OT: Budgeting Tips

[CoastTrash]

Keep going. It will get better.

Value your marriage and health, first. Look for ways to grow income too don’t focus solely on cutting expenses.

 

[OG Goat Holder]

Yes we moved in May. And then had **** absolutely hit the fan immediately afterward. You spend the money on buying the new house, then Movers cost $2K, then we get into the new house and realize that basically the whole house needs to be repainted (was not evident until the previous owners took everything off the walls and emptied cabinets), so that was another $4K, then we got hit with a major medical emergency in early June that cost after $2,500 after insurance. And it was not one that you just get over quick, it was one that took an emotional toll too, I’ll leave it at that. Then you get in the new house and obviously the wife wants to slowly furnish and decorate, which in a vacuum isn’t bad but it felt like death by a thousand cuts.

Candidly, three months ago I was very content with where we were financially and now I feel like I’m trying not to drown. Also don’t want to be too hard on the wife right now as some of the things in our personal life I referenced earlier have been quite challenging.

I know it’s not always gonna be like this but man when you’re in the middle of it, it’s rough.

I recently moved. I move all the time, but it’s still a pile of stress. And it ALWAYS puts you in a hole financially.

I don’t have any great advice for you, but maybe knowing you’re not alone will make you feel a little better about it all. It’s usually temporary.

I won’t say things won’t get worse for you, they might. They always can. But considering your situation, they probably won’t. They can always get better as well.

Stick to your financial plan, it’ll get better. Hey, high five to your 6+% interest rate brother over here! More motivation to pay that bltch off.

And yeah, I’m stressed the 17 out over here too.

 

[ZombieKissinger]

I’m a CPA and not financially stupid, but money is still tight for us just like I’m sure it is for most. Inflation has absolutely sucked the last few years, and we had a baby in 2022 who is a great kid but an expensive kid. Lol. I am by no means in poverty, household income is just under $150K and we just bought a $300K house, but the bank account sure feels uncomfortable more often than not.

I got a pretty significant pay raise in 2023 (over $20,000 per year) and truthfully don’t feel like we’ve really felt it much. I purposely withhold as much as possible from taxes, put money in savings and retirement as much as possibly, aggressively pay off debt (only have mortgage and student loans, no car payment and we pay off credit card monthly), we also have some non-negotiable expenses with tithing and daycare that I know some may not have but it’s essential for our life. Ultimately I’ve always felt like we try to handle our business the right way but our margins are always really tight every month. Savings goes up and down which I figure is normal just because major life stuff happens but I’ve never felt like I’m saving as much as I’d really like to.

I dunno, I guess I’m just curious on how everyone else tries to handle their business and any advice you may have. How do you try to stay disciplined on discretionary spending? How much wiggle room do you like to allow yourself for fun? If you have a joint account with your spouse, how do you try to make sure you’re both on the same page with things?

Depends what your interest rate is on debt, but you don’t necessarily want to pay that down. One of my biggest mistakes early was paying off too much student debt that I should’ve refinanced (rates right now probably wouldn’t make refinancing a good idea). I have some remaining debt that I’ve spread out over 15-30 years at less than 4% because it lets me put more money toward investments. I’d also put your savings in something fairly liquid that gives you a return rate higher than a savings account, like mix of money market and stocks/mutuals/ETFs. This rate isn’t going to last, and has nothing to do with me picking the right fund, but I’ve been getting over 14% annual return the last few years putting my extra money in a fund weighted toward stocks. Charlie Munger used to say to do whatever it takes to get your hands on $100k (now it’s $200k with inflation), but he was speaking to the power of compounding. For example, I put $20k in a fund in 2020 and it’s at $34k right now. Wish I could’ve had $200k instead.

Edit: I also had an expensive move recently, and those things suck

 

[Bulldog from Birth]

1. As many have said, eating out runs up costs fast. But most everyone does it some. But in addition to minimizing the frequency there are 2 things you can do. Don’t just avoid alcoholic drinks but cut drinks entirely in favor of tap water. If you eat out even once a week, $2.50 per drink x 4 people x just one meal out per week = $520 per year. If you eat out twice a week, it’s $1,040 per year. If your take home pay is $100k per year after taxes, you just spent 1% of your take home income on soft drinks and sweet tea eating out. Seems too crazy to be true but it’s true. Also, look at sharing meals. Most restaurants give you more food than you can or should eat. When my family of 6 out, we usually just buy 3 or 4 entrees and get extra plates to share. It adds up over time.

