Author Topic: Help me with our budget?  (Read 8847 times)

micah_mae_

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Help me with our budget?
« on: April 28, 2013, 04:29:55 PM »
So I'm a homeschooling stay at home mom living on one income (my husband's). We have three boys 6 weeks to 4.5 years old. My oldest eats like a grown man and my husband is a 6' string bean who never stops eating!

Ok so my questions are:
1) Where can/should I cut my budget and how?
2) What percentage of the leftover money should be put towards debt, savings and retirement?


Rent: $675

Car: $417 (Pay Off is $9,637)

Car/Renters Insurance: $125

Phones/Internet: $240 (This is through Verizon and our contract is up in June)

Credit Card: $133 (Pay Off is $3,189)

Electric: $125 (I have no idea what our average will be during the summer in Texas but I'm sure it'll get to/over $200)

Water: $60

Kids Allowance: $26

Gas: $480 (Two vehicles filled up once a week)

Food/Diapers: $600

Chiropractor: $110

Christmas Fund: $80

Personal: $160 ($20/ea/week, DH won't budge on this one as that's how he buys cigarettes, coffee, etc. I usually end up using mine for family stuff like food/gas/clothes.)

Joet

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Re: Help me with our budget?
« Reply #1 on: April 28, 2013, 04:45:43 PM »
ah this is simple, you have a revolving credit balance: pay it off

*unless you don't already have 6-months expenses saved in a readily available cash-equivalent [IMO]

daverobev

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Re: Help me with our budget?
« Reply #2 on: April 28, 2013, 05:28:13 PM »
First would be the car payment, if you can get out of it - sell one and buy something older but reliable. No rust where you are (?) so cars should run forever, right? And something more efficient too - petrol is CHEAP in TX I believe, so that's a lot.

Second - electricity - do you use that to heat in the winter as well? Can you turn more stuff off at night? In the summer, try raising the temperature a couple of degrees at a time until you are more comfortable with the heat..

Phones - see MMM's post on getting a $10 plan. $240 is insane.

Rent seems good; I wouldn't quibble over $20 each a week to spend on what you like.

Make sure you're using the best credit cards - as you're spending so much on petrol, if you can get 2-3% cashback on that, and the same on groceries, you'd be getting $20+ back a month.. though obviously driving less, and a smaller/more fuel efficient vehicle, will save MUCH more.

Then attack the highest interest loans "snowball style" - throw everything at the worst one til it's gone; then all that PLUS the amount you had to pay at the next; and so on til they are all gone.

honobob

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Re: Help me with our budget?
« Reply #3 on: April 28, 2013, 05:33:40 PM »
Cure the nicotine addiction.  Former addict but I would never smoke with children.

MsSindy

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Re: Help me with our budget?
« Reply #4 on: April 28, 2013, 05:50:07 PM »
What jumps out at me right away is that you're filling your car up every week?  If you're a SAHM, where the hell are you going that you go through an entire tank of gas each week?  Also, if it's taking you approx. $60 to fill up your tank, I would assume that it's not an economy car.  The car payment is insane - I would focus on getting your overall car/gas/insur costs down ASAP - you're spending an awful lot of money to drive around town.

You know your phone cost is outlandish, hopefully you'll work on that come June.

Otherwise, I would pay off the CC ASAP and put some money away for an emergency fund, especially since you only have one income.

Overall, though, you're in pretty good shape to start really stashin' away.

micah_mae_

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Re: Help me with our budget?
« Reply #5 on: April 28, 2013, 07:09:36 PM »
ah this is simple, you have a revolving credit balance: pay it off

*unless you don't already have 6-months expenses saved in a readily available cash-equivalent [IMO]

As of this moment we have *0* savings. We keep starting our savings but an emergency will crop up and wipe it out. Recently both vehicles quit on us at once.
The credit card is the bane of my existence.

Done by Forty

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Re: Help me with our budget?
« Reply #6 on: April 28, 2013, 07:11:03 PM »
Everyone else has hit on the obvious items to cut.

I think a good benchmark for savings rate is 50%, but a lot depends on your situation and income.  Still, aiming for 50% as a goal is usually a good start, and then you can ratchet up from there.

micah_mae_

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Re: Help me with our budget?
« Reply #7 on: April 28, 2013, 07:12:45 PM »
First would be the car payment, if you can get out of it - sell one and buy something older but reliable. No rust where you are (?) so cars should run forever, right? And something more efficient too - petrol is CHEAP in TX I believe, so that's a lot.

