July 23, 2024
44 S Broadway, White Plains, New York, 10601
THE MONEY MINDER

‘Missed 3-4 months of her first year’: I have a new, lower-paying job to spend more time with family. How can I improve my budget with a 50% savings rate?

Hi Money Minder,

Budget Review – New Job, New Kid

So, we had a baby about a year ago, and that led me to switch to a lower-paying job to spend more time at home (missed out on 3-4 months of her first year due to work travel). With the new income, we revamped our budget, and I’m looking for feedback or any ideas for improvement. Am I missing something or is there a section where we’re spending too much or too little? Appreciate any insights!

This budget doesn’t include retirement savings, taxes, or workplace insurance. We have a savings rate of about 50% of our gross income.

Monthly Total: $4,613.16

  • $1,365.80: Mortgage, Escrow, Home Insurance
  • $500: Home Improvement/Maintenance
  • $475: Groceries
  • $463.12: Charity
  • $353.31: Car Payment
  • $330: Counseling
  • $208.50: Car Insurance
  • $130.13: City Utilities
  • $100.62: Gas (House)
  • $100: Entertainment
  • $75: Gas (Car)
  • $75: Discretionary (Husband)
  • $75: Discretionary (Wife)
  • $61.68: Electric
  • $55: Internet
  • $50.73: Life Insurance
  • $50: Eating Out
  • $50: Car Maintenance
  • $50: Clothing
  • $44.27: Phone Bill

Thanks,

– NewParentOnABudget

Response from THE MONEY MINDER:

Hello There

Hey! First off, congratulations on your new addition to the family. It’s clear that spending more time with your child is a priority, which is absolutely commendable. It sounds like you’ve made some intentional choices to balance work and family life, even if it means a lower income. Here’s how I see your budget and some thoughts on potential adjustments to help you out.

Your overall budgeting seems quite thorough and well thought out. However, there are a few areas that might offer some flexibility or opportunities for savings.

Your monthly home improvement and maintenance budget of $500 is quite significant. If your home doesn’t require urgent major repairs or upgrades, perhaps you could reduce this amount temporarily. Allocating even $250 a month instead would free up $250 that could be reallocated elsewhere or saved.

Another notable expense is your charity contribution at $463.12 monthly. While giving back is undoubtedly admirable and important, this is a substantial amount relative to your monthly income. Consider lowering this temporarily. Redirect those funds to boost your savings or cover variable expenses more comfortably.

Entertainment and eating out are both set at $100 and $50 respectively, which is reasonably modest. If needed, consider cutting this back a bit more and utilizing free family activities for entertainment.

You’ve budgeted $75 each for discretionary spending for both you and your spouse monthly. While personal spending is essential, even slight reductions here could help. Perhaps reducing it to $50 each per month could make a difference without feeling overly restrictive.

Your car payment and insurance totals $561.81 monthly, which seems significant. If refinancing your car loan at a lower rate or exploring less expensive insurance options is possible, this could potentially reduce your monthly expenditure.

Lastly, if possible, examining your grocery bill might uncover some additional savings. $475 is fairly typical, but embracing more meal planning, bulk buying, and looking for deals could slightly lower this expense.

Making these adjustments doesn’t mean sacrificing your family’s well-being; it’s about making every dollar work a bit harder for you. If life insurance, utilities, internet, and phone are locked in, focus on variable categories. Financial stress can be eased significantly with even modest adjustments in discretionary areas.

Keep in mind these are suggestions based on your provided budget, and personal circumstances always play a significant role in financial decisions. It’s a balancing act and any adjustments should feel manageable for you and your family.

Wishing you all the best in adjusting to these changes while enjoying more time with your family.

Sincerely,
THE MONEY MINDER

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