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First Paycheck = FAIL!!!

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I received my first full paycheck at my new rate of pay. I was shocked that it was much lower than I had anticipated (even after using a couple online calculator programs to try to accurately predict take-home pay).  My expectation was that I’d earn somewhere between $5-6,000/month take-home.  The reason for the large range is that I have a LOT of money coming out in pre-tax deductions, including:  medical and dental insurance, Flex Spending Savings accounts for health and dependent care, and 7% retirement investment (required and matched by my employer). In total, I have 20% of my check removed pre-tax. Taxes remove another 20% of my paycheck. So when looking at my base weekly salary compared to my take-home pay, I’m only actually bringing home 60% of what I earn (to be fair, I’m saving money by being able to pay a portion of medical and childcare from our FSA with pre-tax dollars, but our FSA has caps that we exceed, so some of those expenses are still paid out of my take-home pay post-tax).

After all deductions, my first full paycheck was for a total of $2269. I get paid bi-weekly, so we’re talking about $4500/month for most months (except for the odd month with 3 pay periods). This was a huge shock, given that we’ve been quite accustomed to budgeting for literally double that income amount.

I’ve never shared exact income numbers before on the blog because it made my husband feel uncomfortable for his business earnings to be shared and analyzed. But now that he’s shut his doors down and it’s all me – I feel fine with sharing my personal income. Guess what, y’all….my salary is $95,423/year. That’s with my big raise. I was originally hired at $55,000 two years ago. I guess there’s some disconnect in my brain or something because I thought $95k sounded like “BIG MONEY.” When I got my raise I was overjoyed – I was expecting a huge, wild difference in my rate of take-home pay. Under $5,000/month was NOT what I was expecting. Call me spoiled or privileged of whatever else you want (and I own that I am some of those things – I’m lucky to have the job I do), but this was a huge shock.

So although it feels like “starting over” (although it’s not!!! We’re still down nearly $80k in debt over the last 3 years), it’s definitely a come-to-Jesus moment. Hubs and I have had to totally start over on our budget with fresh eyes. Thinking about how to continue making progress on our debt reduction journey while simply surviving (here, we thought we’d be “thriving” with this huge raise). Some tough realizations have been made:

  • Hubs must keep earning an income somehow. Hubs has run a successful flooring business for almost a decade, but recently quit to go back to school. Many people have commented that he should keep his business going for some side-income, but it just doesn’t work that way. Unless you’ve owned a business in the construction trade before, you probably don’t realize how expensive it is just to maintain the proper insurances, licenses, etc. Hubs is NOT the type to do business under the table without the appropriate certifications. It’s a big problem in his industry (and where we live, in particular), and he was not about to go that route. But to just keep his insurances and licenses up to date cost several thousand a year. When we looked at what he was bringing in part-time versus the costs to keep the company legal, it just wasn’t enough to make it worthwhile. And, maybe surprisingly, the flooring trade is not as flexible with a school schedule as we need. Hubs’ first semester back was this past Spring and he had many stressful calls from employees (or worse, home-owners) with issues that demanded immediate attention, while he was still stuck in class for many hours to come. All in all, this was a losing proposition for our family. So now we’re trying to think of more flexible and accommodating ways that hubs can earn some side-money while in school. So far brainstorming has included: driving for uber or lyft, doing some type of food delivery, and perhaps trying to become a personal trainer. Remember – hubs has been big into health and fitness the last couple years, so the latter is his preferred method, but it will also take the longest to get started and requires additional research first. Any other ideas?
  • Food consumption has to get under control. A friend recently posted on facebook to inquire about how much her friends’ families pay per month for groceries. The most common number I saw was $250/week. I have to say, for the past couple of years since I’ve been working 2 jobs, our food budget has been way over $1,000/month (including groceries + eating out). I mean, $1,000/month was a GOOD month. But remembering back to when I first started blogging, it hasn’t always been this way! In fact, my original grocery budget was only $400/month!!! And I stuck to it! To be fair, it was never easy. I would spend a TON of time researching sales, carefully planning meals around sale items and food we already had in our pantry or freezer. I would easily have to go to 2-3 stores per week to get the best priced items (Walmart does their ad matching, but our local Walmart doesn’t have great quality produce). I’d also make a ton of items from scratch. Everything from breads and homemade granola bars to fruit leather and yogurt – even baby wipes I made myself for cheaper than could be bought bulk at Costco. Between ad searching, meal planning, grocery shopping, food prepping, and scratch baking, I probably spent a good 10-15 hours/week on my efforts. It paid off big-time in terms of money saved, but I just simply lacked the time when I started working full time (plus kept my part-time job, on the side). When I accepted my big raise I had to sign a non-compete so I had to leave my part-time job. So even though I still work full-time, I have significantly more time in the early morning/evening/weekend hours to try to devote to some of my old grocery-saving ways. I don’t know that it’s reasonable to get back to only $400/month. But I think if I shoot for $550-600/month (again – that’s for all food: groceries + eating out), it would be a huge savings over our current spending. I’m going to give it an honest effort for the month of August and see how I do.
  • The budget, in general, needs to be slashed. It’s scary how easy it’s been for things to creep up over time. When I first started blogging all our gifts were in the $10-15/range. Recently our gift-giving has been closer to $25-35+/gift. Hubs and I have both rejoined a gym. It’s very important to hubs (and he spends legitimately a ton of time there), but maybe I’ll cancel my own membership to try to save some money since I’m perfectly happy to run outdoors for free as my preferred form of exercise. I also had a friend recently mention that some health insurance companies offer discounts for gym memberships? I need to call Blue Cross, Blue Shield to inquire about this. Spending across the board needs to come down.
  • Debt payments??? Probably the hardest thing to accept is that our debt payments are going to drastically decrease. We’d grown accustomed to throwing thousands a month toward debt! I’m talking many months where we were paying $2500-$3000/month toward debt!!! Obviously if I’m only bringing home $4,500, there’s no room for a $3,000 debt payment. It’s just not possible. So we have to adjust expectations, adjust our 2017 financial goals, and just keep plowing forward, making as much progress as possible with what we have to work with.

