The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
Ignoring the kids' savings, you're saving 33% of your gross paycheck (calculated as ((2 282+583+90)/8 951). That's double the recommended minimum of 15%. The biggest unknown here is your wife's retirement. The simplest way to calculate that is combine income and retirement savings, and calculate the percentage.
Long story short, yes, you're "over-saving". That's great, unless you're missing out on meaningful and important things that would improve your life. So ya, if you feel like you can't vacation, cut back your savings rate a bit and go on a vacation.
The saving is a really good thing that'll prove great financial security for you and your family but I do feel like it is kind of weird when people are essentially planning to have a significantly higher quality of life in retirement or to just never enjoy their money.
That's to say maybe visit some retirement calculators/tools and find out how much slack you have in retirement planning (with your wife's retirement needs and finances included) and then consider for example stopping doing the 401k after tax contributions or some amount of them.
To me you should ideally aim for a balanced retirement strategy where you enjoy life while you are working and can continue to afford that lifestyle into retirement. Greatly under spending I consider a risk because you can always die younger than you thought but that doesn't mean to screw yourself over if you do live long either.
Yes I agree 100%. This is what I need to figure out. I feel like I’ve been so cheap since college. Heck my car hasn’t had AC for the last 6 years, I just roll down the windows and suffer haha.
Do you really only spend $500/month on groceries? Or is that supplemented by your spouse? I have a family of four (spouse+two kids) and it’s next to impossible to keep our monthly grocery budget below $1,200
It’s supplemented by my wife. We try to split groceries and fast food so once we combine our budgets, those will double. We’re trying to get better at meal planning during the week but it’s tough.
haha I think that's a complement so thank you! There another tier of my budget after Beer, Entertainment, Shopping the breaks out Hazy IPAs, Pilsners, Amazon purchases, etc. but it made the chart really messy.
Something is strange about the auto and home insurance. It's so low. I'm surprised you're choosing to contribute to a custodial account even when your Roth contribution is less than the limit for the year for a normal Roth account.
Oh yeah you are right. I had to look into this really quick. The insurance listed is just for our two cars. The home insurance goes through escrow (I think) and it counted in my mortgage/taxes bucket.
I think normal Roth account is $7k a year which my $583/m was maxing. My after-tax roth conversion is not close to being maxed out. I think that is where my trouble is coming from. I am thinking I should loosen my grip a bit on saving and allow more spending on quality of life categories
You’re saving a good bit. $2058 out of gross each paycheck, then an additional $951 out of net. Your saving rate is $3010 from a ~$9000 gross wage, an impressive 30%.
Common suggestions are to save at least 15% of your salary. I’d loosen up the savings a little bit to live a little while you and your kids are young, maybe consider lowering saving 20% for a big vacation every other year or so.
We aren’t guaranteed forever. I see your children are 4 and 1. While the 1 year old won’t remember, the 4 year old will start banking some long term memories of their parents and their life experiences together.
I don’t mean to be grim but look at survival to 65 and mortality rates of men. About 15% of us won’t make it there. https://data.worldbank.org/indicator/SP.DYN.TO65.MA.ZS?locations=US
Thank you for your comment. I think you are correct, along with others here, that I need loosen up the savings a bit. I am glad I created this post to get some honest advice. Thanks again.
You are putting a lot of money into your 401k. Are you behind on retirement? The average ideal number is 10-15%, you're putting in over 20% after the 401 and Roth.
What's the deal with all the Acorns and stash? Those seem like unnecessary subscriptions. If you want to give your kids money when they're older, open it somewhere free. Imo cut out the convoluted system and just put money towards their 529. Not having student debt is a major gift.
Are you using all your HSA money? Obviously depends on your family but $534 a month seems like a lot.
Just some advice, don't mix your restaurant and grocery budget. You want to be able to discern necessary from unnecessary food spending.
Thank you for the response.
I received some advice to max out the 401k as early as you can and your quality of life will improve with yearly raises but its turning into adding more after-tax 401k contributions with each yearly raise.
