This is the question that Mike asks me often.
Let me give y’all a little background. Mike and I have joint finances. But we actually have different checking accounts. I make less money than Mike and we try to use my salary for living and his for my student loan repayment and saving. My paycheck is not very big, but neither is it pitifully small. Since we don’t use any of it to save, I think we should be able to live on it. But sadly, I am ashamed to tell you that this has not been happening the past few months. We finish all the monies in my checking account in a week and use the credit card to pay all expenses in the next week. We don’t carry a balance and pay it off in full, but that money comes from the amount that we would have saved or paid down debt with. Various items in that category include my trainer fees of $550 for 6 months, a heart rate monitor that costs $100, a rock climbing Groupon for Mike and so on.
I have worked out a basic budget for us, after analyzing our spending pattern for the last few months. I will post it soon, after I am finished tweaking it. But the budget allows for miscellaneous spending of $100 every paycheck. Which means we each get $50 every 2 weeks. But that could become a little messed up. For example, my car registration was up for renewal this month and it cost $75. That means we just have $25 for 2 weeks. Which wouldn’t be so bad, but we just filed our taxes and we owe fees to H&R Block (and also owe $7000 to the IRS,a story for another day when I feel less stressed about it). We just can’t tell the good folks at H&R Block to wait till we save enough, can we? I know a lot of PF bloggers save money in a sinking fund to pay for things like these. But I figured that since it would take a while for my sinking fund to build up, I would tackle these expenses from the amount that I plan to save each month.
Our expenses including rent, groceries, car insurance and so on come to about $2500 each month. And we have 2 car loan payments of $350 and $250. Like I wrote before, we have been paying $2000 towards my student loan (but not this month 😦 ). Once we knock this down, we will have a lot more money free up each month. I also owe $10000 to my parents and I need to start saving that up soon. Apart from loan payments, we would like to save for 2 travel funds – one for traveling within the States and the other to go to Europe. And we would also like to save for a sinking emergency fund to pay for yearly maintenance types bills and also for things like small car repairs and so on. We would also like to save $1500 each month in our Savings account.
After all the loan payments, bills and expenses, we find that we have very little fun money to buy things we want to. Mike hates that he is just not able to go to Barnes and Noble and buy himself a book when he wants to without checking if the budget allows for it. And to be honest I hate it too. It’s like being on a diet. I tell myself that I have to do this for the greater good and that my future self will thank me for it.
My question for the wise PF bloggers out there is, does this actually get better with time?