New here, currently living in Stupidland

[mudgestache]

Just turned 40, SAHM to 3 daughters. Money is currently the bane of our existence. Husband and I have 1.5 years left on a chapter 13 bankruptcy and I'd like to make the most of our "clean slate" when it's done. We aren't really allowed to save up money at this point but we'd like to get our life in order so we can do some serious saving when our bankruptcy is done. Hubs is moving on up in his career and he enjoys his job. We bought our house at the bottom of the market so it's almost doubled in value at this point. Less then 10g in 401k and set at 4% right now. We can't increase that at all right now. No ER cash.

I'd like to drop many expenses right now and the Hubs says he agrees yet any action is met with much resistance. Guess I'm going to have to baby step it for the next year or so. :(

[Retired To Win]

...bought our house at the bottom of the market so it's almost doubled in value at this point. Less then 10g in 401k and set at 4% right now. We can't increase that at all right now. No ER cash...

For now, you'll have to consider that 401k as your ER cash.  You might also plan -- after your bankruptcy settles out -- to set up a HELOC against that increased house value.

I'd like to drop many expenses right now and the Hubs says he agrees yet any action is met with much resistance. Guess I'm going to have to baby step it for the next year or so. :(

You might want to start with changes that are in your primary control and that would have minimal/low effects on your husband.  Success with those could open his mind to further progress.

[mudgestache]

For now, you'll have to consider that 401k as your ER cash.  You might also plan -- after your bankruptcy settles out -- to set up a HELOC against that increased house value.

HELOC? I shall Google that immediately!

You might want to start with changes that are in your primary control and that would have minimal/low effects on your husband.  Success with those could open his mind to further progress.

I hope so. Thanks for your response!

[Prairie Stash]

If you can't save can you increase your mortgage payments?

[TrMama]

You might want to start with changes that are in your primary control and that would have minimal/low effects on your husband.  Success with those could open his mind to further progress.

I hope so. Thanks for your response!

I call this leading by example. I biked to work for a year before my husband spontaneously decided he was going to bike as well.

If you SAH, you're probably in charge of meals and grocery shopping. This is something you can save a ton of money on, if you plan and shop carefully. Use the extra to pay off the house, or buy items that will save you money going forward. Such as low flow showerheads, which you can install yourself when your DH is at work . . .

Cut your own cell plan to bare bones, cut all the channels except the ones your DH watches from your cable plan, etc.

[mudgestache]

If you can't save can you increase your mortgage payments?

I can not :( Basically the way it works is your court appointed trustee gets your mortgage payment and all income past your approved expenses and then they pay your mortgage payment for you and put the rest into an account that gets divided among the rest of your creditors at the end of your plan term. Our term is 3 years total so we have about another 1.5 years to go till we are in total control of our money. The Hubs got a promotion so we do have a little bit of money we can keep and if we cut expenses lower we can keep that too but oddly enough you aren't allowed to build and ER FUND (kinda counter intuitive) so we spend it on approved expenses when we can. For example, home repairs/upgrades like new windows or increasing energy efficiency. We don't have enough to do new windows but that's just an example. We've spent most of our on orthodontic work for the kids because that's an approved expense for them.

[mudgestache]

Yes @TrMama, I think that is probably the best way to go!

[domustachesgrowinhouston]

Are the children indentured as well?  Legally, children can contribute to IRA's so long as they earn the money themselves.  Would they be allowed to stash an emergency fund, again provided they earn it themselves?

[MrsPete]

A couple questions:

- If your kids are old enough for braces, they're not small children -- why, if your family is in financial straits, are you not working too?  Once your year and a half is up and your financial restraints are removed, that'd be the time for you to add a second income to speed forward your retirement goals.  With that in mind, now might be the time to begin preparing yourself for that:  Build up a professional wardrobe from consignment shops, start making contacts, etc.   

- What got you into bankruptcy the first time?  Once your term of "indenture" is over, what will be different so that you aren't one of the families who gets back into the same situation again and again?  Your husband's increased income is one thing in your favor, but that alone probably isn't the answer. 

And two comments: 

- I don't find it counter-intuitive that you're not allowed to build up savings at this point in your life.  Any extra money should be going to the people to whom you owe money -- that is the cost of having a portion of your debt forgiven and getting that clean slate. 

- I would not consider a HELOC.  A HELOC is a loan with your home as collateral, which means that if you fail to pay, you lose the house.  Your house is your biggest financial asset, and with a shaky financial background, I would not want to see you gamble it in any way. 

