My hubby and I both work full time and make decent money. I want so bad to stay home with my girls and we are down to one debt (truck pmt) so we think we can finally do it without having to dip into our savings to survive.

So, I made up a budget (first time ever). I know pretty much what things are like utilities, etc. but I wasn't sure about grocery bills and things that you don't expect a lot. I put $400 a month for groceries. Is that too low? We buy a half a beef once a year and that meat takes us most of the year, so that's a big expense off (although I do have to think about that coming in the fall).

Things I've decided to cut are:

Long distance on our house phone since I have a cell phone that I have another year on my contract - also call waiting can be dropped

I'm going to downgrade our dish from $63/mth to hopefully $30.

I spend between $200 and $300/mth on gasoline to drive to work and back - won't have that.

We pay my MIL $150/mth to watch the kids and $20/wk to clean the house - won't have those either... although I'm going to miss the cleaning!!!

We are going to try to do this for the next 2 months to make sure we can do it and then I won't be quitting until October when my contract at work is up.

Any advice on anything else I can cut? or any advice on budgeting at all would help.

Thanks!

The fact that you are starting out with very little debt is great! You can do it if your heart is really in it. Your grocery amount is about what mine is. This site will help you a lot. Good luck!

Sounds great!! You definitely are going in the right direction!! Hope you accomplish your goal!

you are in a good spot. with no debt besides a vehicle payment. i would make sure that besides the savings you ahve, to also have an emergency fund set up, that you could use to pay a bill if you are for some reason strapped for cash and that way you don';t have to dip into your savings. you coudl also try to have in a different account enough money for 2 months of rent or mortgage payments. then you are really set up, with next to nothing to worry about.

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An emergency account would be a great idea. I was thinking of keeping some cash in case of emergency, but I guess that's too easy to just spend. Maybe I'll set up a separate account. My hubby lived a home with his folks till we got married (he was 35) and he saved quite a bit that we bought a cheap house and fixed it up and it's paid for, so very lucky for me we don't have to deal with a mortgage.

Thanks for the tip!

Sounds like you are off to a great start! I recently started staying home, and one thing that was helpful is that we don't eat out at all anymore. Now that I am home I am able to really plan our meals and groceries and make everything at home. We ask for restaurant G.Cards as a gift for a B-day or X-mas and that way we can use them on our anniversary or just a much needed night out. Also, for the kids for X-mas my parents got them a membership to the zoo as one of their gifts and my inlaws got them a membership to the children's museum, so that gives us fun things to do together at no cost.
Also, the library is great for getting DVD's for the kids and the local Y has great kid's programs. Good Luck with everything! Keep us posted

Actually, when you stay home with your children, some expenses go away and some expenses increase. Since you'll be home with your girls, you'll want to take advantage of some of the programs in your area - even if it is just a weekly playgroup or story time at the library. You WILL be driving and using gas.

Also, if your MIL is taking care of the girls at her house, then you will experience a slight increase in your utilities because you will be home using the electricity and heat. You'll also be eating three meals at home, as will the girls. Your MIL won't be feeding them lunch and snacks anymore.

A nice frugal amount to spend per person, per meal is $1. If the baby is on formula, that might be a bit more. If you use pre-mixed baby food, you'll have to budget extra for that, too. Your other daughter won't eat much but you might find yourself having to spend more for food just for her if she is a picky eater.

Anyway, if you have 4 people in your family, that is $4 a meal, time 3 meals a day or $12. That would be $360 a month, plus any pets you have to feed and your non-food groceries like cleaning supplies, diapers and TP. $1 per person / per meal isn't luxurious eating but it can be done. My recommendation is you start pricing out what your current meals are costing you, then see what would be reasonable for the way you cook.

When I decided to quit, I lived for a certain amount of time on entirely hubby's salary. I banked as much of my income as I could - using my income for only work related expenses like the daycare and extra gas.

