Need help with budget

hamsterdance · May 2013

I am cutting my hours back in June a little little because my health and marriage cannot tolerate me working 55-60 hours a week much longer, and my DD will be here for the summer. Currently we take home 5-6k a month, but starting in mid-June it will be 4-5k a month. We are on track to have all the credit cards paid off by then.

Here is what is currently not in our budget that needs to be:

We want to get a condo in the next couple of years, if possible, and have no savings for that yet. DD will be going to college in five years, and we are not currently saving for that. I have $350 in a 529 plan right now, but that's it. DH has a 401k but I do not have retirement savings at all. My employer does not offer it. We also basically have no emergency savings. And lastly there will be a hospital bill for 2-3k coming within the next few weeks for DH.

Here is everything we currently pay for and what it costs us monthly:

Rent: 960

Internet and Cable: 150

Cell phones (3 of them): 150

Electric: 60

Child support for DD: 298

Tax bill (DH underpaid a few years ago): 50

My short term disability coverage: 38

Student loan #1: 54

Student loan #2: 110

Student loan #3: 90

DD' s plane tickets: 215

My bus pass: 100

Massage studio rental: 135 (more or less pays for itself right now, and could potentially make us more)

Professional licenses: 10

Professional Liability insurance: 17

Continuing education requirements: 20

Science museum membership: 9

Pet ( cats and fish) food and supplies: 60

Quarters for laundry: 25

DH' s gym membership: 23

Netflix: 9

Rhapsody: 17

Massage therapy for me: 50

Haircuts for all of us (and color for me): 100

Food and other groceries: ?

Clothing: ?

Medical: ?

Gifts: ?

Entertainment: ?

Spending money: ?

Incidental: ?

The items with question marks, we have started to keep track of but don't have enough data to know what we actually spend yet. Also DH has some things coming out of his paycheck already: health, dental, and vision coverage for all of us, his bus pass, life insurance, his disability coverage, his retirement, and 20$ every two weeks into an HSA.

bparkhur · May 2013

Since you have so many question marks, it's hard to give really concrete advice. How much is your DH's 401K? How old are you guys? Since you have a daughter who is about to start college, I'm assuming you are not just starting out. What are your retirement plans? I think you need to think about yourselves before you even start thinking about trying to help DD with her college expenses.

Do you guys really need to spend $100 a month on hair cuts? That seems like a lot if you are trying to pay off debt and have no retirement account.

Does your DH have a car? Cost of insurance?

Cut out cable, beauty indulgences, etc. Do you NEED massage therapy?

hamsterdance · May 2013

We don't have any cars. DH is blind so we have to live in an area where he can get to and from work on his own, and it's not really worth it to pay for a car.

I do have to get massage since I do massage for a living. If I don't take care of myself I will have a very short career. I get it done at a nearby school for a lot less. 50 gets me an hour every two weeks. If I can manage to get an exchange with another therapist I consider it a bonus, since people in my profession tend to be flakey as all ****.

The person who does our hair is a good friend, and she does a much better job than others we've been to, so I hesitate to go anywhere else, but I could stop getting it colored. I wear my hair short, so I do need pretty frequent cuts, as does DH. DD only gets hers done a couple times a year.

I don't know how much DH is putting into his 401k.

I would like to cut cable but DH doesn't want to. He said we could look at maybe reducing the package we have though.

Oh, I am 34 and DH is 37.

kasi55 · May 2013

The expenses you have listed add up to $2,750 assuming each one is monthly. Which leaves you about $2,250 to $1,250 depending on whether total income is $4 or $3k.

I would start dividing that up among your remaining expenses. You don't mention if you have any savings. If you don't, I would work really hard to make sure there is some room in the budget for some type of savings. Also, make the savings automatic, so you aren't tempted to spend it.

I second the PP about the college savings. If you are 34 and have no retirement savings, I think retirement should be the priority above college savings.

Good Luck!

CuriousKiddosMama · May 2013

I do have a couple questions- and then some assumptions. I'm assuming this budget is for 2 people because you said DD comes to stay with you- as in she is living somewhere else?? One of my questions is how often does she come visit and how much generally are the tickets? 215 monthly seems excessive- that's like 2600 a year for her trips. I know plane tickets can be bad whenever they are last minute- but try to find sales to limit this.

