Hi Money Minder,
I’m a bit lost and need some advice. We’re a small family of three living in Kansas City, and I can’t wrap my head around whether our spending habits are okay or if we need to tighten the belt a bit. I mean, the average income in the US is about $80k, and we spend close to that figure while earning a bit more. It’s not like we’re living it up like crazy, but I still have this nagging feeling that we might be splurging too much. How do people manage to thrive with less? It seems like such a challenge, but I know it’s possible since that’s the median income. Any thoughts?
Here’s a breakdown of our expenses:
- Mortgage: $2200
- Shopping/Clothes/Baby/Home: $1100
- Groceries: $850
- Dining/Alcohol: $650
- Utilities/Phone/Internet: $500
- Gas/Car Insurance: $450
- Health Insurance: $400
- Entertainment: $200
- Miscellaneous: $200
Total Expenses: $6,550
We have some money left over from our income after taxes, donations, and savings/investments:
- Taxes: $1300
- Giving: $500
- Saving/Investing: $1500
Total Gross Income: $9,850/month
Thanks for all the feedback so far. It looks like shopping for cheaper insurance and planning meals ahead could be good starting points. By the way, my wife and I only work part-time, and with the help of family, childcare is sorted. I can’t imagine how folks manage to shell out $2k monthly for childcare!
Cheers,
Seeking Sound Advice
Response from THE MONEY MINDER:
Hello There,
It sounds like you are being very mindful of your spending habits and are looking for ways to potentially cut back and optimize your budget. It’s great that you are aware of your financial situation and are seeking advice on how to improve it. From the breakdown you provided, it seems like you have a clear picture of where your money is going each month.
One suggestion to potentially cut back on expenses is to evaluate your shopping budget and see if there are areas where you can reduce spending. This might include looking for discounts or buying used items instead of new ones. It could also be helpful to meal plan and shop for groceries strategically to avoid overspending in that category.
Additionally, reviewing your insurance policies and comparing rates could help you find potential savings. Sometimes, bundling your insurance policies or shopping around for better rates can make a significant difference in your monthly expenses. Cutting back on dining out and alcohol expenses could also free up some extra money in your budget.
In terms of childcare costs, it’s understandable that this is a major expense for many families. Exploring alternative childcare options or looking into cost-saving measures in this area could help alleviate some of the financial burden.
Overall, it seems like you are on the right track by being proactive and seeking advice on how to optimize your budget. Making small adjustments in different spending categories can add up and make a noticeable difference in your overall financial health. Keep tracking your expenses, stay focused on your savings and investment goals, and continue seeking ways to cut back where possible.
Best of luck in your financial journey,
THE MONEY MINDER
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