So, ultimately, we need to cut our expenses AND try to find a way to increase our income. There’s not much wiggle room for me (since I can’t pick up side work in my current industry), but I think we can try to find solutions to get hubs some part-time side gigs. My focus will be best spent on trying to reduce our food expenses, since that tends to be our #1 monthly expense (cumulatively speaking. And yes, I know how ridiculous that sounds, but it’s true).

So there you go – I’ve laid it all out on the table. Next up will be formulating a solid budget plan and figuring out how to juggle our debt payments. Especially now that we owe $1,000/month to the IRS from our poor planning last year. Ugh! But baby steps here – if I think about everything at once I become overwhelmed so it’s one thing at a time. We now have a solid “income” figure so we know what we’ll be working with in terms of take-home pay. Now it’s time to figure out how to make our outflow match with our inflow and to find additional areas to cut back.

 

How much does your household spend per month on groceries (and how many people are in the household)? How do you save money on your food budget?

Ashley

Texan at heart; Arizonan on paper. Lover of running, cheese, camping, and family (fur-family included!). Blogger, motivated to get out of debt YESTERDAY! Follow along with my journey!

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73 Comments

  • Reply Angie |

    Time to update your w4. Even if you think you have it correct, if your employer is taking out too many taxes you may wish to change it anyway to get more in line with your taxes owed. Is this something you may have changed when you first started in order to have more taxes taken out of your paycheck to cover self-employment taxes?

    Unfortunately, this might be affected by your IRS debt. Better read the fine print carefully.

    • Reply Ashley |

      Yikes – who would I even ask about this? A CPA? You said “read the fine print” but I don’t even really know what that means. I’m starting at square one here! (gulp!)

      • Reply Angie |

        There’s some fine print next to a box you have to check at the bottom of the W4 regarding past tax debt if I remember correctly. It is to ensure you are not fibbing on your W4 and owing the IRS a lot at the end of the year, multiple years in a row.

        • Reply Kim |

          there is a nifty calculator on the IRS website that works for me. Standard deductions, and child care deductions are all in the calculator. IRS.gov > tools > withholding calculator

    • Reply Jen From Boston |

      Makes sense, especially now that your husband isn’t working I think you could take an extra allowance.

  • Reply Laura |

    You need to count what will be reimbursed from your FSA in your budget. Yes that is not reflected in your take home pay on your paycheck but you get that money back and it should be counted as income.
    Also like Angie said above check your W-4. With a nonworking spouse that could affect your withholdings.
    Could your husband work as a flooring person for someone else part time since he already has that skill set?

    • Reply Ashley |

      I could include the FSA as part of our budget, but I’ve never included those expenses as part of our budget (they’re just paid directly on our FSA card), so I don’t know that it makes a ton of a difference. Either both (income & expenses) are included or they’re excluded.
      Thus far, I’ve only included expenses outside of our FSA in our budget. For instance, I don’t include childcare costs that are covered from our FSA. But our childcare FSA maxes out at $3500 annually and we pay close to $1000/month in childcare, so we quickly hit our FSA max and pay the rest out of pocket. Anything over/above the FSA is accounted for in our budget, but any payments directly from the FSA account are not recorded in the budget given that I don’t include FSA money as “income” in our budget. Does that make sense?