Also, do you NEED internet and cable, and netflix and Rhapsody- that seems like a lot of money being spent on those things so evaluate your use of them. Would netlix without cable be okay- or cable without netflix? Every little bit helps you get out of debt. You may need to make some drastic lifestyle changes in order to make retirement an option. I like PP would like to know what you have in retirement and how old you and DH are. (also evaluate massage- hair coloring, science musuem, etc.)

I added up your budget you posted above and it equals $2600 a month- that means if you end up bringing in 4k a month you still have 1400 to play with. That is a lot of money left over. Budget decently for food. For 2 people we spend under $300 every month- that would leave you 1100 left. Clothes should be minimal- you don't NEED new clothes right now- maybe $50 a month. That leaves you 1050 to help clean up your debt and to create an emergency fund and start saving for retirement. I would focus on retirement before you focus on a college education- you need to take care of yourself first.

My advise I guess boils down to REALLY examine what you NEED versus what you WANT. You NEED a retirement, you NEED 4 walls, utilities, food, pretty much everything else is a want.

hamsterdance · May 2013

DD lives in Alaska and depending on the time of year tickets can range from 700-1000 round trip. I don't have any choice about when she comes, so I just have to pay up. She comes three times a year. I do save up money in advance and watch the prices to get the best deal I can, but it's really that expensive.

I would like to cut down majorly on the media expenses, but I need to get DH on board. The science museum is definitely worth it to me because we live close by and we go at least 10x a year, and we get lots of guest passes which we also use. That is one of the last things I'd want to cut out.

We don't spend a lot on clothes as it is right now. DD gets a lot of hand-me-downs. My best guess would be 20-25 a month for that. We haven't bought clothes in a few months so I don't know for sure.

Food is the hard one. We spend a lot on food. 500-600 for DH and I and even more with DD here. I hate cooking. Hate washing dishes. We all eat different things. I work late into the evening so we can't do dinners at home together. We have a hard time keeping the food budget under control.

hamsterdance · May 2013

I don't think I said so, but for the past month we have been putting every last extra dollar towards the credit cards so that we can get them paid off and I can afford to work less hours. It was only about 3k total, but I wanted it gone so we wouldn't have to worry about it or pay those bills any more.

What I am not sure on is how to prioritize our remaining debts and savings needs. Should we do the same thing with the hospital bill? What about the student loans?

bparkhur · May 2013

That's a lot of money for two people! Consider doing sandwich night, breakfast for dinner, etc to help you control expenses. Consider crock pot meals (you can easily freeze/reheat, or have leftovers the next. Minimal cooking involved! I hate cooking too, so I totally understand where you're coming from. You need to decide what kind of lifestyle changes you (both) are willing to make to meet your financial goal(s). Keep take out to once every other week as a treat if you need to.

CuriousKiddosMama · May 2013

Maybe you need to sit down and finish up your written budget, and talk about your goals with DH. One thing I found interesting when I came across it was this investment calculator- I know you aren't at that stage yet, you need to pay off your debts first, but the bottom of the calculator applies to you. The "What if I gave up....." part.

http://www.daveramsey.com/article/investing-calculator/lifeandmoney_investing/#/entry_form

If your husband is a numbers guy, he may find this interesting. Start by putting in the amount he currently has in his retirement, and what he is contributing. Then you can put in something like your internet/cable/netflix/rhapsody. If we cut that to 75 a month, and put the rest in savings/pay off debt/ retirement- this is what it will do for us by the time we are able to retire.

You really do have a good income between the two of you- there of course are some expenses out of your control (plane tickets for one) but beyond that you do have a lot to work with. I believe the statistics are that the average family of 4 in America makes 50,000 a year, and you and your husband are well above that right now- if you go down to 4000 take home a month, you are still above average. Maybe start cooking at home with things like Viola skillet meals- they are pretty quick and easy- just require a skillet and the plates you will eat from, and they go on sale pretty cheap at around 3.00. Add a can of veggies to that and you have a great meal for 2 people.

hamsterdance · May 2013

Another thing that hurts our food budget is that I am extremely picky, and DH has to really watch his sodium, carbs, and saturated fats because he is diabetic and his kidneys and heart are not in great shape. Luckily DD will eat almost anything. I won't eat very much reheated and most frozen and canned veggies are inedible to me. There has got to be more we can do though. I eat a lot of salads and sandwiches, which I mostly buy ready made, but I could start making them at home. And DH makes black beans in the crock pot that reheat up well and he can control the amount of sodium. That's a start.