2. Make sure your budget has a miscellaneous category for all the monthly random stuff (e.g. kid’s school yearbook fees, city baseball league registration, etc.)

3. Cut back on streaming services. Rather than subscribing to most, just buy 1 for a year, use the heck out of it, and then swap to a different one the following year.

4. Adjust your A/C 2-3 degrees warmer in summer and 2-3 degrees cooler in the winter than what you prefer. And adjust it even more than that when you are out of the house for more thsn half a day. You’ll get used to it. And it’ll all add up.

5. Ignore “eligible for a trade in offers” on new cell phones. Use the ones you’ve got until the point it’s frustratingly unusable.

 

[MSUDC11-2.0]

Bless you on the infertility issues. You have absolutely had a lot on your plate.

Long journey but it worked out awesome in the end. Our daughter is 2 and she’s been a blast.

 

[OG Goat Holder]

1. As many have said, eating out runs up costs fast. But most everyone does it some. But in addition to minimizing the frequency there are 2 things you can do. Don’t just avoid alcoholic drinks but cut drinks entirely in favor of tap water. If you eat out even once a week, $2.50 per drink x 4 people x just one meal out per week = $520 per year. If you eat out twice a week, it’s $1,040 per year. If your take home pay is $100k per year after taxes, you just spent 1% of your take home income on soft drinks and sweet tea eating out. Seems too crazy to be true but it’s true. Also, look at sharing meals. Most restaurants give you more food than you can or should eat. When my family of 6 out, we usually just buy 3 or 4 entrees and get extra plates to share. It adds up over time.

I cut out restaurants altogether, save for fast food once in a while. If I eat out, I want to have fun. If I have to cut shlt, I’d rather not go.

 

[Boom Boom]

 

[Maroon Eagle]

Don’t just avoid alcoholic drinks but cut drinks entirely in favor of tap water.

But do the opposite if you live or work in Jackson **

Also, look at sharing splitting meals. Most restaurants give you more food than you can or should eat.

I’m single and hate cooking for myself so I go to restaurants fairly often. This is an easy way for dinner and a meal or two over the next day or two.

2. Make sure your budget has a miscellaneous category for all the monthly random stuff (e.g. kid’s school yearbook fees, city baseball league registration, etc.)

This and I also have an entertainment line in my budget. Live music can be expensive but doable. I did sacrifice going to a music festival Labor Day weekend though so I can pay for my car tag.

 

[Boom Boom]

Depends what your interest rate is on debt, but you don’t necessarily want to pay that down. One of my biggest mistakes early was paying off too much student debt that I should’ve refinanced (rates right now probably wouldn’t make refinancing a good idea). I have some remaining debt that I’ve spread out over 15-30 years at less than 4% because it lets me put more money toward investments. I’d also put your savings in something fairly liquid that gives you a return rate higher than a savings account, like mix of money market and stocks/mutuals/ETFs. This rate isn’t going to last, and has nothing to do with me picking the right fund, but I’ve been getting over 14% annual return the last few years putting my extra money in a fund weighted toward stocks. Charlie Munger used to say to do whatever it takes to get your hands on $100k (now it’s $200k with inflation), but he was speaking to the power of compounding. For example, I put $20k in a fund in 2020 and it’s at $34k right now. Wish I could’ve had $200k instead.

Edit: I also had an expensive move recently, and those things suck

That's why I put recurring expenses in 10 year costs. That new computer for $1500 that will last 10 years is a lot better than $15000 in cable or streaming costs!

 

[Dawgbite]

My advice. Don’t farm. It’s not fun right now.

200 acres of cotton across the road from my house. We’ve had less than one inch of rain in the last month, maybe longer. My yard crunches when you walk across it.

 

[retire the banner]

The government printed way too much money during COVID. 1 stimulus was needed. The rest was overkill.

 

[Dawgbite]

Outside of a home and an automobile, if you can’t pay cash for it, you can’t afford it. Strive to shift automobiles to the cash side in the future. It’s almost impossible to function in today’s world without a credit card but if you can’t pay it off in full at the end of the month, you’re living beyond your means. Just keep working and you’ll get there.