      • Reply Laura |

        Yes that’s does. My apologies, with my FSA it is deductes from my check, after that I have to pay the bill first, then submit the receipt to be reimbursed. I didn’t realize yours worked the way it does.

        • Reply Ashley |

          Oh that makes sense! I still have to submit my receipts for verification, but I do have an FSA card so I’m able to pay for accepted expenses directly from the FSA account. : )

          • Laura |

            I’m glad you figured out what I was trying to say with all my typos :). I hear you on it not covering everything. We can put $5000/ yr for childcare in the account and used to pay for then that for our one kid. When he started kindergarten that went down quite a bit so there is light at the end of the tunnel for you :).

  • Reply Honey Smith |

    Sounds like hubs has time to research and shop the sales. He should take over grocery duties.

    • Reply Ashley |

      While true in theory, I don’t know that this would work. We try to work to our strengths. I do better with price comparison, thrifty shopping, etc. Hubs has picked up nearly all the house-hold chores (laundry, cleaning, childcare, etc.), but I don’t think he’d be able to find sales like I can. I mean – anyone can get better at it, but it takes a certain “knack” and it just comes more naturally for me.

      • Reply Laura |

        I think it makes sense for the main cook to do the shopping, so if that’s you then continue to be the one to look for the deals.

        • Reply Ashley |

          Cooking used to be 99% me. Since hubs has stepped back with work he’s stepped up more with cooking, but I’d still say that I do the majority (probably a 60-40 split)

      • Reply Lisa |

        Please check with your Walmart for their price matching. Most of my state has stopped price matching last year in October. The only option is the savings catcher…and it doesn’t price match anything that is per pound.

  • Reply Juhli |

    Can’t you use gym facilities at the university for no or low cost? Otherwise it seems like you have let expenses increase and need to make the effort to bring them down as a team.

    • Reply Ashley |

      Students can, but faculty cannot. So that might be a possibility for hubs, though I know he likes having multiple locations available (he can still go while we’re back in Texas, etc.). Still, though, something to think about.

      • Reply Juhli |

        Many gyms or YMCAs offer a day rate for vacationers so you could probably find one to use the few days he would want to do so.

  • Reply Susan |

    Imo you’ve been making many mistakes lately that could have been avoided. Simply asking others who earn as much as you would have given you a better ballpark take home figure. You lifestyle has been out of line with your income for quite a while and I’m glad you’re seeing the light now. It’ll get easier as you adjust your budget. Unfortunately, 100k salary really isn’t a lot different than 60k but so many people don’t realize this.

    • Reply Ashley |

      Your last sentence = TRUTH!!! But – how? why? It still blows my mind!
      And I have to humbly agree. Many mistakes have brought us to this place. Nothing like waking up to a $2200 direct deposit to make me see the light! Agh!

      • Reply Joe |

        I can understand the sentiment that 100k is like 60k in that fundamentally ones lifestyle would be similar. But let’s not kid ourselves: it makes a huge difference – the difference between living a lifestyle or living that same lifestyle except saving an extra 2.5k/month give or take.

        • Reply Susan |

          I think the main lifestyle changes from 60/70k to 100k are things like being able to fully fund retirement savings, appropriately fund emergency savings, etc. Some piece of mind. Others might spend the extra on something like a safer car or finally being able to take savings paid family vacations. Even more probably blow it on food, new cars, etc.

        • Reply Shauna |

          I don’t find that there is a huge difference between the two. I think the big difference here is a tax rate bump since all the income is coming from one employer. If you have 2-3 smaller jobs taxing you like you’re making 25k-35k a year with some deductions you are barely taxed ( not even looking at self-employment tax figures). While I do have a large portion (20%) of income going to my 401k to catch up on my retirement savings due to being barely employed I’m also taxed out the nose so I take home less than 47% of my salary.

          • Joe |

            There is no “big tax rate bump” that makes 100k equivalent to 60k. That’s not how the tax code works.
            I think we are all saying basically the same thing with respect to lifestyle, but the plain truth is that making 100k gives you much more breathing room than 60k, all else being equal.

  • Reply scarr |

    Our grocery budget is about $200/month for 2 of us. We are very strict about not eating out – including not going out for coffee, so that budget includes most of our monthly food. We are lucky in that we live close to a few different grocery stores that have a range of prices and discounts.