[Deano]

This may seem silly-but you can save cash. Put it in a safety deposit box-tell no one!

[brizna]

OP, if the bankruptcy was your fault from bad planning or overspending, I wouldn't suggest a HELOC or a second home, especially if your husband isn't on board with cutting spending. The last thing you need is more debt.

It's probably moot anyway since your credit rating is presumably wrecked.

Good luck though. I'd love to hear the full story behind the bankruptcy.

[Elderwood17]

Sounds like you have been through a lot, but are heading in the right direction.  baby steps in the right direction sure are better than steps in the wrong direction, or standing still.  I would definitely be looking for any ways to raise any extra income through side gigs, etc.

Good luck and keep us posted!

[mudgestache]

Don't know why I didn't get notifications on these replies. I apologize for the delay.

As for why we got in trouble in the first place...I could give you the slew of things that happened but I can't pretend it doesn't boil down to being our fault. We didn't mean to be so stupid. Our finances changed right after we bought the house and we just didn't realize how bad it was at first. By the time we did we were perpetually behind on the mortgage. I called to see if they would work with us and they told me that if I stopped paying till I was 4 months behind I would then qualify to have my payments reworked. They assured me that was all I could do to get straightened around. So that's what we did. I called every month and every month they assured me the minute I was 4 months behind they would rework it and bring me current. So we get to 4 months and I call and all of a sudden...they tell me I have to talk to their lawyers now. I'd been saving those payments so I had most of the money but of course now I needed a lot more to cover lawyers fees. We only did the bankruptcy to protect the house. We did have some other debt but not tons.

As for the ER fund and my comment on it being counter intuitive, it's not that I don't think the creditors should get paid. I argued with our attorney when he told us all the ways we could use to pay even less. We owe that money and they should get paid. My beef with the system is they take people who have been irresponsible and then they require them to keep doing things that can get them in trouble. Do you know what I mean? I don't think we should get to build big amounts but it seems like a grand in the bank for things like car repairs is reasonable. Also, they made us base our payments on numbers that included overtime. Now again, I agree they should get that money but I think it should be a side calculation not part of the original monthly payment. At the time, we only got overtime for 3 months out of the year but the rest of the year was a straight 40. It didn't end up being a problem for us because our pay structure went to salary shortly after that but it was nerve wracking at first.

I don't work for medical reasons. I do some side work here and there when I can but I can't take on a regular job. As for what's changed...we have. While the Hubs resists Mustachian levels of spending cuts, he has no issue with living below means. I did catch him reading the links I sent him though. I think I can get him to come around.

I know this all makes me sound like an idiot. I swear I'm not. This is all just very different from how I always thought about money. This all makes so much more sense.

[mudgestache]

Part of that didn't come out right. This won't happen to us again because we won't be taking on any more debt. We've already agreed to pay on the house, fund retirement and not buy things we can't afford to pay cash for. My new goal is to get Hubs to see what can be done. Until I found MMM I didn't understand what was possible. I know from talking to him that my husband doesn't realize it either. MMM and all these stories on the forum have just given me a new perspective. I don't think I could look at money and spending the same way again if I tried. I can't go back in time and punch myself in the face, I wish I could, but I'm awake now. I can make every choice better than the last. That's the best I can do.

[Zamboni]

Congrats on working to turn things around!  You have come to the right place.  Many of us would like to go back in time and face punch our younger selves.

I agree that you need to create an emergency fund of a couple of thousand dollars. 

This may seem silly-but you can save cash. Put it in a safety deposit box-tell no one!

Great idea.  This is what you do to get the emergency fund for things like unexpected car repairs or the refrigerator going on the fritz.  It sound like because of your bankruptcy agreement you need to siphon off money slowly over time in a way that looks like an "approved expense."   So just get an extra $40-60 cash back from your debit card every time you buy groceries, buy stamps at the post office, etc.  Does the trustee look at your itemized receipts?  It seems like probably not, just statements.  Then - and this is key - you have to be sure you stash that cash where you can't spend it (in an envelope in a safe place and then a weekly trip to the safety deposit box is a good idea.)  You'd be surprised how fast this adds up.  If you can optimize MMM style on things like how much you spend for food, phone, tv etc. then you can pull this cash out and not even change the overall approved budget that now includes some extra cash to save.

Just get this going yourself.  Let your husband know so he doesn't think you are sneaking behind his back, but I'm guessing you are the one buying groceries, so you get the cash and you stash it somewhere for the family.  It sounds like your husband will come around gradually.  Control what you can control yourself and let him figure out what he can do without making any specific suggestions that might rub him the wrong way right now.

