Our Temporary Budget

We’re socking away a lot of money over the next few months. And I think we’ll have way more than we need come March based on a recent closing estimate from our mortgage lender. We use You Need a Budget for zero-based budgeting, and live on last month’s income, so I know at the beginning of the month exactly what we have to spend. We don’t have a “normal” monthly budget; it varies based on our income in the previous month. However, we do have some baselines each month that I then modify as needed.

Income

Our income is after taxes, 401(k) contributions and other paycheck deducted items (like an FSA, health insurance, and my parking pass). Our after-tax incomes will change again next year as we will no longer contribute to an FSA, but to an HSA instead.    This is November’s budget – which means, this is all of the income we earned in October’s paychecks.  The reimbursements is the guaranteed money we get from the FSA for daycare.  We spent the 5k legal limit early in the year (by April based on DC daycare prices), and I already filed the reimbursement, so we get $192.31 every two weeks until the end of the year.  We budget based on two paychecks per month for Dad (although he gets paid bi-weekly), and in those months where we have 3 paychecks, we use that entire paycheck (~$2100) for paying down debt, or putting more to investments, etc.

Salaries 8,625.15
Reimbursements 384.62
Interest 43.00
Total Income 9,052.77

Expenses

Our Expenses are relatively low since we’re not paying a mortgage or most of the utilities (although I keep telling my mom to tell me how much she wants us to contribute to the Internet, Water, and Electricity bills – I’ve just been contributing $50/mth to her checking account).  Many of these expenses are not spent in a month, like car insurance – we pay it every 6 months – but we set aside the money on a monthly basis so it’s there when we need it.

We’ll also be saving less as we start paying on a new mortgage in the March timeframe (estimated principal, interest, escrow is $2200) along with all the other expenses that come along with owning a house – although, there’s a top to bottom warranty for everything in the house for the first year from the builder, so I don’t expect we’ll be spending much in repairs.

We use a VoIP phone line through CallCentric, and we brought it with us – that’s where the “Phone and Internet” line comes in.  We pay $1.50/mth for E911 service, and per minute for all other calls.  We tend to spend about $2 in phone calls since Dad works from home – it’s nice because he uses a softphone to join conference calls from his laptop.  I budget $5/mth which is a bit overkill, but covers are heaviest usage months.

Food
   Groceries 300.00
   Restaurants 150.00
   wine & Beer 60.00
Recreation
   His fun money 200.00
   her fun money 200.00
   entertainment 50.00
Debt (car payment) 500.00
Pets 40.00
Daughter Person
   Daycare 800.00
   Clothing 25.00
   Misc 50.00
   College 50.00
Personal
   Life Insurance 50.00
   Doctor/Dentist 20.00
   Prescriptions/meds 15.00
   Gifts 25.00
   Misc 50.00
   Memberships 80.00
   Clothing 25.00
Transportation
   Gas 300.00
   Car Insurance 100.00
   Repairs & Maintenance 50.00
   Inspection 11.00
   Registration/Property Taxes 25.00
Housing
   Storage 1,014.80
   Utilities 50.00
   Phone & Internet 5.00
   Cell Phones 95.26
   E-mail/hosting accounts 8.00
Charity 20.00
Total Expenses 4,369.06

Savings

We have a separate section for savings – money that we’re not planning on spending in the near future, or are earmarked for a want and not a “need” (although, a lot of the above are for wants as well).  These are things like saving for our new house down payment – and the appliances we’ll need to be buying, money we send to our after tax investment accounts, and money that gets added to the emergency fund.  Right now, the money sitting waiting for moving costs and the down payment is acting as our emergency fund, and anything left after I allocate the rest of the money goes to the emergency fund.   Once we’ve moved and have an idea of where that fund stands in relation to our car payment and investments, we’ll likely throw any “extra” to the car payment or (more likely) the taxable investments.  Until we’ve moved and settled, I’d rather have a large cash buffer though.