Second - electricity - do you use that to heat in the winter as well? Can you turn more stuff off at night? In the summer, try raising the temperature a couple of degrees at a time until you are more comfortable with the heat..

Phones - see MMM's post on getting a $10 plan. $240 is insane.

Rent seems good; I wouldn't quibble over $20 each a week to spend on what you like.

Make sure you're using the best credit cards - as you're spending so much on petrol, if you can get 2-3% cashback on that, and the same on groceries, you'd be getting $20+ back a month.. though obviously driving less, and a smaller/more fuel efficient vehicle, will save MUCH more.

Then attack the highest interest loans "snowball style" - throw everything at the worst one til it's gone; then all that PLUS the amount you had to pay at the next; and so on til they are all gone.

I sooo wish we could get out of the car loan. Worst mistake ever. It's only worth a few grand so I can't see a way out of it. :(

We don't use heat at all during the winter but we just moved to this house a couple months ago so I have no idea what to expect for heat/air.


micah_mae_

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Re: Help me with our budget?
« Reply #8 on: April 28, 2013, 07:14:04 PM »
Cure the nicotine addiction.  Former addict but I would never smoke with children.

I wish I could get him to quit. He has before but started again when he was away for work. I nag him about it every once in a while.

micah_mae_

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Re: Help me with our budget?
« Reply #9 on: April 28, 2013, 07:15:27 PM »
What jumps out at me right away is that you're filling your car up every week?  If you're a SAHM, where the hell are you going that you go through an entire tank of gas each week?  Also, if it's taking you approx. $60 to fill up your tank, I would assume that it's not an economy car.  The car payment is insane - I would focus on getting your overall car/gas/insur costs down ASAP - you're spending an awful lot of money to drive around town.

You know your phone cost is outlandish, hopefully you'll work on that come June.

Otherwise, I would pay off the CC ASAP and put some money away for an emergency fund, especially since you only have one income.

Overall, though, you're in pretty good shape to start really stashin' away.

My oldest son has autism so the gas I spend is to take him to therapies/appts, etc.

Hamster

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Re: Help me with our budget?
« Reply #10 on: April 28, 2013, 07:21:26 PM »
What everyone else said. And a few other thoughts.

Do you have choices of electric companies? If so, shop around and see your options. also, see if you can get higher efficiency bulbs subsidized by your utilities if you don't have them already. CFLs are pretty cheap now, and where I live they are subsidized to almost the same price as incandescents.

See what your early termination fee would be with Verizon. Don't wait til June if you could save money by bailing on them to get something cheaper today. See IP Dailey's superduperguide.

Don't save money for Christmas now, when you could pay down the credit card debt first. Unless your credit card is at zero interest, it would be cheaper to pay the credit card now, then borrow on the credit card in December (you are effectively paying interest on the $80 per month that you could use to down your debt). Better yet, spend less on Christmas and don't borrow. Nearly a thousand dollars for Christmas when  you are in a debt emergency seems excessive. Kids under age 5 certainly don't many gifts, nor do you and hubby when you're in a debt emergency.

Good luck.

micah_mae_

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Re: Help me with our budget?
« Reply #11 on: April 29, 2013, 05:09:36 AM »
What everyone else said. And a few other thoughts.

Do you have choices of electric companies? If so, shop around and see your options. also, see if you can get higher efficiency bulbs subsidized by your utilities if you don't have them already. CFLs are pretty cheap now, and where I live they are subsidized to almost the same price as incandescents.

See what your early termination fee would be with Verizon. Don't wait til June if you could save money by bailing on them to get something cheaper today. See IP Dailey's superduperguide.

Don't save money for Christmas now, when you could pay down the credit card debt first. Unless your credit card is at zero interest, it would be cheaper to pay the credit card now, then borrow on the credit card in December (you are effectively paying interest on the $80 per month that you could use to down your debt). Better yet, spend less on Christmas and don't borrow. Nearly a thousand dollars for Christmas when  you are in a debt emergency seems excessive. Kids under age 5 certainly don't many gifts, nor do you and hubby when you're in a debt emergency.

