Author Topic: Examine My Budget so I can sleep!  (Read 7474 times)

FromRedToBlack

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Examine My Budget so I can sleep!
« on: February 11, 2015, 05:59:07 AM »
Its 4am and I am having a hard time sleeping because way too much financial stuff is in my head. I posted about whether we should move to another apartment, try to buy cheap condo with FHA loan or stay where we are (1 br with our 5 yr old son) and general consensus is to stay put unless something amazing comes along to rent. But I feel very uneasy overall...here is our situation:

Income:
*Mine Net approx 3k (I may need to leave my job soon as Grad school demands are becoming insane, at the very least find different way less demanding job. But not making any moves until we have a tight plan)
*Hubby Net 2800
*Savings: $6472.64; earmarked for emergency fund. Trying to determine just pay off all small debt other than the "old bills" with this & possibly buy hubby a cheap car say 2k to reduce wear & tear on other car. Adding about $400 monthly to this. Only have been saving since July 2014.

Expenses:
*Rent: $1133 for 1 br
*Car Payment: $365 (1 car, 23,496k left on it. 2011 Toyota Highlander. Public transportation is not an option where we live, work & daycare. I checked into trading it in & even with a car that is say 16k with negative equity added to it the payment may go down $50 if that the bank said)
*Cell phones: $60 a month
*Gas: Approx $200 monthly
*Utilities: Electric $60 monthly, Gas $20
*Food: $750 monthly?!?!?!? (This is a huge issue! Just tallied up groceries, Starbucks, lunches, dinners for each of us...on bank statements for last month, whoa. Obv if I am working less this will be dramatically cut but we will curtail this immediately, this realization alone was worth the post!!! )
*Daycare: $640
*Personal Loan: 110 month
*Car Ins: 107 monthly
*Health Ins (son): $148
*Health Ins (me if I lv my job) $232
*Entertainment (Currently this is about $200 or so for the last few months)
*Unexpected/unusual things (car repairs, gifts, tires, car registration, trip for business to FL, etc. this happened last 2 months, needed tires & car maintenance) so need to start adding a line item for this. each event was about $200-$600.)

Credit Cards (all are current):
*Target card- $25 monthly, bal $112.27
*Old Navy - $25 monthly, bal $117.08
*Care Credit - $29 monthly, $349.13
*Capital 1- $75 monthly for 2 cards; totaling $619.59
*Credit union card - $25 monthly, $312.19 bal
*Old Chargeoff will pay next week $180

Student Loans: 50k currently in deferment but in grad school total cost will be about 60k

Old bills that do not affect credit in order of importance of repayment
* Old LLC dues $3600
*UCLA $947 *UCLA $390.56 *UCLA $291.43

Retirement is nearly non existent. My hubby & I have about 2k each in IRA's my job canceled the 401k program & never matched and he is contributing very little now to his. I am 33 he will be 40 this year. This is mainly what's keeping me up.

Feel free to tear it apart. We need a plan!!




« Last Edit: February 12, 2015, 04:30:48 PM by FromRedToBlack »

ShoulderThingThatGoesUp

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Re: Examine My Budget so I can sleep!
« Reply #1 on: February 11, 2015, 06:01:41 AM »
Next year your son will go to first grade and you won't have daycare anymore, right? Can you put off full-time school until then and maybe reduce your current daycare costs?

FromRedToBlack

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Re: Examine My Budget so I can sleep!
« Reply #2 on: February 11, 2015, 06:06:27 AM »
No, he will start kindergarden in mid August. That will free up some money but since we don't know the school he will attend yet or the after care costs I am unsure about that item. We wanted to move to try to get him in a better school district but it is seeming fruitless and we are going to do all the local charter school lotteries. I am already in Grad School and $160 of the daycare costs pays my mother in law as she watches him Sunday night until Monday after work so that I can study for classes, that will likely change once he starts school as well.

fields

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Re: Examine My Budget so I can sleep!
« Reply #3 on: February 11, 2015, 06:08:30 AM »
Can hubby make more money?  Work a second job?  How about selling the car and buying something cheaper?

