Help fix my household budget - VeggieBoards
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#1 Old 07-11-2011, 07:41 PM
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Here is the scenario
You are head of a family of four.
Wife can’t work due to illness or injury handicap etc..
Kids, age 7 and 10
Income is impressive at 100k a year.
Taxes between state and Federal after all is said and done comes to 39%
You are left with a respectable 61k to live on.
The payment on your modest 5500 sq ft home is 3100 a month, or 37,200 a year
The payment on the BMW is 700 a month or 8400 a year, Wifes mini van is old but in good shape and paid for
Utilities for the home are 350.00 a month 4200 a year
Food costs you a modest 125 per week 6500 a year
Auto insurance 2500 a year
Credit card payment 100 a month, 1200 a year

1000 a year is left after payments to use for family outings, college funds, retirement, emergencies etc…
If this was your situation, how would you go about fixing this issue?
Again
Income 100,000 a year
Taxes 39000
Mortgage 37200 a year
Car payment 8400 a year
Utilities 4200
Food/household supplies 6500
Insurance 2500
Credit card 1200
1000 left over after all is paid.
Find me a college fund or a vacation fund.
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#2 Old 07-12-2011, 10:27 AM
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I think you can do it.
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#3 Old 07-12-2011, 12:09 PM
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I'm a bit reluctant to comment because I think any specific suggestions might be resented.

I think you can start with going to the public library to read up on budgeting. If 9 out of ten books tell you the same thing, you may have a better chance of accepting it.

I think you should also look into seeing a financial counselor. You should be able to contact people at fairly low cost through banks or debt management organizations. Or you can find pricier ones, as you wish.
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#4 Old 07-12-2011, 12:18 PM
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What is the interest rate on your mortgage? Can you refinance, maybe pull out some money to pay off the car and your credit cards and then stay debt-free except for the house? Are you putting away for your retirement? You have a very expensive car and a big house - are those things negotiable?

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#5 Old 07-14-2011, 07:07 AM
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Paying off the credit card and the car would be a good idea as suggested but I noticed that there's no place in the budget for regular misc items like clothes, school supplies or regular household items that need to be replaced once in a while, do they all come out of that 1,000 or the credit card?

Your taxes seem a little high. Do you get your tax filed by a professional? I think it's very likely that your itemized deductions (mortgage interest, property taxes, state taxes) are higher than the standard deduction.
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#6 Old 07-14-2011, 07:32 AM
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I believe that you are house poor. My income is similar, my mortgage is $2,000 a month and I rent out part of my home to reduce my expenses even more.
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#7 Old 07-15-2011, 03:16 AM
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Quote:
Originally Posted by Fatman View Post

If this was your situation, how would you go about fixing this issue?

Reduce housing expenses to less than 1/3 of net income (better to make it 1/4 or less)
or
increase income.

Assuming you live in the US...
Remember that many retirement accounts and for some college savings accounts, the money can be invested pre-tax. And both your kids are old enough to work for a family business (and have their incomes invested into college accounts), which could function as another way to syphen off your income pre-tax to reduce your taxable income and increase your household net income. Also, states like Nevada have no state income tax. But mostly, your home is just a little too expensive for your income.

This is not financial advice. This is just what I might consider doing were I in the same situation.
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#8 Old 07-15-2011, 03:38 AM
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And both your kids are old enough to work for a family business (and have their incomes invested into college accounts), which could function as another way to syphen off your income pre-tax to reduce your taxable income and increase your household net income.

I'm interested in hearing more about how you'd move forward with a family business employing your 7 and 10 year old children.

"Yes! Live! Life's a banquet and most poor suckers are starving to death!" Auntie Mame
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#9 Old 07-15-2011, 04:59 PM
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http://biztaxlaw.about.com/od/employ...ngchildren.htm

Edit to add better link:
http://www.irs.gov/businesses/small/...=97748,00.html
Obviously, it depends on your business and it depends on the kid. Some 8-year-olds can handle feeding animals for a pet sitting company and others can't. Some 10-year-olds can can test and organize the equipment in your video game repair shop and other 10-year-olds can't. Some 14-year-olds can pass out 50% coupons at a fair and others can't.

On I sold Girl Scout cookies since about age 8 and I was pretty good at that. During summers I often had a lemonade stand or I would go door to door asking to wash people's cars. When I was 11 I had a paper route and I was terrible at actually doing the job but I was great at delegating to other kids in my trailer park Unfortunately, I was too much of a push-over to collect the payment, so I lost that job. When I was 14 I was an excellent motel maid. I worked alone and could clean a room in 15 minutes. Now, of course, I hate cleaning. But I have a pretty strong work ethic when I work and I think that's partially because I was encouraged to earn money from an early age. So I think it's a good idea to give kids chores and jobs that are age-appropirate and that help them build skills.
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#10 Old 07-15-2011, 05:10 PM
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Quote:

About.com, always authoritative...

I really don't think a vegetarian message board is the best place to get this kind of advice. But that's just me. It would be kind of like asking for advice on how to fix your car here, you know what I mean? Not to mention the added risk of posting personal financial information publicly on the internet -- it's just a bad idea.
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#11 Old 07-15-2011, 05:43 PM
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the thing that impresses me most about your stats is that housing is a very high % of your disposable income. this would tend to make you 'house poor'.

how do you get out from under this situation? i have no idea.
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#12 Old 07-15-2011, 05:47 PM
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oh yes, and it seems to me the beamer is a bit much. i drive a 6 thousand dollar truck i paid cash for.

what you have that i don't have is a big house and a nice car. what i have that you don't have is freedom from the man. i'll take the second option any day.
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#13 Old 07-29-2011, 07:02 PM
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All responses here were what I would call good sound advice.
basically, downsize.
Now in reality, this is not my situation, I am actually in a modest size home, actually small but large acreage for the DC area. I have two cars, both paid for in cash when I bought them. A boat that is paid for and a travel trailer that is only 200 a month payment,
Im doing good.

