So, here's the fun part - How it comes in, and where it goes...
Monthly net Income:
Job salary (50k annually) $3,000
Overrides 1,500
Commission (not consistent) 1,000
Child Support 1,000
Side business 500
Total 7,000
Expenses:
Rent 2,100
Car 600
Insurance 600
Cable 120
Phone (land line) 70
Cell (all 3 of us) 260
FPL (electric) 300
Student loan 340
Credit Cards 390
Gym membership 90
Investment 150
Food/groceries 600
Covering Lauren's expenses 1,100
Gas (3 of us) 500
Misc 400
Total 7,620
Ok, no wonder I have nothing left, and have gone through 30k in savings in 3 years.
Lauren's full tuition, etc. aren't even in here - there are sorority dues, school expenses, etc. that she is going to have to help pay for next year.
She is working full time this summer and paying down her credit cards and paying me back for some things she owes. (So, I'm not totally an enabler here..)
But, no doubt, I provide her with way too much, and she and her brother are going to have to come up with some assistance. Once I do that, I should be able to pay down some of the debt, and increase the savings.
Income/Expenses
June 16th, 2007 at 03:12 pm
June 16th, 2007 at 03:37 pm 1182004637
June 16th, 2007 at 03:47 pm 1182005226
To answer your comments just a bit -
It is almost impossible to use cells in our home due to reception, and I am getting my business started and must have a phone and voicemail. Believe it or not - that's all I have, with call waiting.
Lauren ran up about $2000 in credit cards in freshman year, plus her $400 month rent, and $100 month utilities.
She took out $2,500 in loans that she will pay for after she graduates, but I paid for her sorority, gas, car, food, dorm, supplies, everything else. Now, her fixed costs that I have been covering and will cover are $1100, except she is taking 1/2 the money she earns over summer (2k) to pay back what she ran up. She will then have 2k in savings to bring back to school with her. She will pay her gas and food from her part time job, and I will pay her rent and utilities.
I did defer the student loan this past week, and we really do all use the gym. It's my only form of sanity, socializing, etc. so I really consider that a $90 necessity.
Thanks for the great feedback, and keep watching out for me!
Deb
June 16th, 2007 at 05:49 pm 1182012561
Lets see, is your rent and car for one home/vehicle or is a combination of a few? $2100 seems to be a LOT! Our home loan is for $200,000 and with escrow and house payment it is only $1500. Could you buy something or downsize since it is just you and your son at home now?
Could you cut back on the food expenses by even $100 and put that into the investment category?
I hate doing it, but you may want to start a little book where you record all your expenses each day. From putting gas in the car to paying rent. Then you total it up at the end of each month and see where your money is really going!
Thanks for being so open with your finances and I wish you lots of luck at your new business too!
June 16th, 2007 at 06:03 pm 1182013401
June 16th, 2007 at 07:13 pm 1182017620
June 17th, 2007 at 01:13 am 1182039237
Thanks so much for thinking of me and coming up with solutions...let me see if I can shed some light -
I live in a VERY high cost area in South Florida - our property values are still overinflated, and when I sold my townhouse 3 years ago, I had intended to purchase after a year, but property values increased over 300%. And so did taxes. Today, the least expensive 3br home in my area is over 450k. With property taxes, I couldn't buy that house for under 3500 a month, and I plan on moving next year, and the real estate market is in the toilet - so, believe it or not, that rent is very inexpensive for what I live in.
And yes - I have already "fessed up" with the kids, and given them specific responsibilities in our quest to get financially "right", and they both buy in 100%. They will be rewarded proportionately for their efforts in saving, and we have identified a few ways each of us can help in the cost reduction.
I went out and got one of those little memo pads today. I'm reading tons of blogs and getting ideas, and will definitely make it a point to keep on reading and writing, and working on all of these little details.
Thanks everyone for your great comments! Wow - people are so helpful here!
June 17th, 2007 at 02:14 am 1182042869
June 17th, 2007 at 03:23 am 1182046986
Right now, you are spending at least $620/month more than you are earning. Obviously, that needs to stop immediately. It sounds like you are already addressing the issue with the kids, so that's a great start. As for your own expenses, $120/month to watch TV is ridiculous. Cut back to the limited basic service. It is usually about $10-15/month. Call you cable provider and ask for their absolute cheapest package. Cell phone is also awfully high. We have 5 people on our family plan and the monthly bill is about $125. $600/month for groceries for 3 people is high. You should certainly be able to trim that by a hundred or more.
The initial numbers aren't good, but I think there is plenty of room for improvement in that budget to get you back operating on the positive side. Good luck.
June 17th, 2007 at 11:54 am 1182077694
Thanks -
Good advice - I absolutely know and am committed to changing the landscape of being upside down. That being said, I don't think I'm ready to live in the world of frugal, either - I know I should, but it would be a dramatic departure from what I know, and I think it would be an unrealistic change to expect.