FromRedToBlack

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Re: Examine My Budget so I can sleep!
« Reply #4 on: February 11, 2015, 06:14:11 AM »
He can work more overtime at work. We are discussing this & how to make it work & make sense. If we sell the car (we bought it last March & had to trade in a car with neg equity) we will be upside down about 3k. It may make sense to do so if we can get the same or similar interest rate again through our credit union as the dealerships were insanely high for me (20% vs the 4% we got).

Stash Engineer

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Re: Examine My Budget so I can sleep!
« Reply #5 on: February 11, 2015, 06:19:41 AM »
Your aren't in bad shape as far as cash flow goes.  Yeah sure, you could save more, but at least you have a surplus to work with.  I would use some cash out of your emergency fund to pay off all those pesky credit card balances.  That would free up $179/month and get them off your mind (not to mention the interest savings). 

I would attack that car next.  If you can get by with only one car, then that's better than two (especially if one is a beater - think about possible maintenance issues).  Sell or trade in that SUV and get a 4-door economy car.  $3k in neg equity won't kill you (that will pay for itself in a year).  That will slice your payment and fuel costs IN HALF.  Total potential savings - $250/month, not including any insurance reduction

Take your newfound $429/month of excess and attack those old debts to get them out of your mind and your life.  Don't let these linger and keep you up at night.

MetalCap

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Re: Examine My Budget so I can sleep!
« Reply #6 on: February 11, 2015, 06:27:59 AM »
Your savings [are] too large with that debt.  Pay off all the small cards and cut them up immediately if you haven't already, this also includes all of your "old bills".  No need to drag that out.

EDIT:Wow early morning grammar...
« Last Edit: February 11, 2015, 11:50:53 AM by MetalCap »

SMCx3

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Re: Examine My Budget so I can sleep!
« Reply #7 on: February 11, 2015, 06:40:45 AM »
Your savings is too large with that debt.  Pay off all the small cards and cut them up immediately if you haven't already, this also includes all of your "old bills".  No need to drag that out.

Could not agree more if I were to make suggestion.  Make the debt go away.  I would sacrifice a portion of the dollars out my safety budget to clear up these small debts.  This will allow you to start tackling the big picture.

When I read your original post, my thought was NO MORE CREDIT CARDS!

Does your husband have a company match in 401K?

gecko10x

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Re: Examine My Budget so I can sleep!
« Reply #8 on: February 11, 2015, 06:54:59 AM »
Would be nice if you put Total Incoming, Total Outgoing.

Looks like you have nearly $6k coming in, so I think you should have plenty of cash flow.

Just start paying down all that debt!

thd7t

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Re: Examine My Budget so I can sleep!
« Reply #9 on: February 11, 2015, 06:55:04 AM »
Adding everything in this budget together, including $400 in saving gives about $3500 of spending per month.  Where are the other $2000/month going?  This is an incomplete budget unless you can really account for your spending.  Seriously, you should eliminate all credit card debt today.  Take from your savings if necessary.

You also need to take your last three months of bank statements and make a real accounting of where you've spent money, because you're not being complete, here.

FromRedToBlack

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Re: Examine My Budget so I can sleep!
« Reply #10 on: February 11, 2015, 06:59:23 AM »
Thank you!!!!! OK will pay off all the cards immediately! I need to check on hubby 401k matching, not sure but don't think so. I will speak to him about trading in car & see his thoughts; I'm open to it 100%. That is a great plan because then the former cc monthly payments can start paying off the old bills. This as top of my head. OK I will revise based on statements. That is huge chunk missing.

HairyUpperLip

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Re: Examine My Budget so I can sleep!
« Reply #11 on: February 11, 2015, 09:01:59 AM »
I'd get rid of the Highlander and downsize to something like a Honda Fit.

