Review my budget please

Submitted by weruroverlord95 t3_10p717m in personalfinance

Hi, I do not have family support or a mentor I can talk to about this. My parents have never taught me about money so everything I've learned about finances has come from the Internet. I would appreciate any tips or suggestions on my personal budget. I'm a 27 year old living in a major Texas city. I live with my wife who does not currently work.

Monthly Income after taxes is $3,605 all figures below are monthly numbers. The debt is a mixture of loans and credit cards. I own my vehicle. I appreciate any feedback.

Rent- 850

Lights- 150

Water- 75

Internet - 26

Home security - 12

Lawn Service - 30

Phone Insurance - 8

Renter Insurance - 6

AAA- 8

Car Insurance - 85

YouTube red- 25

Paramount Plus - 11

Phone bill- 8

Online subscription - 17

Grocery - 600

Gas- 180

Haircut - 60

Debt Min payments - 762

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sephiroth3650 t1_j6iobmq wrote

There probably isn't a lot that you can cut there. There's a couple of subscriptions, and you can probably get the grocery bill down a little bit. The real killer for your situation is the debt payments. You should have around $700 extra now, based on what you listed. Get the debt paid off, and you'll have $1400-1500 extra each month.

I'd list out your loan/credit card debts from highest interest rate to lowest. Make the minimum payments on all of them except for the one with the highest rate. Put all your extra money towards that debt. Repeat that monthly until it's paid off, then move on to the next highest rate. Do that until the debts are all paid off. That will save you the most money in terms of interest paid.

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weruroverlord95 OP t1_j6iovqc wrote

Oh I know. I felt embarrassed even typing it out. That's almost another rent payment for me. I'm currently in the process of eliminating all of my debt by July. I know this is a killer for me.

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Nickyweg t1_j6imrxz wrote

How much dent do you have and what’s the interest rate on it?

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weruroverlord95 OP t1_j6in8ar wrote

The interest rate ranges from 0 to 27% or so. I have about $7000 total and plan on having it paid off completely by July.

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Nickyweg t1_j6inesb wrote

Great. That debt should be your #1 priority right now

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weruroverlord95 OP t1_j6inxlo wrote

Absolutely. My plan is to have it paid off in full by July.

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SolutionLeading t1_j6ip344 wrote

That’s great. Is there any expenses you can cut until then to help speed up that process? I’m thinking maybe cut back the haircut to every 2 months, pause the YouTube red? I know it’s small things but every dollar counts with high interest debt

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weruroverlord95 OP t1_j6ipfdg wrote

I'm kind of pushing it with the haircut at once a month. I work in a professional setting so I need to stay groomed. As for the subscription, yes I can likely do with holding on for a few months.

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infinity_o t1_j6ipx8u wrote

Investigate if you can consolidate some of the high interest debt. You may be able to get a lower interest rate which will make paying it down easier.

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weruroverlord95 OP t1_j6iqeqq wrote

Currently working the snowball method. I understand this is mathematically incorrect, but it's my habits that got me into debt. So far I've got 2 paid off in January so it's working for me.

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infinity_o t1_j6j7j9l wrote

Snowball method is a totally valid approach, but you can do both. “Snowball” the lower interest debts but consolidate high interest debts to slow the bleeding.

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weruroverlord95 OP t1_j6j7rbb wrote

Hmmm. This is a great hybrid method. Another one I was thinking about is to list the highest payment to the lowest. Pay off debt with the highest payment to free up more money per month to put the next one.

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how_obscene t1_j6irpqn wrote

you should be able to pay for AAA all at once instead of monthly, but i guess it depends on what plan you have. and i would get rid if any streaming service unless youre really passionate about one in particular. you can find almost every single movie and episode online for free by typing in the title of it then adding “watch online free” after it. just download the adblock extension and youll have no problems

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weruroverlord95 OP t1_j6isfu4 wrote

I'm thinking of using my income tax to do this. Pay for my insurance and anything I can yearly to get a discount. As for streaming I can probably cut those out. The only thing I really feel my wife and I use daily is YouTube red as it doubles as music streaming.

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nails_for_breakfast t1_j6iyx09 wrote

Cancel the lawn service, cut down to 1 streaming service at a time, find a cheaper barber, and eat cheaper foods until you get that debt paid off

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weruroverlord95 OP t1_j6izcbo wrote

I need lawn service as it is part of my lease agreement. I'm not able to cut the grass as I am deathly allergic to pretty much every insect.

A cheaper barber is not possible. I'm already getting a better price as it's family.

I'm shopping Aldi and heb but will try and cut down food if possible.

Streaming, yeah I need to cut that.

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SpecificLanky513 t1_j6jj8ga wrote

As other has pointed out there may be some areas in which you can squeeze out a few more dollars. Lights is what I would look at depending on the size of your rental. But I just want to tell you good job with your plan of having paid by July. I think $600 a month for 2 people on groceries is pretty good. That is about what my wife and I spend on the two of us. And food can be a good way to enjoy some of the little things.

Any way good job with the budget you outlined, good luck with your endeavor. There may be a few more dollars to squeeze but you already got most of it and this something to recognize and celebrate. You and your wife can achieve this.

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weruroverlord95 OP t1_j6jjpyr wrote

Wow. I appreciate your encouraging words!

