How CAN anyone live on a Budget

[BadlandZ]

Originally Posted by LuxLiving

badlandz - it does sound as if you've suffered a hard hit.

Try:
http://www.forbes.com/2005/10/31/kar...1liverich.html

UGH! It looks good, called "150 Cheap Places To Live" but there is no list? It only mentions a couple places. Am I missing something, how do I get at the full list?

[Budgeteer]

A few comments for you BadlandZ. I'm a budgeting fanatic, so I might be a bit biased.

Tax: No way you'll pay 25% on that kind of income. So you need to up your assumption. Someone else mentioned a similar salary and 3500/mo. Even if you split the difference that gives you 904 instead of 604 for rent.

Rent: I agree, you are going to spend more than that almost anywhere for somewhere nice. And living someplace that you don't feel depressed or unsafe is important.

Phone: dump the home phone. We did it and haven't had any issues.

Car insurance: yikes. My car is oldish, but my wife's is pretty nice. We save $125 a month for our insurance, and I've noticed we are getting ahead of payments. Check around and see if you can get a better deal. Geico has been great to us.

Car payments: what can ya do? If you were desparate I guess you could sell and downgrade.

Utilities: might be high. I have a 3k sqft home in MN. We get very cold in winter and run our air conditioner most of the short-ish summer, mostly because we have two large fish tanks which need a steady temp. Speaking of which, we have HUGE lighting setups for the tanks, pumps that run constantly, and did I mention lots of computers? Our utilities are about 225 a month or so.

Cable/Internet - gotta have the internet

Savings is high. I love saving money, and love telling people they should save money. So I hate to recommend cutting that. But it's probably not realistic to expect to save so much on an income like this.

I agree with your overall summary though - it IS going to be really tight. I think if I were in your shoes I would have to do some thinking about where I was and where I was going. How would you foresee this picture changing in the next five years? Then I'd make some decisions based on that.

[safari]

Originally Posted by BadlandZ

UGH! It looks good, called "150 Cheap Places To Live" but there is no list? It only mentions a couple places. Am I missing something, how do I get at the full list?

There you go http://www.forbes.com/2005/10/25/che...ife2_land.html

[LuxLiving]

Is your new spouse working?

I'd work on NOT leasing another car when your current lease is up. Use the one car together and save up 1000-1200 & go buy a decent used second car for now. You can upgrade later after you save up for it.

I'd likely ditch the home phone as well.

One of the things to think about is that you need to regroup (obviously you are thinking about it or you wouldn't be here) and retrench. Divorce is costly and you obviously were living a very nice lifestyle before and most likely you can again if you don't dig yourself into any more holes.

Think CASH ONLY for everything!

Plan inexpensive menus and budget for food wisely. Turn off extra lights and unplug all the unnecessary items in the house. Make do with the clothes and shoes you have now or get replacements at thrifts and garage sales for awhile. Rethink every purchase and every bill.

I'm not saying these have to be lifelong sacrifices but for now stop and think before you lay out cash in any form for anything - be it writing a check, using a debit card, paying online.

Give each of you a small allowance to blow and then tighten the hatches on everything else. At first it may take awhile to see daylight. It can be the proverbial one step forward two steps back for a bit of time before you make any real headway so be prepared for it.

Do you have an emergency fund or savings of any kind to fall back on?

You're on the right track w/cutting back on trips to town and combining trips...keep going!!

What kinds of economic books have you read about this topic? I'd suggest The Wealthy Barber, Debt Proof Living and Total Money Makeover. Get them at your local library.

Keep asking questions here.

[disneysteve]

Originally Posted by BadlandZ

The only real asset was my house, which has been on the market now for over a year, and after numerous price reductions is down to $350k, and still hasn’t sold.

Check your local paper or yellow pages for people who buy houses as is. My mother's house was on the market for 6 months, 2 different realtors, 3 price reductions. Finally, she contacted on of the "We Buy Houses For Cash" places and the house is currently under contract, scheduled to close at the end of this month.