Good luck.

Do light bulbs really make a big difference? I always thought it was a matter of pennies..
I also assumed early termination would be super expensive, I'll call them today to find out. Would that look bad on us credit wise?
I never even thought of possibly using the credit card if needed for Christmas..the reason it's so much is because we usually buy gifts for our immediate family too, although I'm sure they would understand if we didn't this year..
Lots to think about, thank you!

happy

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Re: Help me with our budget?
« Reply #12 on: April 29, 2013, 06:39:45 AM »
I pretty well agree with everyone else: you just need to keep whittling away your budget as much as possible. At this stage you are on emergency debt payoff mode, so you need to be brutal. If you can for example just save $10 a day, every day for a year , thats $3650 and the credit card gone.

Debt wise I would go for the Credit card first (assuming its got a higher rate than the car loan). Then the car loan/emergency fund.

Budget wise:
Car: Is there anything you can do cut this down? Could one or other be sold and a lower mileage car purchased? Can hubby commute/bike? Or work from home even 1 or 2 days a week.  Your petrol costs are huge even in Australian terms. Could you both learn/practice hypermiling techniques?, really think about all your trips and try combining/reducing mileage.
Phones/Internet: slash this in June...you've only got a month to go and you can be busy fixing all the other stuff til then. At $240/month you could really make big savings here.
Electricity: Seems high especially for a more southern state. Check out http://michaelbluejay.com/electricity/ which I think it the best overall guide on how to cut down your electricity usage. For a family of 5 you are aiming for <25kwh/day at a gentle level of frugalism. (experts at this get under 10kwh/day). Small changes are worthwhile: everything adds up.
Kids allowance? Do kids under 5 need an allowance? Not when you are in emergency mode
Food/diapers isn't too bad, but Again this is an emergency so scrutinize everything, maybe you could knock a bit off here. Cloth diapers yes, but line dry, no dryer.
Xmas fund: agree use to pay off CC. Also what about trying simple handmade gifts as a gesture? There is a thread on hear somewhere about home made gift ideas. I know 3 boys under 5, you have your hands full, so something simple!
Chiropractor? might be essential..can;t comment
Personal:$20/week each sanity money , not too bad, but this is an emergency! If you are not using yours why not deliberately pay it on the CC so you can see it being useful, rather than let it evaporate into the other categories. As for hubby, well you don't get coffee and ciggies when your hair is on fire or you are being stung by a cloud of killer bees...but if he really is unmovable on this its not a disaster...just another $1000 a year you don't need to spend.

I know from your other post you are feeling a bit frustrated...those unexpected bills happen to us all just as we think we are making progress.

Overall though, your debt is not huge, and we all see areas of wriggle room/hope in your budget. Try going all out for every cent of saving until those debts are cleared....

GoStumpy

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Re: Help me with our budget?
« Reply #13 on: April 29, 2013, 07:52:41 AM »
I love the debt is an emergency mentality, however quite often when a spouse is involved and not fully on-board with the 'emergency' part, problems can and DO arise...

I would love to buckle down and go emergency debt payoff mode, but a TON of the population (my wife included) doesn't see the debt as an emergency :(

A happy balance can be found, though!

happy

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Re: Help me with our budget?
« Reply #14 on: April 29, 2013, 08:01:22 AM »
Yes I agree, better to let hubby spend $20 a week sanity money on whatever he chooses if it keeps him happy and co-operative, or enthusiastic even, about other changes.

chatsc

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Re: Help me with our budget?
« Reply #15 on: April 29, 2013, 08:14:22 AM »
I am a SAHM (not homeschooling, though) with 3 boys 5 and under as well.  I understand how frustrating it gets with trying to budget when emergs/life just keep coming up.  I say, cut where you think you can, but don't beat yourself up about it too much.  And do your best not to incur any new debts, while steadily chipping away at your current debt.  I dont know how many times I have tried to cut our grocery bill, only to have an empty fruit drawer on Thurs, or a "surprise" bake sale the next day.  I see this part of my life as a phase, and it will get easier to budget and save money later. 

Everything has 2 sides:  cut out the kids allowances to save money OR give the kids an allowance so they learn how to control their own money. 

