Budget

alice0422 · June 2015

brij2006 said:

It really is all about managing your time and being intentional about things. For the groceries, meal planning will go a long way. Since you have the option to purchase things at the commissary, do so. Be sure to price match, but for the most part everything is cheaper. And even better, you don't have to pay taxes on the purchase.

As far as the work stuff, your $1,000 income includes when you utilize carpool? That really isn't worth the high car payment, full coverage insurance, and the higher gas cost to have the bigger car to do so. Almost half of your income goes toward just paying to have that vehicle that fits 5 kids. So not worth it.
Instead force yourself to get on before they go to school (especially if you're west coast and there's more work in the morning). If that means you get up at 4am, then so be it. It just means you get to stop working earlier. Be intentional about the work you do, and do what it takes to bring in more income to get these debts paid off and build up some wealth.

The 1000 was with utilizing carpool, but this year I did drop off everyday but Friday because I didn't know the parents yet and didn't want someone I didn't know dropping her off. Because of this I missed out on a lot of work everyday and since I won't be taking her in the a.m. because the other moms are doing drop off I will be able to get some of that work. I'm fortunate that my work lets me stay logged in while I take/ drop off, but we have a limit of how many files we can keep in our cue at a time.

I do get up at 4 in the morning currently, but unfortunately a lot of the other girls figured out my secret and started getting on earlier recently. I'm hoping this summer since I won't be driving an hour in the morning I can make up on the work. Probably 12-20 a day, at least, which adds up to 100 a week. I know its not a ton, but it could make for an awesome month, plus I will be getting on on the weekends more than I normally do. I was short last month because my daughters were sick and my husband had surgery so it was a terrible month and has motivated me to try to get more work done.

MommyLiberty5013 · June 2015

alice0422 said:

hoffse said:

If you need additional motivation, your children should be it. We've discussed financial role models on this board before, and kids learn to do what their parents do.

Prove to yourself and your kids that you can say "no" to consumerism and you can make a positive change to get your financial life under control. Your kids will learn by example. Set them up to make good financial choices when they are old enough.

Such good points. Unfortunately our daughter has the mentality that money grows on trees because before we moved I made more than double what I make now so she was spoiled rotten. We are trying so hard to teach her that we don't have to have everything we see at the store and we definitely don't have to get something every time we go. Unfortunately my mom and sisters were just here and bought her sooo much stuff (junk mostly) and when I tried to stop them they said "we never get to see them so let us buy it for them."

I grew up with a mom who pretty much bought whatever and now these are the consequences. Out of four of us three of us are like this, but I am not as bad as my sisters, but still need to improve.

This is a great revelation to observe about yourself, your kids and your family. What you're looking at doing isn't JUST cutting expenses, what you're looking at doing (hopefully) is learning a new way of life/thinking with money and stuff. You are working on changing your relationship with materials.

I second doing the meal planning. Since you work from home, you can build meal planning time into your at-home schedule. I started this a few years ago when we just waited until 6:30pm and would say, "What are we eating tonight?" It was not good - we spent more money, faster food is unhealthier, and we just felt disorganized when it came to meals. It was stressful to an extent. Food is such a big part of family life and well-planned intentional meals in the evenings are SO important for young families and relationships.

Here's what I did...

1. Having a boat load of recipe books was over whelming to me. So, I went through them all and photo copied all the ones I knew we enjoyed AKA kid-friendly, pretty simple, and healthy. Then, I put all the recipes into clear page protectors. All the sheets went into one binder, which has tabs: Entrees, salads, soups, sandwiches, etc.. Now, during my meal planning each week, I have ONE go-to spot for the meals. Occasionally, I will buy a Cooking Lite magazine to get new ideas for food. I rip out the ones I want and put into page protectors then I toss the rest of the magazine.