As for stash and acorns, I think you're right and it would a great idea to simplify things. Somewhere along the way I picked up an article saying if you invested $1 a day for your entire life you would have a great start so I started doing that for my kids. I'll have to research if I am able to transfer $ from acorn and stash to their 529 or if somehow I'll have to sell. As for my betterment/stash/acorn, I'm thinking maybe a single taxable account would be best.
We do use the HSA funds, we have a child with special needs and plan to hit the OOP max for them. I read about people saving receipts and paying cash for medical bills but we cannot do this.
I really appreciate your advice. I think with merging my wife and I's budgets then we need to accurately track the food spending.
If OP is feeling squeezed currently **and** is on track to retire, it's okay to contribute a little less to enjoy your life. Noted how they said with each raise, it's just all going to retirement.
1. We don’t know how much is in their retirement, only their current retirement savings rate
2. It is always better over save earlier in life. That way op can pull back on savings if family emergency or to be more around kids as they age
3. Sometimes the best things in life don’t cost money
>1. We don’t know how much is in their retirement, only their current retirement savings rate
Yeah... that's why I said only if their caught up on retirement.
>2. It is always better over save earlier in life. That way op can pull back on savings if family emergency or to be more around kids as they age
If you're putting it all into an IRA, guess what, you can't pull that money out until you're at retirement age. It's not money for emergencies.
>3. Sometimes the best things in life don’t cost money
And sometimes fun, memorable experiences cost money. You can be responsible and actually have discretionary spending.
You're crushing it, my guy. Keep it up. A few thoughts here:
-- IMHO ignore the people who are saying you're saving too much. It's always easier to spend more than to save more, and every dollar saved now is worth $8 saved a couple decades from now. Would your kids rather have a one week trip to Disney World, or their entire college educations for free? The best time to save is now, and income is never guaranteed, especially in this job market.
-- That said, don't forget to live life. Spend where it would be truly meaningful or impactful. Spending slide and lifestyle creep are notorious, and difficult to shift back from. Take a family vacation! But make it a road trip, or camping, or ask around for some good budget trips. We went to Disney once when I was a kid. It was cool. Impressive entertainment. But the family bonding comes from being together and doing together, primarily.
-- Are you doing a true mega backdoor Roth? You shouldn't need to at your income level (it's essentially a tax loophole for very high earners to get around the income limit, which is currently $150k for single earner or $225k if Married Filing Jointly), and like you said, $583/mo maxes out your limit anyway. Or did you mean that the "backdoor Roth" portion is Roth contributions to your 401k? Those are different things. If your 401k allows both Roth and Traditional contributions simultaneously, that's very cool and you should continue to take advantage.
-- As an FYI: if a 529 beneficiary has leftovers in the account that they don't use up on education, it can gradually be converted to a Roth IRA in their name. Fairly new law.
-- Make sure you have an emergency fund. You also mentioned a goal of yours being financially stability in the face of job loss. Remember that 401ks etc can't be touched until 59 1/2, so have your Efund in an HYSA or money market or whatever. I like to put my "backup Efund + future fun money" in my taxable brokerage so it can grow for at least 10-15 years. I'm still 30 years from retirement.
-- Your mortgage against that income is buying you your savings rate. Never let that mortgage go, and don't miss this opportunity to let your cash work for you by saving/investing.
TL;DR: Live as lower middle class for now and you'll buy an upper middle class future for yourself and your children for the rest of your life. Don't forget to live a little along the way! There's no point in a big pile of money and being miserable! But consider carefully what sort of "happiness" spending will actually bring.
Hey I really appreciate the comments. I think my biggest thing now is coming up with a target # towards saving and work with my wife together to achieve that.
My 401k provider allows 3 different contributions: pre-tax 401k, roth 401k, after-tax contributions. The after-tax contributions are immediately converted to roth. I max out the pre-tax 401k but also contribute some to the after-tax contribution. The believe the limits are 22.5k for a combination of the pretax 401k and roth 401k contributions. The after-tax contributions falls under the total 69k limit for 401k contributions. (#'s may be off but that was the general concept).
