First House purchase -- Budget -- Advice Please

**Preston** · 06-17-2009, 09:07 AM

I'm working on our budget for our first house. We have lived in an apartment for years where we only pay electricity. In the past year we have gone from having bills well over $100/month to bills near $50 a month. I figure in the house the bill will be higher, but we are also more energy-conscious and I do have a kill-a-watt meter :-)

It is just the two of us and a few cats. No kids. We probably won't be able to have any for medical reasons.

But here is our budget and I'm seeing if there is anything I have missed or general feedback on ways to improve it.

Our general income is about $3600/month take home pay.

Mortgage Payment (plus ins, tax) - $675 however I am budgeting to pay $700 to pay less on the loan over time.
Gas & Electric - $200
Water - $100
Trash Pickup $25

Auto:
Insurance - $41/month (pay $244 every six mos but put this amount into savings for when the bill comes due)
Fuel - $125
Service - $50/month

Misc/entertainment/Dining - $100/month

Cellular - $72/month

Groceries - $200 / month . (includes household items such as soap, cleaners, etc)

I got over $1900 budget surplus leaving room for comfort -- But I feel I am missing something.

I purposefully left out the amount of the debts we owe because those amounts do not change and I am applying extra $$ toward them and paying them off as soon as possible. We will be out of credit card debt by the end of the year.. probably sooner.

Any and all feedback appreciated.

My wife is insisting we get internet ($50/month) but I feel it is not a necessity as it is free at the library. I am having a hard time but I am holding my ground.

**Momto2Boyz** · 06-17-2009, 09:12 AM

Do you need to pay for cable TV? That is the only thing that I see that would be missing from what I have for my budget.

You might also want to set up a home maintenence account. Put a few dollars in that each month, so that if something comes up or breaks down in the house, you have some seperate money set aside to fix it. We learned that when we moved in and our furnace broke down within the first year. Luckily, we had money set aside for "home emergencies" and we were able to fix it!

Other than that, it looks like you have a pretty bare bones budget that includes all the necessitites!

**2ndGenGranola** · 06-17-2009, 09:22 AM

Originally Posted by Preston

My wife is insisting we get internet ($50/month) but I feel it is not a necessity as it is free at the library. I am having a hard time but I am holding my ground.

If I had to go to the library every time I had to research something, we would not be saving nearly as much $$. Having it in the house, I research even the minor things. Just this month the info I found online saved us about $150+.

When DH couldn't get the toilet reset after replacing the wax ring, I got on found the info for him. Would we have gone to the library? No, it wasn't even open at that time.

I have cut out all magazine subs because I can find info online. I could go on and on...

**tervsforme** · 06-17-2009, 09:42 AM

I second the home maintenance account. There are things that pop up all the time. I received a letter from my city telling me that I needed to have some Pressure Valve tested on my sprinkler system. It's something that has to be done every few years by a certified plumber, cost $80.00. While not a lot, it was an unexpected expense. Last year I had to have a dry well put in for the water softener runoff, that was very unexpected to the tune of $700. So, speaking from experience, definitely save some money for household repairs and maintenance.

**cheles2kids** · 06-17-2009, 10:23 AM

The first thing & the biggest (to me) that I didn't see was an E.F./savings account.

Also a good rule of thumb for the upkeep of the house is to average about 10% of your house payment per month to put aside each month for whatever might come your way.
More would be nice, but since you're paying off debt then I would strive for 10%.

Also I didn't see a clothing category? I'm asumming this is included in your "misc." category?

**Preston** · 06-17-2009, 10:49 AM

EF is there I just don't include it in my budget since it's automatic and I am not changing it. I put $100/paycheck in it and don't even consider that usable money as part of my income.

I had a clothing category for a while but found it impossible to track. The way I have been handling it (and the way it works for me) is to just use the EF for clothes (gasp!) Whatever is left over from the 'misc/entertainment' category also goes into the EF. It may not be the most efficient but that is what works for me.

In reality, we already have full wardrobes and as clothes wear our we give them to charity. We also go to Goodwill, Salvation Army, garage sales to find replacements but if that doesn't work we will buy new clothes.... at discount stores. I never pay for name brand.

I got $75 in Macy's gift cards for Xmas last year -- It drove me crazy that that would buy next to nothing in that store. It took me about 4 hours and I only got one pair of pants... I call them my 'gourmet pants'

So fancy that the button fell off a month later.

The only one that throws us off is shoes. I have to keep good work shoes as I work on my feet, however, once a pair of work shoes wears out that because my 'leisure' shoes and once those wear out they become my 'painting/yard work' shoes. I've only bought 2 pairs of shoes in the past 3 years.

Here is next question -- is cable internet worth it?

**savvy_sniper** · 06-17-2009, 11:28 AM

Originally Posted by Preston

Here is next question -- is cable internet worth it?