[mudgestache]

That is a great idea! I didn't even think of the cash back option. I can cut back on food costs and stash that money. No, the trustee doesn't look at the itemized unless you request a change, which we won't be doing. I'm working on getting our utilities lower too. That mainly involves me following kids through the house turning off lights and electronics. Getting them to grasp that concept is harder than I thought it would be. :(

[missksaves]

In terms of saving on utilities, closing lights when not in use has an effect but maybe not a big impact compared to if you have a more efficient refrigerator at a higher temperature.

Insulation and temperature will also factor into lowering your utilities more when you use a/c in summer and heat in winter. Try to make sure that if you use hot water tank that the tank itself is at least wrapped in an insulation jacket or think about going tankless water heater.

There is also "vampire voltage." Try to make sure any appliances not in use are plugged into a power strip that is flipped off when not in use.

Lighting represents a much smaller percentage of the consumption profile for a normal non-mustachian household so cutting the use won't make a big impact but it's the first thing people go to for some reason.

Hope these small tips help in some way.

[mudgestache]

I get what you're saying but these kids are crazy with it. It's not just lights with them. If they plan to go back to the tv at all that day (or computer or radio...ect) they leave it on. Makes me crazy. Same with leaving the doors open if the air or heat is on. I'm constantly reminding them. We've started grounding them from electricity for leaving things on at this point. I did plug all electrical groups into power strips so I can turn them off completely when not in use. My electric company has a new program that let's you monitor your usage live from the smart meter. I'm hoping we'll be approved for it. I'll talk to the a Hubs about the hwh and insulating it. I've also been doing research to get ready for winter too so feel free to throw out any suggestions for that! :)

Thank you for all the replies. It's very helpful and makes me feel less alone.

[MrsPete]

As for what's changed...we have.

Thing is, you need more than just an "We've changed" attitude -- not that I disbelieve you, but it's easy to slip back into old ways.  Habits are hard to break.  Right now you're spending carefully because you're being supervised.  You need to develop a solid plan for the day you begin supervising your own spending again.  A budget that allows for saving and spending.  A plan for developing an emergency stash, then whatever your next goal might be.  A plan for your children's educations.  You have the attitude -- now make your plan.

Once that's done, you need to work accountability measures into your plan.  For example, my husband and I sit down and give our finances a thorough go-through twice a year:  Once at New Year's and once on our anniversary, which falls in summer.  We look at how much we have in savings, whether our investments are still appropriate, discuss upcoming expenses.  We're an old established cheapskate couple though -- you probably need to "schedule yourself" to review your finances more often. 

I get what you're saying but these kids are crazy with it. It's not just lights with them. If they plan to go back to the tv at all that day (or computer or radio...ect) they leave it on. Makes me crazy.

Keep in mind that a light bulb and the TV use next to no electricity.  What costs big money are things that generate heat:  Your kitchen appliances, your dryer, your curling iron.  I say put your efforts where the real money is being spent and don't worry over a light being left on.  For example, a small adjustment to the air conditioner (or heat in a few months) would net you more savings than chasing after lights all the time.  Likewise, hanging clothes out to dry will make a real dent in your electricity bill, whereas leaving the TV off won't show up at all.  Yes, yes, every penny counts -- but realistically you can only focus on so many things, so be sure they're the things that really matter.

However, if you disagree with my philosophy and really, really care about the kids turning off the lights -- take their light bulb when they leave the lights on.  Don't mention it to them -- let them discover it for themselves.  It'll happen at bedtime or some other very inconvenient time.  Let it happen.  How do they get it back?  They have to do a small chore for you -- and it has to be done NOW, not later.  And, of course, any extra light bulbs in the house must take up residence in a secret place -- maybe your sock drawer.

Leaving the TV on drives you nuts?  Unplug it from the wall so they have to scoot back behind it and plug it in again.  Or, if it's not a big TV, move it into your closet.  Yes, these things are trouble -- but you only have to do them once or twice before the kids get the message.  I'm big into natural consequences instead of nagging. 

[mudgestache]

We have started taking lightbulbs...lol. We remove doors for slamming too. I am definitely working on your other suggestions, the ones that use the most drain. Our tv is probably a big drain though compared to other kinds of tv. It's almost 10 years old and on of the first plasma screens. It's technically not even really a tv, it's really more like a computer monitor. It kicks of heat. I've been considering getting rid of it and putting one of our smaller, less often used tv's in there.