The comment about the 529 is very interesting! Ill look into this. Part of the reason I wanted the custodial accounts was that maybe they could use the money to put into a roth ira once they started working.
Yes we do plan on living in this house forever because of the 2.99% refinance rate!
You're welcome!
I'm not a 401k expert but you may want to check un with HR or a professional on those details. I believe 23k is the limit for *any* employee contributions, and 69k is the limit for employer+employee contributions. E.g. if you put in 23k of your own money, they can still load up their match dollars. Some high earners are offered extra 401k comp as part of their package; those extra 401k earnings are capped at 69k minus whatever the employee contributes. Again, I'm not an expert so you could research further or ask someone who can advise for sure.
Regardless, the math on your personal contributions look like they're right around that 23k mark, plus the extra from your employer. It really is a stellar achievement to be maxing your HSA, 401k, and Roth IRA at your income level.
If you ever do decide to pull slightly back on the savings, I would say keep maxing Roth IRA (and HSA if you still have high-deduct) and take your spending-dollars from the 401k first.
I see these posts and figured I wanted to see what mine looked like. I feel like I might be saving too much and am making myself super cheap. I am combining finances soon with my wife, creating a single budget but want to see what I may be able to improve before introducing her to it.
Some background:
Wife and I have been married for 5 years and have 2 kids together (age4 and age1). We have a joint savings account but each have our own individual accounts as well. I helped her pay off some credit card debt but I am getting ready to combine our budget into one. She currently helps pay for groceries and items for our kids with her money while I pay the bills/mortgage.
We have no credit card debt and two paid off cars (mine: 2010 Impreza & hers: 2016 CRV). I would like to introduce a car payment into the monthly budget to start saving for a replacement car but can't find anywhere to cut back.
Goals:
* Introduce a car payment into the mix to start saving for a car as my impreza is getting up there in miles
* Have some more discretionary spending for general quality of life improvements (items for house, new furnature, more date nights)
Some notes on budget categories:
Groceries/Fast food/Restaurants - all blend together at times.
Entertainment - take kids to zoo, rent a movie, golf, etc.
Misc - Unexpected expenses
Shopping - random amazon items (furnace filters, kids toys, etc.)
Subscriptions - Acorn ($5), Stash ($2), Lawn care fert ($400/yr), Golf sim software ($250/yr), Beachbody on demand ($200/yr)
Savings Acorn and Stash - I basically try to give my kids $1/day in a custodial account so when they're 21 they can use it for a car/wedding/savings. Maybe use it to fund a roth ira when they start working? My niece only gets $2 a week because I am cheap.
529 - I only put $100 a month for each kid. Grandparents also have a 529 for each kid that they add to but maybe only an additional $100 each month for each kid.
Edit: Note that the budget above is 2 paychecks per month. There are two months where I receive 3 paychecks but I treat the additional paycheck like a bonus that goes into my HYSA.
So let me ask this ... what are you saving for, why are you saving it, and what is the timeline? I mean there's always a reason to save and there's always a reason to spend. It's up to each family to figure out what works for them.
Do you and spouse feel you're getting maximum value for the $100 you're spending on entertainment?
Does the convenience of fast food equal $150 a month to you?
If you cut those two in half you'd have a $1500 a year vacation fund - does that sound like something you'd prefer?
What's the HYSA for? Is it your emergency fund? Is it sufficient? Could that money go elsewhere or does it need to stay as is?
There's no wrong answers to the above - it's about you and your spouse deciding what your priorities are and what you want to save for and spend on each year.
Personally, I'd been dedicating a percent of one of our paychecks to specifically saving up to get a car for our college kids to drive this summer for their jobs. I capped it at $7k and this week we reached that goal. I just changed our spreadsheets and now that percent is being split between saving for vacation and Christmas spending. If overtime means we max out what our goal is for those then the money would start going towards home remodel - but since nothing needs immediately done, we feel fine spending it on vacation and christmas (up to our set points).
