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Homeowners: How much spending cash do you have per month?

DjPiLL Posted:

Homeowners: How much spending cash do you have per month?

I normally don't need advice on things like this... but I am torn on this issue so if anyone wants to offer up... please do so. Here is my story... sorry for the length.

I was about to put in a binder for a house and after discussing with my wife last night... I chickened out because I was concerned I would be stretching myself too thin every month.

My wife doesn't make too much... but I make very decent money... and its VERY decent when I am DJing. I am well over six figures with DJing on just my salary alone.

The problem is... I have been DJing for four years straight now and never really had to 'budget myself'. So I am unsure how much it takes a month to be on a good budget. Plus any budget I set... I CANNOT include my DJ cash because that is not guaranteed work for me.

Another issue I have is... I put a LOT of cash into my 401k every month (over $1000 pre-tax a month). That could be a lot of extra spending cash if needed. I am also curious if people who own houses are still able to contribute nicely to your 401k. I currently put in 15% of my salary (the max at my job).


So... feel free to offer your opinions... or if you want to remain anonymous... just vote the poll.

I am mainly asking... after all the bills are paid... how much money is left each month. As far as bills go.... only count stuff you actually write checks for and mail out (like mortgage, electric, cable, cars, etc.).

When figuring out how much 'spending money' you have... factor in stuff like gas... groceries... clothes... etc... INTO your spending money amount.

Thanks in advance!
DJ
Kra5hnburn Posted:

Re: Homeowners: How much spending cash do you have per month?

Well, I didn't take the poll, but I thought I'd let you know how we're working it.

We set up a spreadsheet on what all out costs would be--mortgage, tax, insurance, PMI, electric, gas, oil, water, school loans, car insurance...etc. Then we put in for $200 each a week for spending money (this would include gas, groceries, etc.). That's how we're telling how much of our salaries we're eating up each month and what we could save depending on each house. That gives $800 a month for overall spending each. My credit card bills (Mine always include all the groceries and any household stuff we need), usually come to about $1000 a month and his are usually less. So we figure, that should be plenty to set aside and maybe still be able to go out a little.

PS I put 10% into my 401K and he puts like 7%.
IrishBride-05 Posted:

Re: Homeowners: How much spending cash do you have per month?

We have over 1,700 to spend after bills each month, but every penny of that is going on the wedding right now. I can't wait for November...

In answer to your 401K question. I only contribute 6% because my company only matches 50c up to a total of 3%, so anything after that is just my input. I will definitely look into other savings options after the wedding, because personally, I like to have varied investments instead of it all going into my 401K. 15% is a lot. I think that would be a good place for you to hold back on if you need the cash in your pay check every month.
DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Posted by Kra5hnburn

Well, I didn't take the poll, but I thought I'd let you know how we're working it.

We set up a spreadsheet on what all out costs would be--mortgage, tax, insurance, PMI, electric, gas, oil, water, school loans, car insurance...etc. Then we put in for $200 each a week for spending money (this would include gas, groceries, etc.). That's how we're telling how much of our salaries we're eating up each month and what we could save depending on each house. That gives $800 a month for overall spending each. My credit card bills (Mine always include all the groceries and any household stuff we need), usually come to about $1000 a month and his are usually less. So we figure, that should be plenty to set aside and maybe still be able to go out a little.

PS I put 10% into my 401K and he puts like 7%.




Interesting setup you have there. I did something similar with DW last night (it wasn't on a spreadsheet)... but I listed out all the bills I currently have now with the co-op and compared it with the bills I would have with a house.

So are you saying you have $800 a month for spending... AFTER you pay off your credit card bills which include groceries... or do you have to buy food with that $800 a month?


september2004 Posted:

Re: Homeowners: How much spending cash do you have per month?

spending cash, what's that?

since we've bought the house we have yet to figure out how much we will have because there is a lot of $$$ going towards initial startup costs. prior to purchasing though, we had calculated very little spending money as anything we have 'left over' will go towards extra prepayments and/or a liquid emergency fund...
patti08 Posted:

Re: Homeowners: How much spending cash do you have per month?