    I know what you mean about lifestyle creep. We paid off my student loans in the beginning of 2016. We have been saving for a house since then and we’ve done great if you don’t know how much we wasted not planning for some things like car/renter’s insurance premiums or yearly vet bills. I feel so stupid for falling in the trap. AND it felt good not having to pay off debt and instead just buy something I’ve wanted for a while.

    So, while we overall are still doing great financially, there were plenty of times I made excuses for budget busting instead of cutting frivolous expenses.

    If your husband does side gigs like Uber/Lyft you may need to look into taxes as well. I think you should speak with a professional since you seem to be out of your element about some of these tax issues (which is not a judgement on you, we can all be great at everything). Good luck on your new budget, you two will figure something out!

    • Reply Ashley |

      I think you’re right that a meeting with a professional is in order. We hired a CPA for our 2016 taxes so I may try to go back and meet with him again, given that our 2017 financial picture is so completely different than 2016’s was.
      In terms of your $200/month grocery budget – can I ask for a few of the types of meals you make? I only ask because on my friends’ fb post there was ONE other person who commented $200/month and when I asked her the same question she never replied. I’m assuming some vegetarian meals (since meat tends to be $$$), but I’m just curious in general about the types of meals that make up staples in your diet since $200/month would be like a life-changer for us!!!

      • Reply scarr |

        ** in my previous post it should have read we CAN’T all be great at everything lol oops!

        My husband and I are pescatarian so we eat a lot of fresh fruits, vegetables, beans, lentils and rice. We make a lot of our own snacks, sauces and dips from scratch and we bake our own bread. Our grocery bill for the last week was $57, some weeks are more some less. I try to get us to do a “cook from the pantry week” to keep our food expenses down. Our weekly grocery list looks like this (some things are bought once a month not every week):
        * Produce: leafy greens (spinach, romaine, kale, etc), red & orange peppers, sweet potatoes, cherry tomatoes, red onions, baby carrots, cucumbers, various other seasonal veggies, bananas, whatever other fruit my husband likes and may be in season,
        * Bulk items: Green lentils, red lentils, variety of beans (we have a pressure canner and can our own beans in bulk), white and wheat flour, oats
        * Dairy: Yogurt, cheese block (if on sale), feta cheese cottage cheese, eggs
        * Almond or soy milk, tahini, spices and herbs
        * Off-brand soda, beer, corn chips

        A few times a year we make a trip to Costco for bulk items like white & brown rice, tp, tissues, tuna, tomatoes & tomato paste. We don’t really get much produce there or anything else, mostly dry goods.

        Our weekly meals are a lot of vegetable dishes served over rice or veggie burgers or tuna salads and sandwiches. For breakfast we have either toast and yogurt/cottage cheese or I make a green smoothie. We make a big dinner and eat the leftovers every day for lunch: this past week we had: Lentil loaf with mashed potatoes, curried cabbage over rice, bean & cheese burritos with chips & salsa (we can our own salsa, too), salmon with vegetables, grilled sweet potatoes & vegetables over brown rice w/Thai peanut sauce. Saturday & Sunday are kind of DIY days – lots of salads and random dishes prepared with leftovers. We bake bread on Saturday or Sunday for the week.

  • Reply [email protected] |

    I would leave the W4 where it is. If you get a big tax return next year — great, you can pay a chunk of your student loan and adjust the W4 then. I feel like you’ve been too optimistic about taxes for a couple of years now and even if it means your budget is tighter for the next six months than it strictly needs to be….

    I also don’t see why you can’t get the groceries down to $500 a month, with effort!

    • Reply Ashley |

      You make a good point. Also, it’s really only the next 5 months (Aug-Dec), right? And given that we owe so much for taxes as-is, paying a little bit extra to the IRS might not be the worst thing in the world. I do want to do it in a smart way (I hate giving the government an interest-free loan), but I think there’s really bigger fish to fry. I’m looking at you, budget!!!

      • Reply Meg |

        If you still owe for past taxes you may not get any refund at all. The IRS may just keep it to offset the amount owed. Yet another question for the accountant.

  • Reply [email protected] |

    p.s. could your husband be a part-time worker for other floor contractors? Fill in when they have big jobs? Seems like it might be better money per hour than driving or food delivery.

    • Reply Ashley |

      I don’t know – the hourly is usually about $10/hr starting, up to $12/hour. Plus its hard manual labor. He’d probably do better with food delivery given the tips, etc.
      Also, I don’t think contractors are very flexible with their help, in general. The flexibility thing is pretty big since schooling (and childcare) take forefront responsibilities over a part-time job.