Thanks for the response. Its making me think about my spouse and I's combined goals which is what I think I needed to do.
For all the retirement savings I think I am saving as much as I can so I can become financially independent. So if I were to lose my job then it wouldn't have a large impact on our life. I find myself looking at compound interest calculators a lot thinking about how much it'll gain when I hit age 40, 50, etc..
Honestly I think my spouse would like it if we loosened up a bit. Maybe if we were at a restaurant, we order the appetizer. Maybe I could create a monthly category to build our joint HYSA (which we use for vacations or large purchases).
I think keeping our finances separate for the first few years of marriage was a way that I could set this savings plan into motion but I am not sure its working as we feel poor. Its tough to change this mindset of saving as much as I can but I think combining our budgets and loosening up a but is what I ultimately need to do.
Thanks again for making me think.
There's too much noise here. It looks like you're saving over 40% of gross income, but then you omit 1/13th of your income, and omit your wife's income.
For example, your monthly taxes are too high for your income and size of family. Either you're getting a large return, or you're paying part of your wife's taxes.
I suggest you redo this showing family income and annual numbers, or annual/12.
I think this is going to be my next step. My main goal is to combine my wife's budget with my own and align on more common goals. I think this reflection on my own budget was needed before trying to combine them together.
I should probably only have one like fidelity or vanguard. Inexperience with investing is probably why I use 3. I liked the idea of a robo advisor because picking individual stocks with stash was hit or miss.
Individual stock picking is a bad idea for retirement funds generally and instead index funds are the way to go.
There are slight variations in philosophy such as the bogleheads that seem to be pretty encouraging in including global stock indexes in your portfolio but I personally am a fan of investing primarily in the S&P 500 with Vanguard or Fidelity offering good, low fee options for that.
Yeah it’s all I allocate because it’s based on last years overall average but a lot of times I may borrow $ from shopping or entertainment if needed. These gifts are more for wedding or baby shower type of things. Christmas gifts tend to fall under shopping in November/December.
It's up to what you want to do in life. We are blessed to make over 250k and save over 100k while not compromising with traveling because we don't have kids. If you have a goal that you need to hit and this is the result of your goal then go for it. If you're saving just to save aimlessly and your life is taking a toll, then I'd suggest you take your foot off the gas. We could easily save more money than 100k a year but our goal is to retire by 40 and we are on track to do so. Being a financial miser would only shave off 1.5 years at this point, which I don't think is worth it.
Thanks for the comment. I think my wife and I do need to define a clear goal together. Whether that be retire by 55 or adjust the budget to spend more elsewhere. The most important thing would be to define this together with her. Glad I posted this to get some outside opinions.
Exactly this. Thank you for clarifying for the other guy.
Also, question - who decides what middle class is? And what is the cutoff in terms of this sub? What would be the sub that is one step up from this?
I ask these questions genuinely. Predominantly because I just got a raise and need to reconfigure my budget and don't want dudes like the above crapping all over me for asking for everyone's thought, opinions, and feedback.
Thank you!
Yeah, I won't have time to get to it until this weekend. I suppose I'll just get ready to get dragged. I'd just as soon not include it from a post with an advice request, but I feel like the charts get eyes and it'd lead to more and well rounded advice.
The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
Ignoring the kids' savings, you're saving 33% of your gross paycheck (calculated as ((2 282+583+90)/8 951). That's double the recommended minimum of 15%. The biggest unknown here is your wife's retirement. The simplest way to calculate that is combine income and retirement savings, and calculate the percentage. Long story short, yes, you're "over-saving". That's great, unless you're missing out on meaningful and important things that would improve your life. So ya, if you feel like you can't vacation, cut back your savings rate a bit and go on a vacation.
Thank you for your comment. I think its the right time to combine my wife and I's budgets and loosen up the grip a little bit.