 

[OG Goat Holder]

Depends what your interest rate is on debt, but you don’t necessarily want to pay that down. One of my biggest mistakes early was paying off too much student debt that I should’ve refinanced (rates right now probably wouldn’t make refinancing a good idea). I have some remaining debt that I’ve spread out over 15-30 years at less than 4% because it lets me put more money toward investments. I’d also put your savings in something fairly liquid that gives you a return rate higher than a savings account, like mix of money market and stocks/mutuals/ETFs. This rate isn’t going to last, and has nothing to do with me picking the right fund, but I’ve been getting over 14% annual return the last few years putting my extra money in a fund weighted toward stocks.

I see so many people on both sides of this fence. I don’t think there’s a wrong answer. If you are disciplined with investments, do that for sure. Because if you get debt free, but don’t invest with that extra, you’ve gained nothing. So in a way, a little debt to keep you a little fearsome isn’t bad, especially if you’re buying an appreciating asset. That’s the Kyosaki vs Ramsey dilemma. The former says to buy investments first, then find a way. Dave says wait til later.

just pick one and execute, I say. Discipline is the key.

 

[The Cooterpoot]

My Advice developed over years over listening to olders:
Personal debt is Thors Hammer. You won't ever have wealth if your personal debt is large.
Also, if you want to have money, don't spend it all
And lastly, poon and alcohol will steal you blind!
I plan to die in debt, drunk, and with a hard on.

 

[greenbean.sixpack]

I’m a CPA and not financially stupid, but money is still tight for us just like I’m sure it is for most. Inflation has absolutely sucked the last few years, and we had a baby in 2022 who is a great kid but an expensive kid. Lol. I am by no means in poverty, household income is just under $150K and we just bought a $300K house, but the bank account sure feels uncomfortable more often than not.

I got a pretty significant pay raise in 2023 (over $20,000 per year) and truthfully don’t feel like we’ve really felt it much. I purposely withhold as much as possible from taxes, put money in savings and retirement as much as possibly, aggressively pay off debt (only have mortgage and student loans, no car payment and we pay off credit card monthly), we also have some non-negotiable expenses with tithing and daycare that I know some may not have but it’s essential for our life. Ultimately I’ve always felt like we try to handle our business the right way but our margins are always really tight every month. Savings goes up and down which I figure is normal just because major life stuff happens but I’ve never felt like I’m saving as much as I’d really like to.

I dunno, I guess I’m just curious on how everyone else tries to handle their business and any advice you may have. How do you try to stay disciplined on discretionary spending? How much wiggle room do you like to allow yourself for fun? If you have a joint account with your spouse, how do you try to make sure you’re both on the same page with things?

Haven't read the replies, but unless your ole lady's take home is double of day care, I'd consider her staying at home full time. Especially if she has a hobby she can make a little scratch on.

 

[Mjoelner]

First of all I'm single with no kids and no mortgage, a very sweet deal on rent and a girlfriend who lives 2 hours away that is loaded.

Back when I was in debt I Dave Ramsey'd it. Beans and rice, rice and beans and saved enough to start paying off my higher interest debt then whittled everything else down to zero pretty quickly. Now I only have a little credit card debt but its very manageable. I put 15% in my 401k, eat cheap at home and budget for MSU sports and vacations of which I take about 3 per year. On vacations, which are usually cruises with a trip to Vegas every now and then, we split the costs. I pay for airfare and she pays for hotel/rental car and we each pay our own way on a cruise. For the Vegas trips, we're set up well as MGM gold card members due to our Royal Caribbean tier status so that makes those trips very cheap since neither of us really gamble.

 

[Anon1717806835]

I’m a CPA and not financially stupid, but money is still tight for us just like I’m sure it is for most. Inflation has absolutely sucked the last few years, and we had a baby in 2022 who is a great kid but an expensive kid. Lol. I am by no means in poverty, household income is just under $150K and we just bought a $300K house, but the bank account sure feels uncomfortable more often than not.