Emergency Fund 883.71
Investment 300.00
Moving 2,000.00
New “stuff” (House) 1,500.00
Total Savings 4,683.71

If you made it this far, you are a saint. I know there is a lot of room for improvement, but we’re limited in what we can do at my mom’s house as far as buying in bulk to save on the grocery budget, or using less gas (because she’s far away from everything). I’m hoping to lower our expenses somewhat once we’ve moved and settled, along with selling several things and bringing in some extra money.

9 thoughts on “Our Temporary Budget

  1. evenstevenmoney

    I’m with you on having a buffer/emergency fund for multiple uses, especially during uncertain times, extra cash isn’t going to hurt you in the short run.

    Reply
    1. Mom Post author

      It comes down to the age old question of “how much should I have in cash”. Our emergency fund only has 5k in it at the moment (and the 85k we’ve already got set aside for closing), and I’d like it to be more like 35-60k, but having that much money sitting in cash doing nothing isn’t very appealing to me. Assuming no major surprises between now and the end of next year, we’ll have our e-fund balance up to that amount.

      Reply
  2. Jason

    I don’t think this is bad. Particularly, because this is temporary you just need to squirrel away as much as possible. I mean we are only talking about five months, not five years. The only other thing would be to temporarily suspend 401k stuff for six months you might get another few thousand bucks that would really get you money for that contingency stuff (e.g. rugs, etc). Sounds like a good plan to me.

    Reply
    1. Mom Post author

      We just started maxing out our 401(k) plans, so we’re lucky in that we have this income *after* that. If the $hit hits the fan, and we need more cash flow for some reason, we can always adjust those deductions, but I’m really hoping that we don’t. I get 8% of my salary contributed by my employer whether I contribute or not, but Dad has to contribute 10% to get his full 8.33% match.

      Normally, I’d like to see more money going towards debt, but the 0% interest rate is holding me back – tempted to keep it around and put that money towards taxable investments, but would love to say “no debt except the mortgage”!

      Reply
  3. donebyforty

    Your after tax (and 401k contribution) incomes are awesome, and you’re putting them to good use! And glad you’re able to move to an HSA: it’s my very favorite account. I really wish they’d up the limit significantly though. Expenses for medical can easily surpass the current limit on an annual basis.

    Reply
    1. Mom Post author

      Our HSA “family” limit of 6650 is just below our out of pocket maximum, which we’ve never met. Dad’s company will contribute 2250, so we contribute 4400 and that’s that. I’m hoping to make it through year #1 (2015) without reaching the family out-of-pocket max, and then bank the rest in the HSA. I still need to research our HSA – I know we can’t contribute pre-tax dollars, so we may open a separate account from the company “approved” HSA. I haven’t seen what the fees are and the available investments – and it’s difficult to get access to them until we’re able to open an account in 2015.

      So far, this year (starting in June), our out-of-pocket payments have been about $300, if we extrapolate that to a whole year instead of a half a year, we are *well* under what Dad’s company contributes.

      Reply
  4. RichUncle EL

    Mom just called me she wants a raise from the 50 bucks. If you put money into the Roth, it can act as an emergency fund as you can take out all contributions, and not gains. If I were you I would hold only 2-3 months of living expenses in a savings account, the rest would go to my after tax / Roth accounts. Hope this helps.

    Reply
    1. Mom Post author

      If I could sneak in more than $50 without my mom noticing, I would, but she’d end up trying to give it back to me somehow. Her total utilities (not counting cable) are about $75/mth. Cable is almost $300/mth (and she won’t let me reduce it for her *sigh*). So three of us are covering most of the non-cable utilities. Since we don’t watch cable, I don’t feel so bad, we just use the Internet – which would have been sitting idle without us there… I keep telling her every month if she wants us to pay her for a particular bill (other than the full cable bill), I’ll pay it for her.

      Reply
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