Thursday, January 12, 2012

Debt Repayment Part 1: Living expenses

My husband and I have an electronic bank account that I stare at obsessively. I desperately hope that the numbers will some how add up differently, and I'll see the light at the end of the tunnel sooner.  We definitely do not want to wait 30 years to pay off our loans and decided to do something more drastic. Our goal is to live on one salary as long as it takes to pay off our loans.

Household salary after taxes and benefits:
Jane MD 5,100
Husband JD 4,700

Fixed monthly expenses

Rent $1,000
Daycare $670-770
Cell Phone plan $125
Internet $35
Insurance car/home $125
Car lease $190
House cleaning $100
Gym $88
Total $2333-2433

Variable monthly expenses, estimated
Utilities $160
Gasoline $150
Groceries/ toiletries $800-1000
Personal expenses $500
Charity/religious $400
Onetime expenses $300
Total $2310-2510

Total monthly budgeted expenses $4643-4943

There are a few questions you are probably wondering about our listed expenses. We rent an 850 sq foot apartment, our day care is $150-175 a week depending on number of days attended. Our cell phone plan is unlimited and Hubby JD's work reimburses it for $60 a month. We have the lowest grade internet possible. The gym has free babysitting for up to two hours any day we go. Our cleaning service comes every other week and cleans the house except the kitchen for $50 just to keep the peace. We lease a car because our family keeps growing, and we will need to trade up.

Utilities vary based on the month since we pay electric and gas, worse in the hotter summer months.  We have two cars that get 25-40 mpg, and our total driving time with daycare is 100 minutes a day.  We fill up about 4 times a month. Our grocery bill is primarily at Walmart where we buy almost everything, including dog food, diapers, tolietries. We try to eat as cheaply and healthily as possible, but Hubby JD has the metabolism of a 15 year old boy and consumes something like 3,000-4,000 calories a day. (Yet he still has a six pack and weights 173 lbs, so unfair)

Personal expenses includes clothing, babysitting, haircuts, dry cleaning, medical/vet bills, and unrelated car bills.  We recognize that wear and tear is going to occur no matter what we do and have budgeted accordingly. Similarly, our onetime expenses are used to plan for the presents, special occasions, holiday gifts, big purchases like glasses or procedures. We have a monthly dues to our synagogue and since we both have jobs, we feel obligated to give every charity/fundraiser that solicits us at least a $10 token donation. Invariably some elementary school student wants to sell us a raffle ticket or buy cookies for their bake sale.  This category appears particularly large at this time because of our end of the year donations. 

Some of you will notice that we are missing cable and have no restaurant or entertainment budget. We eat out so rarely we spend less than $30 a month. We do not use credit cards and the only card burning a hole in my wallet is my library card. There is no home phone. Hubby JD contributes to an FSA which covers some medical expenses, but not everything. We only pay for babysitting because Hubby JD donates his time teaching a free martial arts class.  Our date night involves geeking out on the couch after the baby is asleep watching Star Trek TNG over microwave popcorn.

The key to making this work is budgeting for those little expenses that happen every month despite your best frugal efforts. We did holiday cards and Child#1 portraits in December as part of personal expenses. We used a free portrait sitting coupon, bought some electronic copies for much cheaper than a package price, and went on Shutterfly during their holiday sale for all our cards and larger portraits with free shipping. The month before we needed new car tires and had to pay for it.

At the end of the month, we are often 500-1000 below available budget.  What happens to that money will be covered in a future post.

Next up a medical post: Prebiotic, probiotic, or yogurt.

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