sparklerose · May 2013

PPs have given good advice. Don't even consider putting a dime to your child's college fund. You need to take care of retirement and savings first. Your kid will thank you in the end when they dont have to worry about taking care of you when you get old.

hamsterdance · May 2013

Ok, so maybe this is a dumb question then, but how do we pay for college? I am not realistically expecting any help from her dad.

brij2006 · May 2013

There are several different ways to pay for her college. You can not pay at all and have her take out student loans (most kids have to do this). Or you can take out student loans yourself for her, and pay over the next 10+ years on her college tuition. She will also fill out the FAFSA forms to find out how much government assistance she can get for her schooling. Although, I can tell you that you and your DH likely make too much for her to receive assistance.

Now my personal opinion based on the budget you posted and your situation. I would not pay for her schooling. You need to focus on your savings and retirement first. Also, there have been studies done that students who pay for their own schooling usually graduate faster and with better grades than those who's parents pay. Just an FYI.

hamsterdance · May 2013

Well, here is where I am coming from. My parents have a barn, a leaky camper, and 20 acres of wilderness to their name. I did not get any help with school expenses. My husband was abandoned as an infant by his parents and raised by elderly relatives. He did not get any help with school expenses. It has been tough. Really tough. We are just now getting to a point where we are somewhat comfortable financially. I don't want things to be that hard for my daughter.

brij2006 · May 2013

Just because you didn't come from much, doesn't mean you HAVE to help your daughter out with her choice to go to school.

My H's parents do not have much at all, but they paid for 2/3rd's of his college tuition. Here we are, 6 years later and we are paying to put a new roof on their home since theirs is leaking and they do not have the money to fix it. They also have very little in retirement (they're in their mid 50's). H says every day that he wishes they would've focused on themselves instead of paying for his college degree (that they are still making payments on). Then we wouldn't have to be helping them out with day to day expenses.

Coming from experience, focus on your own finances first.

hamsterdance · May 2013

Right, but it doesn't necessarily need to be either/or. I can understand prioritizing retirement savings and emergency savings, but I don't see why that means we shouldn't be saving for college at all. It's not like we're broke.

brij2006 · May 2013

hamsterdance:
Right, but it doesn't necessarily need to be either/or. I can understand prioritizing retirement savings and emergency savings, but I don't see why that means we shouldn't be saving for college at all. It's not like we're broke.

Didn't you say that you don't have an E-fund or savings? Every person's definition of broke is different, but this would be my #1 priority.

You can definitely help your daughter out with school. But don't finance yourself to the gills in order to do so.

hamsterdance · May 2013

We don't. We used to to have an emergency savings, but I went back to school last year and it was needed to get by while my income was reduced. I do feel like we have enough income to make both happen at this point though. I may not be able to pay for 100% of her schooling, but I do want to contribute.

My thoughts were that we could pay for her to go to trade school or get a certification in something, and that way she would have the ability to work for a lot more than minimum wage whether she decides to go on to a four year school or not.

bparkhur · May 2013

hamsterdance:
Right, but it doesn't necessarily need to be either/or. I can understand prioritizing retirement savings and emergency savings, but I don't see why that means we shouldn't be saving for college at all. It's not like we're broke.

I'm not trying to be snarky, so please don't take it that way...but you sort of ARE broke. You have credit card debt, student loan debt for yourselves, medical debt, no retirement for yourself (an unknown amount for DH), no investments, no E-fund (from what I can tell), and a decrease in salary. In my opinion (which is only MY opinion), you need to change your perspective because as morbid as it sounds, you're worth more dead than alive. The longer you continue to see yourselves as "fine," the more you will justify already-prepared meals and a premium cable package. You make very decent money, but you need to figure out your priorities and make your money go where you want it to go instead of wondering where it went. I understand wanting to help your daughter, but you need to focus on getting yourselves out of debt first, planning for your own future (you don't want to end up being a burden on your daughter, right?), and building your own security. I don't know why you have a $1200 medical bill, but what happens if someone needs to be hospitalized again? You've paid her tuition and now, sadly, you're in debt again. In your case, your daughter really needs to fend for herself. You can help her look for scholarships, grants, and yes, potentially loans as well to help her pay for school. The most important thing you can do to help is teach her about proper money management so she is able to thrive and not just survive. Some of the best students are those who work while in school because they don't throw their time away. It often means more to you when you're paying for those credit hours! Sometimes people don't feel broke because they pay their bills on time. But you need to change your worldview: what are your balances? Making your minimum payments doesn't mean you are fine. What is the total amount of your debt? What is the total amount of your assets (savings, investment accounts, etc). Compare them and make a plan. Good luck to you! I recommend Dave Ramsay's Total Money Makeover. It has a lot of good advice.