Let me also clarify - $120 is not just to watch tv. I run a side business from home, and $50 of that is for High speed internet, and a wireless router. Here in Weston, our basic cable package is $40 per month. We have 1 HD television, and I have one hd package and one dvr, and that adds $30.
In the scheme of things, I've thought about it, and I don't consider this a huge expense, and here's why...I don't go out, I don't shop, and compared to other women in my socio-economic position, I spend very very little $$. Also, my house is where most of my son's friends like to hang out, and I like it that way. WHY? Because we have a great HD television and the $30 adds several sports packages, and it keeps them home, safe, drug free, and under my nose. And they like it here. I feel it's a small price to pay for those comforts.
My son doesn't spend or ask for much, either, so I see it as only a $30 extra expenditure that I can definitely justify.
In my mind, it's the $1100 (and more) I'm paying for Lauren that needs the first change. I've gone to the ex, and we're working on a plan for him to come up with another $200/month to go directly to her for her rent at college. She is already committed to paying her own gas and food and spending money at school (should be about $100/week) but she can make $10/hour, and work 20 hours while in school. That will increase her contribution to $200, and reduce mine by $100.
Furthermore, we are able to take out additional loans for her for next year, so we will borrow 5k, instead of 2500, and that reduces my expense by another 200k. So, there is 500k monthly reduction right there. I think it's a decent start, and I definitely know I can whittle away at another few hundred to turn the situation around.
The $600 for groceries combines groceries and eating out, for both myself and my son. I spend about $100/week at Publix, unless I entertain, and once or twice a week out, but I definitely need to get frugal about those things. We can eat at Subway as easily as we can eat at Chili's, and we will.
Thanks for the really good advice!
D
June 17th, 2007 at 12:05 pm 1182078340
You've all posted such great stuff -
Can you all explain some of this "challenge" stuff to me?
What, specifically, is the $20 challenge?
June 17th, 2007 at 09:26 pm 1182111998
June 17th, 2007 at 10:47 pm 1182116855
"I don't go out, I don't shop, and compared to other women in my socio-economic position, I spend very very little $$...."
That's a very deadly attitude in this endeavor. Comparing your spending and forming your expectations against what we call the Joneses, most of whom are on even shakier financial ground than you are, is how you got where you are in the first place. Unfortunately, you have to compare your income with your outgo to get yourself out of this fix. You have to let your rationalizations go - that's the only way.
I agree with you that you will have to move your costs onto your daughter; and for fairness, also move a little bit onto your son. (Then one sibling won't resent the other on this issue.) Let's look at other spending - do you go and do you get a benefit by going to the gym ... I mean really go? You have a category called Misc. What is that?
June 18th, 2007 at 01:15 am 1182125729
Thank you. One of the reasons I came here is because we can all feed ourselves the same lines of b.s....and over the years, we actually believe them.
I get it.
And so, if I didn't want (or need) to read responses just like yours, I could stay off this site, and keep telling myself that SOMEDAY things would work themselves out. Well, they WON'T. Not unless *** I *** do something about it. So, I get exactly what you are saying, and I AM taking it to heart.
I can honestly say, though, that I do not judge against the Joneses. Never have. They appear to have far more material goods than I will ever hope to, but I don't base my life on those. We are a happy, healthy family, and for that I am so grateful.
But, I base my wants/needs on certain things important to me, that I consider necessary for my profession, and my enjoyment of life. Those are the personal care items I choose to spend $$ on, like the mani/pedi every other week, getting my hair done, and wearing relatively nice clothes, because I am a sales professional, and I really do feel that some things are just not negotiable.
If I didn't make the living I did, I would certainly not choose those things. I spent the money I did over the last few years by being financially careless. The budget you see above has already been reduced by LOTS!! This is actually a huge improvement.
To answer your question - yes, we all go to the gym. The $69 is for a family membership at the YMCA, and my daughter and I have always battled a weight problem. Thanks to that gym, we go at least 4x a week, and are able to keep our weight under control. My son plays on many basketball/football teams, and it is his social outlet as well. There aren't a lot of "hang out" places for kids here our town, so the gym is the most wholesome. I really consider that a necessity.
MISC - is the category where all of my household items, business supplies, hair/personal care, clothing, car maintenance, etc. falls under. It also includes $$ I am trying to put away into savings. ($25/week) In order to not put tons of categories out there, I allocated about $125/week for all of those expenses I didn't list in the income/expenses worksheet.
Honestly, there isn't much here that is really exorbitant, again, except covering Lauren's payments, and that is definitely over. I think we can save some $$ on gas and food, but the rest is trying to get the debt down. I am also increasing the amount of tutoring hours I put in for the next few months, to put more $$ down on credit card debt.
