Stressing about future

mellyn1020 · June 2014

My husband and and I currently live with my parents. Neither of us have been good with money in the past and have just recently in the last year been able to pay off all but one credit card. We are tying to save for a place and my hours at work at dwindling/I don't know it the family is keeping me on come the fall. (I'm a nanny) also my husband just started a new job for the summer and will be out of a job for the winter until he finds a new one...
We have very little saved due to me needing to go to doctors and fix my car. Any advice on how to save more? Here is our monthly budget:
Cars 700 (cannot be a one car household right now)
Phones 100
Car ins. 150
Cc 100 (or any extra we can put)
Gas 175
School 218
Groceries 150
Date nights 100 (we only see each other once or twice a week)

We were bringing in about 2200 a month but with my shortage of hours even with a second job is only 1800.
Any ideas?

strickland8052 · June 2014

Aw... don't get discouraged. It sounds like you are on the right track. Bravo on paying off your credit cards; that is an excellent start!

The main thing that stands out to me is the amount you are spending on cars. Could you possibly refinance one or both cars, or could you sell them and buy a new one? When will those cars be paid off? $700 is a LOT to spend on cars...

Another thing is the phone bill.. $100 is a lot, considering your income. Do you have smart phones? If so, you cannot afford them at this time in your life. Get the cheapest cell option you can find, even if it is pre-paid.

What is the "school" expense? Is that for student loans? When will that bill be paid?

If your hours are getting cut back, could you possibly take up a second job? Maybe even some babysitting jobs on the side? Your income seems really low for two people to be working full time. It sounds like you really need to both try to find higher paying jobs. Maybe even go back to school and get a trade, so you can be making more money. OR get second jobs if you are not working full time.

In the meantime, you really are on the right track by paying off your CC bills. It looks like, you have about $100 extra every month to save. Is that correct? If so, start saving that and definitely try to save money anywhere else you can.. any bonuses, extra job money, birthday gifts, etc.. save it. It sounds like you don't need to move out of your parents' house until you have the CC and cars paid off. When will that be? Let's say it is in 3 years, that gives you at least a $3600 e-fund from the $100 extra saved. If the cars and CC are paid off, then you have $800 to go towards rent, and hopefully you will be making more money by then (create a career plan so you WILL be making more money by then). Create a 3 year, 5 year, and 10 year plan, and just focus on those plans. Things might be tough now, but with the right attitude and a solid plan.. it can get better.

als1982 · June 2014

Personally, I would get rid of your cars for something less expensive. (Ideally, paid for in cash, but a lower car payment is better than nothing!!) That would also likely make your insurance less.

Is the $218 listed as "school" for student loans?

brij2006 · June 2014

It sounds like you have an income problem. I would suggest to search for either new jobs or 2nd jobs. Your income is very low for a 2 person income.

Also get rid of the cars and purchase something with cash. Sell both of the vehicles and purchase 2 very cheap vehicles with the money you get after paying off the car loans. If it means that there isn't much cash left over, then live on a very strict budget for a few months and save up as much money as you can to buy a $1k vehicle in cash. Then snowball that car payment aside to save up money to buy a 2nd car in cash. Your car payments are way too high for your income, and are eating up almost half of it. It doesn't mean those $1k vehicles are something you drive for 3 years, but drive them until all of your debt is paid off and you have a 6 month emergency fund saved up. Then start saving up to buy newer/used vehicles in cash. Never have a car payment again.

I will just ditto the others on what the "school" expense is for?

hoffse · June 2014

Yeah I hardly ever recommend getting beaters as vehicles, but your combined income is so low that you really need to explore that option - and please drive CAREFULLY while you own them.

Your car insurance is really high. H and I pay $80/month for ours, and he has a new 2014 vehicle. My car is not new (2007), but it's a more expensive model than his generally, so our cars are pretty close to being the same cost. It's not clear to me how you guys pay almost twice what we do for car insurance, unless one of you has a history of accidents/violations... in which case that's something that needs to be addressed for all sorts of reasons.

I will second the cell phone thing. Smart phones didn't exist 15-20 years ago, and people managed to survive without them. Cut that and go to the cheapest "dumb" phone you can find, preferably pay as you go. And don't use the cell phones as your primary means of communication (to keep PAYG dirt cheap) - use email, internet phone, etc.

I hate to say it, but the $100 date nights need to go. H and I make several multiples of what you make, and we allocate less than that to date nights, with the exception of our anniversary. Try free activities - watch a movie you already own, go for a walk/picnic in a park, play a board game, etc. Date night doesn't have to be expensive.