You'd still have almost $4800 if you took your savings money and just paid off all the small debts. You should pay them off ASAP.

Can you find a cheaper place to rent? That seems kind of high currently.

caseyzee

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Re: Examine My Budget so I can sleep!
« Reply #12 on: February 11, 2015, 10:27:06 AM »
I'm sorry, but that really doesn't look like a budget to me.  Where is all of your money going?  You bring home $5800ish but expenses account for less than half of that.  The fixed expenses amount to approximately $2300, not including daycare.  But you have no car insurance listed?  No internet?  No phone?  How will you quit your job if expenses approach the take home pay of your husband?  And how did you get all this debt?  That is a LOT of credit cards!

JLee

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Re: Examine My Budget so I can sleep!
« Reply #13 on: February 11, 2015, 10:35:04 AM »
I'm sorry, but that really doesn't look like a budget to me.  Where is all of your money going?  You bring home $5800ish but expenses account for less than half of that.  The fixed expenses amount to approximately $2300, not including daycare.  But you have no car insurance listed?  No internet?  No phone?  How will you quit your job if expenses approach the take home pay of your husband?  And how did you get all this debt?  That is a LOT of credit cards!
It's a lot of cards, but the balance is only ~$1500. I would wipe them all out at once and stop charging shit on them. Problem solved. :)

caseyzee

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Re: Examine My Budget so I can sleep!
« Reply #14 on: February 11, 2015, 10:42:13 AM »
Quote
Quote from: caseyzee on Today at 10:27:06 AM

I'm sorry, but that really doesn't look like a budget to me.  Where is all of your money going?  You bring home $5800ish but expenses account for less than half of that.  The fixed expenses amount to approximately $2300, not including daycare.  But you have no car insurance listed?  No internet?  No phone?  How will you quit your job if expenses approach the take home pay of your husband?  And how did you get all this debt?  That is a LOT of credit cards!



It's a lot of cards, but the balance is only ~$1500. I would wipe them all out at once and stop charging shit on them. Problem solved. :)

Yeah, I don't disagree.  I wouldn't want that many cards though.  I think it justs encourages spending - an Old Navy card?  Who needs that?  And it seems like a lot to keep track of - I owe this card 100 bucks, and this one 300 bucks, yada yada.  You're right, wipe them out, but then I would close them.

JLee

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Re: Examine My Budget so I can sleep!
« Reply #15 on: February 11, 2015, 10:45:06 AM »
Quote
Quote from: caseyzee on Today at 10:27:06 AM

I'm sorry, but that really doesn't look like a budget to me.  Where is all of your money going?  You bring home $5800ish but expenses account for less than half of that.  The fixed expenses amount to approximately $2300, not including daycare.  But you have no car insurance listed?  No internet?  No phone?  How will you quit your job if expenses approach the take home pay of your husband?  And how did you get all this debt?  That is a LOT of credit cards!



It's a lot of cards, but the balance is only ~$1500. I would wipe them all out at once and stop charging shit on them. Problem solved. :)

Yeah, I don't disagree.  I wouldn't want that many cards though.  I think it justs encourages spending - an Old Navy card?  Who needs that?  And it seems like a lot to keep track of - I owe this card 100 bucks, and this one 300 bucks, yada yada.  You're right, wipe them out, but then I would close them.
If spending can't be avoided, then close them out - but there's not much reason to close open / paid off cards (with no annual fee).

I have cards that I never use that just sit there with available credit (three Amex cards, three Chase cards, I think a Sears card...) everything I've read says that will benefit your credit due to a low percentage of utilized credit.

