Reworking the budget

So I severely undershot the budget in a few ways. Before Child 2, I was making 5.1K and we were paying about 4.6K in expenses. I imagined I would have enough money to just add Child2's daycare to take up the rest of that $500-600 and then add $300-400 on in new rent. I sat down and recrunched all the numbers - which I had been too busy to do for a few months. It was scary.


Instead of our $5,400 I imagined, we were spending $6,400!

Salary $9,500/month - $6,400/month expenses = $3,100 - $1,600 minimum loan payment - $1,300 savings = $200.***


At that rate it would take us 16 years to pay off the loans. (20 years without the extra $200 a month in payments) It would also cost another $150,000 in interest.

*** I ignore our FSA reimbursements in these calculations because we weren't filing them regularly and two months we spent over $7,000.

Where did the budget go so wrong? Even though we spent less than $30 a month eating out, we were still spending $920 on tolietries and food. I even estimated a little down on this number since alot of the moving expenses were included in this. Also, the personal expenses included clothes, hair, car, and dog expenses. We spent at good $100-200 dollars/month on the dogs alone between end of life care and dog sitting. I splurged right before Child2's birth and got my hair colored -$150. We spent alot on 'onetime' wedding expenses $450, which some people would put as part of 'entertainment.' We ended up on some charity mailing list and ended up giving away $450 in charity a month.

So I did some more number crunching. Our income went down from $10K because of our FSA's. We should get about $500 back per month. The dog expenses are gone which will decrease our personal expenses. While we aren't buying more apartment equipment anytime soon, I know something would certainly always come up and plan accordingly. (Look, our microwave just burned out, $50 at Walmart!) I recognized I needed to set aside money for holiday and birthday presents for the year - that is $900 of our monthly new onetime expense budget of $300/month.

Here's how things look now.

Previous Monthly Budget (JaneMD salary 5.1K)	Actual Monthly expenses	New Monthly Budget (JaneMD salary 4.9k )
Rent + gym + housecleaning $1188	$1700	$1700
Cellphone + internet $160	$160	$150
Car lease $190	$190	$190
Home/car insurance $125	$125	$125
Daycare $670-770	$1365	$1365
Utilities $160	$150	$150
Car Gas $150	$150	$135
Groceries/Toiletries $800-1000	$920	$770
Personal expenses $500	$700	$350
Charities/religious $400	$450	$400
Onetime expenses $300	$450	$300
Bank autosave feature $42	$45	$45
Total budgeted monthly expenses $4685	Actual spending $6405	New budget $5680

Our new budget decreased by $750 from actual expenses. Little things have changed. I got an employer discount on our internet. Our phones will be someday paid off, dropping that expense by $25. I watch our grocery bill like a hawk and move things into appropriate categories, like the microwave. We have an upcoming vacation to see our families, which is already budgeted for ($500), but I'll be coloring my hair with my mother (savings of $140). I also made our FSA reimbursements a major part of our budget, thus making sure they always get filed.

Salary $9,500/month + FSA $500/month - $5,650/month expenses = $4,350 - $1,600 minimum loan payment - $1,300 savings = $1450. 


At that rate it would take us under 8 years to pay off the loans and save $60,000 in interest.


A message from HubbyJD: I appreciate my wife, JaneMD, and all of her hard work at our budget and finances, especially since she does my accounting for free. I want to be financial independent and get all our loans paid off. I do draw the line at the beer austerity measures that she has recently enacted. Someone please tell her I can buy 2 twelve packs a month of Guinness.