Where are we going wrong??

amother

Tue, Jun 19 2012, 10:37 pm

DH and I sat down to work out a budget as he got a new job and we would like to get a 2nd car. We live in Brooklyn and between the 2 of us are earning $98,100 gross annual. We have 2 school age kids and a baby - but we are barely getting by! Our monthly rent is standard NY - $1800, and our monthly utilities amount to about $300 monthly. Thank G-d DH gets health insurance from work, albeit with co-pays of $25 per visit. Kids' monthly tuition is not as crazy as some others', it's about $1100. Monthly food bill is about $1000. By the time we're done with childcare, cleaning help (once a week 5 hours) and clothing (nothing fancy, standard gap/old navy stuff with one or 2 shabbos outfits), WE HAVE NOTHING LEFT at the end of the month. Nothing for a car and definitely nothing for savings.

How crazy is it that we're considered middle class but I'm feeling so poor? We have a 10 year old 5 seater car that we squash into and I've been dying for a mini-van but it's just out of my reach.

MaBelleVie

Tue, Jun 19 2012, 10:46 pm

Can you cut the food bill a bit? I think in Brooklyn you can manage with $800 a month for a family that size, without feeling like you're giving anything up. Do you shop in cheap stores with sales?

What kind of car do you have? If its one with high resale value, like a camry for example, you may be able to sell it for very close to what you'd pay for a used mini van, like a kia sedona. If you're looking for an Odyssey or a sienna, forget about it.

amother

Tue, Jun 19 2012, 11:05 pm

ElTam wrote:

The food bill also seems really high to me. My family is the same size and $850 a month covers groceries, gas, clothing, medicine, cleaning supplies, toiletries, cleaning help (2x per month).

OP here:

EiTam, wow $850 covers all that for you??

My food bill might be on the higher end, admittedly, but it's because I buy takeout here and there and I'm including toiletries, cleaning supplies and paper goods in the bill. I work full time and have demanding kids and this keeps our sanity in the house.

Either way, if my food bill is the only thing where I'm going wrong, it's still ridiculous that I can only scrimp $200/month.

Sadly our car doesn't have a good resale value, it can go for under $5,000 so it will not nearly get us a mini-van.

DH gets about $7200 taken off annually for taxes and I get about $5500.

amother

Wed, Jun 20 2012, 2:13 am

OP, I don't have answers to your questions. The only way to know exactly where every penny is going is to write down every penny and then see where you can cut down.

I WOULD, however, like to support you on your grocery bill. We are a family with 4 children in Israel, 9-2 years old, and our bill is $1200 or more a month. Grocery shopping is a decision. Sure, you can keep your bill at $600 with lentils and beans, you can go for $800 with no prepared foods or sauces, you can go for $1200 a month with ketchup, sauces, prepared items, the occasional takeout, chicken during the week, heck, you can even go for $5000 a month with filet mignon every night.

It just irks me a bit when people say, "Oh yeah? Well MY bill is .43 cents a month!" Okay. That's truly amazing and I'm in awe of you, but I'm still not going to cross certain items off my list. And I'm talking things like yogurt or ketchup, or cheerios, not imported chocolate for $75 an ounce. I shop responsibly - I shlep to the cheapest store, I'll go across town when I hear about a sale, but it just strikes me as funny when person A tells person B that their bill "sounds high".

ora_43

Wed, Jun 20 2012, 2:19 am

You're middle class and you can afford private school for your kids, takeout, cleaning help, paper goods, and rent in New York. It sounds to me like you're not doing anything wrong. Middle class doesn't usually get you more than that. (Sorry if that sounds negative, it's not my intention.)

If you want a van, you'll probably need to cut back on either the food bill or the cleaning help or both.

Whether or not you go for the new car, I would advise cutting back a little to start putting some money into savings. You should have at least several thousand dollars saved in case of emergency. Treat savings like taxes and take it out of your salary before doing your budget instead of trying to fit it into the budget.

ora_43

Wed, Jun 20 2012, 2:23 am

amother wrote:

I agree that a $1,000 bill isn't too high if you can afford it. But if you want to save money, it's probably the easiest thing to start with.

amother

Wed, Jun 20 2012, 8:12 am

connie wrote:

I remember reading a few years ago an article quoting a school menahel. he said that unless a family of three is making between 110 and 140k they are either in debt or are getting other assistance.

so it makes sense what your saying. its really expensive.....