If someone can't refrain from spending on them, then absolutely close them out. :)

justajane

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Re: Examine My Budget so I can sleep!
« Reply #16 on: February 11, 2015, 02:40:48 PM »
So you're paying your MIL $160 to watch your kid for less than 24 hours, much of which he sleeps? I would find a way to change this. I don't think it's fair to take advantage of family, but come on. That's a pretty good paying gig. Can I have it? :)

Edited to add that I might have misinterpreted and this is $160 monthly (i.e. 4 times). If so, carry on. That's a good deal.
« Last Edit: February 11, 2015, 02:43:11 PM by justajane »

FromRedToBlack

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Re: Examine My Budget so I can sleep!
« Reply #17 on: February 12, 2015, 04:56:31 PM »
So after the idea to go through bank statements I see huge gaping holes that we need to account for. We are paying our bills and saving but then the rest we are acting like it is "free money" and not really accounting for it...it just kind of pilfers away.

After reading the responses & reviewing everything, this is our game plan.
*Take the $ out & pay off all cards & stop using them but keep them active but in document safe to keep credit lines good.
*Curtail stupid spending immediately, i.e. cash for groceries & eating out 2x a month. No more target runs, starbucks etc.  Feel like a complete moron for this!!!!!!
*Find a 2 br for no more than $1350 so that we can still put some savings away. Hubby will work addl overtime each week to make up the difference if necessary once I go down to part-time.
*We can't find a 1 br any cheaper that doesn't jeopardize our safety & that we can share comfortably, literally it is a steal in LA. We went through that 2 yrs ago & ended up where we are.
*Mother in law is $160 monthly for 4 day & a half visits, not weekly. :D (honestly we are helping her pay her life insurance, it is just her "working" for it.)
*I will not stop working until we have made payment arrangements for the old bills and all the current ones are paid off leaving only the car. Then I will work part time so that I can bring home $500-$1000 a month which will be the excess needed to survive.


I so appreciate you guys replying & helping me to identify the issues. Such invaluable advice!!!!





Bracken_Joy

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Re: Examine My Budget so I can sleep!
« Reply #18 on: February 12, 2015, 05:48:59 PM »
I don't have advice at this point. I think you're off to a great start. You were piloting a leaky boat, and now you've noticed the holes. Just time to patch them up =)

I just wanted to wish you luck. Keep on keepin' on! You're doing the hardest stuff already. You can rock this!

Retire-Canada

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Re: Examine My Budget so I can sleep!
« Reply #19 on: February 12, 2015, 06:27:10 PM »
Starbucks and $200 for entertainment + eating out is crazy when you have a car loan and credit card debt.

Tell your hubby WE HAVE AN EMERGENCY and every dollar not feeding you or paying a bill should go to pay off all debt.

Once that's done you can start saving and sleeping at night.

-- Vik

galliver

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Re: Examine My Budget so I can sleep!
« Reply #20 on: February 12, 2015, 07:19:14 PM »
Are you using anything like Mint or "You Need A Budget", OP?

If you use debit cards, Mint will catch your transactions automatically and help you categorize. It also has tools to set budgets so you can see little green bars filling as you spend throughout the month. But they turn red if you go over! So that's a good visual/motivational tool, I find. I also like how automatic it is. I can't forget or "forget" to put in a transaction. But it sounds like some people benefit from doing the manual input which it sounds like YNAB requires (I don't use it so I'm not sure...), and they like that one.

Either way, it sounds like you really need a system for tracking/categorizing ALL expenditures! (It won't control your grocery spending, but I won't get into it because there are other people and threads on this site with much better advice than mine!)

By the way, I for one am impressed with your savings since July; obviously you're changing your habits, and stressed, and have a kid, and live in a pricey area, but it's working! I would still use some of it to pay off some of those smaller debts (besides the car); but you know you can build it back up! And once you figure out where your $$ is leaking, you'll be able to free up some cashflow and throw even more at all your goals!

daymare

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Re: Examine My Budget so I can sleep!
« Reply #21 on: February 12, 2015, 08:20:38 PM »
I love your attitude and how willing you are to make changes.  Completely agree that you should go and pay off all your credit cards NOW (like yesterday) and just get rid of the debt.  I think you're right to put the cards away and not use them again - you guys have clearly had issues in the past responsibly using credit resopnsibly.