Cloth diapers versus disposible diapers.  When you are homeschooling and trying to cut costs, bringing a kid who has special needs to apt after apt, the last thing you want to do in the middle of the night, with a 6 week old would be stuff cloth diaper inserts.....well, it would be the last thing i would want to do.   I tried cloth diapers and it was miserable for me. 

I dont want to appear complacent about budgetting and the debt emergency (we have worked very hard to remain consumer debt free), but you have to live too.  I think some of the suggestions (like reducing the christmas fund and researching a new cell phone plan in June when your current plan expires) are good easy ways to start.




micah_mae_

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Re: Help me with our budget?
« Reply #16 on: April 29, 2013, 08:26:10 PM »
If you have a washer/dryer in your home, consider cloth diapering.  It costs a bit to get set up with good quality diapers/covers, but you might be able to find them used if you ask around and you will save a TON over disposables, even if you are paying more for water/electricity to wash them.  It really isn't much of a hassle to cloth diaper.  We did it while living in a third floor walk up in NYC  -- coin-op washer/dryer in the basement, 4+ flights of stairs plus three separate sets of doors and I made it work, and saved tons of money even with each load costing $2 or so.

It might be difficult with three kids in tow, but try to combine all your other errands with your trips to your son's appointments so that you can reduce the amount of driving you are doing.

The amount you are paying on vehicles is insane.  More than your rent!  Try to think creatively about how to get your spending in that area down.

Hopefully you are able to breastfeed your infant.  That is a huge money saver over time and also helps keep him healthy. 

Read MMM's post in the blog archives about how to adjust your body to hotter/colder temperatures.  Definitely worth trying.  We do this -- only turn the AC on when it gets to 30 C in our house in the summer, only turn on the heat when below 18C

Definitely talk with the family about adjusting gift expectations.  We weren't struggling financially when we did this years ago, but it is something none of us regret.  we only give gifts to the kids, nothing between adults.  No body misses it and the holiday season is much less stressful for all of us.

We do cloth diaper during the day but we have heavy wetters so we use disposables at night for all 3. Luckily my oldest potty trained (finally, at 4.5) and my middle child is potty training (he only wears diapers in public and at night).
I also do breastfeed (and have been for the past 4.5 years straight, lol).
I will look for that post about temperature, I know that can save us a bunch. I have the ac set on 76 to 78 but it gets so hot I can't do anything but sit without getting super hot.
I called my mom and discussed doing homemade presents for adults this year and she agreed, so yay! I know my brother and sil will agree too.

Thanks!

micah_mae_

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Re: Help me with our budget?
« Reply #17 on: April 29, 2013, 08:30:11 PM »
Definitely find ways to cut down on gas.  You might have to think more creatively on this part.  Find options closer to home for your son, public transportation (if there's any), bike/walk more.

If it's not necesary for survival, cut it.  You can add it back in when you have more leeway.  What's the chiropractor bill for?

Alright so today I scored a double jogging stroller for $80! One of my sons appts is 2.5 mi away and our church is 2.5 mi away so I'm going to start walking to those.
We can't change his therapists, there aren't enough in our city and there are months long waiting lists.
The chiropractor is because I have ankylosing spondylitis and it helps. Gotta be mobile with 3 young boys!

micah_mae_

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Re: Help me with our budget?
« Reply #18 on: April 29, 2013, 08:32:00 PM »
I pretty well agree with everyone else: you just need to keep whittling away your budget as much as possible. At this stage you are on emergency debt payoff mode, so you need to be brutal. If you can for example just save $10 a day, every day for a year , thats $3650 and the credit card gone.

Debt wise I would go for the Credit card first (assuming its got a higher rate than the car loan). Then the car loan/emergency fund.