2. Then, I made and photocopied a bunch of shopping lists. As I meal plan, I sit in the kitchen and write down the grocery needs based on the recipes I'm going to use. I also peek in the pantry, freezer, and fridge to check on the consumables we may need like spices, milk, eggs, etc.. Sometimes I will plan a week's of meals and do 2 separate grocery lists, with each one dated for the day I plan to go to the grocery store.

Next, try and stop seeing your cars as assets or benefits. Vehicles are ALL liabilities - with gas, insurance, and even warranties, plus their constant maintenance and cleaning they are simply a drain on wallets and nothing more. So end your love affair with vehicles and begin to ONLY see them as a mode to get from point A to point B.

Maybe buying a beater car is a bit drastic for you. However, there is absolutely no reason to continue in the cars you do have. Replace the existing gas-guzzlers with safe, reliable vehicles...think like a smaller or mid-sized older car like a Honda, Nissan, or Toyota.

abrewer5 · June 2015

I think PPs have given you great advice! I just wanted to chime in and say good luck! It is not easy to make a change, but the first step is realizing you need to. I highly recommend checking our Dave Ramsey, others on this board may not agree, but in your situation I think he would be a HUGE help to get rid of your consumer debt.

Also agree with @hoffse on teaching your kids a better way to manage money. I love my parents to death, but I wish I would have learned at a young age what I know now as an adult to make better money decisions.

Good luck and stick around! All the people on this board are great and they give awesome advice.

alice0422 · June 2015

Thanks everyone for the great advice. Just showed my husband everything as well as called and took care of the items discussed and updated my snowball spreadsheet. By sticking to out budget we could have the top four items paid off in 16 months and that's not counting if I have extra income for the month. Question though, what if I switched the car note with the lower loan with card #4 in the payoff plan. The payment on that is $40 higher a month and the balance is a little lower so we would see an improvement quicker than with the other loan?

AprilZ81 · June 2015

alice0422 said:

Thanks everyone for the great advice. Just showed my husband everything as well as called and took care of the items discussed and updated my snowball spreadsheet. By sticking to out budget we could have the top four items paid off in 16 months and that's not counting if I have extra income for the month. Question though, what if I switched the car note with the lower loan with card #4 in the payoff plan. The payment on that is $40 higher a month and the balance is a little lower so we would see an improvement quicker than with the other loan?

That is personal preference. Some people do it by balances (tackling low balances first, then moving on to higher balances) and some people do it by interest rates (paying on highest interest rates first and then moving down the line). Some people do a combination... You need to do whatever keeps you motivated and on track and as long as you keep at it that is all that matters. Personally, I would pay off one or two of the low balances so you start to see an immediate benefit of lowering the amount of payments you are making, then I would switch to the debt that has the highest interest rates.

brij2006 · June 2015

We personally pay off the lowest balance first, regardless of the interest rate. That way we look at the next debt itself, rather than the bigger picture that we have $35k left in debt. Right now we're working on a $2,600 loan. Our extra this month will be about $2,300 (snowballing payments of what we've already paid off). So in this case we're trying to figure out where we can either earn an extra $300 this month, or save $300 somewhere in the budget to get that next debt finished off.

Debt payoff is 90% behavior, 10% math. For most people, trying to "out-math" debt is what got them into this mess. So don't make it complicated for yourself. List them smallest to largest and go to town on them.

smerka · June 2015

I have no idea what the military provides in the way of life insurance, but you need some. The general rule is a policy for 10 times the yearly income, but you also need coverage for you so your husband could pay for childcare. We have $1,000,000 on my husband and $600,000 on me and pay $130 a month. But we are older (40's), and I am overweight. But we are also nonsmokers so your husband might get seriously dinged for that. And get term insurance. Probably a 15 or 20 year policy depending on your kids' ages. If anyone tries to sell you a whole life policy, get up and walk out of the office. You want term.

smerka · June 2015

Oh and great for you for taking the advice here. So many people get defensive and make excuses when it comes to overspending and debt.

alice0422 · June 2015

smerka said:
I have no idea what the military provides in the way of life insurance, but you need some. The general rule is a policy for 10 times the yearly income, but you also need coverage for you so your husband could pay for childcare. We have $1,000,000 on my husband and $600,000 on me and pay $130 a month. But we are older (40's), and I am overweight. But we are also nonsmokers so your husband might get seriously dinged for that. And get term insurance. Probably a 15 or 20 year policy depending on your kids' ages. If anyone tries to sell you a whole life policy, get up and walk out of the office. You want term.