We've used Microsoft Money in saving for wedding and for house. We recently switched to Quicken. Both are great, a little tedious in the beginning but they are intuitive and get much easier after the first few months. Keeping detailed records, every credit card, student loan, cash expenditure and so on. Not a penny comes in or out that doesn't get logged.

First of all it helped us curb some bad spending habits.

Second we have a budget set up now and another for when we are in the house. All utilities, groceries even a monthly 'dining out' budget, an 'entertainment' budget a 'New Clothing' budget and a 'gift' budget.

Above all of that we know exactly how much extra money we'll have each month and knowing that makes us so comfortable as we are getting ready to close on our first house.

I highly recommend using MS Money or Quicken it does so much for us.
DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Posted by patti08

I highly recommend using MS Money or Quicken it does so much for us.



I am going to check this out! Thanks.


After working out our budget last night... I am not sure how much spending money Vanessa would have had. But I am sure she would have been able to get by.

But after all the bills... I would have about $900 buks a month in spending cash for food/gas/entertainment/lunches/etc for me.

For some reason... I did not feel comfortable with that number. If I would have dropped my 401k from 15% to 7%... i would probably have an additional $400 a month after taxes ($1300 total).

Still wasn't comfortable. Maybe I was overly critical on this... since I see people here are getting by with even less spending cash!



Maybe its my extravagent spending habit that I have been used to for the last five years thats killing it for me.
Kra5hnburn Posted:

Re: Homeowners: How much spending cash do you have per month?

Interesting setup you have there. I did something similar with DW last night (it wasn't on a spreadsheet)... but I listed out all the bills I currently have now with the co-op and compared it with the bills I would have with a house.


No, the $800 is to emmulate our spending habits as they are now. That $800 per person is basically our credit card bills that include all our everyday needs, plus whatever clothes, presents, eating out, etc we buy each month.

What the spreadsheet does for us is take our actually monthly take home, subtracts all those other things, including the $800 cerdit card bills, and lets us see how much we'd save at the end of the year. The spreadsheet also accounts for a rental, if the house has one, and how much we think we could get for it.

Now this doesn't account for home improvements. We have money saved to be able to do whatever immediate work the place may need. Neither of us make a 6 figure salary, but we have good jobs.

The best thing is to take the worst case scenario. We put down no rental, really high utility bills, more for insurance and PMI. Then we also worked it out if one of us got layed off and were hopefully on unemployment.

Everyone keeps saying to me, 'Don't worry, you get a lot back in taxes.' I don't want to rely on that. Everything we do, we assume we get nothing back at the end of the year. This is because I know people who set up for home improvement projects based on that extra money, and didn't get back enough to cover it. Anything we get at the end of the year is bonus and gets saved.

I'm all about saving cause you never know!

Blu-ize Posted:

Re: Homeowners: How much spending cash do you have per month?

If I were you, I would consider some life insurance on you since your DW does not make a lot. She will be covered to take care of the mortgage and bills if something should happen to you. Take that into account before you figure out what your net cash is. Keep contributing the max to your 401(k) because it is the best pre-tax investment you can make. Make sure you monitor it and don't leave it hanging there when the market changes. It's easy to make investment changes. As far as cash left, it really depends on the month, since things come up. It's extremely hard to come up with an exact number each month. Everyone is going to be different. DH works somewhat on commission. We both have 2 jobs though and we tend to allow ourselves to spend. We have a house and are refinancing right now which will allow for about another $700/mo cash. Hope this helps.

ETA: When we first bought the house we both knocked our 401(k) back to 10% until we were sure we would be ok with the house payments etc..then once we were ok, we went back to the max. Short time though.
DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Thanks for the suggestions. I recently did a 20year term life insurance with State Farm this month so my wife is protected well.

verdila Posted:

Re: Homeowners: How much spending cash do you have per month?

I think I read somewhere that your mortgage should be no more than b/w 28 and 35% of your income.

