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New Budget Advice
I am recently divorced and have a 6 year old. I have taken on a lot being the only parent in the house and I could use you guys opinion. Three months before the divorce we closed on our house that i now have full responsibility for. We got a great deal (it was much better when there were two incomes) but the housing market is terrible in our town and putting it on the market is not an option right now. Please take a look and just give me any advice or opinions:
Monthly take home : 2131.00
Child support: 300.00
Mortgage: 750 bal is 104k
Life ins: 41.44 ( me and my son)
Car payment: 220 bal is 8k
Electricity 200 (70 if this is payment on unit bal is ~5k)
phone: 90 ( work furnishes separate cell phone just can't seem to let go)
water:30
TV: 80
internet:40
car ins: 85
Fuel for car: 200 (I work 25 miles from home)
I am a full time online student so internet is necessary. I also have about 15k in student loans that are in deferment while I'm in school- they are not accruing interest but should I be paying on them anyway?? I have no credit cards and no other debt. Some months I think we are gonna make it- others I'm not sure how we will!! We don't budget for entertainment even though we go out for ice cream or go bowling occasionally. I haven't really sat down and made a budget- not sure where to start.....
Re: New Budget Advice
Some more information that would be helpful for us is: Do you have an emergency fund? How many months could you get by on it? Does your mortgage payment include taxes and insurance? Do you have extra money set aside for house repairs you might need? I believe I've heard 1% of the value of your house is a good rule of thumb - for you, it sounds like that would be around $1100-1300, depending on how much equity you have in your home.
Also, do you live in a HCOL or LCOL area? If you're in a LCOL, your house is really more than you can afford. Would it be possible to move somewhere cheaper and rent out your house until the market gets better?
As for your current budget, it looks like once all your bills are paid, all you have left for groceries, incidentals, extra loan payments, and savings is less than $700. I know I would be uncomfortable with that number. I think it's time to think about saying goodbye to your cable and personal cell phone.
Finally, to make a budget, I have found mint.com to be very helpful. I did start before I had mint, just by sitting down with a budget worksheet (I'm sure they're all over the internet) and copies of my bank statements from the last few months. I added up all of the transactions from each category and divided by the # of months to get an average spent on each category. That gives you a good starting point to see where you're spending money and where you can start to cut back. Some categories are inflexible needs (e.g., mortgage), while others are more flexible wants (e.g. your ice cream trips).
"You know you're in love when you don't want to fall asleep because reality is finally better than your dreams." - Dr. SeussI have more questions about your car loan.
What is the rate?
How many more months do you have to pay on it?
What is the make/model/year of car?
One other thing I'm not seeing on your budget is your school tuition. Is this your last semester- are you taking out loans for the entire thing, or are you paying for some of it. You need to be planning for this monthly so that when the time comes it isn't a bad month with you stressed.
Like somebody else said- I would get rid of the personal cell phone- that seems to be an unnecessary expense since you have a work cell phone.
When we started a budget, we honestly had to guess at home much we spent on things in a month. You will adjust it during the month as you realize where you are wrong, and get better at it over time.
Yes the mortgage includes taxes and insurance and also a $101 PMI that will go away in 2.5 years. We do live in a hcol area- I doubt I could get into an apartment for what my mortgage is- now I could rent my house for A LOT more than the payment but it seems that it would be fruitless to rent my house out and pay more for rent than the payment.
My car note interest is 2.0% I thought that was good at the time but now I don't know. It is a 2009 ford edge- book value was 16500 when I bought it for 11500- I have 3 years left on the note.
e-fund: I have about 4k in savings accounts and about 1500 in cash. I know I need to have about 9k to cover 6 months but its harder to build now that there is just one income. I'm having to focus on not touching it than growing it right now.
And the only option I have for Internet is Comcast (my house has no phone lines) and my contract with direct tv will end in July. I was thinking Netflix after that. I know I need to ditch the personal cell- I'm just dragging my feet
Hi There!
I think previous posters have covered a lot of good points, I do, however, see some things missing. It is really helpful for us to budget the non-bill expenses, too. Sometimes that means not making the Target trip until payday, but it really helps us stay on track.
Here are some other areas we have in our budget that you may also have: food, fun money, car insurance, natural gas, target/household, school lunches.
One other thing that helped us a lot when we went down to 1 income was having 2 checking accounts. We move all of our money for "bills" into one account, and leave the rest in the other. That way we can see what is left over for gas, food, etc, even if we don't have our budget handy. It really helps us not spend money earmarked for bills or something we "have" to pay.
Hope that helps, and best of luck. I'm sure it is overwhelming right now, but it will get easier (the money and life in general).
"Be the Lego Lady"