The next step is looking to reduce my car payment. I'm surprised nobody has said anything about that. My previous car was a total lemon, and I was completely upside down in it when I bought this car. I ended up with a $580 payment. I'm almost at the point of having equity in the car, and which time I really think I will trade or sell, and buy another used Honda or Nissan for under 20k. That will bring my payment down around $400 and I can apply the $180 to credit card debt as well.
So, hopefully that explains more. Feel free to call me out any time!
Thanks for watching out for me, and please continue to do so!
June 18th, 2007 at 01:45 am 1182127544
Keep your mani/pedis! We all need a little something to keep us happy! And since you are not in dire financial shape, just trying to be more financially responsible, you should still be able to treat yourself to something little like that.
Definatly tackle the groceries! I know you can find a ton of ways to still eat out cheap!
June 18th, 2007 at 01:59 am 1182128360
I work HARD. A full time management career, leadership in my synagogue, and about 30 hours/week in my side business. I darn well deserve a manicure!
Here's my point...
It's NOT at all how much I spend on what I spend for what I consider necessities.
It's my mental state of denial that exists that REALLY is the out of control part. It's that I truly, subconsciously forget/disregard/deny that the $3k that goes into my bank account is already spoken for, and I spend $$ on top of it and then I get afraid to see the damage I've done, and then a disaster occurs. I know it comes from the hectic life I live, and the stress that occurs, and that is really what I am here to work out.
I need to make sure that I plan for each and every expense, and know each and every day what I have, where it's going, who I owe, and what I'm doing with it all. I need to simplify the process, have someone to hold me accountable, so I can hold my children accountable, and we can all learn the lessons I should have learned years ago.
But, thanks again, boo..You will be happy to know that today I cleaned the freezer, found plenty of stuff that I took out for the next few days, went to the store to get the NEEDS (not the WANTS) and only spent $62. I have plenty to get us through the week, with $25 allocated for dinner Wednesday night (our craziest night of the week - no time to cook) for wings. WOOHOO. I'd love a $62 grocery bill every week!!
June 18th, 2007 at 06:09 am 1182143378
I'd sell all three of your cars and buy three cheap, gas efficient used ones that have a good standard of quality. Not only would you eliminate or bring down your car payments, you would also bring down your car insurance. I'd also have my kids paying for their own car insurance. I was by my senior year.
One thing you may want to consider is that your daughter ran up $2500 worth of credit card debt her freshman year. This is the cycle of the mother repeating itself in the daughter. I hope you can get her to take a good hard look at that now, before she spends the next 20 years following in your footsteps. You want the best for your children, so don't let her go down this road. It is really scary just how much children learn what they live.
June 18th, 2007 at 04:29 pm 1182180540
The $20 challenge is special account for those times that you save money. If you save with coupons, add that amount to the challenge, if you switch car insurance and save $50, add it to the challenge. Some people set goals and "pay" themselves for acheiveing them, like Ima Saver (Julie) does her steps and pays herself for the exercise. Some use "side" money, like selling stuff on ebay and add it to the challenge. It is all about saving a little bit here and there that adds up to alot!
June 19th, 2007 at 03:47 am 1182221256
anyway. i know you probably already know all this, but i just thought i would put in my bit of advice and hope it helps a little!
June 20th, 2007 at 09:06 am 1182326787
Wow so much feedback - this blogging is wonderful and so helpful.
Just some encouragement: I am also a Sales Exec & understand the need to look good, have a reliable car, clothes etc. but last year I had to close my business and go back to full time employment. There were some months when my dearest aunt supported us with food, gas, rent etc and there was NO money for anything extra.
What I learned is that having no money was a Blessing - it really taught me to recognise the "old have to have's" as luxuries and not necessities.
Here is a challenge for you - imagine that you only had enough money for rent, food, gas, minimum cell phone costs or go a step further, what would you cut if you lost your job and had to survive for a couple of months.
This exercise may help you to sort out what is really important to you and what could be cut.
When money is not really an issue, I found that I could justify anything but now that I am focused on being debt free I can justify NOT buying stuff or luxuries and my DD and I having more fun working out ways to make do and not spend.
The mani/pedi - I taught myself to do this on a Sunday afternoon. Groceries - I only take $50 with me to the store and it amazes me everytime how I manage to buy what we need within that amount. Debit Cards - I don't use mine anymore, it is too easy to add "treats" and a few extra's.
The cable TV - I justify this too - I like to know where DD is and enjoy it myself when I am sewing.
Your DD is learning life lessons, but if you bail her out and help too much, she won't get the full benefit - I know it is hard to watch our kids go through challenges but we need to remember that we won't always be around to help out so they HAVE to learn (with our guidance).
The other thing that really helped me was Dave Ramsey - he cuts right through all our justifications and calls us Princesses when we can give up the mani/pedi etc - quite funny really. Take a look and read the book.
You can do it but have fun doing it.