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budget review and help please. Long!
I'm hoping you all can give me some guidance on how I can better break down my budget. It feels like we've been spending a ton lately and I'm thinking if I break things down into more categories it might help.
income- $7,000
Mort-1610.56
Prop taxes & ins- 480.00
phone/internet/cable- 145.00
union dues- 33.00
car ins- 134.86
verizon (2 cell phones)- 165.00
PGE-180
alarm- 52
preschool- 220
water- 140
gas- 650.00
Groceries (organic fam of 4)- 750
misc- I usually budget $1,000- $1,500 for anything that doesn't fall into the above catergories.
total- $5,560.42
so with the above numbers we should be saving about $1,400 per month but the problem is we're saving zero at the end of the month!! I think I see the big misc. number at the beginning of the month and it seems like no big deal to go out and spend but that money goes quick and we're over budget before we know it.
We have no debt and an emergency fund I feel comfortable with (25k). My husband contributes about 13% to his retirement and I haven't contributed to my roth in quite a while. I'm self employed and only contribute about 30% to our income. We purchased a rental property last year and have great tenants and a separate savings acct. for repairs on that house, we make a $200 positive cash flow on it every month nd that goes straight to that savings acct. so we have about $1,600 in there now.
How do you know how much you spend on clothes, auto maintenance etc.? If you don't use any money that month do you transfer it to a diff savings acct. or just keep it all in your checking acct? Knowing our current situation what would you do with that $1,400 extra per month? I'll prob start maxing out my roth again but on paper we should still have close to $1,000 at the end of the month.
Sorry that got so long 
Re: budget review and help please. Long!
650 on gas? That is huge. Do you not have fuel efficient vehicles and put on a large number of miles?
Pay savings each month as if it was a bill - just auto deposit it or transfer it. But Pay it first.
As for items that only occur a few times or a year or vary each month - take a look at last year as to how much was spent on them totally for the year - then divide by 12 and set that amount aside in your household savings or checking. Then when it is needed it is there.
Track your misc spending, You might find you need to add a few more categories. gifts? vacations? charitable donations? medical?
As for the extra - pay off any debt you have, fully fund your ROTHs, save for vehicle replacement and any other goals
I don't see
* medical (insurance, prescriptions, copays)
* activities (hobbies, date night, movies, museums, toys for the kids, etc)
* travel (vacations)
* dining out
* events (birthdays, presents, wedding gifts, party costs, etc)
* fitness/sports (exercise equipment, gym, athletic shoes, other gear)
* regular shopping (clothes, shoes, coats)
* regular hygiene (hair cuts, personal products)
* donations
* house maintenance (repairs, upgrades, etc)
* financial services costs (credit card annual fee, retirement upkeep, etc)
I strongly encourage you to track EVERYTHING for a few months. I use Mint and can see exactly what I've spent my money on for the last several years. That's the best way I've found to catch the little bits you're losing.
I agree with the first poster who said that 650 is a lot on gas. Wow. I thought my half-hour drive to work was kinda long, and we spend about $200-300 on gas a month with that commute. Depends on how long your commute is. Maybe you could look into carpooling or public transportation?
From my calculations, your total expenses are $4560. I understand the misc idea, but definitely keep track of that, too, so you should have about 2400+ that you should be keeping closer track of, IMO. I use Excel to track our income and expenses (since our income varies each month based on how much my husband works). I made up my own categories based on our family's needs, and I like Excel better than any program I've looked at, b/c I can personalize it so easily for what we need, and because I'm paranoid about putting all my financial info online (like mint.com).
I very rarely use cash, because it's so much easier to track my debit and credit cards, and put those in my spreadsheet. If I had to track everything I was spending, I don't think I would actually write everything down. (Kind of like when I try to keep a food diary--lasts about 2 days, maybe.) Around the 5th of each month, I can look at the last month's bank and credit/debit card statements online and put those in my spreadsheet.
I'd agree to always max out your Roth, if you can afford it.
I look at what I spent last year on auto maintenace, and add a little more to that as my car gets older. Like someone else said, for an estimate, average out the last year's expenses and you can plan on spending that much each month.
My husband and I have our money in a high-interest checking account (it was 4% to start, now at 2%--not as good). We use that for most purchases, can track it easily, and it kind of serves as our emergency fund/extra money should a car problem or renter's maintenance issue or whatever comes up where we need money quickly. That account just keeps adding up each month, as yours should if you can get the extra $1400/month. Once it gets to the max the checking account allows at the higher interest rate, we put a chunk into our Roth IRA, into our daughter's college fund, or into mutual funds. That works really well for us.
My husband and I were in the same boat as you a few months ago. Even though we technically have a high income, we were losing money every month. I think we thought we made enough to just spend whatever we wanted. So we printed out several months' worth of bank statements and added up all our spending. We were shocked to see how much we ACTUALLY spent on things vs. how much we thought we were spending. This really helped us get a clear picture of where our money was going. We then set up a mint.com account to help us track our expenses. I found it to be the easiest way of keeping track because I really don't want to go through our statements every couple of days to add things up. You can also add your savings accounts, credit cards, etc. to get a very clear picture of your overall finances. I would recommend doing that and getting a firm handle on your finances before decided where to put the "extra" money. You first want to make sure you have extra money before you use it!
Yeah gas adds up quickly. I mostly stay home with kids but driving around to practices, swim lessons etc. uses a lot of gas. I usually fill up once a week for about $75. My husband drives a diesel truck that costs $100+ to fill up, but he's been borrowing his grandparents little Toyota matrix during the week to save $ since he's working about an hour away right now. My parents have a cabin 3.5 hours away that we usually visit once a month.
I do track our money and it seems our biggest overage is eating out. Not necessarily big dinners out but I might take the kids to subway one day and my husband might grab a Gatorade a few times a week. It always seems like no big deal but it adds up fast. I know it varies but how much are you all budgeting for eating out? Entertainment?
I'm still a little confused on where to keep this money. For example, our annual life insurance premiums are around $470 so if I put aside $40 a month do I just keep that in my checking acct. all year? I feel like that wouldn't work for me but I can't imagine having 10+ ING accts that I transfer to each month for all the different categories. The logistics are confusing me