[creditcardfree]

This website is great for calculating your net paycheck by inputting gross income, your state, exemptions, filing status, ect. Check it out here.

[MonkeyMama]

Originally Posted by BadlandZ

There are a couple mentions of “pay off your debts.” But the only debt is a single student loan, one of the lowest interest loans going. I actually (mistakenly?) thought not having any credit card or other revolving debt was already a fairly good start.

I just had to say for us that is too much debt. We don't do debt. We are oodles ahead. $45k would be plenty to live on with no debt. I assumed the car payment was a debt - way too much to pay for a car if things are so tight. We lived very well on $45k with no debt or car payments. With, we would have been hurting.

Utilities seem way high as does cable - so not necessary if things are so tight.

Just clarifying, any debt makes it harder. Like someone said above - think CASH everything.

Sounds like you have had hard time - I just wanted to say too - Good Luck. It is possible - everyone here has lots of ideas. If there is a WILL there is a way - just keep working on it.

[zetta]

Badlandz,
I had an idea about your housing situation. It may or may not work, depending on what part of the country you are in. How about living in a trailer park for a year or two while you get back on your feet? If you manage to sell your house for more than the mortgage, you might be able to afford to purchase your own trailer. You might be able to have your pets with you that way, and a park geared toward retirees should be a fairly safe neighborhood. Here in San Diego it's definitely a viable option, although I can imagine it wouldn't be as attractive in a place like Boston.
There's a book I'd like to recommend for you called, "Live Your Life for Half the Price". One chapter has a very good strategy for buying a cheapo car and slowly but surely upgrading to something much nicer. What is the fine print on your lease like? Any way to escape early? If you are going through bankruptcy anyway, would it matter much if you were to walk away from the lease at the same time?

[BadlandZ]

Originally Posted by zetta

I had an idea about your housing situation. It may or may not work, depending on what part of the country you are in. How about living in a trailer park for a year or two while you get back on your feet? If you manage to sell your house for more than the mortgage, you might be able to afford to purchase your own trailer.

I wish I could sell the house for more than the payoff, but right now it's listed for $56k below the payoff and no one is making an offer, or even looking at it. The local market just collapsed.

Here in the Tucson area, new home prices doubled in the last 4 years. My $230k house went up to a value of $418k+ and it was at that point the judge, lawyers, and my ex-wife had me buy her out.

Then, in the last 6-10 months, prices dropped, the inventory of houses for sale skyrocket, and there is a historic high number of homes on the market for sale (I think 2-4x as many as last year at this time). So, nothing is selling.

Tucson is also in the middle of a new construction boom. And the builders have responded to the market changes by slashing prices rather than slowing down construction. If they have to sell a new home for $300k instead of $400k, no problem. Only 3-4 years ago they were making good profits for selling the same houses at around $225k, so they are still making money at $300k.

Of course, a collapsing market, and almost no slow down in new construction is causing a nightmare for sellers. I can't afford the new re-finance payments on the $418k price, and I can't even get payoff for the sale. Talking to my realtor about it, she knows all about "short-sales," "foreclosures," and bankruptcy and she said it has become very common in her office, happing a couple times a week now.

So, I'm back to looking at bankruptcy, and crunching numbers on how to live in a "cash only" situation, with no money down and no savings.

Originally Posted by zetta

There's a book I'd like to recommend for you called, "Live Your Life for Half the Price".

Thanks for the tip. I'll have to check the library for it, can't buy a book right now!

Originally Posted by zetta

What is the fine print on your lease like? Any way to escape early? If you are going through bankruptcy anyway, would it matter much if you were to walk away from the lease at the same time?

If I got out of the lease, I'd free up $225/month. However, I would have no car, no cash to buy a car (other than $225), no down payment, and no credit even if I had a down payment.

As I'm traveling a lot looking for work, and most jobs I would get in my field will require a lot of travel, having a reliable car that can do a few hundred miles a day at times is necessary.