They do provide very good life insurance while he is active and we still have about 10 years left until retirement give or take.

alice0422 · June 2015

Side noted: we both got pretty excite o see how much could be paid of in 2 years with just my current pay and the fact that we could put so much into savings once it's all paid off.

smerka · June 2015

Do you have life insurance coverage?

Sisugal · June 2015

As for the kids - do not take them with you when you need to grocery shop or run errands.
Set a limit on the number of gifts you purchase for birthdays and Christmas etc. (and a $ total) - they can make a "wish list" - but it is just that a wish - no guarantees they will get what is on their list - (but do try to get something from the list within the overall $total gift budget)

Do have have items you can sell - clothing, toys, household belongings that you no longer need/use? Garage sale, Craigslist, e-bay --- apply the money to debt.

You can find almost anything/everything for less than advertised price.
Consider borrowing or renting big ticket items that are used rarely rather than buying them.
Kids clothing is very available at garage sales, consignment shops, Goodwill etc - for a huge discount. Often with the store tags still on them.

Limit your wardrobe to classic, basics and a few colors that mix & match.

Let your kids know they can have SOME of what they want but not ALL of what they want.
They do NOT have to be like everyone else - it is often smart to not follow the crowd.

alice0422 · June 2015

smerka said:
Do you have life insurance coverage?

Yes.

MommyLiberty5013 · June 2015

alice0422 said:

Do you have life insurance coverage?
Yes.

If you need more coverage or if DH is covered but you are not, then check out USAA. It's open to active, retired and honorable discharged military members and their families regardless of military branch or rank.

I will also add that they offer amazing auto, renters, and homeowner's insurance!!!

alice0422 · June 2015

MommyLiberty5013 said:

alice0422 said:

Do you have life insurance coverage?
Yes.

If you need more coverage or if DH is covered but you are not, then check out USAA. It's open to active, retired and honorable discharged military members and their families regardless of military branch or rank.
I will also add that they offer amazing auto, renters, and homeowner's insurance!!!

Thanks. We have pretty much all of our accounts through them and love their service/ rates. We just switched are auto though because they kept going up every six months because of our location and geico was about a 400 dollar savings every six months for better coverage.

formerlyGDaisy09 · June 2015

I've been away, but all the PPs make very good points. your vehicles are strangling you both from the payments and the gas. I'd support getting rid of both vehicles, ideally you'd sell them and be able to buy something in cash, however, it sounds like you're underwater on them and don't have any available cash to do that. I'd suggest trying to sell them to a private party, you may need to finance the difference in the selling price and what you owe for a little while, but this should be a much lower payment than what you're making right now.

then look for USED smaller cars...I'm thinking 4-door family sedans probably from model years 2006-2008, something like a toyota camry, nissan altima, or honda accord. Agian, if you're underwater on your current vehicles and don't have cash around you'll probably need to finance this, but this should get you car payments in the $100/month range and save you $600-700/month on car payments. Those vehicles are also much more fuel efficient than the SUVs you're driving now, so you'll probably save a noticible amount on gas too. then you have all that money in your budget every month that can go towards getting out of credit card debt and subsequently building an e-fund and getting rid of your monthly car payments. You will probably also find that your car indsurance rates may drop.

I bet all this seems overwhelming right now, but you can do this. H and I live on a similar income and in the past 3 years have tackled $30K in credid card debt and we're chipping away at $50K in student loans. just getting rid of the cars and taking some of the suggestions like getting rid of XM radio and dropping cable will go a long way towards getting you there faster.

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