  • Reply OneFamily |

    I’d take a look at the W-4 worksheet (you can find online at irs website) and see if you need to adjust your withholdings, especially with your DH not working. What are you currently claiming for the number of allowances? I’m assuming the 20% pre-tax deductions for healthcare, FSA and 401K were in place before the big raise?

    • Reply Ashley |

      Uhhhh……this was an eye-opening activity. In reviewing my W-4 tax forms, I currently have 1 allowance. When I reviewed the W-4 worksheet from the IRS’ website, I should now be claiming 7 with our current situation. Whoa! That should make a big difference!!!

      • Reply Walnut |

        Chat with the accountant before making any adjustments. You’ll still want to take into account any income your husband made in the first half of the year. Ideally, your relationship with your accountant doesn’t need to be a once a year occasion. Use them to help you with tax planning earlier in the year.

        • Reply Ashley |

          Yes, I was thinking that, too (since hubs was still drawing an income for the first part of the year). This year it’ll probably be a more complicated picture than in future years.

  • Reply Sarah |

    My DH’s salary is about what yours is. I would caution you to run the numbers before adding to your husband’s load with side jobs. The tax burden of the extra income could possibly negate any financial gain. And it might be more of a burden on your family life than you want. It might not be what you expected, but you have a healthy income. You are probably going to have to readjust your debt repayment plan. You will not be able to throw those huge payments you have been used to and your debt will take longer to repay. When your girls go to kindergarten, which isn’t too far off, right?, you should see a significant bump with the reduction in child care costs. Use that for debt. Meantime, you say you have gotten sloppy with the budget. Work on that and you might be surprised with what is left. I don’t see any reason why you can’t live comfortably on your income and continue to make steady progress with your debt.

  • Reply Kiki |

    Take a look at the site, “The Prudent Homemaker.” She has a lot of good low-cost recipes and ideas about building a pantry too. I think it would inspire you. She has 8 kids and sometimes only spends $200/month on food. As you tweak your new budget and cut costs, I think you will find ways to throw more at debt. You may have to go gazelle for a while to tighten things up a bit. No more cruises for a while! 🙂

    Good luck as you settle into the new normal.

    • Reply Katie |

      I love that site! Also, onehundreddollarsamonth.com for great recipes and frugal ideas. Thumbs down from me on driving for Uber, you’re an independent contractor, which has tax implications, and in the end, just don’t make much. I always encourage students to try and find a job where you can study at work. Oftentimes, that can be at the front desk of someplace, working off hours. If that’s not in the cards, then seriously look for a job in the field you’re studying, that experience will be valuable when looking for a post-graduation job.

  • Reply Joe |

    Ashley, again I always hate to be critical but this is very reminiscent of the IRS situation from last year. I suggest you try to get a better estimate of your actual tax liability, as opposed to what is being withheld. For instance, my quick calculation based on 2017 tax brackets, assuming your 20% pretax are not taxable, and standard deduction with married filing jointly, is that your liability is somewhere around $9000, e.g $750/month or $375 per paycheck. This is for Federal only.

    I caution I am not a tax lawyer, but this is a very simple calculation that anyone can do. You can visit this link, among many others like it: http://taxfoundation.org/2017-tax-brackets/

  • Reply Cathy D. |

    Also, find out if any of your husband’s college costs are tax deductible! My accountant found some deductions for us when we paid for our son’s college tuition and expenses.

  • Reply Tina |

    Hey Ashley,

    What about working part time at a do it store like lowes or somewhere with an employee discount. If you work at Walmart you get a discount which could lower your grocery bill while getting extra money. Also, maybe your husband could look into a YouTube series on flooring. It is minimal money at first but could build with some effort.

  • Reply Margann34 |

    I have a family of 5. We spend about $500- $600 per month on food. We really don’t eat out much. If we do, it is usually cheap fast food. We buy meat in bulk ( as in half a beef) and have a large freezer for storage. We cook most meals from scratch. I buy whatever is cheapest. If I need cheese, I buy the cheapest. Same for butter, milk, flour, sugar, etc. Some items I only buy on sale like brand name chips or certain fruits and meats.

    • Reply Lisa |

      Family of five here too. My budget is 125 per week for groceries and toiletries/dog food. I don’t do the coupon/sales shopping, but with a strict list for the week’s meals I have been able to stay in this budget.
      Maybe Michigan has cheaper living costs? I’m not sure.

  • Reply Janie B. |

    I’d be reluctant to encourage your husband to drive for Uber or lyft. It’s proven to be a dangerous occupation for some folks.

