Hello all, I’m looking for some advice on my budget. I’m a 28F, my husband is 32M, and we have two kids, a 2.5-year-old and a 5-month-old. We live in a high cost of living area. I work as a nurse and my husband is in the public sector, where he pays for our insurance and gets amazing benefits. Our after taxes and 401k deductions income is about $2,200 for him and $4,000 for me. We have everything in separate accounts, but I’d like to combine them. Our total living expenses are $5,670, and we spend about $4,200 on that. Here’s a breakdown: Rent is $2,000, Wi-Fi is $90, electric is $150, my car is $500, car insurance is $180, car payment is $250, gas is $150, groceries are $600, Costco household is $150, and Amazon household is $100. Gym is $30. For subscriptions, we spend about $180, with Peacock at $4, Spotify at $18, Disney+ at $8, Netflix at $8, Apple storage at $10, Disney annual pass at $50, and massages at $80. Our debt totals $750, which includes credit card payments. We save about $140 each month, with $20 for each baby and $100 for an emergency fund. For fun, we budget $400. I realize now there’s about a $500 difference between my budget and take-home income, and honestly, I’m not sure where that $500 goes since we have separate accounts. I pay most of the bills and have nothing left over at the end of the month. My husband says he is paying that amount towards our mutual credit card debt each month. We’re also hoping to move to a 2-bedroom apartment since our 1-bedroom is cramped with the kids. The 2-bedrooms near us are $2,400 to $2,800 a month, and I’d like to use any extra money we have to pay off debt while the kids are still young. We could move 45 minutes north and get a 3-bedroom townhouse for the same price as our current apartment, but my mom is our nanny and doesn’t charge us, so I’m not sure how a longer commute would impact our schedules. Thoughts?
You listed a handful of credit cards as expenses but were pretty vague in your explanation. Are those all debt? If so, how much debt do you have in total? Credit cards as debt are an emergency and should be treated as such. That means cutting discretionary spending. No fun, no subscriptions, and no massages.
No, $750 is the total debt payment, not the balance, right?
And all the C1 things are credit cards? Are those just the minimum payments?
Your husband needs a better job, seriously. I don’t care how good the benefits are if he’s only netting $26,400 per year. He needs to be making at least twice that for you to move to a bigger apartment.
The commute will increase your gas and car maintenance bills, plus maybe even your takeout expenditures. Have you thought about decreasing your subscriptions or streaming services? What’s the $250 in household spending?
You really need to make sure your fixed costs are not too high. Ideally, they should be around 50% of your net take-home. If you’re putting $3,000 to $4,000 a month into retirement, then those percentages are fine, but your money direction needs to go towards high-interest debt before investing.
You need to combine your accounts. That $500 gap is probably untracked spending, and with separate accounts, it’s hard to know for sure. Combining them will help track expenses better.
First priority should probably be paying off the credit cards. You might even consider pausing 401k contributions until you get that cleaned up. What are the balances on those cards?