I'm switching providers when I can to get the best deal on electricity.

We love to make meals at home together so It definitely double as some fun money when we make something new and exciting.

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Werewolfdad t1_j6ilxyg wrote

Grocery bill seems quite high for a single person, especially one carrying high interest debt

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weruroverlord95 OP t1_j6im7d8 wrote

My grocery budget of $600 is for my wife and I. Also Includes toiletries and food for my dog.

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Werewolfdad t1_j6imauw wrote

> wife

Sorry, missed that.

Can wife work?

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weruroverlord95 OP t1_j6imhde wrote

She is not able to work full time at the moment but does side work for small income Monthly. We tend not to budget it since it is sporadic.

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Werewolfdad t1_j6impza wrote

Well, groceries is the main area you can control. The rest is just small rounding errors effectively. You may be able to cut some of that out but it won't be meaningful. Trimming groceries is likely the only place that you can make meaningful cuts.

try /r/EatCheapAndHealthy

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weruroverlord95 OP t1_j6in1ki wrote

Understandable. I plan on having my debt completely paid off by July. That extra money will come in handy. Thanks for the subreddit tip!

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how_obscene t1_j6is33k wrote

also regarding the grocery bill, which store do you shop at? because you can save a lot of money by switching to offbrand items or stores like aldi/ruler foods/etc rather than big stores like Trader Joe’s/Target/Kroger etc

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SolutionLeading t1_j6imnoz wrote

Does the haircut happen every month or is that just an example of this month’s?

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weruroverlord95 OP t1_j6imrqn wrote

I get it cut once a month. It varies from $50 to $60.

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FckMitch t1_j6irdu9 wrote

Can wife cut your hair?

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weruroverlord95 OP t1_j6irqoa wrote

I'll be completely honest and apologize for sounding vain, but no. My haircut requires a barber due to the cut and fades.

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FckMitch t1_j6iuxto wrote

Just wondering ! Lots of people had spouses cut their hair during the pandemic. But then they were on zoom - don’t know what the back looks like!! 😝

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A3thereal t1_j6indbr wrote

The amounts mostly seem okay, except water. I know this is highly variable by region, but I pay about $50 a quarter in a 2k sq ft home with 3 occupants, nowhere near 75 a month.

Beyond that, I ascribe to the 0 budget mentality. I would recommend adding lines for savings (tax advantaged retirement accounts being the first priority after funding your emergency savings and paying down your high-interest debt) as well as entertainment/travel/leisure/etc.

The entertainment/etc. lines would be rollover. Unused money from one month would go in to an account specific for this/these purposes and any spending on said category should never exceed the rolled over budget. It requires that you pre-fund any trips or leisure activities, avoiding the possibility of funding them at 24.99% annual interest rates.

With this philosophy, your expenditures should equal $3,605. You do lose flexibility, and some will advocate against. You can also create a 'slip' category in there of 5% of your income. This covers overruns in any critical category and any remaining funds here should go in to paying down debt or savings at the close of the month.

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weruroverlord95 OP t1_j6invco wrote

Thanks. I'll review my water bills and check for any discrepancies.

I'm focused on paying off debt right now so the wife and I have cut out "fun" money until then. I've halted savings contribution until then. Plan on having it paid off completely by July.

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A3thereal t1_j6iob2s wrote

>focused on paying off debt right now so the wife and I have cut out "fun" money until then

That's fair, but those additional debt payments should added as a line item as well. I would recommend caution in completely removing 'fun' money from your budget as it makes it difficult to follow your budget. One compromise can easily snowball to the point a budget gets ignored outright. Instead of eliminating consider leaving yourself $50 for a date night to allow the flexibility.

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weruroverlord95 OP t1_j6iopfp wrote

Thanks for that input. That makes total sense. I would imagine burnout after a month or two. Will look into including this on the budget list.

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A3thereal t1_j6iqfb6 wrote

Yeah. There's an excitement to creating a budget, the prospect of financial independence from high-interest debt. A honeymoon period if you will. It fades fast and the reality of adhering to it will hit hard. For some people it's a couple of weeks later, for some it's a few months. It almost always hits though.

Knowing it's in the budget makes it a choice not of whether to follow the budget, but how best to allocate that part of the budget.

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weruroverlord95 OP t1_j6iqphv wrote

Making a plan for every dollar and executing it. I appreciate the feedback, truly!

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FckMitch t1_j6irne1 wrote

Groceries are high. How much is people vs dog?

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weruroverlord95 OP t1_j6is75q wrote

This total also includes out toiletries like toilet paper shampoo washing detergent etc. About $50 is allocated to dog food.

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FckMitch t1_j6iuuk0 wrote

Can you share a BJs or Costco membership w another couple/family? I do! Cheaper for paper products and toiletries.

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weruroverlord95 OP t1_j6ivf6r wrote

Oh yes. Lucky a family member let's us use their Sam club card any time

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No_Expression_411 t1_j6ktlss wrote

I know most folks are focusing on your debt but do you have any savings? I would set aside a small amount each month for an emergency fund in addition to making (ideally) a bit above your minimum payments so you don’t end up with a surprise expense that ends up putting you back farther in debt.

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weruroverlord95 OP t1_j6kxwat wrote

I have a month's worth of expenses set aside. Any extra money or overtime goes straight to debt payments

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