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our monthly budget
I posted last week about whether to use our tax refund to pay off some debt or whether to save it.... you guys were very helpful and we decided to keep $100 to put into a savings account and put the rest of the money towards debt. We paid off our Lowes credit card and all but $120 of another debt. A few of you mentioned that I should post our monthly budget for any suggestions you may have, so here goes:
Combined monthly income is $3350.
Mortgage: $370 (bal $33,650 / 4.875%)
Gas: $80
Electric: $70
Water: $25
Sewage: $35
Garbage: $24
DirecTV: $80
Comcast Internet: $35
Groceries: $200
Cell Phones: $190
Car Loan #1: $320 (bal $17,900 / 2.99%)
Car Loan #2: $350 (bal $21,850 / 5.89%)
Car Insurance: $171
Gas: $300
Student Loan #1: $50 (bal $430 / 4.25%)
Student Loan #2: $183 (bal $8,950 / 4.8%)
Student Loan #3: $300 (bal $31,405 / 6.8%)
Credit Line: $110 (bal $4,375 / 8.75%)
Overdraft Protection: $36 (bal $130 / 24.79% - will be paid off in 2 months)
Credit Card: $125 (bal $5,070 / 19.99%)
Misc. Expenses: $50
Savings: $100
Debt Snowball: $50 ($140 starting May)
TOTAL: $3254 ($3344)
Notes:
- We had a $90/mo Lowes payment but I paid that off last week so that will get added into our debt snowball.
- Our credit line was previously a school loan of hubby's but I transferred the balance because it's a much lower interest rate.
- Our monthly mortgage payment includes our homeowners insurance, mortgage insurance and all taxes. The amount that goes towards our mortgage balance is actually $191.04 and the rest is for all the other stuff.
- We don't pay for childcare, as both of our mothers rotate watching LO.
- We don't pay for health benefits because my employer covers all those costs.
- I get a diaper delivery from Amazon every other month ($35) so that normally comes out of my grocery budget or misc budget, whichever one I have extra money in.
We have a lot of debt, but the majority of it is our mortgage, school loans, and car payments. Since we don't make much, we don't have much to put towards our debt snowball.... It just seems like its going to take forever to pay everything off (which it is!).
Any help you guys could offer would be GREATLY appreciated!!!
Re: our monthly budget
Here's my take on it.
1. Go bare bones. Cancel Directv and go to non-smart phone cell phone plan.
2. Call your credit card company and try to negotiate the interest rate. Your goal is to get it in the single digit %.
3. Focus on the Overdraft Protection first. 25% interest is huge, even if it's only on a $130 balance. Apply your debt snowball to that first, then the CC.
4. Check into refinancing Car Loan #2. You may be able to find a lower interest rate depending on your credit score.
5. How much is your savings at? Once you have $1,000 in the savings account, begin applying that $100 per month toward your debt.
6. Get part time jobs, and apply the extra money toward debt. Then it will not take forever to pay everything off. The more time you take to focus on it now, the less time it will take to pay it off.
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I have to agree with all of this. A part time job delivering pizza a couple nights a week could add $1000 to your budget that would give you a lot of extra traction. Also, beans and rice, rice and beans- REALLY, REALLY cut everything down to the bare bones. Do not eat out/get coffee/ pay for a car wash- anything extra like that. Every additional $20 here and there you can squeeze out of your budget will help you get out o debt quicker. Also 'found' money- things like refund checks, birthday cash from Parents (if yours do that every now and then) or anything unexpected needs to go towards the debt.
Also, keep yourself motivated. A checklist on the fridge helps me get going on anything- but find something that works for you, where you can see that you are gaining traction and getting this under control!
I think you are headed in the right, debt-free, direction!
My suggestions would be:
Cut out the DirecTV. You can keep the internet and sign up for NetFlix which is only $8/month. That will save you $72/month!
Definitely look into lowering your cell phone bill. H and I both have smart phones but we have the smallest data package available to us and we pay $140/month (which I know is still a lot but it works for us).
Is it an option to sell car #2 and use that money to get a cheaper, new-used one? $350/month is a lot to pay for just one car payment.
Is it an option to carpool to and from work with a coworker? That will help you save on gas monthly.
I don't have children but is it really a good deal to get your diapers from Amazon? Do you have to pay any sort of shipping or processing fees included with that $35? Could you look for coupons for the diapers and purchase them in the store when you are grocery shopping?
What all is included with the misc. expenses? Are you sure that it is only $50? Sometimes we might budget it to be only X amount of money but then when we break it down, we discover that it is a lot more than we originally thought. Really sit down and look at that area and see what exactly is being spent as misc.
Right now where does the extra $96 that you have leftover each month go? Do you keep in your account to rollover into the next month?
I agree with the other PPs. At the bare minimum, I would:
Cut out direcTV. Keep the internet and get Netflix for $8 month. That right there would save you $72/month that you could put toward the overdraft that has an extremely high interest rate. I would definitely pay the overdraft off first.
I would also reduce the cell phone bill. Smart phones are a luxury, not a necessity. DH has one, but I do not. I use his when I want to. This could at least save you another $50/month which you could put toward SL1 and get it paid off in order to put both toward the next snowball.
I would also really look into getting rid of both car payments and finding older, cheaper vehicles. We have a 2001 SUV that we paid cash for back in 2009. We searched high and low to find a nice vehicle with low miles and found it. Still in excellent condition. We also found a cheaper 2006 sedan with lower miles and just paid it off. IMO, I would never have a car payment the same as a mortgage payment since automobiles lose value so quick.
Lastly, I really like PPs suggestion of keeping something on your refrigerator or something else to keep you motivated. It's a good feeling to pay off a debt and I hope it becomes addicting for you! GL!
Cable & Internet- Even if you don't cut the cable can you look at getting these through a different company? We recently moved and switched to at&t. It is $54/mo. for cable and internet combined and we received a $150 visa card for signing up. It is a 12-month contract and we intend to cancel cable after the year is up and just use netflix and an antenna.
Auto insurance- You might want to check with a company like selectquoteautoandhome.com and see if they can find a company that will be less expensive. They take your info and run it through 100+ top-rated companies and see who is cheapest. We used them recently and changed from State Farm to MetLife. We saved $103/year on homeowners insurance and $500/year on auto for our two cars. These amounts were for the exact same coverages and deductibles. I was shocked that we were able to save so much. Even if you don't save money it is worth checking so you know for sure.
I also agree with previous posters about looking at cheaper cell phone plans and possibly refinancing your car. The refinance may have a small cost ($50-$100) but you might make that money back fairly quickly on the savings. Again, it is worth looking into.
I hope I am not too late to the party but you need to sell both cars. They are too expensive for your budget, especially since you have cc and student loan debt.
You need to find a cheap car you can pay cash for...and drive that around until you pay off the cc's. Then you can save up to buy a nicer car with CASH.