I got a pretty significant pay raise in 2023 (over $20,000 per year) and truthfully don’t feel like we’ve really felt it much. I purposely withhold as much as possible from taxes, put money in savings and retirement as much as possibly, aggressively pay off debt (only have mortgage and student loans, no car payment and we pay off credit card monthly), we also have some non-negotiable expenses with tithing and daycare that I know some may not have but it’s essential for our life. Ultimately I’ve always felt like we try to handle our business the right way but our margins are always really tight every month. Savings goes up and down which I figure is normal just because major life stuff happens but I’ve never felt like I’m saving as much as I’d really like to.

I dunno, I guess I’m just curious on how everyone else tries to handle their business and any advice you may have. How do you try to stay disciplined on discretionary spending? How much wiggle room do you like to allow yourself for fun? If you have a joint account with your spouse, how do you try to make sure you’re both on the same page with things?

Stay on top of where your money goes. You're a CPA - you should be able to keep a set of books for your personal account(s) with your eyes closed. I keep all of my my accounts on QuickBooks Desktop. Set up as many GL accounts as you think you need. Review your expenses over a few months. If you are overspending in an area it will jump off the page.

Like someone else said - delete Amazon, Doordash, Wal-Mart, and Paypal from all of your debit/credit cards. All of those make it way to easy to spend more money than you should.

 

[ZombieKissinger]

I see so many people on both sides of this fence. I don’t think there’s a wrong answer. If you are disciplined with investments, do that for sure. Because if you get debt free, but don’t invest with that extra, you’ve gained nothing. So in a way, a little debt to keep you a little fearsome isn’t bad, especially if you’re buying an appreciating asset. That’s the Kyosaki vs Ramsey dilemma. The former says to buy investments first, then find a way. Dave says wait til later.

just pick one and execute, I say. Discipline is the key.

The rate your debt is at is so important. For me, I'm going to consider paying something at 5% of higher, but that can vary person to person. I agree that if you decide to not pay off debt but don't have the discipline to invest the money you've saved, it's not a good approach.

Something people struggle with as well, conceptually, is the idea that money today is worth more than money tomorrow. Part of that is that you can invest money today and earn a return, but even outside of investing, if you have $10k in a checking account today and keep it there, it's going to buy you a whole lot less in 20 years due to inflation. So when people are paying off debt on a 30 year term, that $2000 payment 30 years from is a lot less than the $1000 payment today. You can always check this stuff using the PV function in Google sheets to get a sense of the present value of a loan. Or you can look at today's equivalent payment for $2000 at some point in the future using Monthly payment/(1+predicted inflation)^(year). So a $2000 per month payment in today's world is going to be around $823 30 years from now if you're predicting 3% inflation. That's part of why I'm comfortable pushing debt out if the rate isn't too high. I like to be able to safely beat the interest rate w/ my rate of return for investment after accounting to tax impact

 

[RotorHead]

I don’t control my household budget, my wife does that and I do what I can to be in the same chapter with her. As we’ve collectively made more money, our expenses have increased only in the sense that we now have 2 kids in private school. That is a choice we felt led to and committed together based off the school district we live in. As I don’t handle the funds for our house, I can’t speak to tips/tricks for savings because I also allocate and execute government spending in my day job. But I can speak to the sense of drowning
1) get rid of Facebook and socials. This will relieve you of subconsciously comparing your life to others
2) even when you’re absolutely wiped, spend time with that kid. Leave your phone in another room and put them to bed
3) if you wake up on a Saturday and don’t want to cut the grass. Don’t. Take the family to Waffle House.
4) The good Lord put you on this earth, everything will work itself out

not financial advice, but somethings I’ve found to help out when I’ve felt similarly

 

[turkish]

Yes we moved in May. And then had **** absolutely hit the fan immediately afterward. You spend the money on buying the new house, then Movers cost $2K, then we get into the new house and realize that basically the whole house needs to be repainted (was not evident until the previous owners took everything off the walls and emptied cabinets), so that was another $4K, then we got hit with a major medical emergency in early June that cost after $2,500 after insurance. And it was not one that you just get over quick, it was one that took an emotional toll too, I’ll leave it at that. Then you get in the new house and obviously the wife wants to slowly furnish and decorate, which in a vacuum isn’t bad but it felt like death by a thousand cuts.

Candidly, three months ago I was very content with where we were financially and now I feel like I’m trying not to drown. Also don’t want to be too hard on the wife right now as some of the things in our personal life I referenced earlier have been quite challenging.

