Hello All! My (31M) wife (33F) and I were going over our finances at the end of the year, and I thought it might be constructive to get advice from others. We’ve been budgeting for close to 10 years now, and a version of this budget has grown with us as our income and life has changed. However, we’re still finding ways to refine and save money, for example, our phone plan I’ll mention later. Are there any ways you think we could easily save some money, or anything that looks out of whack? Here is our monthly budget ending 2024, in a more easily viewable format. Here it is in text, with a little more breakdown than provided in the graph: Income: Monthly Gross income: $13,472. $7,068 Net Pay Deductions. Deductions: $2,104 Fed & State Taxes, $1,724 Oth. (SocSec, Health, etc.), $660 FERS 6c Retirement (pension), $1,916 Roth TSP Contribution (Also get $540 per month matching). Bills: $2,787 Mortgage (Insurance/property tax included), $450 Groceries, $100 Gas/Misc. Credit Card, $20 Husband Term Life Insurance (20-year policy, $500k), $16 Wife Life Insurance (20-year policy, $400k), $92 HOA, $500 Spending Cash ($250 each), $50 Water, $180 Electric, $135 Phone plan (2 lines unlimited talk/text/data), $65 Internet, $200 Baby 529 Plan, invested in S&P 500, $114 Car Insurance (Full coverage on 2014 Toyota Corolla), $16 Netflix, $643 Wiggle Room (This is due to budgeting for two pays per month, but we get 26 pay periods, so technically we have some extra floating around. It usually builds up in our checking and we throw it at a random thing like our Roth IRA, etc.). Savings $1,700 Sinking Savings Funds Total: $100 Car Maintenance, $120 Dog (Food, Grooming, Vet), $250 Gifts, $100 Home Improvement, $400 Vacation, $250 ‘Car Payment’, paid to ourselves saving for new car, $200 New Furnace Fund, $200 Medical (copays, ER deductible, etc.), $80 Clothes/Haircuts. 2025 Changes: Some changes to our budget we’ll be making are the following: We switched our healthcare plan from Blue Cross Blue Shield Basic to MHBP Consumer, a high deductible health care plan eligible for an HSA. They will contribute $200 a month to it, and we’ll contribute $250. Previously we were putting $200 a month away in a savings account, but now we’ll put $250 in tax-free and invest the $450 total monthly in S&P 500. We will be changing our phone plan. We currently pay $135 a month to a mainstream phone carrier for 2 lines of unlimited talk/text/data. We will be switching to Mint mobile and doing the prepaid 12-month special that comes out to be $416 with taxes and fees for 2 lines unlimited. This will save us $1,200 a year. We will likely put this towards our vacation budget to have $6k a year for vacations. I will be getting a 2% annual increase this year, and I will be contributing more to my Roth TSP. The max increased from $23k to $23.5k per year, so I’ll now be contributing $1,959 per month increased from $1,916 per month. As I mentioned, I look forward to anywhere we could cut some fat off of our budget, or comments if anything seems out of whack (is our power bill extraordinarily high compared to yours, for example?). Thank you!
I think it looks really solid overall and in-line with what my expectations would be for everything. There doesn’t look like a ton of ‘fat’ to trim. You already are going to be addressing the phone plan with Mint, which I think is a great idea. You may want to consider sitting down with an independent insurance agent to shop multiple companies for different auto coverage. It is hard to compare directly because rates are different between states and there are a TON of factors that go into it. This isn’t necessarily helpful, but just as a single data point, our family with two vehicles around the same year as yours with a $500k combined BI/PD limit and $25k medical pays $70 a month through Progressive. Does your mortgage line item include homeowners insurance and property taxes?
@Mason
Thank you for really giving it a good look! Yes, Mint came up at our end-of-year planning because our phone plan went up $10, which was annoying. We talked to 3 different friends that had switched to Mint, and we dug into it for a week before deciding it sounded worth trying. Is that the same thing as an insurance broker? We use a guy that I know from my high school hockey team, and he shops for us each year. We’ve switched a few times when he found something cheaper, but I’m not sure if that’s what you’re talking about. Your price sounds a lot better, so maybe I’ll check in with him. Yes, that mortgage line does include the escrow account for taxes and the insurance!
@Harley
Sure thing! You are right, though I mentioned broker, agent is a common title as well. You will have some agents/brokers that are ‘captive’ and others that are independent. Captive works with a single company, and independent works and can quote for many different companies. The independents can mix and match between many companies, which can give you a wider range of shipping rates as you pick out the best value for your family (warning: best value may not always be the cheapest). Captive vs Independent Insurance Agents. Sorry, I wish I had an agent I could recommend, but we just went direct through Progressive at the moment. When our current policies are set to renew next year, I plan on sitting down with a local independent insurance agent, as the last couple of years when I shopped around, I made the mistake of just reaching out directly to bigger companies and didn’t find anything close to what we are paying now.
It is normal and natural to feel a bit guilty about your vacation budget, but it is important to know that you guys are being very responsible and deliberate with your personal finances. You are making a conscious decision about how to spend your money and making disciplined choices around that. If you and your family choose $6k for vacations while being vigilant about staving off lifestyle creep elsewhere, that is an excellent spot to spend some of your hard-earned money on what your family will enjoy. Our family chooses to spend more on experiences and vacations, and we have a smaller budget on categories like clothing or dining out than others might. We know how it is once you get the international travel bug!
@Perry
Thanks for the reassurance! I really appreciate it. I think we’re trying to strike a balance between enjoying life and being financially responsible.