I wrote this post a few days ago and I have since been going back and forth on whether or not to publish it. When I was making $1,800/month and living just fine I wanted to be proof that you don’t have to make a lot of money to live a happy life.
I know that a lot of you are in that position right now where you’re just barely scraping by like I was a couple years ago. While I have no intent of this post coming off as a “look at me now” type of thing (because even with our combined income we’re still far from “rich”) I just wasn’t sure how it’d come across to some of you.
Now that I’ve increased my income (through tons of hard work) and have gotten married I feel very grateful to be where I am. A lot has changed in my life over the past three years. In the sake of keeping things real and since I started this blog to chronicle my financial and entrepreneurial journey I decided to go ahead and publish this post.
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I’ll be officially switching to a two person budget next month. And I’ve got to admit, that feels kind of nice. Luckily, Jamie and I are on the same page financially with a few minor exceptions.
So, I’ve been reviewing the numbers and here’s what everything comes out to.
Our New Monthly Budget
This was kind of tricky for me to lay out. Jamie works for the state department of transportation and therefore has some pretty good benefits. He contributes to two retirement accounts pre-tax and then also has health insurance, life insurance, union fees, charitable donations, and who-knows-what-else taken out of his check. That adds up to a pretty significant amount.
I decided to add the retirement and health insurance money to the budget so I can see the big picture of where everything is going. That makes this budget slightly wonky since I’m adding those pre-tax amounts to his post-tax take home pay. But hey, it’s still showing where our money will be going so it works for now. (And it doesn’t include any employer matches or employer paid benefits he gets.)
You’re going to see a huge difference between my old budget and this one. And while this budget is still a work in progress I’m just being completely realistic. I, for example, don’t care about food – he does. I don’t care about TV but he has to watch every show that ends with men. (You know Yukon Men, Swamp Men, Ax Men, and whatever other ones there are like that.) I also haven’t yet convinced him that prepaid is the way to go with cell phones.
There’s give and take in this budget for sure! And we’ll see how true these numbers are in the next few months.
Jamie Income: $2,634.80 (Doesn’t include over time which he gets a good bit of. He plows snow in the winter and inspects state construction jobs in the summer.)
Alexa Income: $3,000 (It is my goal to reach at least this amount every month after taxes. But this number could fluctuate highly. We’ll see.)
Estimated Total Take Home Pay: $5,634.80
Expenses
- Mortgage: $630 (Actual payment is $439 including property tax and insurance. He always pays extra.)
- Car Insurance – $55
- Trash – $25
- Water – $100 (he has city water which is SO much more expensive than county water that I had)
- Gas (Heating) – $30
- Electricity – $170 (high end, winter months)
- Gas for Cars – $150
- Groceries – $800
- TV – $80
- Entertainment – $100
- Cell Phones -$175 (He has an expensive plan! Need to work on this one.)
- Internet – $55
- Credit Card (Recurring Donation Paid in Full Each Month) $45
- Health Insurance – $206 (This is with me and the girls added. Deductible is $1,500!)
- Jamie Spending Money – $200 (combination of hunting money and work lunches)
- Jamie Retirement # 1 (Pension) $305.86
- Jamie Retirement # 2 (457 Plan) – $200
- Alexa Retirement (Traditional IRA) – $120
- Miscellaneous – $170 (Because I feel like I’m missing something ?)
- Down Payment Savings – $2,017.94
Total – $5,634.80
I’m hoping I didn’t leave out a glaring expense. Does it look like anything is missing?
If we stick to this budget we’d be saving a total of $2,643.80 or 47% of our income. And maybe even more. I inflated a couple of these categories and used what I *think* will be our minimum incomes just for the sake of being cautious. (But being self employed the truth is my minimum could be much less or much more depending on the month.)
We also have combined savings of around $22,000 together across various savings accounts.
No Debt and the Same Mindset
Jamie and I have a pretty similar mindset when it comes to money – we both hate debt! In fact he is even more debt averse than I am.
Sure there are things on this budget that don’t particularly appeal to me like a high grocery bill, cell phone bill, and Dish Network. However, I am more than happy to make those compromises with him. Our overall financial goals and mindsets match up so well that I’m not going to pick him apart for wanting TV and buying food on the more expensive side. (Though my plan is to lower some of these expenses in a non-nagging sort of way.)
As you can see this is definitely NOT a bare bones budget. That means as my income rises (which it’s going to, darn it!) then we’ll be able to stash away even more money and still live very comfortably.
I’ll still be reporting only my income, spending, and saving for February since this budget won’t go into effect until next month.
In case you’re wondering my little brother is moving into the trailer. And no I’m not collecting rent. That’s a different story for a different day.
Creating Financial Goals Going Forward
I do still have the same financial goal of saving for a down payment and earning $60,000 for the year. I really want to buy a house by 2017.
Jamie does own his house but it’s near town and in the suburbs. While I do like the area for it being so close to town, I’m not the type of person who likes to walk out my backdoor and be surrounded by neighbors. And he’s really not either.
He’s a huge hunter so finding a house with land is appealing to him too and we’ll be working on this goal together.
Assuming that I can, in fact, earn $60,000 this year then we should really be saving more than $20,000. I’m going to give everything a couple months and then reassess the situation.
I’m also thinking that I should up my retirement contributions. I’m pretty competitive and I don’t like that he’s so far ahead of me. But maybe I shouldn’t look at it like that …… 🙂
I’ll give it a few months and see how everything pans out budget-wise.