DH & I put in 10% each of our salaries to our 401ks and have not changed that since we bought a house. Perhaps, you can move yours down to 10% for now - 15 is great but if you are uncomfortable then I would say adjust that first. Remember, buying real estate is a great investment too, so youre not really losing any money in the long term hopefully.

Personally, we have about 1000 a month each in cash after all bills and I havent felt tight but have decreased some frivolous spending.
DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Yeah... I already have a 2br co-op so its not like I am in a renting situation right now. Money is going towards real estate.

When I used the debt/income ratio calculators... the house I wanted actually put me right at the 28/36 mark (after plugging in my expenses as well).

I installed Quicken and I plan on using it at the start of next month to track spending. I am going to throw all my DJ cash into a savings the day I get it and see how much I do actually spend each month.

I think if I actually had a clue what I spent each month... i would be more confortable with budgeting the house.
violet Posted:

Re: Homeowners: How much spending cash do you have per month?

This is an issue for us too when we get a house.

Someone suggested to me that if I really am hard up for cash but really want a house that's a bit out of my price range, I can talk to my accountant to adjust the deductions on my paychecks. I really don't know how to explain it, but you basically figure out how many dependents you can claim on your W-2 to give you more money back each month (from taking less taxes out), BUT you arrange it so that you end up paying 0 come tax time, and also receive 0. Instead of getting a lump sum back at the end of tax season, you get it back over the year on every paycheck.
DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Posted by violet

This is an issue for us too when we get a house.

Someone suggested to me that if I really am hard up for cash but really want a house that's a bit out of my price range, I can talk to my accountant to adjust the deductions on my paychecks. I really don't know how to explain it, but you basically figure out how many dependents you can claim on your W-2 to give you more money back each month (from taking less taxes out), BUT you arrange it so that you end up paying 0 come tax time, and also receive 0. Instead of getting a lump sum back at the end of tax season, you get it back over the year on every paycheck.




Well... I was just assuming that everyone already did this. I know my spending numbers reflect my after tax dollars... claiming married-15 or whatever it was when I last checked it out.
violet Posted:

Re: Homeowners: How much spending cash do you have per month?

I always filed 0 as my dependents? I never knew that you could file dependents to get more money back (and do it without having to pay money back at tax season).

Blu-ize Posted:

Re: Homeowners: How much spending cash do you have per month?

the number of dependents claimed only represents when you pay the gov't either in each paycheck or at the end of the year. 15 is a lot though..

DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Right now I claim single-0 and I own a 2br co-op. I get a $7000 refund every year.

Using the W4 witholding calculator.. in order to take home more cash every paycheck and break even at tax time... I would have to claim single-11.

I am guestimating single-15 for the house since I would be paying twice the mortgage interest and triple the RE taxes compared to the co-op. But I would obviously check it first.
Blu-ize Posted:

Re: Homeowners: How much spending cash do you have per month?

Do you file a sched C for your DJ income? If so, do you write it down all the way to 0 or show a little each year?

I don't really trust the claiming of more than a few dependents because of flagging issues at the IRS. We both have decent jobs with decent incomes and second jobs that pay most in cash. We each claim married 1 and end up with about $6k and the end of the year total. With a cash biz you have to be careful about how you claim and what can flag you. that being said, claiming 15 could be a red flag.

I learned the hard way.
DjPiLL Posted:

Re: Homeowners: How much spending cash do you have per month?

Good to know.

I do know my boss claims married 13 on his taxes. And he still gets back like 1000-2000 buks in a refund. He is probably over six figures on his salary.

I worked it out... if i claimed single zero on the house i wanted to get... i would be getting back a 12k refund!

The main issue is... my job takes out a LOT of taxes from my paycheck because I make a decent salary. I would need to negate that by claiming the appropriate number of dependents.

violet Posted:

Re: Homeowners: How much spending cash do you have per month?

I really like getting that big amount of money at the end of tax season (we get a really good amount as it is even without the house), but I do think it'd be a good idea to get more money on each paycheck rather than a big chunk of it at one time if it's to make ends meet for a nice house. Eventually as our salaries would go up, I would probably like to change it back to claiming 0 (or more if we have kids then).

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