifestyle a bit, that probably means no more golf or trips to the mall.
Also, no totals yet... this is a work in progress.
HS
11 comments:
Thanks for posting. It's always interesting to see cost of living and expenses in different areas. I do jars, which is a bit like envelopes. It takes a bit to get used to then works very slick.
I would respectfully disagree with your statement "at least we are not living paycheck to paycheck", if you are continuing to charge on your CCs. $200 leftover but additional charges on the CC means you are using more than you make each month.
enjoy your work is progress. It is such a great learning experience.
It's a start.
I recomend each getting 2 small notebooks and write down everything you buy (one page per day) (one for you and one for your wife.) Do this every day for 30 days. You will be surprised at what else (besides monthly bills) you are spending your money on.
Then try to make a budget, including cash for gas, food, and spending. Also don't forget all the stuff that comes up but not monthly (like AAA, oil changes, car maintance, car repairs, gifts, Christmas, etc.)
The point of the envelopes are when the money is gone you have to stop spending in that category. I.e. if you put $100 a month in to play golf and you want to play golf, check the envelope. If money is there go, if not you can't. (I, of course, have no idea what it costs to play golf, just an example.)
It isn't fun, but being debt free will be!
I used to go by paychecks, too, but over the summer I started budgeting based on monthly income and it has made the process of tracking my expenses MUCH easier.
I noticed you're paying almost $1000 a month for your cars - is there any way to reduce that? Maybe with a re-fi or two?
Good work, though! Setting a budget - then sticking to it! - is the first step towards better finances.
That definitely helps put things into perspective, and as someone who inquired about it, thank you for taking the time to write it up. Your fixed monthly expenses are $3455.26 a month, and that ends ups being a little over $41,000 a year. Which means that your fixed monthly expenses are *less than* just your wife's gross income- and then you have your $75K income on top of it. You seriously have a ton of unaccounted for money. I have no idea what your income after taxes is, but it is certainly enough to never have to use credit cards, much less use them each month and still end up with only $200 a month at the end of it.
I agree with Becky R that this is a start. I just... I have to be frank and admit my jaw drops sometimes when I read your blog. It is so very hard for me to wrap my mind around your mindset and situation. I really don't mean that as a judgment, I'm just being honest.
I hope you can start to see that it is freedom to be debt free, to live simply, and that it is worth it. You don't want to be chained to some job forever, or be tossed about by economic ups and downs.
I am with courtney!
I also didn't see your credit cards listed.
The rest of the money goes back to credit cards, gas, groceries, eating out, going out, maid (every 6 weeks or so) pet supplies, auto etc. Stuff! then there's always other stuff that comes up like doctor's bills or just unexpected purchases etc.
I also keep a lot of money in my 401k, I currently save around 8% and with company match it's close to 15%.
HS
I love using mint.com. It does the tracking for me. Just link your CC accounts, investment accounts, etc. If it is electronic, it can be tracked. I never have to wonder where the money went.
All these things (credit cards, gas, groceries, eating out, going out, maid, pet supplies, auto and unexpected purchases, retirement contributions)should be included in the your cash flow plan. It is money that you are spending. With out these things you just have a list of a couple of things that you paid for.
You're gutsy posting this stuff, good for you! Ok a couple of my cents...
This isn't really a budget, it's just your expenses and you're right-- it's just a start. To actually make a budget, you need to know how much you spend. The only way to know how much you spend is to track it-- all of it. Do it for thirty days and you have now have a better platform to create your first budget. Then you do it another 30 days and your next budget is even better. You really don't have a grasp on budgeting for your life until you've got an entire year's worth of spending tracked to the nickel. That will show you all of those so-called "Unexpected" expenses and help you budget for them.
Also, I suggest you take ALL of your and your wife's credit cards out except your check card. Stick them in a bag and freeze them. This will give you peace of mind that in case of a super duper emergency, they are accessible but they will really make you think before using them.
@Mutantsupermodel- those are all great tips, I agree.
I hate when that happens!! I just barely called Tmobile to downgrade my plan to save money! Its pretty ridiculous what they charge! I really like your blog! Thanks for sharing!
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