Finally, you guys need to both be looking for second jobs. The amount of money you make together is probably not sustainable if you want to eventually live on your own, pay your own bills, save for retirement, have kids, etc. You need to find a way to increase your income.

twoforksonelove · June 2014

My husband and I are big fans of both Suze Orman and Dave Ramsey. If you haven't picked up one of Ramsey's books, you should go to the library and borrow it. I really think that it will help you. I agree with the PP's who say you need to get rid of the cars. $700 is WAY too much for you both to afford. Sell one, or both, and use that cash to get a slightly older car. You can't afford to spend 1/2 of your income on transportation expenses if you ever want to dig out. Older car means less gas and less insurance costs. Use that savings to build up an emergency fund of $1000, so if something does happen to the cars, you aren't fixing them on your credit cards. Once you've done that, start tackling the debt -- smallest amount to largest. Don't worry about the interest rates -- just pay off the littlest amount first and keep working your way up. And in the meantime, hustle. Be a virtual assistant, walk dogs, take odd jobs, shovel snow. Whatever you need to do to get ahead. You can do it, you just need to make some short term sacrifices to get you there!

Erikan73 · June 2014

I would suggest having a talk with your employer about your hours being cut back. You need to know if they plan on making you part time or plan on letting you go. This way you can start looking for something else with more hours now. I know it's only June but your husband needs to start planning for the winter and start thinking of job options now.

In regards to your date nights, try to find fun ways to make them cheaper. Check out groupon & living social to help get discounts to places in your areas. With it being summer what about just picking up a dinner from a deli or fast food place and going for a picnic at a local park where you can go for a walk afterwards. Check to see if any of your movie theathers have discount nights. One chain by us has $5.00 movies on Monday nights. It's all the new releases, it's just their discount night. Date nights sound like they are more about spending time together then what you do and probably getting out of the house some since you live with parents. In my area there are free concerts in the park almost every night in somewhere. They aren't big names, just local acts from the area with all types of music. Again, a great way to pack a picnic & some chairs & enjoy a night out with spending very little money.

Xstatic3333 · June 2014

Although I agree with PPs, to get more specific about your job, I think you need to start looking for a new nanny position. If your current employer is cutting your hours, it sounds like they need a babysitter, not a full time nanny.

Many nanny employers will offer a measure of paid vacation or at least will still pay you if they are home at the last minute. Put together a great resume and references and apply for those higher caliber jobs. Try Sitter City, care.com, and any agencies in your area. In my area, experienced full time nannies make $15-$20 an hour.

On the car thing-though downgrading to used may be wise, I wouldn't get a total beater for you. It could impact your employability. Maybe a medium-used Subaru or Carolla? You'll need a reliable car that parents can see their kids in comfortably.

Definitely shop around car insurance. I did have rates approaching yours when I was young and lived in a major city, despite a good record, but shopping around can be huge. My H just got us new insurance less than our current even though we're moving to a more expensive state.

mellyn1020 · June 2014

Thanks for all the input.
The school is a monthly payment during the semester because I don't want to to take out any loans and am on a payment plan.

The car situation... I could try to refinance because I'm the one paying over $400 because myself credit was bad when I got it a few years ago. We both have small cars and I never have luck with older used cars.

Job wise.... I am in school so I can further myself and will be looking for another nanny job until that happens... My boss wants to keep me on just isn't sure what they plan on doing yet. The hours dwindled because instead of commuting 90 minutes the dad only commutes 20 minutes . He gets home a lot earlier and leaves later now. I know I have a great resume so when the time comes I will be good. My second job is a weekend job as needed as well as babysitting for 3 other families. My husband is looking to be a cook again when the time comes.

Also when I said date night $100, that's the total for the four or five date nights we actually do. Not $100 each time.

Thank you again

als1982 · June 2014

mellyn1020 said:

Thanks for all the input. The school is a monthly payment during the semester because I don't want to to take out any loans and am on a payment plan. The car situation... I could try to refinance because I'm the one paying over $400 because myself credit was bad when I got it a few years ago. We both have small cars and I never have luck with older used cars. Job wise.... I am in school so I can further myself and will be looking for another nanny job until that happens... My boss wants to keep me on just isn't sure what they plan on doing yet. The hours dwindled because instead of commuting 90 minutes the dad only commutes 20 minutes . He gets home a lot earlier and leaves later now. I know I have a great resume so when the time comes I will be good. My second job is a weekend job as needed as well as babysitting for 3 other families. My husband is looking to be a cook again when the time comes. Also when I said date night $100, that's the total for the four or five date nights we actually do. Not $100 each time. Thank you again

Good for you with no loans!! That is going to really, really pay off for you in the end.