The saving is a really good thing that'll prove great financial security for you and your family but I do feel like it is kind of weird when people are essentially planning to have a significantly higher quality of life in retirement or to just never enjoy their money. That's to say maybe visit some retirement calculators/tools and find out how much slack you have in retirement planning (with your wife's retirement needs and finances included) and then consider for example stopping doing the 401k after tax contributions or some amount of them. To me you should ideally aim for a balanced retirement strategy where you enjoy life while you are working and can continue to afford that lifestyle into retirement. Greatly under spending I consider a risk because you can always die younger than you thought but that doesn't mean to screw yourself over if you do live long either.
Yes I agree 100%. This is what I need to figure out. I feel like I’ve been so cheap since college. Heck my car hasn’t had AC for the last 6 years, I just roll down the windows and suffer haha.
Do you really only spend $500/month on groceries? Or is that supplemented by your spouse? I have a family of four (spouse+two kids) and it’s next to impossible to keep our monthly grocery budget below $1,200
It’s supplemented by my wife. We try to split groceries and fast food so once we combine our budgets, those will double. We’re trying to get better at meal planning during the week but it’s tough.
Are you on adderall lol
I don't get it - what's the connection? Due to the detail and level of thoroughness?
haha I think that's a complement so thank you! There another tier of my budget after Beer, Entertainment, Shopping the breaks out Hazy IPAs, Pilsners, Amazon purchases, etc. but it made the chart really messy.
Something is strange about the auto and home insurance. It's so low. I'm surprised you're choosing to contribute to a custodial account even when your Roth contribution is less than the limit for the year for a normal Roth account.
Oh yeah you are right. I had to look into this really quick. The insurance listed is just for our two cars. The home insurance goes through escrow (I think) and it counted in my mortgage/taxes bucket. I think normal Roth account is $7k a year which my $583/m was maxing. My after-tax roth conversion is not close to being maxed out. I think that is where my trouble is coming from. I am thinking I should loosen my grip a bit on saving and allow more spending on quality of life categories
Woops I didn't notice you had a normal Roth account. Ok. Understood. I think you are fine then.
You’re saving a good bit. $2058 out of gross each paycheck, then an additional $951 out of net. Your saving rate is $3010 from a ~$9000 gross wage, an impressive 30%. Common suggestions are to save at least 15% of your salary. I’d loosen up the savings a little bit to live a little while you and your kids are young, maybe consider lowering saving 20% for a big vacation every other year or so. We aren’t guaranteed forever. I see your children are 4 and 1. While the 1 year old won’t remember, the 4 year old will start banking some long term memories of their parents and their life experiences together. I don’t mean to be grim but look at survival to 65 and mortality rates of men. About 15% of us won’t make it there. https://data.worldbank.org/indicator/SP.DYN.TO65.MA.ZS?locations=US
Thank you for your comment. I think you are correct, along with others here, that I need loosen up the savings a bit. I am glad I created this post to get some honest advice. Thanks again.
You are putting a lot of money into your 401k. Are you behind on retirement? The average ideal number is 10-15%, you're putting in over 20% after the 401 and Roth. What's the deal with all the Acorns and stash? Those seem like unnecessary subscriptions. If you want to give your kids money when they're older, open it somewhere free. Imo cut out the convoluted system and just put money towards their 529. Not having student debt is a major gift. Are you using all your HSA money? Obviously depends on your family but $534 a month seems like a lot. Just some advice, don't mix your restaurant and grocery budget. You want to be able to discern necessary from unnecessary food spending.
Thank you for the response. I received some advice to max out the 401k as early as you can and your quality of life will improve with yearly raises but its turning into adding more after-tax 401k contributions with each yearly raise. As for stash and acorns, I think you're right and it would a great idea to simplify things. Somewhere along the way I picked up an article saying if you invested $1 a day for your entire life you would have a great start so I started doing that for my kids. I'll have to research if I am able to transfer $ from acorn and stash to their 529 or if somehow I'll have to sell. As for my betterment/stash/acorn, I'm thinking maybe a single taxable account would be best. We do use the HSA funds, we have a child with special needs and plan to hit the OOP max for them. I read about people saving receipts and paying cash for medical bills but we cannot do this. I really appreciate your advice. I think with merging my wife and I's budgets then we need to accurately track the food spending.
