Wife and I made $60k last year. Between the payroll tax holiday and we just got word that the Right-To-Work law just kicked us in the ass because the union contract where we work came up for renewal and now We're taking a decent sized pay cut. The numbers come out that we're essentially losing a month's pay altogether.

We're really *big* spenthrifts. I mean that very sarcastically. We were making about $65k a few years ago combined but we had another family member show up and we both had to change jobs to accommodate childcare. Before our son was born we knocked out $65k in debt in about 2.5 years. We're used to living very frugally.

Right now our combined incomes will bring us $1700 every two weeks, $3400 a month except for the two months where there is a 3rd paycheck, but I want to budget to the $3400.

Here are our expenses:
Mortgage : $800 (actually $755 but I pay a little extra.)
Electric: $150-200
Water: $75
Groceries: $400
Gas: $300
Childcare: $400
YMCA Membership: $95
Netflix: $8
Internet: $50
Car Insurance: $80
Life Insurance: $127

This leave about $400 a month left. We have -ZERO- Debt but I am not comfortable only having $400 leftover, especially considering we have a tax bill of $1200 coming due in April, which takes a chunk out of the emergency fund. Right now we have about 3 months of expenses covered.

But any car issue or other fairly significant expense can throw us off and there's not much room for fun in there. unless my priorities aren't right.

I've cut everything I can think of. Should I consider a part time job at this point? We're stretched as thin as I can think. We don't even have cell phones, we have ipod touches and use those to make phone calls. And the YMCA membership isn't negotiable, that is paying dividends via we are losing significant amounts of weight (I was 300 pounds when we started.) I'm figuring once this goes through it will lower our life insurance but beyond that I'm kind of hard pressed for ideas on what to do. We're already going vegetarian.


Car Fund $200/month (both our cars are 150k+ miles so I have to put this fairly high on priority list)
My Roth IRA: $100/month
Her Roth Ira: $100
Son's College Fund: $50

To be honest, I feel you are in OK shape. After all your expenses and savings you have $700 per month left over (that is including the $3400 in "3rd paychecks") - $8400 per year. You have an emergency fund and no debt. Take a step back and breathe, because you are in better shape than a lot of people with double, triple your income.

At this point, maybe you should be thinking about big lifestyle adjustments rather than small frugality measures (though those certainly don't hurt). Moving closer to work, maybe to a house that would allow you to rent out a basement apartment or in-law unit to help with the mortgage. Downsizing to one car. Looking for better work, additional work, and/or at-home work.

I would also agree to stop paying extra on the mortgage for now.

I think you can lower your food bill by $100. We are not even remotely vegetarian (my husband does low-carb permanently) and we spend less than $300/month on groceries buying tons of meat. We are also big eaters but thankfully not big. I shop sales, stock-up, keep track of what I am buying and make "meal plans." By that I don't actually plan out a meal but I will write what we are having on the calendar that day for anywhere up to a month's time.

My husband also used to be big (before I met him) but regularly goes to the gym. He used to go to one that cost $75/month. Then for awhile we had NO disposable income and he left that gym for one that was $20/month and now he is at one that is $10/month. Are there no cheaper options? Do either of you guys have insurance that reimburses gym payments? My husband's insurance will send him a check for up to $200 every six months if he goes to the gym fifty times.

Are you opposed to finding a part-time job at all? That's probably what I would do if I wanted more cushion in my budget. Or looking for new jobs? Just wondering.

Thank you for the replies.

We have a family membership at YMCA. It seems the best because they offer childcare while we work out, which the other local gyms didn't offer. That's been our biggest thing. I've got a nice bike and I have no trouble walking around our neighborhood but it's hard to get good cardio if you have a toddler and I can't go jogging due to an old back injury.

I've been thinking about this for a few days now and I don't think it's as bad as we seem. We're still able to sock money away every month for two Roth IRA's, a new car, max out our 401ks, pay a little extra on the mortgage. I think I'll keep going the way things are, as I have been negligent in the 'pay yourself first' category. I don't want to lose momentum. Worst case scenario I pull principle out of Roth IRA, using it as a backup emergency fund. I don't think we'll get to that point, though.

We're going to be going to more farmers markets as the weather gets better.

We carpool when we can. The car we use to carpool is 4 cylinder and it has the only childseat. Our schedules vary and some days only one of us works we drive the second car, which is a 99 Olds Aurora 8 cylinder that gets 20 mpg on a good day. It's seen better days but it's still got some life and I'm one who drives a car until the wheels fall off. Our round trip daily commute is about 40 miles. I have biked it in the past when I was in better shape.

I'm leaning against part time job if I can help it. I do want to be able to see our son grow up instead of just working all the time. It's not like we're really struggling but I'm growing weary of constantly trying to cut cut cut everything.

We can't move and we've been casually looking for new work. We owe about as much as our house is worth so after realtor fees and getting the house ready for sale we'd be in the hole. I'm trying to make this house work for us.

I agree. Your expenses seem pretty reasonable to me. Perhaps you can find some dollars in being more careful about electricity usage, and I also think the Y membership seems to be on the high end (though I've only looked at individual gym memberships, not family plans before, so I could be wrong). Either way, I don't see anything excessive in your expense list. Also, while you'd obviously like to have more than $400 left for saving at the end of the month, that's still a really good place to start from -- it's a good habit you've developed to consistently put good money at your savings goals. I guess you're referencing withdrawing from your IRA as a last resort for emergencies, but seriously, I would never consider doing that unless dire straits. Sorry to hear about the work contract situation constraining your budget this year, but I think with all the thought and planning you've put into it, you will withstand it very well. Good luck!

Wait... the $3400/month is net of maxing out two 401(k)s (almost $3000/month combined)? Yeah, I would say you're doing just fine.

whoops. We max out the match is what I meant . But between Roth IRA's and 401k I think we're on solid ground here.