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Monthly expenses are so high - help!!



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amother


 

Post Sun, Oct 05 2014, 9:58 am
dh makes a decent salary but After taxes, and between a large mortgage/high taxes and then tuition & groceries ( incl diapers & expensive formula) for a family of 8 our monthly expenses are crazy. It's over $13,000 a month and obviously we're not covering it all.
Dh thinks that's a normal amount to spend and that we have no where to cut from ; I think it's way too high but don't know where to cut from.
So what is a normal amount to spend monthly and how to cut our expenses?
(We live in the tri state area. Oh and these expenses don't include car pmts or insurance)
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SRS




 
 
    
 

Post Sun, Oct 05 2014, 11:50 am
You are trying to find a solution all backwards. It does not matter what "normal" is and I can guarantee you whatever "normal" you will compare to is overinflated and won't get you to an appropriate financial situation for your station with a family of 8 operating under "normal". So stop thinking about normal and start your budget in the appropriate place which is your monthly income. From monthly income figure take out taxes and see what you have left to spend. Everything needs to fit in that budget and you should be putting away some amount for savings, perhaps between 10-15%.
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amother


 

Post Sun, Oct 05 2014, 12:13 pm
If youre not covering it all now- whats the plan when life gets more expensive? how r u gonna marry them off? if theyre young then what about when tuition gets more expensive etc.
To answer your question-It is not normal to be living beyond your means
the people I know, and I do not live amongst the extremely frugal type, save money for the future, and have somewhat of a budget.
some have a harder time sticking to it but they try.
I know a woman who took on a small job but every penny from there goes to savings- its a small amount but its a start...
LIfe only gets more expensive!
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LittleDucky




 
 
    
 

Post Sun, Oct 05 2014, 12:26 pm
SRS wrote:
You are trying to find a solution all backwards. It does not matter what "normal" is and I can guarantee you whatever "normal" you will compare to is overinflated and won't get you to an appropriate financial situation for your station with a family of 8 operating under "normal". So stop thinking about normal and start your budget in the appropriate place which is your monthly income. From monthly income figure take out taxes and see what you have left to spend. Everything needs to fit in that budget and you should be putting away some amount for savings, perhaps between 10-15%.


This. OP, don't compare yourself to others. It doesn't help. The rest of your community (who spend this "normal"amount) may be thousands or tens of thousands in debt. Just because others do it, doesn't make it right. It doesn't make it "good". Figure out how much take home pay you have as a family. That's your pie. Then figure out what are fixed expenses and what are technically flexible. Health insurance is a fixed expense. Same with housing, tuition, and medical costs (copays etc). While these are fixed, shop around for cheaper alternatives. Car insurance is notorious for fighting to keep customers- good student discount, good driver discounts etc. compare plans!
If you have no choice in it-it's fixed. If you have a choice (any choice at all) it's a flexible cost.
Take the whole pie. Take out slices for each fixed cost. Whatever is left over is all you have to spend on EVERYTHING else. Food, clothes, phone plan, internet, entertainment etc. if it's too small a number-start cutting. Do you need the car? Do you need a smart phone or can you downgrade? Etc..
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Dolly Welsh




 
 
    
 

Post Sun, Oct 05 2014, 12:27 pm
You have a nice lifestyle. So sell it to others a bit, in the shape of caring for their babies (non-mobile) or children (talking and toilet trained). People will be delighted and convinced to leave their kids with you exactly because you present a nice lifestyle.

Even one kid will be that "little job" mentioned right above, a very good idea.

GET YOUR KIDS TO HELP. WITH THAT.

AND WITH EVERYTHING ELSE.

Start buying food in bulk and stop buying easy, packaging-heavy foods, because one is really paying for the packaging, not the handful of food inside.

Do not think "healthy" or "organic". You can't afford it and it's meaningless anyway. Get normal produce and all that. Get rice and flour and beans in bulk, big sacks, and use your slow cooker. Bake your own bread. It is not hard. Get your daughters into it as a fun thing. Think production, make many loaves at a time, and freeze them.
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amother


 

Post Sun, Oct 05 2014, 2:28 pm
That's the problem, the fixed items like housing, tuition ,public transportation to work and taxes all are very large expenses, and can't be cut. So is health insurance.
I'm trying to figure out what can be cut ( this isn't luxuries, this is basics like food electricity etc.)
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amother


 

Post Sun, Oct 05 2014, 3:05 pm
Can you take on some sort of small side job and channel that money directly to a savings account?
some ideas I see people doing is selling baked goods etc. / babysitting one kid a few days a week, not major daycare ...
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Dolly Welsh




 
 
    
 

Post Sun, Oct 05 2014, 3:12 pm
Carefully examine your own employment. It has consequences re: taxes on the increased income bracket, transportation to get to work, proper clothes for work, hair for work, nails for work, makeup for work, time away from other things while in transit to and from work, lunch and coffee expenses, and day care expenses perhaps.