Budget wise:
Car: Is there anything you can do cut this down? Could one or other be sold and a lower mileage car purchased? Can hubby commute/bike? Or work from home even 1 or 2 days a week.  Your petrol costs are huge even in Australian terms. Could you both learn/practice hypermiling techniques?, really think about all your trips and try combining/reducing mileage.
Phones/Internet: slash this in June...you've only got a month to go and you can be busy fixing all the other stuff til then. At $240/month you could really make big savings here.
Electricity: Seems high especially for a more southern state. Check out http://michaelbluejay.com/electricity/ which I think it the best overall guide on how to cut down your electricity usage. For a family of 5 you are aiming for <25kwh/day at a gentle level of frugalism. (experts at this get under 10kwh/day). Small changes are worthwhile: everything adds up.
Kids allowance? Do kids under 5 need an allowance? Not when you are in emergency mode
Food/diapers isn't too bad, but Again this is an emergency so scrutinize everything, maybe you could knock a bit off here. Cloth diapers yes, but line dry, no dryer.
Xmas fund: agree use to pay off CC. Also what about trying simple handmade gifts as a gesture? There is a thread on hear somewhere about home made gift ideas. I know 3 boys under 5, you have your hands full, so something simple!
Chiropractor? might be essential..can;t comment
Personal:$20/week each sanity money , not too bad, but this is an emergency! If you are not using yours why not deliberately pay it on the CC so you can see it being useful, rather than let it evaporate into the other categories. As for hubby, well you don't get coffee and ciggies when your hair is on fire or you are being stung by a cloud of killer bees...but if he really is unmovable on this its not a disaster...just another $1000 a year you don't need to spend.

I know from your other post you are feeling a bit frustrated...those unexpected bills happen to us all just as we think we are making progress.

Overall though, your debt is not huge, and we all see areas of wriggle room/hope in your budget. Try going all out for every cent of saving until those debts are cleared....

Thanks for the encouragement :)

micah_mae_

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Re: Help me with our budget?
« Reply #19 on: April 29, 2013, 08:33:39 PM »
I love the debt is an emergency mentality, however quite often when a spouse is involved and not fully on-board with the 'emergency' part, problems can and DO arise...

I would love to buckle down and go emergency debt payoff mode, but a TON of the population (my wife included) doesn't see the debt as an emergency :(

A happy balance can be found, though!

Yeah DH was raised that debt is inevitable and it is literally impossible to be debt free with kids. He's really not interested in considering debt an emergency. Luckily he lets me control the budget mostly so I can do what I can.

micah_mae_

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Re: Help me with our budget?
« Reply #20 on: April 29, 2013, 08:35:23 PM »
I am a SAHM (not homeschooling, though) with 3 boys 5 and under as well.  I understand how frustrating it gets with trying to budget when emergs/life just keep coming up.  I say, cut where you think you can, but don't beat yourself up about it too much.  And do your best not to incur any new debts, while steadily chipping away at your current debt.  I dont know how many times I have tried to cut our grocery bill, only to have an empty fruit drawer on Thurs, or a "surprise" bake sale the next day.  I see this part of my life as a phase, and it will get easier to budget and save money later. 

Everything has 2 sides:  cut out the kids allowances to save money OR give the kids an allowance so they learn how to control their own money. 

Cloth diapers versus disposible diapers.  When you are homeschooling and trying to cut costs, bringing a kid who has special needs to apt after apt, the last thing you want to do in the middle of the night, with a 6 week old would be stuff cloth diaper inserts.....well, it would be the last thing i would want to do.   I tried cloth diapers and it was miserable for me. 

I dont want to appear complacent about budgetting and the debt emergency (we have worked very hard to remain consumer debt free), but you have to live too.  I think some of the suggestions (like reducing the christmas fund and researching a new cell phone plan in June when your current plan expires) are good easy ways to start.

Thanks for commenting, it's good to know we're in a similar boat to other families!
Also the kids allowance isn't money we give them, it's money we put aside for their savings accts..but I agree we could cut that momentarily.

Jules13

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Re: Help me with our budget?
« Reply #21 on: May 03, 2013, 11:19:35 AM »
One option for Christmas is to draw names with the adults (everyone always wants to buy for kids, so we don't include them).  We have been doing this with both sides of our family for years.  We used www.elfster.com.  It's great.  It draws the names for you and you can even set parameters, so you don't get your husband, for example.  It emails everyone who their person is so you can keep it like a secret santa as well.  We set a $$ amount limit and everyone puts items on their "wish list".  It's great.  It fits everyone's budget and everyone gets something that they want.  We also don't buy birthday gifts for siblings anymore.  With in-laws it just all got to be too much.

What about selling some things to knock out that credit card debt?  I just sold the last of my cloth diaper stash for $70 today.  Yay!  Can you consign any baby stuff that you don't need any more?  Consigning and craigslist and ebay is where I've had the most luck. 

Good luck!
Jules