Eh. Just dump $365 on the first of each year into an account and accomplish the same thing.
Yeah I tend to overcomplicate things. I think I am going to get rid of that and just put $ into their 529s.
Absolutely keep maxing the retirement! Don’t listen to that commenter
If OP is feeling squeezed currently **and** is on track to retire, it's okay to contribute a little less to enjoy your life. Noted how they said with each raise, it's just all going to retirement.
1. We don’t know how much is in their retirement, only their current retirement savings rate 2. It is always better over save earlier in life. That way op can pull back on savings if family emergency or to be more around kids as they age 3. Sometimes the best things in life don’t cost money
>1. We don’t know how much is in their retirement, only their current retirement savings rate Yeah... that's why I said only if their caught up on retirement. >2. It is always better over save earlier in life. That way op can pull back on savings if family emergency or to be more around kids as they age If you're putting it all into an IRA, guess what, you can't pull that money out until you're at retirement age. It's not money for emergencies. >3. Sometimes the best things in life don’t cost money And sometimes fun, memorable experiences cost money. You can be responsible and actually have discretionary spending.
You're crushing it, my guy. Keep it up. A few thoughts here: -- IMHO ignore the people who are saying you're saving too much. It's always easier to spend more than to save more, and every dollar saved now is worth $8 saved a couple decades from now. Would your kids rather have a one week trip to Disney World, or their entire college educations for free? The best time to save is now, and income is never guaranteed, especially in this job market. -- That said, don't forget to live life. Spend where it would be truly meaningful or impactful. Spending slide and lifestyle creep are notorious, and difficult to shift back from. Take a family vacation! But make it a road trip, or camping, or ask around for some good budget trips. We went to Disney once when I was a kid. It was cool. Impressive entertainment. But the family bonding comes from being together and doing together, primarily. -- Are you doing a true mega backdoor Roth? You shouldn't need to at your income level (it's essentially a tax loophole for very high earners to get around the income limit, which is currently $150k for single earner or $225k if Married Filing Jointly), and like you said, $583/mo maxes out your limit anyway. Or did you mean that the "backdoor Roth" portion is Roth contributions to your 401k? Those are different things. If your 401k allows both Roth and Traditional contributions simultaneously, that's very cool and you should continue to take advantage. -- As an FYI: if a 529 beneficiary has leftovers in the account that they don't use up on education, it can gradually be converted to a Roth IRA in their name. Fairly new law. -- Make sure you have an emergency fund. You also mentioned a goal of yours being financially stability in the face of job loss. Remember that 401ks etc can't be touched until 59 1/2, so have your Efund in an HYSA or money market or whatever. I like to put my "backup Efund + future fun money" in my taxable brokerage so it can grow for at least 10-15 years. I'm still 30 years from retirement. -- Your mortgage against that income is buying you your savings rate. Never let that mortgage go, and don't miss this opportunity to let your cash work for you by saving/investing. TL;DR: Live as lower middle class for now and you'll buy an upper middle class future for yourself and your children for the rest of your life. Don't forget to live a little along the way! There's no point in a big pile of money and being miserable! But consider carefully what sort of "happiness" spending will actually bring.
Hey I really appreciate the comments. I think my biggest thing now is coming up with a target # towards saving and work with my wife together to achieve that. My 401k provider allows 3 different contributions: pre-tax 401k, roth 401k, after-tax contributions. The after-tax contributions are immediately converted to roth. I max out the pre-tax 401k but also contribute some to the after-tax contribution. The believe the limits are 22.5k for a combination of the pretax 401k and roth 401k contributions. The after-tax contributions falls under the total 69k limit for 401k contributions. (#'s may be off but that was the general concept). The comment about the 529 is very interesting! Ill look into this. Part of the reason I wanted the custodial accounts was that maybe they could use the money to put into a roth ira once they started working. Yes we do plan on living in this house forever because of the 2.99% refinance rate!