As for needing more than just "we've changed", I agree. I've been tracking our spending and budgeting for awhile now. Reviewing things together is probably the hardest habit to get into for us. For so long I've just been the one taking care of everything. It's been a problem and we've been working on it. The Hubs works a lot and goes to school so it always feels like he's to busy or that I don't want to ruin his little relaxing time with money stuff. Now that money stuff isn't so stressful it's hard to get into the habit of going over it. I think scheduling it is a great idea. Maybe sit down to go over things at the end of the month? See what we've done and what is going to happen the next month?

[TrMama]

I'm working on getting our utilities lower too. That mainly involves me following kids through the house turning off lights and electronics. Getting them to grasp that concept is harder than I thought it would be. :(

Try putting a physical price tag on some of these things. When the kids leave them on charge them that amount. I bet it will start to sink in fast! I did this when I was trying to get into the habit of hanging our clothes to dry. The dryer had a label that said, "$0.75/load".

For stuff like leaving the TV on, you could also remove the power cord that connects it to the wall for a week, provided it's a cord that disconnects at both ends.

[Primm]

And, of course, any extra light bulbs in the house must take up residence in a secret place -- maybe your sock drawer.

Leaving the TV on drives you nuts?  Unplug it from the wall so they have to scoot back behind it and plug it in again.  Or, if it's not a big TV, move it into your closet.  Yes, these things are trouble -- but you only have to do them once or twice before the kids get the message.  I'm big into natural consequences instead of nagging.

Or the vegetable crisper. They'll never look there. :)

[Goldielocks]

You may find this a good time to build skills, like car repair, new recipes that save money, start a small side business, with very low income charged just to cover expenses, that you network and  build over a year before it makes money...

Career planning, tax return prep, tree pruning, PC repair, something with a short certification course could all be good choices.  Invest time now, to save or generate $$$ later

[mudgestache]

I've been talking to a friend about getting a real estate lisc. I'm hoping to get that done within the next year.

[2ndTimer]

Congratulations on "getting it" about your new financial situation.  Lots of people don't get that far.  I am also the nonworking partner for health reasons and I can report it is amazing how much money you find being wasted  as you begin to tighten up your routine household finances.  If you do decide to stash cash somewhere you will find it very motivating.

My single best suggestion for finding wasted money is to keep track of everything you spend.  I do it with a 99 cent notebook and pen.  People who prefer to keep stuff on their phones use various apps.  You will be amazed at how much automatic spending you are doing just because you have always done things a particular way.

Here is an example of how that worked for us.  The specific things we did probably won't be relevant to you.  I just want you to see how the process worked.

Example:  About a year ago on a road trip I noticed from my notebook how much we were spending on coffee stops.  When we got home I bought a thermos and began filling it with coffee whenever we went anywhere together.  Just for fun I started a log where I recorded a $2.00 saving whenever we used the thermos.  Obviously coffee for two usually costs more than that but even using an artificially low rate of return the thermos paid for itself in two months.

...But wait, there's more... Having the thermos made it easy to make our regular exercise hikes into picnics.  Instead of stopping for coffee and bagels on the way home we added sandwiches and found a favorite log to picnic on saving an extra $10/weekend.

...But wait, theres more...This very morning, the Hub anticipating a late running Nat Guard exercise actually filled the thermos HIMSELF and carried it along.  This despite the fact that there is coffee for sale on the base. Estimated savings $2.00

...But wait, there's more...inspired by visible evidence of change, the Hub dug out the camping stove his brother gave him and we began making coffee while camping instead of rushing out buy it each morning.  We also began filling the thermos at the campsite so that we would have coffee during the day instead of having to stop and buy it.

...But wait, there's more... inspired by the ease of coffee making over a camp stove I am planning to carry eggs, bacon and a pan with us this weekend and try my first ever cooking on the camp stove.  If successful, this will dramatically reduce one of our major camping costs, going out for hot food.

You will find your savings in different areas than we did but it all starts with keeping track.   You won't even really have to review your spending.  The fact that you keep recording purchasing X will begin to permeate your consciousness and before you know it solutions will begin popping out of your brain.

[mudgestache]

Thanks for taking the time to type that all out! I'm doing that now. We'll see what Sept spending shows. Hopefully (and I'm sure it will) I'll find lots of silly stuff to cut.

[Bose]

Lol at removing doors!