So, $225/month keeps a fairly new, reliable car. One that doesn't require a down payment now, doesn't need any work, gets fair gas mileage, and has very low additional cost (oil changes) in addition to the $225.

For $225, I don't know of a better deal than a 6 month old car that gets good mileage. I think it would be very difficult to find anything for $225 that would be better than the car I already have.

Getting a new loan or payments isn't going to happen post bankruptcy. And getting more cash together than $225 isn't going to happen unless I save up for months, which would require being without a car at all for those months, which would make working impossible. So, kind of stuck there.

That puts me back at tweaking percentages in my ideal budget, based on an income I'm hoping to get from a job that I hope happens before I'm homeless... Ok, I'm getting depressed...

[zetta]

Sounds like the car lease might be the right thing for you right now. Just trying to throw out any ideas that might help.

A former roommate of mine went through bankruptcy, and had no problem getting a car loan from dealers -- they love you because you can't go bankrupt again for several years. Ditto with credit cards. It would be a tradeoff between the higher interest rate and having a car that you own at the end, you'll have to do the math.

I agree internet and phone are necessities during a job search.

Through AT&T I'm paying $20.02 (incl taxes, etc.) for DSL internet.

You can probably get your phone bill down to $20-$25 by either going for a prepaid wireless plan or the following:

We haven't gone mobile-only because DH's parents are overseas.

I pay about $11.50/month for local home phone. Ask for "Measured rate service". It's something they don't advertise but is very inexpensive. It's $5.70 for the basic service, taxes and fees are another $5.75, and the calls are charged on a per minute basis, with the first $3.00 of calls free. Looks like my calls range from $0.01 to $0.10 per minute depending on zone and time of day.

My domestic long distance plan(AT&T OneRate Nation) is $2.00 plus $0.10 per minute. The international plan (AT&T Worldwide Value) is another $5.00 and DH's home country is $0.08 per minute. Taxes and fees on these plans add another $3.75.

[boefixepa]

Monthly Yearly
Auto:Fuel - Her $30.00 $360.00
Auto:Fuel - Him $90.00 $1,080.00
Auto:Maintenance $50.00 $600.00
Donations:Tithing - Salary $400.00 $4,800.00
Gifts:Birthday $10.00 $120.00
Gifts:Holiday $80.00 $960.00
Gifts:Other $10.00 $120.00
Hidden Files:Auto Insurance $80.00 $960.00
Hidden Files:Auto Registration - Her $15.00 $180.00
Hidden Files:Auto Registration - Him $15.00 $180.00
Hidden Fileseductible $- $-
Hidden Files:Home Owners Ins $38.00 $456.00
Hidden Files:New Car Fund $20.00 $240.00
Hidden Files:Property Tax $142.00 $1,704.00
Hidden Files:Savings $100.00 $1,200.00
Hidden Files:Tax Savings $40.00 $480.00
Hidden Files:Vacation $40.00 $480.00
Home:Maintenance $85.00 $1,020.00
Home:Mortgage $1,000.00 $12,000.00
Household :Cleaning/Other $40.00 $480.00
Household :Eating Out $50.00 $600.00
Household :Food Storage/Bulk Buys $85.00 $1,020.00
Household :Groceries $100.00 $1,200.00
Medicaloctor Visits $15.00 $180.00
Medical:Perscriptions $30.00 $360.00
Misc.:Clothing $40.00 $480.00
Misc.:Entertainment $20.00 $240.00
Misc.:Personal - Her $20.00 $240.00
Misc.:Personal - Him $20.00 $240.00
Misc.VD/Games $15.00 $180.00
Misc.:Temporary Fun $- $-
Utilitiesirect TV - Cable $50.00 $600.00
Utilities:Internet $45.00 $540.00
Utilities:Budget Software $10.00 $120.00
Utilities:Gas $45.00 $540.00
Utilities:Phone $50.00 $600.00
Utilities:Electricity $120.00 $1,440.00


$3,000.00 $36,000.00

Okay I'm sure the colomus are going to get all messed up, but this the budget we use and it is realistic, and about the amounts you mentioned. Granted we have no debt other then the house and own both cars. We will have a nice emergency fund built up before I quite working and all his bonus money get's but into retirement or savings. This is take home pay after all taxes, health insurance premiums, and 401K contributions.