Do keep in mind, your taxes will change when you stop working. When you do your taxes this year, see how much you would have paid in income taxes bases on both your incomes, then again on just your husband's income. You may be surprised how much it is costing you to work. As soon as you quit working, plan on changing your husband's withholding to reflect any reduction in taxes you'll pay. You can calculate your husband's withholding at the irs.gov website.

Lastly, make sure you take into account non-recurring and unusual expenses. For instance, do you pay life insurance annually? If your life insurance was provided by your employer, you'll want to purchase a policy separately to cover you. You'll have to take into account car repairs, house repairs, property taxes, medical expenses, dental care, hobbies, seasonal items, clothing, toys, gifts, charity, entertaining, and vacations.

Lastly, you'll want savings. And you'll want to continue to fund a savings account even after you quit work. Not only do you want an emergency fund, you'll need room in your budget to regenerate it if you have to tap it.

I'm not discouraging you from quitting work, quite the opposite! I think it is a wonderful idea. Just go into it with your eyes wide open. My inspiration was "The Tightwad Gazette". I still keep a copy on my desk.

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"Poor people work for their money. Rich people make their money work for them."

Keep an EF in a place that's easily accessed because if an emergency pops up, you want to be able to get to the money quickly vs having to wait a few days, say an ING savings where it takes a couple days to transfer the money to your checking.

If you enjoy the cleaning, then maybe ask your MIL to barter with you. Offer to mail her stuff when you go to the post office or pick up her groceries if she will continue to clean the house. If not, get the girls involved. Dd is 2 but loves to sweep. Ds folds laundry for me.

It will take a few months for your budget to be perfect. Until then don't get discouraged. Be flexible, expect small surprises and anticipate for them. I sort fo use the envelope method- things such as groceries I pay cash for so I withdraw the cash on payday. Utilties are paid electronically so I keep that money in our account. I withdraw ALL cash we need in one swipe then divide it up.

400 per month is reasonable- start with it and see how it goes. Pay only in cash, put change back in the envelope or whatever you chose. If you make it ok with that, then keep with it. By paying in cash you will be more focused on reasonable spending vs writing a check or using a debit card where you don't physically see the cash.

Any possibility you could start paying more on the truck to get it closer to being paid off by October? I don't know what you have left on it. IF you can start living on hubby's income alone *now, use your paychecks toward the truck debt and an EF.

I think you can print off the free spending allocation sheets on www.daveramsey.com. THese are great, makes things so much easier!

For annual costs such as the side of beef, divide the cost by however many paychecks you will have between now and then and that will give you the amount you need to save out of each paycheck for the beef.

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Devin

David 6, Alexis 2

Indymomof3:

Thanks for the advice. I will miss eating out. We usually eat out every Sunday after church. We've already decided that we can do that once a month, hopefully, if not that will be OK too. But, that's a good idea to ask for GC for such things. I already take my kiddos to the library almost every Saturday. They usually get a load of books and one movie each. I do plan on continuing that and maybe taking them to the park once in a while on our way home.

Cookie2:

Thanks for the tips. It will be interesting to see how our taxes will change. I want to work it our both ways to see, like you said. What is "The Tightwad Gazette"?

DevinM322:

I've heard Dave Ramsey on the radio and never thought to look at his website. I've been looking at it for the past half hour. Lots of goodies on there, thanks!

That's a good idea to pay for groceries in cash and keep it in an envelope. If you don't use it all in one month do you keep it in there for the next month or put it in savings?

Our truck should be paid off in March of 2008. I am hoping to save enough from my checks from now until October to pay it off or come as close as possible to paying off.

Thanks again everyone, I am forging ahead with this and I'm sure I'll be here a lot for advice!!

Man I guess I'm doing pretty good! There are three of us, and with this allotment, I'd spend just $270 on groceries alone, not counting diapers or other household needs. In reality, I have about $250 (at the most) to spend on everything for the month. Sometimes it gets pretty hairy, but stockpiling, getting coupons from a coupon clipper (so I can stockpile the sales), and shopping at cheap food stores (Aldi's and other stores like it), help me to do okay. There's always room for improvement, but I'm patting myself on the back for a job better done than I thought!

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