    • Reply Jen From Boston |

      And the financial returns might not be worth it. For example, you may have to pay a higher insurance rate.

  • Reply Sarah |

    I know you work for a university. Find out if the gym has a special rate for university employees. When I joined a gym, they asked if I was affiliated with a company. Maybe they will have a special rate for you and hubby.

  • Reply Kili |

    Regarding the side job situation:
    What is it your husband is studying?
    Will he eventually work in that field?
    Would it make sense for him to already look for side jobs in that field so that he already has prove of some experience once he graduates?

    Could the skills from the flooring business be used in other work places eg could he work for a carpenter?

    Regarding the grocery budget: would shopping at Aldi help save some money?

    Like others have said:
    Make sure you definitely check if the side jobs will actually result in more take home pay for the both of you or if other deductions will increase leaving you with more work but not more pay.

  • Reply Shauna |

    I don’t know if I’d worry too much about your husband earning extra income right now. You’ve got an adjustment period coming up this fall with your full time position and his class load. The fact that he is able to provide a portion of the childcare is great both financially and for the family time. Plus it’s not like he’ll be in school forever, and the girls will go off to school soon as well.

    I’d say focus on the food budget and settle into a routine. Even with your current take home pay, IRS situation you’re still able to pay all your bills including paying down those pesky student loans even if it’s not as fast as you’d like.

    Like another poster commented if you have an ALDI shop there. I know there are some that are better than others, so maybe try a few out if you have options. Also cooking from scratch makes a huge difference. I know in some areas you can find groups that get together occasionally and do batch cooking together, like a freezer club. You can learn some good tips on different things to prepare ahead of time to make cooking during the busy week easier.

    I’m sure you can figure out a great budget now that you have solid numbers to go on.

  • Reply DIY$ |

    Gotta love taxes…

    Our family of 6 spends around $600/mo. in groceries and $200/mo eating out. Our kids are still pretty small and don’t eat a ton, but this is without really even hunting for sales/coupons.

  • Reply Teri |

    I think you guys are still doing fine you just have to adjust your expectations for debt payoff for now. Maybe take the next couple of months to tighten the budget and see where you are once childcare costs begin to go down and food budget gets under control again. Imagine how stressed you would be if hubs were in school and you were carrying the amount of debt you started with! Your family has come VERY FAR; please don’t lose sight of that! You will get there…..it’s a marathon this year, can’t be a sprint. And that’s fine! You’re still making good progress–don’t let the paycheck shock get you down. 🙂

  • Reply MH |

    Long time reader, first time commenting. Your salary of $95K works out to $7917 per month gross. You say that you lose 40% in taxes and other deductions, which leaves you with $4750 each month. I am not clear why this figure is a surprise….I do not understand how you could have thought you might bring home $6K each month. This is not a snarky comment–just trying to understand your thought process….I agree with other posters that before your husband takes on a side job you might want to see how things go in the fall with your new responsibilities and his courses….

  • Reply Rachel |

    It’s true you’ve become reliant on higher income, but you can adjust! I think things will get much easier once you don’t have to pay for childcare. There are probably a lot of benefits to having hubby around more often, and the marginal tax rate for his additional income will likely be high. He gets to take home 75% of every dollar he earns out of taxes. So I would say make the income be worth it, or use the additional time to tighten things up at home. No point in working more if it causes you to eat out more and to forget things because you are crunched for time.

    Also, in terms of driving for Uber/Lyft, do your research! Your car insurance can be null and void for some providers if you work for them. If he does drive for Uber/Lyft, make sure you are properly insured and tracking mileage to deduct all the wear and tear / gas as a business expense!

  • Reply Kate |

    Do you read the frugalwoods ? They talk a lot about eating healthy for little money. Budget bytes is another good resource.

  • Reply Jessica |

    I’m a household of 1, so these numbers/ideas might not be useful to you, but take it for what it’s worth. My grocery budget is $100-120/mo for just me. Here are some things I do to make that work:
    – I base my meals around cheap staples. I do include some meat, but rather than using a pound of ground beef or turkey for tacos, I make a bean/meat mixture to stretch the meat.
    – I always have a back up meal on hand, even if it’s something simple like PB&J or pasta and sauce. Some work days are hard and it’s nice to have something on hand if you just can’t even think about coming home and spending more than 10 minutes preparing food.
    – I try to be realistic with myself about what I’m realistically going to prepare and how much fresh fruit and vegetables I will eat. My dream self makes elaborate meals and eats a ton of fruits and vegetables everyday, but my real self can’t wait more than 30 minutes for dinner to be ready or fit in 7 servings of vegetables a day. So I’ve had to learn to be honest with myself about that so I don’t waste food or grab something because what I have on hand is too elaborate.