[BadlandZ]

Originally Posted by boefixepa

Donations:Tithing - Salary $400.00 $4,800.00

I don't know what this one was, so I deleted it. I put the rest in excel, and combine a couple things (his/her stuff put as 1 thing). It was very useful for reference percentages.

I wish there was an easy way to do tables here, I'm going to try something... or at least attach something? Anyway, I'm comparing your numbers and percentages to mine, maybe I can figure something out? Let's see if this shows up:



I see one error, boefixepa savings got stuck in the student loan catagory, I'll have to fix that, but at least this is a start?

[Broken Arrow]

Eh? Why is boefixpa's budget in next to yours? Is it because you two are together? If so, please excuse me for I'm a little slow.

[Daylily]

BadlandZ,
You've mentioned Arizona and California. Have you considered the midwest? There has been a (small) exodus of people leaving the west coast and heading for the midwest. We do have employers that could hopefully cater to your background: high tech, big company, science based. I would also think that with that kind of background you'd be able to make more than 45k even in the midwest.
The weather isn't the greatest here but we do have good schools, safe communities and COL well below the national average.

[BadlandZ]

Originally Posted by Broken Arrow

Eh? Why is boefixpa's budget in next to yours? Is it because you two are together? If so, please excuse me for I'm a little slow.

Nope, going back to the original question in my first post, I put up my numbers, and asked if they looked reasonable... And I asked how people get by on these numbers, and if they make sense.

So, understanding, evaluating and comparing my numbers to other numbers was the original point.

If you're not able to see the point, I'll make a few observations for you.

Things that seem to be pretty dead on, with little difference:
Auto Fuel (Gas)
Auto Maintenance
Entertainment
Gas (heat)
Home Owners Ins
Internet
Medical Doctor Visits
Trash Pickup
Water

Things that are way off that I might need to change are:
Auto Insurance
Auto Payments/Saving Fund
Food Storage/Bulk Buys
Gifts Given (Birthdays, Christmas)
Home Property Tax
Home Rent/Mortgage
Retirement
Savings
Student Loan Repayment

[BadlandZ]

Originally Posted by Daylily

BadlandZ,
You've mentioned Arizona and California. Have you considered the midwest?

Not really a choice I'm making, I'm open for anything to get a job right now. I've been flying 2-6 places a month to interview lately, looking at jobs as far away as Europe. Sorta a nitch thing I do... and IF I get one of them, the pay and growth should be worth it... If not, career change coming soon.

Either way, I'm sort of focusing on budgeting at the moment, trying to stay positive.

[Daylily]

Originally Posted by BadlandZ

Not really a choice I'm making, I'm open for anything to get a job right now. I've been flying 2-6 places a month to interview lately, looking at jobs as far away as Europe. Sorta a nitch thing I do... and IF I get one of them, the pay and growth should be worth it... If not, career change coming soon.

Either way, I'm sort of focusing on budgeting at the moment, trying to stay positive.

I wish you good luck and hope the job situation turns around soon for you.

[boefixepa]

FYI - we donate 10% of our gross income to charity. That is that line item you took out, which is fine. If that's not your thing you could use it for savings/new car fund/ or investing. Hope what I gave you helped.

[cptacek]

Originally Posted by zetta

I pay about $11.50/month for local home phone. Ask for "Measured rate service". It's something they don't advertise but is very inexpensive.

This isn't available for me. I too have AT&T, but this plan is only available in certain markets. I would also suggest that you try to get it, but it is not guaranteed.