The reason I asked this was because of the current fight in congress going on with the budget. It seems that the governments answer is to acquire more debt to make payments on the current debt, any talk of downsizing is not being taken well at all.

It seems that those that did respond to this post agree with me. Cut spending and cut expenses. Its the only way to work out of this problem. more debt is not the answer.
Not one person suggested I take on another credit card to use to make payments on the existing cards. Not one.

All is not lost, common sense still exists in this country,, just not at the top.

again, sorry for misleading you but I wanted to see if anyone would suggest a foolish way out.
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#14 Old 07-29-2011, 07:32 PM
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again, sorry for misleading you but I wanted to see if anyone would suggest a foolish way out.

Duplicity of this nature is in poor taste and is disrespectful to the membership who put effort into assisting "you" in the lie of a scenario that you constructed.

"Yes! Live! Life's a banquet and most poor suckers are starving to death!" Auntie Mame
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#15 Old 07-29-2011, 11:35 PM
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With how much you make it seems like your mortgage payments are too high. I'd downsize to a smaller house with a smaller payment per month.
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#16 Old 07-30-2011, 06:06 AM
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Quote:
Originally Posted by Fatman View Post

All responses here were what I would call good sound advice.
basically, downsize.
Now in reality, this is not my situation, I am actually in a modest size home, actually small but large acreage for the DC area. I have two cars, both paid for in cash when I bought them. A boat that is paid for and a travel trailer that is only 200 a month payment,
Im doing good.

The reason I asked this was because of the current fight in congress going on with the budget. It seems that the governments answer is to acquire more debt to make payments on the current debt, any talk of downsizing is not being taken well at all.

It seems that those that did respond to this post agree with me. Cut spending and cut expenses. Its the only way to work out of this problem. more debt is not the answer.
Not one person suggested I take on another credit card to use to make payments on the existing cards. Not one.

All is not lost, common sense still exists in this country,, just not at the top.

again, sorry for misleading you but I wanted to see if anyone would suggest a foolish way out.


I guess I should have went with my original idea of telling you to rob a bank. It would have been funny.
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#17 Old 07-30-2011, 08:00 AM
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At first, I thought you had made this thread just to brag, which I didn't think was very nice. Now I see that it was meant to rip on the government, which also isn't very nice.

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#18 Old 07-30-2011, 08:23 AM
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Comparing household budgeting to government budgeting makes little sense to me. Families don't wage wars, take care of veterans, build highways or protect our borders. They don't have space missions or manage air traffic. Few have to fight terrorism on numerous fronts or maintain national parks. Governments have long-term commitments and contracts that go on for years, and a huge number of employees to provide for. This constant refrain of "American families have to live within their budgets, so should the American government" is catchy, but unrealistic. The government budget has to be fluid. We spent our last surplus on two wars. If we have to have a balanced budget, we won't be able to attack anybody!

It is our choices that show what we truly are far more than our abilities. ~A. Dumbledore
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#19 Old 07-30-2011, 08:41 AM
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Wow, the second person this month to use the "Social Experiment" card on VB!
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#20 Old 07-30-2011, 01:39 PM
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Quote:
Originally Posted by Poppy View Post

If we have to have a balanced budget, we won't be able to attack anybody!

I can right off hand think of a few hundred countries that might be happy about that prospect.

As far as the rest of it goes. Yes the government has to be ready to perform certain tasks that are directed in the constitution, however there are also things (like obamacare) that are not actually in the best interest of the financial standing of this country. Those sort of things should not be on the table, and should not be in the budget. Same with welfare, for some reason its protected, but God forbid you are a teacher or something.
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#21 Old 09-23-2011, 09:17 PM
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That large house is expensive, and fancy cars are a waste of money. I'm surprised food only costs so little with a family of four.
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#22 Old 11-19-2012, 02:37 PM
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Its good that your rethinking it. Your just one major life event from loosing everything.

 

I'll give one more vote for the house and the fancy car being the problem.

 

If living like a rich man is making you poor other options would include live moderately or live like a poor man and get rich.

 

Sell the fancypants luxury car and buy a dependable used car. My little pickup looks nice, is inexpensive to repair, is rock solid and only has a bluebook value of $2,500. You dont need a $25,000+ car bought on debt.

 

You also dont need a huge and luxurious house, bought on debt, for a family of four. Thats actually bad for the kids, they get raised being accustomed to decadence being the norm and get in debt too deep when they buy their own. Beyond that, with such a big house when theres a family problem they can just avoid each other. In a small house people cant avoid each other and are statistically more likely to try and work through their problems. Sell the house and buy one half its size.

 

Good job on the food budget. It seems you spend too much on the things neighbors and friends can see?

Sometimes people have to choose between ego and safety.

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#23 Old 11-19-2012, 03:07 PM
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This thread is old; the OP is a banned conservative voice here.
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#24 Old 11-19-2012, 04:47 PM
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Wait, did the bumpers post get deleted or did a year-dead thread really show up on page 1 of 'New Posts'?

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#25 Old 11-19-2012, 04:50 PM
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Originally Posted by Auxin View Post

Wait, did the bumpers post get deleted or did a year-dead thread really show up on page 1 of 'New Posts'?

The bumpers post got deleted, it was a spammer. It can be confusing when old threads get bumped! I've gotten used to glancing at the date but I've been tricked before. tongue3.gif

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