Second galliver's suggestion to track your spending better.  What works for me was setting up a free account on mint (you could also use personal capital) that inputs all our bank accounts, credit cards, etc. So I have this convenient repository to see my net worth, bank accounts, and spending.  Then I have a simple spreadsheet with categories I use (car/transportation, groceries, alcohol, entertainment, eating out, etc) and I manually type in all of the transactions.  It's not hard because we've gotten to a place where there are more days we don't spend than ones where we do (plus I am obsessed and go on mint way too often anyway).  This is helpful because you can gain data about what exactly you're spending on.  Being accountable by going through transactions this way is also a good way to motivate yourself (at least in my experience) to not spend wastefully or carelessly.

Then you and your husband can go through the spreadsheet at the end of the month - I bet what you spend will be eye-opening.  Take a look and consider whether your spending is lining up with your values/enjoyment.  For instance, if you spent a few hundred on eating out, but looking through realize it was mostly mediocre or fast food and you don't think it impacted your life positively, challenge yourselves to significantly cut the category next week, or have one date night at home instead of going out, or whatever.  Once you have a good sense of your baseline/average spending, you can feel more comfortable allocating some of your income to retirement savings and debt paydown.

You guys really can't afford to not save for retirement, especially with your husband being already 40.  Look into opening Roth IRAs for both of you - what's nice is that you can always withdraw the principal you put into the Roth at any time for any reason for no cost (which totally doesn't mean that you should).  That might make you more comfortable with investing.  Good luck!

thd7t

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Re: Examine My Budget so I can sleep!
« Reply #22 on: February 13, 2015, 08:27:00 AM »
I love your attitude and how willing you are to make changes.  Completely agree that you should go and pay off all your credit cards NOW (like yesterday) and just get rid of the debt.  I think you're right to put the cards away and not use them again - you guys have clearly had issues in the past responsibly using credit resopnsibly.

Second galliver's suggestion to track your spending better.  What works for me was setting up a free account on mint (you could also use personal capital) that inputs all our bank accounts, credit cards, etc. So I have this convenient repository to see my net worth, bank accounts, and spending.  Then I have a simple spreadsheet with categories I use (car/transportation, groceries, alcohol, entertainment, eating out, etc) and I manually type in all of the transactions.  It's not hard because we've gotten to a place where there are more days we don't spend than ones where we do (plus I am obsessed and go on mint way too often anyway).  This is helpful because you can gain data about what exactly you're spending on.  Being accountable by going through transactions this way is also a good way to motivate yourself (at least in my experience) to not spend wastefully or carelessly.

Then you and your husband can go through the spreadsheet at the end of the month - I bet what you spend will be eye-opening.  Take a look and consider whether your spending is lining up with your values/enjoyment.  For instance, if you spent a few hundred on eating out, but looking through realize it was mostly mediocre or fast food and you don't think it impacted your life positively, challenge yourselves to significantly cut the category next week, or have one date night at home instead of going out, or whatever.  Once you have a good sense of your baseline/average spending, you can feel more comfortable allocating some of your income to retirement savings and debt paydown.

You guys really can't afford to not save for retirement, especially with your husband being already 40.  Look into opening Roth IRAs for both of you - what's nice is that you can always withdraw the principal you put into the Roth at any time for any reason for no cost (which totally doesn't mean that you should).  That might make you more comfortable with investing.  Good luck!
Before advising people to open Roth IRA's to withdraw money, check out Gocurrycracker's post from last week.  It shows how in a lot of cases, taking a penalty for withdrawing money early from a tIRA can be more tax advantageous than a Roth.  It's counter-intuitive, but the math is sound.
http://www.gocurrycracker.com/turbocharge-savings/

Otherwise, I totally agree with you.  Very few people start with the attitude that they'll really analyze their situation and then change it.  OP, here is doing a great job adjusting to what she can do to gain control!