But I think you saying you've never had luck with older cars is a complete cop-out. We make over $150K in a low-cost of living area, and my H still drives a 2001 Corolla and I drive a 2000 Accord. The Honda has nearly 190,000 miles and while I've been stringent on preventative maintenance (regular system flushes, new timing belt and brakes immediately after purchase, etc.), neither of us has ever had any unexpected issues. Would we like bright shiny new cars? Yes. Do we need them? NO. Our "beaters" get us from point A to point B perfectly fine, and monthly payment free.

mellyn1020 · June 2014

When I mean I have no luck I mean in the last 10 years I've had 5 cars. I am all for the older cars. I miss the ones I've had in the past. It's more so my husband hates the fact that I'd put lots of money into the cars just to have them completely die on me within a year or two of getting them. That's what I mean by no luck. I'd love to have my 98 Bonneville back :-)

Xstatic3333 · June 2014

That's awesome that you're paying cash for school! I wish so badly that I had done that.

What kind of car do you drive now? How is it valued compared to what you owe? If you did sell it, would you stand to get any money back for something more affordable (but still safe, of course). My H is kind of anti-used cars too, even though he's currently driving one, but its something we've agreed to disagree on. The fact is, even routine repairs often end up cheaper than car payments. I hate my car payment, and really hope to make this the last time I ever have one (although I'm not anti-car payment in all situations).

mellyn1020 · June 2014

I have a used 2010 scion xb. I gotta look into how much it's worth at. I still owe 14,000.

Xstatic3333 · June 2014

mellyn1020 said:

I have a used 2010 scion xb. I gotta look into how much it's worth at. I still owe 14,000.

You can play around with kbb.com to put in your car's specific options and condition, but it does look like you couldn't quite get it back. I would absolutely try to refinance however. If your H would be able to profit by selling his, I wouldn't discount the idea. Your car payments are very high in relation to your income (as I'm sure you realize). I know it feels drastic, but just imagine how great it would feel to $300 more a month to either save or have available to cash-flow small emergencies.

For date nights, could you cut down to one time a month where you actually buy food, and then look for fun free things to do for the others? You could go for a nice walk, to go to free summer festival or concert, etc.

hoffse · June 2014

AprilH81 said:

mellyn1020 said:

Thanks for all the input. The school is a monthly payment during the semester because I don't want to to take out any loans and am on a payment plan. The car situation... I could try to refinance because I'm the one paying over $400 because myself credit was bad when I got it a few years ago. We both have small cars and I never have luck with older used cars. Job wise.... I am in school so I can further myself and will be looking for another nanny job until that happens... My boss wants to keep me on just isn't sure what they plan on doing yet. The hours dwindled because instead of commuting 90 minutes the dad only commutes 20 minutes . He gets home a lot earlier and leaves later now. I know I have a great resume so when the time comes I will be good. My second job is a weekend job as needed as well as babysitting for 3 other families. My husband is looking to be a cook again when the time comes. Also when I said date night $100, that's the total for the four or five date nights we actually do. Not $100 each time. Thank you again

You still need to cut back. DH and I have no debt outside of our mortgage and we usually only do one date night a week. If you are in debt that needs to be cut back to once a month (if that).

I agree with April. When I made the comment about date night, I assumed it was once a month.

$100/month is still way too high. H and I have had a date/entertainment budget of $0 for the last three months. It's warm now, so our "dates" are trips to the pool at our apartment or wandering around the botanical gardens, which is free. In August we're budgeting $25 so we can buy some nice wine when we celebrate moving into our first house.

Seriously, free things are out there if you are just willing to look. Right now you are spending over 5% of your take-home on date nights, 50%+ on your transportation costs, 8% of your take home on cell phones... I'm sorry, but your income is just not high enough to support those things right now.

smerka · June 2014

Hoffse - car insurance rates can vary greatly depending on where you live so it's not really fair to compare. But OP - you should call around and see if you can lower it. We were able to cut our bill in half. Smart phones didn't really become a thing until like ten years ago. So you can totally survive without them. DH and I have dumb phones and we pay about $55 a month for both with ATT GoPhone.

mellyn1020 · June 2014

No need for apologies... We never really cut back from when we were both making great money. Just needed outsiders opinions on how to go about it and ideas of what else we could do.

mellyn1020 · June 2014

Our insurance should be dropping soon but I have an accident still on my record. I live in NJ and I know our insurance is high

Wulfgar · June 2014

Not sure how much a ScionXB cost new, but I have a 2010 Kia Soul that I bought new for 15k.

I learned the hard way with my ex-wife that being able to adjust your lifestyle to what you are currently making is a good skill to have. Also, MW and I would rather live a simpler life instead of having expensive vehicles.

Until your income goes back up, you should really focus on downsizing your vehicles to no more than 20% or less of your take home income. Currently you can't even afford to move out of your parent's house.

jtmh2012 · June 2014

I have two thoughts on the car situation.

Are you paying your car insurance monthly or twice a year? My insurance company offers a discount if you pay twice a year versus monthly.

As for the cars, how long do you have left on the loans? Call the bank they're with and ask about refinancing.

Stressing about future

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