YES! You seem to have your finances in order. We use the internet ALL the time to research things we want to do/buy for the house. Going to the library would be very inconvenient. The library is NOT open 24/7. We tend to look things up late at night/on the weekend.

I also pay most of my bills online and I wouldn't EVER do that from the library.

**Preston** · 06-17-2009, 04:15 PM

How about this.. best of both worlds.

I am sitting in one of the bedrooms on the house we just closed on with my laptop where I am able to get a wireless signal that I am using to post his here. So we will have internet after all, just free of charge. I guess I'll find out if the neighbor has his computer on 24/7 now.

Obviously I won't use this connection for hardcore gaming, but for basic email and research it will do.

This will be one of my favorite features of the house.

**cheles2kids** · 06-19-2009, 11:14 AM

Originally Posted by Preston

EF is there I just don't include it in my budget since it's automatic and I am not changing it. I put $100/paycheck in it and don't even consider that usable money as part of my income.

I had a clothing category for a while but found it impossible to track. The way I have been handling it (and the way it works for me) is to just use the EF for clothes (gasp!) Whatever is left over from the 'misc/entertainment' category also goes into the EF. It may not be the most efficient but that is what works for me.

In reality, we already have full wardrobes and as clothes wear our we give them to charity. We also go to Goodwill, Salvation Army, garage sales to find replacements but if that doesn't work we will buy new clothes.... at discount stores. I never pay for name brand.

Here is next question -- is cable internet worth it?

Glad to see that about the EF, nothing was mentioned & I just wanted to make sure that all of your basis were covered.

Clothing is a hard one, but I've found if I keep some kind of clothing budget put away each month, then I know I'll have it in case I do need to pick something along the way.

As for using your EF for clothing, entertainment, etc. If that system works for you, then by all means continue on with it.
But for me personally having those categories seperate helps to keep an eye on how much I'm spending in each category as well as making sure that I wouldn't overspend and, in your case, accidently dip into the emergency fund.

I completely understand about shopping at thrift stores/salvation army, there's absolutely nothing wrong with that.

For me personally, I think that internet is worth it. The money that I've saved, being able to research prices of items, watching 'how-to' videos and learning new things, instead of having to pay someone to do those jobs for me, has saved me more money in the long run than what I pay each month to my internet provider.
I think you just have to figure out, if the service it provides for you & your family balances out the amount that you have to pay each month.

Good Luck to you Preston! It defiantely sounds like your on the right track!

**McD** · 06-19-2009, 07:44 PM

Holy moly your water and trash is high!!! Are these fixed rates or based off consumption?

**craftypam** · 06-19-2009, 09:39 PM

I would get on the budget plan for your utilities if you can. I pay $100 a month for gas for 11 months and the 12th month they figure out if they owe you or you owe them. Whats nice is it is easy to budget when it is the same every month. I don't do it with my electric because my dh has a seasonal job and works more in the summer when the ac is on. Also I don't know if you have it or your city lets you do it; but we got a second meter for our water; so when we water the garden, wash the car we don't pay the sewer cost on it. The sewer cost is what is high on the water bill. If my water is $12; the sewer bill is $24. I think your budget is set up very well and you have thought of most. I do like the fund set aside for house repairs although you ef could just as easily pay for it.

**McD** · 06-20-2009, 10:37 AM

Originally Posted by craftypam

. The sewer cost is what is high on the water bill. If my water is $12; the sewer bill is $24.

That blows my mind! The water utility where I work charges 3.43 per 1000 gallons of water. We are the billing agents for sewer and garbage. Garbage is a flat fee of 8$ but is going up to 10$. Sewer is only 2.75$ per thousand gallong. I can't believe sewer charges are so high!

Irrigation meters are wonderous things! They can save people a ton!

**strezzed** · 06-20-2009, 10:52 AM

There are a lot of smaller expenses with a house, which I assume you're using the Misc. category for (eg. you may need more cleaning supplies, you may need furniture, etc.)

**craftypam** · 06-20-2009, 03:01 PM

Originally Posted by MrsMcDowell

That blows my mind! The water utility where I work charges 3.43 per 1000 gallons of water. We are the billing agents for sewer and garbage. Garbage is a flat fee of 8$ but is going up to 10$. Sewer is only 2.75$ per thousand gallong. I can't believe sewer charges are so high!

Irrigation meters are wonderous things! They can save people a ton!

Different people live in different cities with different prices.
I pay nothing for trash and 1.67 month for recycling

**strezzed** · 06-20-2009, 04:02 PM

Originally Posted by MrsMcDowell

That blows my mind! The water utility where I work charges 3.43 per 1000 gallons of water. We are the billing agents for sewer and garbage. Garbage is a flat fee of 8$ but is going up to 10$. Sewer is only 2.75$ per thousand gallong. I can't believe sewer charges are so high!

Irrigation meters are wonderous things! They can save people a ton!

We don't pay anything for garbage or sewer, unless it is hidden in our property taxes. Different everywhere, I guess.