bparkhur · May 2013

Sorry, I don't know why my paragraph breaks aren't showing up!

hamsterdance · May 2013

The credit cards will be paid off by next month and will no longer be a concern. The hospital bill is from my husband because he has diabetes, congestive heart failure, and kidney failure. (It has nothing to do with how well he takes care of himself fwiw. It appears to be mainly genetic. He takes very good care of himself.) So yeah, it's very likely there will be more hospital bills, and we do need to plan for that. There should be enough money there to save for retirement, emergencies, a home, AND help my DD with school, especially if we can cut back in places where we are currently overspending.

sparklerose · May 2013

hamsterdance:
The credit cards will be paid off by next month and will no longer be a concern. The hospital bill is from my husband because he has diabetes, congestive heart failure, and kidney failure. (It has nothing to do with how well he takes care of himself fwiw. It appears to be mainly genetic. He takes very good care of himself.) So yeah, it's very likely there will be more hospital bills, and we do need to plan for that. There should be enough money there to save for retirement, emergencies, a home, AND help my DD with school, especially if we can cut back in places where we are currently overspending.

There SHOULD be enough to do all that, but currently there is not. Like I said before, pp's gave good advice...make a real budget and cut spending. You made a lot of excuses why you cant cut things, you have to make serious changes if you wamt to get where you want to be. Dh and I are currently still paying off debt. We have a small efund, and are a little behind on retirement but plan to play catch uo once debt is gone. I know exactly how much we have in retirement, and how much we need to have. We have not saved a dime for ds college....and dont plan to for many years.

hamsterdance · May 2013

Yes. That's why I'm here. Because I realize that we need to make changes in order to get to where we need to be. This is honestly the first time in my life that I've even had my head above water financially. This is the first time I have even HAD money to save for anything. I have only been at my current job for two months now. I am just over a year out of bankruptcy due to 15 years worth of medical bills that compounded faster than I was able to pay them. I am not going to be able to fix everything overnight without any help.

It wasn't "good for" me to pay for my own school. It left me financially devastated and it has taken me 15 years to climb out of that hole.

Her dad is supposed to pay about 15% of every ticket. Sometimes he does. Sometimes he doesn't. If I want to see her then I have to pay for them. Whether he pays me back what he is supposed to or not. He is not working at all right now.

CuriousKiddosMama · May 2013

hamsterdance:

Yes. That's why I'm here. Because I realize that we need to make changes in order to get to where we need to be. This is honestly the first time in my life that I've even had my head above water financially. This is the first time I have even HAD money to save for anything. I have only been at my current job for two months now. I am just over a year out of bankruptcy due to 15 years worth of medical bills that compounded faster than I was able to pay them. I am not going to be able to fix everything overnight without any help.

It wasn't "good for" me to pay for my own school. It left me financially devastated and it has taken me 15 years to climb out of that hole.

Her dad is supposed to pay about 15% of every ticket. Sometimes he does. Sometimes he doesn't. If I want to see her then I have to pay for them. Whether he pays me back what he is supposed to or not. He is not working at all right now.

Sounds like you need to take him back to court, get what he owes you and change the custody agreement. If he can't afford to keep her (not having a job means he can't) then you should get her. Then that situation can be flip-flopped- if he wants to see her he can fly her to Alaska.

First step, get on a written, CASH budget. When the cash in that envelop runs out- you don't spend any more money on that thing that month. Allocate every dollar- this includes to things like retirement, and emergency fund, as well as paying off your debts.

Work the debt snowball- you said you will have your credit card paid off this month- great, cut it up and put the $ you were putting towards the credit card to the next smallest debt (maybe one of the student loans).