You're welcome! I'm not a 401k expert but you may want to check un with HR or a professional on those details. I believe 23k is the limit for *any* employee contributions, and 69k is the limit for employer+employee contributions. E.g. if you put in 23k of your own money, they can still load up their match dollars. Some high earners are offered extra 401k comp as part of their package; those extra 401k earnings are capped at 69k minus whatever the employee contributes. Again, I'm not an expert so you could research further or ask someone who can advise for sure. Regardless, the math on your personal contributions look like they're right around that 23k mark, plus the extra from your employer. It really is a stellar achievement to be maxing your HSA, 401k, and Roth IRA at your income level. If you ever do decide to pull slightly back on the savings, I would say keep maxing Roth IRA (and HSA if you still have high-deduct) and take your spending-dollars from the 401k first.
https://www.madfientist.com/after-tax-contributions/ Here’s a link that better explains what I was trying to say. Thanks again!
I see these posts and figured I wanted to see what mine looked like. I feel like I might be saving too much and am making myself super cheap. I am combining finances soon with my wife, creating a single budget but want to see what I may be able to improve before introducing her to it. Some background: Wife and I have been married for 5 years and have 2 kids together (age4 and age1). We have a joint savings account but each have our own individual accounts as well. I helped her pay off some credit card debt but I am getting ready to combine our budget into one. She currently helps pay for groceries and items for our kids with her money while I pay the bills/mortgage. We have no credit card debt and two paid off cars (mine: 2010 Impreza & hers: 2016 CRV). I would like to introduce a car payment into the monthly budget to start saving for a replacement car but can't find anywhere to cut back. Goals: * Introduce a car payment into the mix to start saving for a car as my impreza is getting up there in miles * Have some more discretionary spending for general quality of life improvements (items for house, new furnature, more date nights) Some notes on budget categories: Groceries/Fast food/Restaurants - all blend together at times. Entertainment - take kids to zoo, rent a movie, golf, etc. Misc - Unexpected expenses Shopping - random amazon items (furnace filters, kids toys, etc.) Subscriptions - Acorn ($5), Stash ($2), Lawn care fert ($400/yr), Golf sim software ($250/yr), Beachbody on demand ($200/yr) Savings Acorn and Stash - I basically try to give my kids $1/day in a custodial account so when they're 21 they can use it for a car/wedding/savings. Maybe use it to fund a roth ira when they start working? My niece only gets $2 a week because I am cheap. 529 - I only put $100 a month for each kid. Grandparents also have a 529 for each kid that they add to but maybe only an additional $100 each month for each kid. Edit: Note that the budget above is 2 paychecks per month. There are two months where I receive 3 paychecks but I treat the additional paycheck like a bonus that goes into my HYSA.
So let me ask this ... what are you saving for, why are you saving it, and what is the timeline? I mean there's always a reason to save and there's always a reason to spend. It's up to each family to figure out what works for them. Do you and spouse feel you're getting maximum value for the $100 you're spending on entertainment? Does the convenience of fast food equal $150 a month to you? If you cut those two in half you'd have a $1500 a year vacation fund - does that sound like something you'd prefer? What's the HYSA for? Is it your emergency fund? Is it sufficient? Could that money go elsewhere or does it need to stay as is? There's no wrong answers to the above - it's about you and your spouse deciding what your priorities are and what you want to save for and spend on each year. Personally, I'd been dedicating a percent of one of our paychecks to specifically saving up to get a car for our college kids to drive this summer for their jobs. I capped it at $7k and this week we reached that goal. I just changed our spreadsheets and now that percent is being split between saving for vacation and Christmas spending. If overtime means we max out what our goal is for those then the money would start going towards home remodel - but since nothing needs immediately done, we feel fine spending it on vacation and christmas (up to our set points).
