Hey all, for the first time in my life I’m finally in a position to start paying down some debt, and my wife and I are hoping to buy a house in the next few years. We have one child (a toddler), and we’re currently living with family, so no rent. We also have three cars (one is a work vehicle), all paid off. Our main debt is $40k in student loans and a $6k credit card debt from our honeymoon.
Our budget is based solely on my wife’s income ($3600/month), and mine (which is commission-based) goes directly into savings. Here’s how we’ve split the $3600:
Fixed Payments:
Car Insurance: $320
Gym Membership: $125
Credit Card Payments: $135 (minimum)
Student Loans: $300
Phone Bill: $140
Streaming Subscriptions: $50
Therapy: $30 (copay)
Medication: $150
Variable Payments (limits, with leftovers going to savings):
Groceries: $500
Gas: $150
Clothing: $200
Household Items: $200
Car Upkeep: $150
Medical Bills: $300
Work Purchases: $100
Dining: $100
Entertainment: $150
Pampering: $100
Impulse Shopping (me): $100
Impulse Shopping (wife): $100
Gifts: $100
Emergency Fund: $100
Does this look like a solid budget? Any suggestions for improvements? Am I forgetting anything important or putting money in the wrong places? Your advice is much appreciated!
Honestly, it’s better to use your commission income to pay down the debt instead of putting it in savings. You’re losing money in credit card interest while saving isn’t as urgent.
Teal said:
Honestly, it’s better to use your commission income to pay down the debt instead of putting it in savings. You’re losing money in credit card interest while saving isn’t as urgent.
Yeah, I’ve been thinking about that. The idea was to have some savings for emergencies, but maybe I need to balance it better with paying off debt faster.
You’ve got $850 going to non-essentials, which is a lot considering you have $46k in debt. I’d suggest building a 1-month emergency fund, then throwing everything at the credit card. You could pay that off in 1-2 months, build a 3-month emergency fund, then tackle student loans.
Why not cut down on Clothing and Household Items for now? And maybe reduce or pause things like Dining, Entertainment, and Impulse Shopping until you’ve got that credit card debt cleared up.
Oakley said:
Why not cut down on Clothing and Household Items for now? And maybe reduce or pause things like Dining, Entertainment, and Impulse Shopping until you’ve got that credit card debt cleared up.
We try to keep the Household budget for things like diapers, car seats, etc. Clothing is tough because the toddler grows so fast, but we’re working on reducing it. As for Dining… that’s our once-a-month date night
It might help to have a tighter budget on variable expenses like Dining and Pampering until that credit card is gone. Small sacrifices now can make a huge difference later!
LENAHZ said:
It might help to have a tighter budget on variable expenses like Dining and Pampering until that credit card is gone. Small sacrifices now can make a huge difference later!
Good point! We’ve been looking at ways to reduce those areas without completely cutting them out.