    I love, love, love reading and talking about food spending and how to save on food, so I hope you’ll keep us updated on your progress in this area.

  • Reply Jen From Boston |

    Yeah, looking at your gross pay versus your take home can be really brutal. On the plus side, you are saving for retirement now!!

    So, two quick thoughts:

    Income: Maybe your husband could get a part time job at Lowe’s or a local hardware store? From his flooring experience he could be a pretty helpful sales associate.

    Cutting Costs: Would it be worth it to join a Costco or the like? I know there’s an annual fee, but you can get decent quality food at a lower cost and buy items in bulk. That could help cut your grocery bill.

  • Reply Ashley |

    I have been a group fitness instructor for years, so I am in the fitness industry. Being a personal trainer can be a great part time gig, but it is a lot of work to get started. You have to study and take a national test, then work to get your client list started. It can take quite awhile to actually get a solid list of clients- just FYI. Another good option would be to try to get a part time gig staffing the front desk of the gym. You usually get free membership and they often have odd shifts available (really early morning, late evening, etc).

    • Reply Ashley |

      This is a great idea – free membership saves us the membership fee, and I’m sure it’s a flexible schedule. Thanks for the comment!

  • Reply Jerome |

    With a family of 6, with 2 being very hungry teenager boys, our monthly household budget is 700$. Included in this is 2 take-away evenings per month and all household stuff like cleaners etc. My personal way of saving money on food is basing all my cooking on my 50 standard recipies I use. I use these since more than 10 years, refining them on the way, and it really helps in planning and saving.

  • Reply Nicole |

    First, give yourself some grace and recognize how much you have accomplished. Full-time and part-time jobs, dedicated mom of young TWIN girls, kicking major debt butt for years…awesome!

    As always, tons of great comments here. Aldi is terrific, great produce and super prices. I recall you might not have one nearby though.

    Go for the biggest budget wins and don’t sweat the little stuff. For example, homemade bread in my house would be too much effort with very little savings. Consider the effort required, food amount consumed, and $ amount saved. And your interest level…some people love baking, others love chopping veggies and even call it stress relief.

    Your family’s tastes and food preferences can shift the budget dramatically. Meatless meals (noodle dishes, mexican with rice/beans/corn/cheese, breakfast for dinner, eggs, etc) can help. A huge container of oats provides a lot of cheap breakfasts. There are recipes for make-your-own instant packets, overnight oats if you want a cold meal, or jazz them up in your own ways.

    Not that you’re ready for another expense but a stand-alone freezer can pay for itself quickly with stock-up sale savings and the ability to cook ahead. Maybe a future item.

    BudgetBytes.com was mentioned (love it!) Also goodcheapeats.com

    Talking with an accountant might be helpful. Personally I would leave the W4 as is this year. I understand the thought of not wanting to give an interest free loan to the IRS, but we’re over halfway through the year so it’s not that long and likely not huge money (at least the lost interest portion). It would be nice to get a refund next year you could throw at debt instead of another surprise bill. Obviously as close to $0 owed/refund as possible is ideal, but with your many changing circumstances all year it’s a muddy picture.

    Consider your husband’s side income opportunities carefully. Depending on rate of pay, your tax bracket could make it hardly worth the effort and stress. That said, the Lowe’s/Home Depot idea sounds pretty good and might offer great flexibility.

  • Reply Sarah |

    I think it’s important to point out that your original estimates were fairly close (5k a month take home) to what is actually happening. $2,269 x 26 = $58,994. Divide that by 12 = $4,916 per month. You are counting on that amount to fit neatly into your calendar month, which, of course, it won’t on an every-other-week paycheck. But in the end, you’re still bringing home that amount of money and you just need to adjust how you pay bills and how you think of your income. Seems like you are freaking out without thinking through the bottom line.

  • Reply Janie B. |

    Another thought: some busy people set up a predictable schedule of meals. For example, Monday= pasta night; Tuesday=tacos; Wednesday=soup and grilled cheese sandwiches; Thursday=breakfast for dinner; Friday=fish; Saturday=pizza night; Sunday=chicken. You can vary the “sides” to keep the meals from becoming boring, but having a framework in place can save you the headache of deciding “what’s for dinner?”

    If you want to be really adventurous, you could set up a second week’s meal plan; then alternate it with the first week’s plan. Week #2: Monday=sub sandwiches; Tuesday=pork; Wednesday=chef salad; Thursday=beef stew; Friday=tuna salad sandwiches; Saturday=beans and franks; Sunday=meatloaf.