You may have covered this at another time, but I don’t see clothing. Not the crazy designer kind, but basics. I know I have to budget a little every month with the kids because my oldest will just wake up a in a new size!! I do try to shop sales ahead but last summer I stocked up one size ahead for her and she grew 2. The little one gets hand me downs and a lot of stuff from grandmas…I have a hard time getting the youngest to wear the oldest’s clothes. She is a bit sensitive and does not like jeans…prefers leggings and dresses. If I let my the older one wear dresses she would come home with cut up knees and her tush would always be out! She’s such a tomboy!
Also we put a small amount aside for school expenses. They never give much notice about book fairs, field trips or class activities. I budget a month ahead and last year I kept getting caught off guard with those little expenses.
Yes school expenses!! I didn’t even think about it but it seems something comes up at least every other month to the tune of $20-$50. And you are totally right – without any notice whatsoever. I really wasn’t expecting that when Kailyn started school this year.
As far as clothes right now I think our only issue is Kailyn growing out of pants. My family goes too far on getting my girls clothes and shoes. My Aunt will buy bags of stuff at yard sales, my Dad gets the girls new shoes quite frequently, and my mom stops over with random outfits. Right now my youngest is growing out of shoes at a crazy pace (her foot is bigger than the oldest’s!) and the oldest is getting tall pretty quick. What we have to buy ourselves honestly doesn’t equal up to a whole lot.
I do occasionally buy them outfits though. (I let them both pick a dress out at K-mart for Valentines day. Ava wore that darn dress four days in a row!)
And then I don’t buy many clothes for myself. Especially since I rarely leave the house now.
Thank you for posting your budget. I think it’s a great budget, not bare bones, but far from extravagant! It will be interesting to see how it changes over the year.
Yeah I’m hoping the expense side comes in lower and the savings higher 🙂 We’ll see.
Thank you for sharing your new budget. Congratulations on your wedding. I have to admit that this budget will be changing since I see a hint of determination on bringing certain categories down. My question for you is, do you save for vacations or summer outings?
I know I’m the outlier here but I don’t feel the need to take vacations. I hate to travel and a good time to me is fishing/bonfires/camping and hanging out with my brothers. With that said we told the girls we’d take them to Mammoth Cave this year. Since we live in Southern Ohio near Kentucky that isn’t too far.
We’re using change to fund that if we go. Jamie has a ginormous jar of change that probably has at least $700 in it. That would be more than plenty for a few day trip to Kentucky 🙂
It is the two of you and the two kids right? My only thought is that $800 for groceries is a bit high… I spend $400 for the four of us.
I know the $800 kills me! I’d spend on average $250-$300 a month for me and the girls. I don’t care about food I’m good with eating the same thing over and over. He, however, is not. He thinks meat has to be the main course for every meal and doesn’t do well with repetition. I am hoping the grocery bill (which would cover all household expenses) doesn’t come that high but I don’t want to set a first budget up for sabotage by being unrealistic.
Megan – how do you get by on $400 for groceries (I need to know your secret!)? I am a family of 4 as well and we’re at $700/month. 🙂
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Kudos for figuring this out so far! Lots of folks would think it was a big headache.
1: There is no ” Alexa Spending Money”. What ? Your are going to ask him for money to buy him a Birthday present ?
2. I would add a medical category. With 2 kids you could get hit with that $1,500 deductible pretty easily and there are lots of over the counter meds that I end up buying too.
3. Do you have money set aside for the “emergency fund” ? I know you have savings but is it money that you can get to easily ?
Congrats
~ Christie
I have no spending money by choice 🙂 I very rarely ever spend money! If I do it’s something household related like curtains or an area rug. But other than I don’t get much joy out of spending (and I don’t leave the house in the winter lol)
I lump over the counter meds into the grocery category. Basically everything household goes to grocery. And yes I still have my emergency fund. I need to go through and divvy up all the cash into separate savings though. I’ll have to think about how I want that to look like 🙂
Number 1 was going to be my question, too! 🙂
The only item I thought you might add since you’re dividing everything out is creating a specific emergency fund. Something maybe like CapitalOne360’s savings account where you can transfer in/out of when you need to or better yet, one that has a credit card associated with just it so that card isn’t carried in your wallet or pulled out except in case of extreme emergency. It looks like you’re saving for a house (I haven’t read all of your blog months) but things always pop up out of nowhere like a flat tire, leaking waterheater, hospital co-pay/prescription that isn’t covered, etc.
Congrats on your working numbers!
I do actually have my emergency fund with Capital One 🙂 I’ve had my personal savings divvied up into separate Capital One 360 accounts for awhile as well as a $1,000 buffer in my checking account for life’s little emergencies. He has his savings all lumped together but I prefer having several Capital One 360 accounts. I’ve yet to determine how much will go in each individual account.
The budget looks pretty good! I am wondering if it would be possible to purchase a side of beef and put in the freezer? You two are in hunting country…so I think that you could very easily cut that expense with some venison. I do think that you should increase your retirement contribution per month so that you can max your IRA. You’re pretty frugal so that should be pretty easy for you to do. Again, huge congratulations on the marriage 🙂
Congratulations on the marriage! I look forward to seeing how your budget will evolve.
I have to agree, you have a great budget! I think the key here is to set the goal and then do everything to stick to it. I can see you are doing a great job, congrats! 🙂 Looking forward to seeing how things are going during the next months.
PS: Congratulations on your marriage as well!
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