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I make 41K, my husband makes 65K.
Our mortgage with taxes escrowed in is $1535 a month.
Our house is small and our heat and electric bills are low (125/mo?).
we have some savings (about 20K which friends tell me is a lot
$106,000 - 15% to Save/Invest - 20% to tax etc... = $68,900 ÷52 = $1325 per week
With that $1325 WEEKLY net targeted as the MONTHLY housing budget (incl utilities etc)...
allows ~$1150-1200 for mortgage (incl escrow).
Your $1660-$1700 (vs $1325) puts you over by 25%.
What other budget categories have you spending 25% over?
I make 41K, my husband makes 65K. So together we bring in 6 figures. Our mortgage with taxes escrowed in is $1535 a month. Our house is small and our heat and electric bills are low. We don’t have kids. We have 2 dogs but they are definitely less expensive than kids. We have the normal bills (car payments, cable, internet, groceries, credit cards). We don’t spend much. Most spending is eating out. But we’ve cut down. Wouldn’t you think a couple making 2 somewhat decent salaries and no kids would able to go on vacations etc? I mean we have some savings (about 20K which friends tell me is a lot but it’s not. Maybe for them it is) but we are always concerned about spending too much.
Make a spreadsheet and write down your spending for 3 months in a row. Then you will know where your money go.
You can download budget templates from the internet.
I make 41K, my husband makes 65K. So together we bring in 6 figures. Our mortgage with taxes escrowed in is $1535 a month. Our house is small and our heat and electric bills are low. We don’t have kids. We have 2 dogs but they are definitely less expensive than kids. We have the normal bills (car payments, cable, internet, groceries, credit cards). We don’t spend much. Most spending is eating out. But we’ve cut down. Wouldn’t you think a couple making 2 somewhat decent salaries and no kids would able to go on vacations etc? I mean we have some savings (about 20K which friends tell me is a lot but it’s not. Maybe for them it is) but we are always concerned about spending too much.
One big item is, where do you live?
At first glance your problem appears to be your mortgage. My wife and I make about as much as you -- but with no mortgage. How much are your car payments? We have none of those either. How about insurance on the cars, do yo have collision insurance? You guessed it - we don't carry collision. 20K in bank is ok - and it's better than most of the public, but yeah, you should be able to save a bit more.
Those are significant culprits right there. Credit cards should not be bills, they should only be your regular spending that you pay off every month.
And car payments - one reasonable payment might be okay. And by reasonable I mean in the $200-250 range tops. Two is unacceptable. Stagger vehicle purchases - one vehicle, paid off in five years or less, then a few years of no payments so you can save up for a down payment on the next car, again paid off in five years or less.
Also, I agree that $20,000 is not a lot of savings. Unless that's simply your cash savings and you also have significant retirement assets as well as stocks, etc in a brokerage account?
As already stated, you need to track your expenses to see where your cash flow problem is. I suspect you have a lot of leaks, like leasing that car. Leasing means you'll always have a payment. It's better to pay a car off and then bank the car payment towards the next vehicle. With more specific information, you'll get better recommendations.
You need to track your spending a few months to see where your money is going.
When I was dating my girlfriend (now wife), she had credit card debt. She wanted to get rid of it, but didn't know how because she was barely getting by as a single school teacher. I showed her the math on how she could pay it off in a little over a year. I told her to track her spending and she found she could get rid of some expenditures. She was able to pay off her cc in about 6 months. She's got no debt now. She charges everything on a credit card to get the rewards and then pays it off every month.
After freeing up herself from debt, she then had money to invest in a ROTH. She's now paying herself first.
She asked me once if I would have married her if she still had credit card debt. I told her I guess we'll never know
$106,000 - 15% to Save/Invest - 20% to tax etc... = $68,900 ÷52 = $1325 per week
With that $1325 WEEKLY net targeted as the MONTHLY housing budget (incl utilities etc)...
allows ~$1150-1200 for mortgage (incl escrow).
Your $1660-$1700 (vs $1325) puts you over by 25%.
What other budget categories have you spending 25% over?
I would suspect taxes/deductions eat a sizable amount:
Federal Tax: 12% (estimate)
Social Security/Medicare: 7.65%
State: xx
Dental/Medical deductions: xx
Disability/Life Ins. deductions: xx
Are there any 401(k) deductions?
I suggest the OP first look at net pay vs. gross and what the disposable income amount is. Assuming two cars are needed for work, transportation expense (car/lease payment, insurance, gas, tolls, inspection fees, taxes) should be deducted before arriving at disposable income.
Last edited by Maddie104; 05-20-2019 at 08:41 AM..
Track everything. My friends make over 100k (which is very good here) and they couldn't figure out why they weren't saving more. They realized they were spending 1600-2000 a month JUST eating out.
You might need a financial advisor to review what you are doing. Be careful you don't want someone to invest your money but to advise on how you should manage your finances.
Probably the one think you could do is start to track every Penney you spend for a few months. That might give you some insight into where you can cut back.
You should not have any problems with your income. You should keep your cars for at least 10 years and start saving so you can pay cash for the next car.
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