Hi everyone!
I was inspired by the many posts showing up regarding budgets in different areas and different walks of life. I wanted to contribute the budget my husband and I have been following since January 2017 to pay off our student loan debt sooner. I wouldn't call this an "aggressive" budget by any means but we are definitely surviving below our means in order to pay off debt. We are looking at being completely debt free by October 2019 (one more year!)
Also - this is my throwaway. My main account has a lot of information on it and I didn't want it tied onto this post.
Please see budget and debts below:
Husband is 30 and I am 29. We have two kids (5, 1) and I'm pregnant with our third (due in December). We live in LOS ANGELES which is VHCOL. I will be on maternity leave getting 60% of my pay starting mid December until March 2019. I do an ANNUAL budget as opposed to a monthly budget so I can see the big picture and know when my annual payments/subscriptions will hit (Amazon Prime, DMV registration renewals, etc). And I can move line items around a lot better.
Net Income 1: $4,880 (was $4,200 until August)(8% to 401k, med/dental incl)
Net Income 2: $5,040 (was $4,160 until April)(no 401k, am vested in pension)
TOTAL NET INCOME: $9,920 (our gross monthly income is $13,723)
TOTAL ANNUAL NET INCOME: $114,400
MONTHLY EXPENSES:
Rent: $1900
Student Loan 1: $783 - 2.59% (minimum)
Student Loan 2: $100 - 0% (minimum)****explanation below
Student Loan 3: $93 - 0% (minimum)******explanation below
Internet: $45
Electric: $100
Cell Phones: $100 (prepaid - 3 lines)
Gas (Home): $10
Car Insurance: $150 (3 vehicles - all paid off - trying to sell one)
Hulu: $6 (soon to be $10 I believe?)
Netflix: $11
iCloud Storage: $9 (3 accounts)
Groceries: $476 (usually $400 but some months we had family staying with us)
Gasoline: $216
Household Items: $50
Family Fun Money: $80
Kids Necessities: $50
Car Washes: $12
Child Care: $640 (1 child full time)(to be $1280 next year)
Afterschool: $450*** (I won't include this in totals since I paid for the year in full)
Life Insurance: $80 ($500k each)
TOTAL MONTHLY EXPENSES: $4911.00
ANNUAL EXPENSES:
Union Dues: $567
Medical Insurance: $600 (soon to be $900)
Barnes and Noble: $27
Registration Renewals: $450 (3 vehicles)
Credit Card Annual Fees: $521 (we get a hotel night if we pay the fee - cheaper than the actual hotel night)
Renters Insurance: $230
AAA Dad: $98 (his bday gift every year)
ABC Mouse: $60
AIP Additional Insurance: $50
Amazon Prime: $130
Playstation: $50
iTunes Match: $25
VPN: $30
AwardWalletPLUS: $10
ANNUAL EXPENSES DIVIDED BY 12: $238
TOTAL MONTHLY EXPENSES: $5149
TOTAL LEFTOVER MONTHLY: $4771
SINKING FUNDS (I fill these in at the beginning of the year so it's not a monthly thing - feel free to Google Sinking Funds Dave Ramsey for more info. We got a tax refund this year and will get one this coming year as well so I use that money for the sinking funds below. Otherwise I use our snowball to fluff these accounts up before throwing it at our student loan debt. Hopefully that makes sense. We have Ally savings accounts for each fund)
Kids: $1000 (will go up to $1500 next year)
Gifting: $1600 (Birthdays, Christmas, Anniversary, Weddings, Baby Showers)
Car Repair/Maintenance: $3000
Eating Out: $1340
Clothing: $2000 (will be $2500 next year)
Household: $2000 (towards renter's insurance deductible)
Beauty: $400
Medical: $4500 (this is our OOP Max - we keep this amount in the account at the beginning of every year)
Vacation: $2500 (I churn credit cards and have 750k AA miles so our trips are extremely cheap)
Electronics: $1000
Cash: $200 (keep this in our safe just in case we need cash for something)
Afterschool: $4600 (I like to pay this in FULL as opposed to monthly)
DEBTS:
Student Loans: $65,000
Car Loans: $0
Personal Loans: $0
Credit Cards: $0
Medical Debt: $0
We started January 2017 with $115,000 in student loan debt and $10,000 in car loan debt for a total of $125,000. In 20 months we have paid off $60,000 and bought a new (to us) car to fit our growing family for $4000 in cash.
After all is said and done - we have been paying an additional $2000-$4000/mo at our student loan debt (as an average). We have about $15,000 in our Emergency Fund (not including Sinking Funds) and in the event that we are both unemployed I have a budget created that would have us living comfortably on JUST unemployment (which would be $1800/mo each - $3600/mo total).
***The student loans that are on credit cards were transferred in the last few months. Those student loans had an interest rate of 6.8% and we decided to do a Balance Transfer to a few different cards with a one time transfer fee of 3% and a 0% interest rate for 18 months. These credit cards will be paid off by December so we will definitely NOT incur interest in 18 months).
In case anyone is wondering - these are the vehicles we drive:
2010 Honda Civic ($15k loan, paid off last year)
2004 Hyundai Santa Fe ($4000 cash)(trying to sell and get another sedan)
2004 Honda Pilot (just bought a few months back $4000 cash)
Our goals are:
- Pay off student loans by October 2019
- Max out the 401k every year
- Start two ROTH IRAs (and max out)
- Save 20% down payment for a house
Now the nature of my work is gig/contract based. I work in Television and there is a chance I will not be employed after I am done with maternity leave. If this is the case then my budget representing this scenario (I have many different budgets... lol) would have us paying off $37,000 extra on our student loans (assuming I am unemployed all year) meaning we would be debt free by March 2020. IDEALLY I am employed all year long but if the show I have been working on for the past 4.5 years does not get a new season I will need to source employment elsewhere. We shall see!
In any case - I highly recommend everyone create more than one budget for different scenarios. I have the following:
- Both employed all year (including my maternity leave obviously)
- Both unemployed all year
- One employed all year and one unemployed all year)
- Live like we have no money (for extra aggressive payments - my husband is not a fan of this one lol).
It helps me feel at ease knowing that if anything happens we would not go without.
Anyway - I hope this all made sense and it helps others in a similar situation see what we do to reach our goals.
SIDE NOTE: Since I know this will be questioned - my husband and I spent a whole summer interviewing daycares in many different areas (near my work and near his work) to find our AWESOME affordable daycare. It's 8min away from my husband's office and my oldest went there from age 1.5 until 3 (and he goes during the summer) so obviously we have our youngest there as well. It's $160/week and includes meals. We provide diapers/wipes/formula (when infant) and donate a SHIT TON of materials and snacks because they are too good to us. Both my kids LOVE this daycare... and they are just... amazing. We got really lucky but we also searched high and low for the best daycare to fit our needs (and our budget!). Daycares near where I work are around $2000/mo MINIMUM so this place was a huge blessing. It's an in-home daycare (not a center) so that also helps with the fee.
Thank you! And if you have questions please do not hesitate to ask!
Submitted September 20, 2018 at 05:03PM by throwmeaway081613 https://ift.tt/2pnPBBc
