how much money for discretionary spending in family budget?

dglvrk2 · January 2014

We're expecting DD#2 in 20 days (yeh!). I've spent the last few hours going over our budget from the past year, looking at average expenses and factoring in daycare and other expected costs (diapers, supplies, food eventually etc) for our second LO. I have a pretty solid idea of what our expenses look like for 2014. (BTW, Mint.com is great for this!)

Being generous - ie budgeting an extra $20-50 over what we usually pay for most regular expenses - we have about 10% of my and DH's take home pay left at the end of each month. We would use this money for wants like new clothing for ourselves, date nights, other entertainment and home improvement projects. I'm wondering if this is enough.....or if I should try to cut corners on a few budgeted items such as gas, phone (we have expensive plans and could cut back), and groceries.

I did set aside some money for savings each month already too.

Any suggestions are much appreciated.

TIA

djm31012 · January 2014

I always think the more savings the better . If you have places you could cut that won't impact ur life too much id say definitely cut them out. Then maybe just see how it goes the first few mos. if you are spending every dollar of that 10% each month it's time to reassess . If not then you can sock away even more for a rainy day which is never a bad thing .

Iblamethebeer · January 2014

Hard to answer, because there are two big variances here.

1. What do you consider discretionary? Is vacation included in that? All clothes for grown ups? Gifts? Home maintenance? birthday parties and Halloween costumes and christmas cards? Like if one month a family wedding swallows the whole discretionary category, would you be having to cancel your scheduled haircut and put off drycleaning or would you just bringing your own thermos of coffee into work?

2. What is 10% in dollars? Are we talking 10% on gross income of $20k per month or 10% on net income of $3500 per month? If it's the former and discretionary is really like pocket money, then I am jealous. If it's the latter and discretionary is everything not *really* necessary, then I might cut phone plans and try to build up a bit of a slush fund from the grocery money.

(I don't expect you to answer these questions, just explaining why you might get wide variance in responses)

VitaLuna · January 2014

I agree that 10% can be quite variable depending in your income. We spend <5% on joint activities per month (date night, activities, etc), but we each direct deposit 20% of our checks into our personal accts to use for whatever we want/need (clothes, gifts, etc).

groovygrl · January 2014

Yeah ,that is too tough not knowing what 10% equals or what discretionary means. I think of it more in terms of dollars for what you would like to be able to do each month since % is so different from one family to the next.
My personal discretionary is used primarily for my own clothes, gifts for my own family &friends, travel/entertainment that is just for me (e.g. a dinner w/ a friend or a girls weekend w/ friends), other miscellaneous things like books or things from amazon that are for me, etc. If I have extra in there, I transfer it to savings. I often do have extra but then like to hang onto a little of it if the holidays are coming up or MH's bday or if I want to go do a big clothes shopping trip (I tend to do a big shopping purchase a couple times a year rather than buy things throughout the year b/c I hate clothes shopping).

dglvrk2 · January 2014

Thanks, everyone. The discretionary money is about $1100. We already have money set aside for some anticipated expenses in 2014 including a new washer/dryer and possible re-flooring in our living room. I predict it will be a little tighter with a new baby, but doable. We don't go to expensive restaurants and other costly date nights very often. We each take a girls/guys trip or two each year. Fortunately with DH traveling as much as he does, he builds up a lot of frequent flyer miles, so airline tickets are rarely an issue. (Single momming it is more the challenge!)

LoCarb · January 2014

It sounds like budget wise you are in a good place. I would work with your budget and after a few months determine if you need to cut additional expenses for your needs.

jf198400 · January 2014

It sounds like you have a decent chunk for discretionary items, I would honestly try to put more of it into savings. I also don't think it's bad to cut down on other expenses if you can. I recently looked at lowering our auto and home insurance and cable/internet costs, not b/c we needed to, but just b/c every little bit adds up.

thedash · January 2014

That amount would be comfortable for us, given a separate savings for big ticket items like appliances and flooring. The only thing I wonder is if it would make more sense to break out "home improvement" to its own savings category instead of taking it from discretionary. But this is coming from someone with a townhouse built in the late 70's that we are constantly working on! If you're just doing a $100 mirror or $200 chair every few months then I'm sure it's fine.

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