    Also, you might want to make friends with your crockpot!

    • Reply Ashley |

      I think this is a great idea. I do have a list of “common dinners”, but I have probably 50 items on the list and, often, it’s just too much. Having a very simple plan like you’ve outlined could simplify and make things easier – no thought involved!

  • Reply TPol |

    50+ comments! I was going to say your food consumption can easily be cut in half with some careful planning, cooking extras during the weekend to freeze and etc. There are many frugal blogs which tell you how to make muffins, lasagna, casseroles to freeze. Eating out can easily be limited to once or twice a month at most if you are ready to do some cooking over the weekend. I do not know if you have ever heard about the Tightwad Gazette. See if you can get one through your library but I think owning one is surely worth it. I admit some ideas there are extreme but yet it is very educational and fun. Good Luck figuring it all out and getting rid of that debt.

    • Reply Ashley |

      Thanks for the tip – I haven’t heard of Tightwad Gazette, but I’ll look into if I can get it from our library.

  • Reply Allison |

    My husband and I are both very busy with work, and we spend about $200/month on groceries, and another ~$50/month eating out. I lift weights so protein is a must. Some of our staples are black bean burgers, curried lentils and greens, stir-fries, bean/veggie soups, chili, soba with tofu and veggies, quinoa loaf, and chicken fried rice. We eat out once every week or two as a planned treat, never because we got home late or were tired. That’s what grilled cheese is for. A pressure cooker makes cooking beans from dried super-easy, so we do that on weekends and then cook with the beans during the week. Dried beans, lentils, tofu, and the odd rotisserie chicken are crazy-cheap, then we spend the rest on staples (milk, eggs, butter) and whatever fruits and vegetables are on sale.

    (I also have a PhD and earn almost as much as you but only take home $3400/month.)

    • Reply Ashley |

      Thanks for the tips on inexpensive proteins/meals! That’s so tough to live on! I know people get by with much less, but I really think there was just a disconnect in my own mind. Hearing my annual salary figure, I assumed I’d be bringing home substantially more than I really am. I mean, at least $ is going toward retirement, FSAs, insurances, and other very important things that we’re lucky to have. But still…..it was just a wake up for me!

  • Reply Matt |

    I walk away with approx. 5k each pay check (biweekly) with approx. 2800 in take home pay after taxes. My grocery budget is approx. 400/month for myself

  • Reply Chantal |

    First, I am thinking of your parents every day and hoping that they are recovering as quickly a possible.
    My husband and I changed careers returning to graduate schoo, at UT Austen, when we were aged 32 and 40. We went from Academic university teaching to librarianship and museum curatorship. Much lower salaries but a lot of job satisfaction and steady advancement. We had debts, only up to $43,000 but it seemed like a whale of a lot at the time (beginning of 1980s). We had to hop around some for better positions and came to rest in the Mid Atlantic. Where we have stayed. I no longer worked from 1993 (ill health issues and in 1999 we lost many of our possessions to Hurricane Floyd–some debt again but not much–we bought furniture from Goodwill and The Salvation Army.

    I would say to you–take the long view. The matching 7% is very good; you will end up with a generous pension. We started a similar one when we made our final move in 1993 We also began a private investment fund which can be cashed if necessary.Our previous positions were not vested and the pension funds were meager (Delaware–not a State we recommend) We felt that we were starting at the beginning again.

    Buying a house, while it may lead to all sorts of unexpected expenses, is a very good move. If you stay in Tucson the mortgage will begin to seem very reasonable. You will have the incredible advantage too of free college education for your daughters–what a gift.

    Your husband is young enough for a second career in many fields–good luck to him. Meanwhile, don’t underrate him! He can learn shopping and cooking with the best of them.

    We are now retired with a net income between us of $73,200 per annum. Very comfortable and
    we will inherit quite a large sum one of these days from my 94 year-old mother-in-law. With what you are now doing you have very calm waters ahead so enjoy the journey to them, with all my best wishes.

  • Reply JayP |

    It’s very eye opening to bring in a great salary and not take home much of it. It doesn’t get much better either unfortunately. I make 133k and take home right at 3k bi-weekly. I think earning a salary is the absolute worst way to make money due to the taxes. On the up side, once your debts go away the take home goes so much further! Keep your eye on the prize and don’t be discouraged. The compounding of investments helps too. I love the mint ap where you can watch your net worth move up each month. I find that my time invested in saving money, travel hacking etc really pays off. Our biggest thing is trying to control our spending, when convenience is key when both work and have kids. Good luck!

So, what do you think ?