I know it’s not always gonna be like this but man when you’re in the middle of it, it’s rough.

That’s not **** hitting the fan. That’s life. Your income is good, but you need to understand that you’re still not immune to big punches right now. Have foresight on the painting and decorating. And learn to paint. Household maintenance and repair can absolutely eat your lunch these days. Yet YouTube makes it easier than ever to do it yourself.

Beyond that, and to answer the OP, figure out your priorities and fund them first. What’s left goes to your checking account. Go from there.

Listen to Dave Ramsey and Google “financial order of operations,” too.

 

[The Cooterpoot]

Hire a great accountant

 

[goodknight]

Not uncommon for a younger family to be experiencing what you are. Inflations a killer at the moment. My advice is to stick to your plan and realize you may not keep up with others who may be racking up credit card debt etc. stay with your plan and it will get easier and pay off in the long run.

 

[CEO2044]

Lots of great advice on here- and hopefully, it lets you see that a LOT of people live relatively frugal and certainly within their means.

Agreed with the person that said learn to live a life of contentment. I'm here to tell you it isn't always easy and that doesn't mean you ALWAYS feel content- for me, it's a steady work in progress- I have to remind myself often when I start wanting things that I have everything I need and more.

Another thing that I started this year is writing out a budget and tracking every expense. I've always been good at not spending a lot of money so I never thought I really needed one, but seeing what happens in black and white gives me a lot more insight. I actually paid for a spreadsheet that tracks our budget each month and updates our net worth monthly and shows me exactly how many years until I reach "financial independence". It's been an eye opener for our family and motivates me to continue what we are doing.

 

[DesotoCountyDawg]

200 acres of cotton across the road from my house. We’ve had less than one inch of rain in the last month, maybe longer. My yard crunches when you walk across it.

Cost of production really hits hard when the price has dropped like it has in the last couple of months.

 

[MSUDC11-2.0]

That’s not **** hitting the fan. That’s life. Your income is good, but you need to understand that you’re still not immune to big punches right now. Have foresight on the painting and decorating. And learn to paint. Household maintenance and repair can absolutely eat your lunch these days. Yet YouTube makes it easier than ever to do it yourself.

Beyond that, and to answer the OP, figure out your priorities and fund them first. What’s left goes to your checking account. Go from there.

Listen to Dave Ramsey and Google “financial order of operations,” too.

Trust me, it was **** hitting the fan. A lot more to the story than what I posted because it’s not particularly pleasant.

 

[Maroon Eagle]

Spreadsheets.

You might say I Excel at Them.

I have budget lines for my bills, taxes, and discretionary spending.

I would love to save even more money since I’ve retired from the state and am in my new job but I’ve bought a newer car and have those home improvement projects I held off on doing…

 

[CEO2044]

Yeah, because these kids are spending $25k a year on housing expenses that those of us who bought 15 years ago didn't have to spend!

$150k a year buys a lot less when you add a half million dollar hole to start out from.

True. And student debt that most of those high earners will have.

But inflation period has made that salary not feel like it should.

 

[sandwolf.sixpack]

....unless your ole lady's take home is double of day care, I'd consider her staying at home full time.

Out of curiosity, what's the basis for this line of thinking? Why double? And does your position change if they have 3 kids instead of 1?

 

[patdog]

You're already doing the most important thing (see red type; Malachi 3:10). I was able to retire last year at 61. A few other things that worked for me:

• 5% other giving
• 10% to retirement account (I know they say more but this worked well for me--in later years I was able to increase to the max allowed for deduction)
• $20K - $40K emergency fund
• 15-year mortgage and no other debt
• Pay cash for good used cars (think Honda, Toyota, etc.) and drive them a while. My 3 kids drove older model Civics. For the wife and I, we've had good experience with Honda certified used cars.
• Payoff credit card each month (which you're doing)
• $50/month to savings for each child for college (which was not nearly enough but we managed to send 3 kids)
• Take reasonable vacations. You can go to the beach, national parks, and Disney and even take cruises and go to all-inclusive resorts for reasonable costs if you do your homework.
• Go out to eat once or twice a week at places with reasonable prices.

I probably don't have a lot of good advice concerning a joint account. Most of our marriage, I was the primary breadwinner with my wife working parttime and able to have her own account and spending her money as she liked.

