Now that we’re nearing the finish line to the new baby, I decided to redo our budget to realistic means. Spending time with the baby while he’s still a newborn has always been of paramount importance to us, so my husband is going to go back FT to work starting Sept/Oct with consulting work in the meantime. This is the budget that we’ll use when we settle (finally) into our little house in August.
Realistic is assuming the following:
1. I can’t guarantee I’ll get a job that works for our family quickly so I’ll disregard any possible income for myself. I’m looking for a PT job – we’d be able to work our schedules around the babies so we’d save greatly on childcare. If I don’t get a job, we don’t have to pay for childcare. If I do get a job, it’ll probably be in the morning which means we can at least save on childcare – keep it to a minimum.
2. My husband is expecting to make $50K per year, which is the decided upon number between him and his old employer.
3. We are able to refinance our house – our mortgage broker is waiting until we have paychecks to show the banks.
4. Nothing catastrophic happens.
Realistic is not including the following:
1. The PT job that my husband is working now that brings in about $440 – $880 a week. This will fluctuate, and he might decide that when he goes back FT with his old company he doesn’t want to take the time away from family for the PT job – it’s far away and though he works 12 hour shifts they only pay him for 9.5. Drives me batty.
2. Any PT jobs I’m able to do, or the possibility of becoming a VOA which I’d like to but am slightly confused as to how to start.
3. Any employer paid health insurance.
4. Any money he makes consulting.
The Numbers
$3480 – after tax estimated take-home
($1100) – refinanced mortgage amount
($200) – utilities
($170) – cell phones (looking into Virgin Mobile’s new prepaid smartphone plans which would cut this amount down greatly)
($500) – food/groceries
($400) – auto/transport (A very high estimation of auto costs as we have 1 Honda Accord that gets pretty good mileage and we pay auto insurance avery 6 months – but would prefer to hedge on the side of unknown auto costs. Plus that would include any unknown bus costs, etc.)
($400) – high deductible health insurance for the entire family (put aside $10K in a separate savings account to cover annual deductible)
$710 – Remaining
Where to save…?
My husband and I are both in the camp that retirement is the most important thing we should be saving for, so that remaining $710 would go into our IRA’s.
The query…
After we put aside $10K into a medical e-fund to cover the maximum annual deductible for health insurance for the family, and after a couple more months of low-to-no income, I’m not sure where our regular e-fund will be. We have about $10K in dividend stocks we could cash out to refund our e-fund, but I sort of don’t want to do that unless we need to. I’m estimating that we’ll have between $5-7K left in our e-fund after the next few months – assuming the worst in expenses (e.g. our car insurance payment just came up, in case our refinance takes longer than expected, etc.). That leaves…
$10K in medical e-fund
$10K in dividend stocks
$5-7k in regular e-fund
Assuming that…would you refund our regular e-fund to the $10-20K amount that I’m more comfortable with? Or would you do what we plan and fund our IRA’s for the future? And any extra on top of that shove into the e-fund? Thoughts?
Obviously this means we don’t save for a house yet – but that definitely was a given until I can find a job. Also we don’t touch any retirement savings for any reason, unless absolute emergencies.
I like to have a fully funded E-fund just because I like to be comfortable and not worry as much. Maybe you could fund them half and half with each paycheck?