I just thought I'd throw in my 2 cents worth - a reminder to keep the main thing the main thing with the kids.
They're kind of little captured minions living in your castle, but at the same time they're kind of more like genetic rubber stamps of you.  Same stuff, just 30 years behind.  Keep in mind the whole "free will and mind of their own" and that showing respect gets the point across a lot deeper than just telling.
I'm constantly having to remind myself it's discipline not punishment I'm trying to dole out.
One has their personal growth in mind, the other has just your frustration and the wrong-doing in mind.

Kudos on beginning to cut spending and bucking the consumerism trap!

[2ndTimer]

Congratulations on "getting it" about your new financial situation.  Lots of people don't get that far.  I am also the nonworking partner for health reasons and I can report it is amazing how much money you find being wasted  as you begin to tighten up your routine household finances.  If you do decide to stash cash somewhere you will find it very motivating.

My single best suggestion for finding wasted money is to keep track of everything you spend.  I do it with a 99 cent notebook and pen.  People who prefer to keep stuff on their phones use various apps.  You will be amazed at how much automatic spending you are doing just because you have always done things a particular way.

Here is an example of how that worked for us.  The specific things we did probably won't be relevant to you.  I just want you to see how the process worked.

Example:  About a year ago on a road trip I noticed from my notebook how much we were spending on coffee stops.  When we got home I bought a thermos and began filling it with coffee whenever we went anywhere together.  Just for fun I started a log where I recorded a $2.00 saving whenever we used the thermos.  Obviously coffee for two usually costs more than that but even using an artificially low rate of return the thermos paid for itself in two months.

...But wait, there's more... Having the thermos made it easy to make our regular exercise hikes into picnics.  Instead of stopping for coffee and bagels on the way home we added sandwiches and found a favorite log to picnic on saving an extra $10/weekend.

...But wait, theres more...This very morning, the Hub anticipating a late running Nat Guard exercise actually filled the thermos HIMSELF and carried it along.  This despite the fact that there is coffee for sale on the base. Estimated savings $2.00

...But wait, there's more...inspired by visible evidence of change, the Hub dug out the camping stove his brother gave him and we began making coffee while camping instead of rushing out buy it each morning.  We also began filling the thermos at the campsite so that we would have coffee during the day instead of having to stop and buy it.

...But wait, there's more... inspired by the ease of coffee making over a camp stove I am planning to carry eggs, bacon and a pan with us this weekend and try my first ever cooking on the camp stove.  If successful, this will dramatically reduce one of our major camping costs, going out for hot food.

You will find your savings in different areas than we did but it all starts with keeping track.   You won't even really have to review your spending.  The fact that you keep recording purchasing X will begin to permeate your consciousness and before you know it solutions will begin popping out of your brain.

I did get a little carried away.

[Lyngi]

NO, I loved your example.  I had to read it out loud to DH, because we are(were) the same way.  I am currently trying the cold brewing of coffee to try to break this habit.  For the OP, I have tried to cut heating/AC costs by covering my windows.  I made shades, mostly non-sewn, with a lining of mylar (from emergency blankets)  sandwiched between fabric.  I hang them on the West facing-single pane windows, and french doors.   I can FEEL the heat pumping in the window when uncovered.   My dad, long ago, made his own storm windows for our house.  He used 1X2's to make a frame to fit inside the window, covered front and back with plastic sheeting-, then stapled foam around the outside.  They let the light in, but kept the cold out. 

[mudgestache]

We have storm windows and lined curtains. A couple of the windows don't close properly though so we plastic those in the winter. Our heating and a/c bills are low for our area. Well, compared to my friends and neighbors anyway. The a/c has it's own meter on a special program so I know exactly what that costs us. I was pretty cheap with the a/c this year. I'm going to try to do a bit better with the heat. I can't do 68 during the day though. I mean, I CAN but I'm not willing to go that low. Consider it a vice if you will but even with my long johns and a sweater is still feel cold. I have already noticed a drop in the electric from plugging our entertainment stuff into a power strip and turning it all the off when we aren't using it. I swear that old plasma screen sucks energy like crazy.

I have to tell you, we had a pet ER this weekend and I had to put my daughters rabbit to sleep because there was no way I could pay for everything he was gonna need. Really was hating money at that moment. I told the Hubs there was no way she could get a new one until we were in a better financial place because I can't go through that again. I'm gonna stash a bit of our cash away to cover stuff like that, not that we could spend $1500 on surgery either way right now, but I want to at least be able to cover minor problems without panicking. It really was kinda an extra kick in the ass.