Rent the Total Money Makeover from the library, or go to Daveramsey.com and look at his baby steps. That will help explain how to get started. As far as the library goes, while you are there check out their DVD collection- sometimes libraries are great sources for this, which may allow you to cut out netflix and lower your cable bill.

Like a PP said- you ARE broke! You need to take drastic steps to get things under controll otherwise you will never be able to retire, and will depend on this daughter you are trying to help for everything in your old age- or worse, depend on the state.

No more excuses! These ladies on here are full of help, so get your 'new' budget for June figured out early, show it to us, and we will help keep you on track.

hamsterdance · May 2013

OK, here is what we have figured out so far. We talked about it and we use Netflix and rhapsody a lot but don't watch cable as much. We should be able to cut at least $50 off our cable/net package if not drop cable altogether. We are also looking at maybe switching from Netflix to amazon prime since it is cheaper and has other benefits.

We will be getting an emergency savings and retirement account for me started this week. Not sure how much yet, but we'll at least get a start on it.

We are going to delay saving for a condo for now and instead put money aside for DH to get his personal trainer certification. He has been wanting to do that for a while and is planning to do it part time in addition to his current job. That will help.bring more money in.

Starting yesterday I am making my food at home and packing it with me for work. We should be able to cut our grocery bill by at least a couple hundred a month if we work at this.

Next time I get my hair done I'll go back to my natural color and I will be growing it out to a style that doesn't need to be trimmed every three weeks. I'll start taking DD to the beauty school for her trims since her hair style is very simple.

hamsterdance · May 2013

Oh, and with regards to my DD and ex, I would spend 10X more on the custody battle than I would ever save by having her here. She is in a good school up there and I want her to finish 8th grade. After that it is looking very much like she will be moving here for high school anyway. I have to still pay for most of transportation in order to get XH to agree to it, but it will make the tickets cheaper. (They jack up the ticket prices leaving AK at the beginning of winter and spring break and coming back at the end by a couple hundred each way).

jeapplegate · May 2013

I just wanted to add to the fafsa issue...I think your DD will have a choice which household she uses for her fafsa. I her dad is broke I think she will be able to use his income. This just means that she will probably be offered a decent financial aid package. Unfortunate most financial aid is in the forms of loans that will have to be paid back.

I also came from a background of no money. I had to pay for my own college and grad school. It sucks to have loans, but I wouldn't call it financially devastating. My mother was always helpful in helping me sort through good options vs bad ones and that makes a difference.

I personally plan on helping my children, but I have no intention of paying for all of it. H and I have talked about it alot. He comes from a more financially stable family and has silly ideas about buying children cars and such. We have compromised on matching funds. If M saves $5000 for college we will put up $5000. If she has a part time job, we will match whatever she spends on housing books, tuition etc...`

hamsterdance · May 2013

There were many reasons why it wound up being financially devastating to me. Health issues forced me to cut down to part time which made all of my loans come due before I was done with school (My parents wouldn't or couldn't give me their tax info so all I had available was private loans and my own savings) plus I had massive medical bills on top of that. Eventually I had to drop out altogether.

I can't really cover the costs of a bachelor's degree for my DD, but I don't want her to be completely on her own either. Do you know if she would have the ability to use her dad's household on her fafsa even if she is living with me?

Anastasia517 · May 2013

hamsterdance:
There were many reasons why it wound up being financially devastating to me. Health issues forced me to cut down to part time which made all of my loans come due before I was done with school (My parents wouldn't or couldn't give me their tax info so all I had available was private loans and my own savings) plus I had massive medical bills on top of that. Eventually I had to drop out altogether.
I can't really cover the costs of a bachelor's degree for my DD, but I don't want her to be completely on her own either. Do you know if she would have the ability to use her dad's household on her fafsa even if she is living with me?

I'm in Canada so it may be different, but when I applied for OSAP (student assistance program in my province) I had to put the information of the parent I was living with.

hamsterdance · May 2013

Remind your daughter that expensive schools do not automatically mean better schools. From what I can tell from your posts your daughter would be much better off starting at a community college or branch of a larger school. The costs will be much less and the environment more forgiving (generally speaking). Higher education does not have to mean a ton of student loans.

Well, she's only 13 and doesn't even know what she wants to do yet, but expensive schools probably aren't even going to be an option anyway.

Need help with budget

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