Is this only for NY area? Absolutely not true across the board. Our family is bigger (or do you mean 3 kids in the family?) our income is lower, and we are not in debt or getting other assistance.

yummymummy

Wed, Jun 20 2012, 9:17 am

amother wrote:

Excuse me but what is the point of this thread if not to help OP find places to cut back? she listed out her expenses and we are trying to provide suggestions where she can cut down and her $1k food bill is the largest expenditure with the most wiggle room. how exactly does your post help? she wants a second car so she needs to cut down on other costs. This is a zero sum game; unless she can increase her income she needs to decide what's more important to her - takeout, cleaning help and whatever other discretionary spending she can skip or a mini van.

oh and your grocery bill in ISRAEL is not relevant, $1k a month for a family her size in NY can certainly be trimmed without cutting out the yogurt.

she also still needs to figure out where her remaining approx. $30k of outflows is going.

ceo

Wed, Jun 20 2012, 9:53 am

First of all, I just want to say, BTDT! While I don't live in NY, there was a period where we were always thinking, "Umm, we both have okay jobs (me only pt), but why are we always broke?"

Here are a few suggestions-- first track all your spending so you see exactly where everything is going. Like you're estimating $1000 a month on groceries...are you always sticking to that, or going over that amount often? For the longest time, I thought I was only spending $500 a month on groceries, but really, I was spending closer to $700. Also, you might not realize lots of little small leaks here and there. For example, if I was out and bought a small purchase (under $10) or) a library fine (4.00) or iced coffee (3.50)---I would forget about it. But do that once or twice a week, and it can easily add up.

You say that you eat take out a lot.....for example, I think that once you track your spending, you might see that you're really spending more on takeout than you mean to....or whatever, along those lines.

Also, what you can cut back on is very personal. you might not be able to cut back on takeout, for reasons you mentioned. But maybe you can cut back on something else that I wouldn't be able to, know what I mean? you'll probably have to make some sacrifice somewhere, but that will be for you to decide.

Once you do this for a few weeks or a month, you can then sit down and create a budget.

We use mint.com for tracking and budgeting. It is really easy to use, but it's only really useful if you use a debit card/credit card for most purchases.

Do you know about mesilah.org? They are a frum non profit that helps frum ppl manage their finances. Imamother poster Tova is a counselor there, you can pm her for more info....my guess is that they have an office in Brooklyn. also, on their websites, they have a lot of articles, budgeting info, etc. From what Tova told me, the counselors are trained to not be judgemental. For example, if you budget $200 a month for a sheitel wash and set, the counselors won't tell you, "Oh, you need to cut back on that." But they might say something along the lines of, "Do you think you could find a cheaper place for this, or do one less wash and set a month." that type of thing

hatzlacha!!!

Wed, Jun 20 2012, 9:58 am

I live in a high-cost-of-living area (not NY) and would be hard-pressed to live a middle-class lifestyle on less than 6 figures, and I tend to think of NY as being more expensive than almost anyplace, so I really understand how this might be happening.

Your gross income minus withholdings = 85,400
divided by 12 = 7116.67/month
minus expenses you quantified in your original post = 3816.67 left over each month

Expenses you mentioned but didn't quantify include: childcare, cleaning help, clothing, medical co-pays - how much are you actually spending?

Is your withholding equal to actual taxes owed? In other words, do you pay additional tax or receive a refund when you file?

How about gas, tolls, car insurance, other insurance, dry cleaning, internet/phone/TV (if you have)? Hair/sheital upkeep, mani/pedis?

Keep track of all your minor expenses for a while: school/camp extras, magazines, everything - and see how it looks. Your grocery budget might be a little high, but it would help to look at the big picture. No, skipping one little luxury won't help you buy a minivan, but finding a pattern of excess spending might.

willow

Wed, Jun 20 2012, 10:10 am

amother wrote:

I laughing out loud. I Agree. We eat a lot.
Yes the op wants help with budget but eating beans and lentils are sometimes not applicable if no one will eat it. Call us spoiled but its the reality. I am happy it works for some but for many they eat a lot even shopping responsibly.