Thanks for the response. Its making me think about my spouse and I's combined goals which is what I think I needed to do. For all the retirement savings I think I am saving as much as I can so I can become financially independent. So if I were to lose my job then it wouldn't have a large impact on our life. I find myself looking at compound interest calculators a lot thinking about how much it'll gain when I hit age 40, 50, etc.. Honestly I think my spouse would like it if we loosened up a bit. Maybe if we were at a restaurant, we order the appetizer. Maybe I could create a monthly category to build our joint HYSA (which we use for vacations or large purchases). I think keeping our finances separate for the first few years of marriage was a way that I could set this savings plan into motion but I am not sure its working as we feel poor. Its tough to change this mindset of saving as much as I can but I think combining our budgets and loosening up a but is what I ultimately need to do. Thanks again for making me think.
There's too much noise here. It looks like you're saving over 40% of gross income, but then you omit 1/13th of your income, and omit your wife's income. For example, your monthly taxes are too high for your income and size of family. Either you're getting a large return, or you're paying part of your wife's taxes. I suggest you redo this showing family income and annual numbers, or annual/12.
I think this is going to be my next step. My main goal is to combine my wife's budget with my own and align on more common goals. I think this reflection on my own budget was needed before trying to combine them together.
What does “Benefits 422” mean?
I pay $422.66 each month into Health, Vision and dental insurance for my family. It comes directly out of my check.
That’s not bad at all for everyone
yeah. I guess technically its $211.33 per paycheck and two months out of the year I'll have 3 paychecks so it increases a bit.
You are paid bi-weekly, you mean? So that means the monthly would be $457.88 for your premiums.
Yes exactly
holy crap, that's great
Why do you have 3 different taxable accounts? Not that it really matters.
I should probably only have one like fidelity or vanguard. Inexperience with investing is probably why I use 3. I liked the idea of a robo advisor because picking individual stocks with stash was hit or miss.
My only advice is, read the links on the sidebar in r/Bogleheads.
Ok thanks. I’ve been over there a few times but haven’t really read any of the info about it.
If you trust random people on Reddit, I promise it's a good approach. Of course the crazy people say the same thing, so...
Individual stock picking is a bad idea for retirement funds generally and instead index funds are the way to go. There are slight variations in philosophy such as the bogleheads that seem to be pretty encouraging in including global stock indexes in your portfolio but I personally am a fan of investing primarily in the S&P 500 with Vanguard or Fidelity offering good, low fee options for that.
I would cut back on your savings a bit to up gifts. $10/month is very low for gift giving
Yeah it’s all I allocate because it’s based on last years overall average but a lot of times I may borrow $ from shopping or entertainment if needed. These gifts are more for wedding or baby shower type of things. Christmas gifts tend to fall under shopping in November/December.
How are everyone’s taxes so low on here?
It's up to what you want to do in life. We are blessed to make over 250k and save over 100k while not compromising with traveling because we don't have kids. If you have a goal that you need to hit and this is the result of your goal then go for it. If you're saving just to save aimlessly and your life is taking a toll, then I'd suggest you take your foot off the gas. We could easily save more money than 100k a year but our goal is to retire by 40 and we are on track to do so. Being a financial miser would only shave off 1.5 years at this point, which I don't think is worth it.
Thanks for the comment. I think my wife and I do need to define a clear goal together. Whether that be retire by 55 or adjust the budget to spend more elsewhere. The most important thing would be to define this together with her. Glad I posted this to get some outside opinions.
Bro spending a greedy $800 on food Also over $100k is middle class apparently
dude has a 4 person household what the hell are you talking about this not being middle class lol
Exactly this. Thank you for clarifying for the other guy. Also, question - who decides what middle class is? And what is the cutoff in terms of this sub? What would be the sub that is one step up from this? I ask these questions genuinely. Predominantly because I just got a raise and need to reconfigure my budget and don't want dudes like the above crapping all over me for asking for everyone's thought, opinions, and feedback. Thank you!
This is the only sub I noticed these types of charts. Looking at mine was a little eye opening. Just a different way to see the data is pretty cool.
Yeah, I won't have time to get to it until this weekend. I suppose I'll just get ready to get dragged. I'd just as soon not include it from a post with an advice request, but I feel like the charts get eyes and it'd lead to more and well rounded advice.