Oh, my opinion is that $150K per year is a lot of money and a $300K house is reasonable for that income so great job there.

Last thing--learn the secret of living a life of contentment (Philippians 4:12-13).

10% for retirement, including any company match, is plenty if you start young, keep at it, and don’t take any early withdrawals. I know some say more but trust me you’ll build a nice nest egg with that. And there’s something to be said for not sacrificing for 40 years just to wind up with more money than you’ll spend when you’re old.

 

[patdog]

Since he's a CPA, he knows this does not make a difference. Contributions through an LLC flow through to your personal return just the same. Good try though.

Yep. That won’t work. It could if you have a C-Corp. but nobody wants a C-corp

 

[patdog]

First of all I'm single with no kids and no mortgage, a very sweet deal on rent and a girlfriend who lives 2 hours away that is loaded.

Back when I was in debt I Dave Ramsey'd it. Beans and rice, rice and beans and saved enough to start paying off my higher interest debt then whittled everything else down to zero pretty quickly. Now I only have a little credit card debt but its very manageable. I put 15% in my 401k, eat cheap at home and budget for MSU sports and vacations of which I take about 3 per year. On vacations, which are usually cruises with a trip to Vegas every now and then, we split the costs. I pay for airfare and she pays for hotel/rental car and we each pay our own way on a cruise. For the Vegas trips, we're set up well as MGM gold card members due to our Royal Caribbean tier status so that makes those trips very cheap since neither of us really gamble.

No wife and girlfriend 2 hours away? Man, you have hit the sweet spot on that. Congratulations.

 

[patdog]

Out of curiosity, what's the basis for this line of thinking? Why double? And does your position change if they have 3 kids instead of 1?

Quality of life. Strictly financially, it makes sense for the lower earner to work. But if you’re spending more than half the take home on daycare, is anyone really going to be happy?

 

[stateu1]

I know that as well. There are legitimate ways to make some of it a business expense but of course it won’t likely account for all that you give.

Please elaborate.

 

[M R DAWGS]

No wife and girlfriend 2 hours away? Man, you have hit the sweet spot on that. Congratulations.

I was just thinking the same thing.

 

[mstateglfr]

Haven't read the replies, but unless your ole lady's take home is double of day care, I'd consider her staying at home full time. Especially if she has a hobby she can make a little scratch on.

...or maybe he stays home if she is making more. Wild possibility, I know.

Anyways, I don't know where the cutoff is for making it worthwhile to stay home or work, when it comes to daycare.
At $300 per week for daycare and 60% takehome, you are saying someone should stay home if they earn less than $52,000 annually.
So you save daycare expenses, but you give up $15,000 in additional household income, give up growing 401k thru investment and matching, and you would have food expenses that would be included in the daycare expenses.

 

[turkish]

Trust me, it was **** hitting the fan. A lot more to the story than what I posted because it’s not particularly pleasant.

I’m sorry that happened. Since you came for advice, I’d just recommend you budget, plan for that (SHTF) happening again at some point in the future. It very well could.

 

[OG Goat Holder]

Lots of great advice on here- and hopefully, it lets you see that a LOT of people live relatively frugal and certainly within their means.

…..and we all give to NIL…..FARRRRRT

 

[OG Goat Holder]

...or maybe he stays home if she is making more. Wild possibility, I know.

Shut up, just trying to be argumentative

If your wife makes that much more than you. DUH

 

[MSUDC11-2.0]

I’m sorry that happened. Since you came for advice, I’d just recommend you budget, plan for that (SHTF) happening again at some point in the future. It very well could.

Unfortunately I thought we had. And then it happened, and then some other junk I couldn’t really foresee happened too. Hasn’t sent me into bankruptcy or even major debt but has certainly tested my resolve.

 

[GloryDawg]

I am a one income household. Two kids in college. We are careful how we spend money. If we go out to eat it is Hispanic food or Chinese. Sometime Kystal's. We don't do it often. I take out 200.00-week cash for gas and other things that come up. If I have any leftover It goes to the next weeks 200.00. We go to the groceries store every Saturday. We stick to the list. We spend about 1300.00 a month on groceries. Four years ago, it was only about 900.00 a month. We are just careful.