And, an at-home mother can home school. That can eliminate one tuition, at least for now. Later, yes, send to school. But if school can start at a later age, that's a savings.

If you are spending money on lunch at work, don't. Bring lunch. If you are getting coffee at a store or cart, don't. Put a large bottle of powdered instant coffee in your desk, bring your own mug, and use their hot tea water. Use that for instant soups, too.

Make sure your husband and kids are doing the same thing. We do not spend dollars on hot water with a little powder in it.

Don't buy bottled water or soda. We are not such fools. We put a filter on the faucet maybe, perhaps. We make our own lemonade or something.

Food expenses can be worked on.

The formula and diapers won't go on forever.

See if you can work from home one day a week. Transportation saved.
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Tziril Miriam




 
 
    
 

Post Sun, Oct 05 2014, 3:38 pm
You mention housing, taxes, and health insurance as fixed costs. They are fixed costs only after you choose where to live and what your husband has decided to do for a career.

Do your own or rent? What does it cost? You may not be able to afford to live where you live.

When you mention taxes, are your talking about real estate taxes, which are dependent on where you choose to buy a house, or employment taxes? Is you husband self-employed, and must pay quarterly estimated taxes? If so, you must set aside about 25% or more of his gross income. If he has trouble doing that, he needs to get a regular salaried job. You should talk to a real tax accountant (CPA or Enrolled Agent) to discuss your employment tax situation.

Health insurance is usually included as part of the benefits package for people who work full-time in a setting that has over 25 employees. Many people get jobs just for the benefits package. You husband should also take advantage of a 401(k) or 403(b) retirement plan offered at such workplaces. You complain about your costs, but your husband may need to change his employment situation.

Imamothers have given you excellent advice about providing childcare for a fee.

Please keep responding to our questions.

Best wishes for a sweet year ahead.
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bnm




 
 
    
 

Post Sun, Oct 05 2014, 3:51 pm
can you buy formula on Ebay? can you ask the manufacture for coupons? Are you maybe eligible for Wic or insurance will pay for the formula? I know at $50 a can these things can add up.
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SRS




 
 
    
 

Post Sun, Oct 05 2014, 5:51 pm
amother wrote:
That's the problem, the fixed items like housing, tuition ,public transportation to work and taxes all are very large expenses, and can't be cut. So is health insurance.
I'm trying to figure out what can be cut ( this isn't luxuries, this is basics like food electricity etc.)


Rule #1: There are no fixed expenses. For example, you could have zero tuition tomorrow. I'm not particularly recommending that and I think you should pay what you signed up for this year because of moral obligation. But technically you can have zero tuition next year when you fail to reenroll.

Regarding housing, you can sell your home and move to cheaper digs.

Public transportation is probably more of a fixed cost if this is how you get to work, but perhaps there is a less expensive arrangement.

If you are going into debt you need to put everything on the table and work from there.

Examine the regular expenses and if you can make room in your budget by spending half of food through different eating patterns and save the home, wonderful. If you can't, you have no choice but to put the big ticket items on the table. It isn't pleasant, but it is often reality.
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amother


 

Post Sun, Oct 05 2014, 6:14 pm
SRS wrote:


Regarding housing, you can sell your home and move to cheaper digs.



your mortgage shouldnt be more than 25% of your monthly take home pay.
that means...
lets say your dh makes $150,000
thats about $97,500 after taxes or $8,125 a month
Your mortgage should be around $2000, definitely not more than $3250.

I'm assuming it is.

I do not live in NY but where I live people who have $45,000 in tuition are buying houses that are 1.3M+. Even if they are putting 20% down (thats about 300,000) that leaves them with a monthly payment of $7,000 a month. That means they have to be making $135,000 before taxes JUST TO PAY MORTGAGE.

I have no idea how they are making it. I am afraid for them, not jealous. I am afraid for me because even though I follow the budget rules I know I'm not in charge and I'm afraid of what happens if Hashem changes his mind. But I do have the menuchas hanefesh that I can say I did everything right it was Hashem who made His decision.

I would start with the house and asking for a tuition break. But do realize when you ask for a tuition break they ask you stuff like how much you spend on cars, vacations, clothes, etc. The one time I ask was the year I stayed home with my baby. I wrote a whole letter how we are sacrificing for the wellbeing of our child and that although it was the first girl I had I borrowed almost EVERYTHING. The only monthly expenses I had for this baby was formula (did costco for that) and diapers.
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amother


 

Post Sun, Oct 05 2014, 6:26 pm
I responded above but left out the mortgage problem because it doesnt sound like the OP is desperate enough/in a position to change it...
But it was the first thing that came to mind
people do not think through mortgages enough,how can someone commit ahead for so so much money. its terrible to create such a high burden on urself, ofcourse it makes it hard to budget when ur income is being eaten up by that Crying

even in central communities there are better options, or wait till u can save up more money
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