Finally have a budget, in the 'black'!

[PrincessPerky]

So I sortof knew what is was, but I kept changing it and even though lately that was for the better I still hate doing anything twice . So I finally have it where I think it has been the same for a couple months and I wrote it out and everything, first time in my life I had a budget that came up to under my income! which is not to say I have always lived over income (quite the opposite), just that when I had plenty I never wrote it out. (not the best idea to plan for the future)

It leaves me with about 200 to send on the CC each month, which will take 2 years to pay off (according to the wonderful calculator on here .) which is far to long, though we will be getting some bonuses to put torwards it in the spring. Anyway 2 years is too long!

[PRICEPLUS]

Congratulations! Keep up your good work. I hope to be in the black some day.

[Tree0164]

Wonderful news! Once you get those cc paid off, it will feel wonderful.

[byusteeler]

What exactly does in the Black mean? I have a positive net worth (mostly due to the value of my home) and I make more than minimum payments on my 1 credit card that carries a balance month to month. I could be debt free including my house in 5 years if I reallly buckled down, 7 years easily and 10 years no matter what.(barring any unforseen catastrophy, I have emergency money but I mean major catastrophic event.) So, What is considered in the Black.?

[jmjj215]

In the black means your outflow < inflow for whatever period you're looking at: weekly, monthly, annually. Most people budget monthly.

[gakline]

Being in the "red" is your spending more than you're taking in.

[niki_the_tiger]

Do you have to have $0 debt to be in the black? Because if you have a balance on your credit card, even if you are paying more than the minimum each month (but not the full balance), and have money "leftover" from your check, aren't you still in the red because of that balance?

[gakline]

Originally Posted by niki_the_tiger

Do you have to have $0 debt to be in the black? Because if you have a balance on your credit card, even if you are paying more than the minimum each month (but not the full balance), and have money "leftover" from your check, aren't you still in the red because of that balance?

No, you don't have to have zero debt. No one would ever be in the black. It depends on what you're looking at. Running in the black just means that you're taking in more than you're spending. It has nothing to do with net worth. Most people and companies measure running in the black on a monthly basis or even quarterly. Running in the black also means you're not digging a bigger hole (into debt).

Like my mortgage. Because I owe a large amount my networth is negative. But since I'm able to pay my mortgage and other bills and have some money left over every month, I'm in the black.

[niki_the_tiger]

Hmm I guess we would be "in the black" then, cuz we would have "leftover" money if we didn't send extra to the credit cards each month.

[byusteeler]

So let me get this straight. As long as my income exceeds my outgo I would be considered "in the Black" regardless of debt.

[Bluezy]

Congratulations!!!! (((HUG))))) I love to hear when one comes into the black

[cercis]

I took my debt payments out of my budget just to get an idea of how we are running. I figured out we actually have a lot leftover. We choose to pay that extra on the debt right now.

We owe quite a bit in total debt (student loans, car, etc) but still have a positive networth. Not hugely positive, but still there. Most people who have a mortgage could still have a positive networth as most homes are still worth as much as they were bought for.

[niki_the_tiger]

Our house is thankfully worth more than our mortgage. We got a great deal on it, plus we're doing renovations (mostly pulling wallpaper and rugs and painting).

[PrincessPerky]

OK so tecnically since the extra goes to the CC it ain't black, but don't go raining on my parade here! It has been consistantly a decent amount extra so it is good enough for me to celebrate (which beats the depression creeping in over how long it will take to get rid of the CC completly)

[gakline]

Originally Posted by PrincessPerky

OK so tecnically since the extra goes to the CC it ain't black, but don't go raining on my parade here! It has been consistantly a decent amount extra so it is good enough for me to celebrate (which beats the depression creeping in over how long it will take to get rid of the CC completly)

No, the extra is still in the black. It's above and beyond the minimum. You CHOOSE to put the money to the cc. You could just spend it.

Sometimes it makes sense to pay the minimum and sometimes not. But if you're making the minimum and have money left over, you're in the black, you just have to make sure you're not spending more (ie continue to charge and only pay the minimum.)

[jmjj215]

No one would ever be in the black.

I disagree! I'm in the 'black' by that definition also. Until we get our first house in a year or so. We'll still be very positive on the net worth side though. You would have to borrow more than your home is worth (or experience a drop in housing prices) to be upside down (in the red so to speak) on your home.

[gakline]

Black
A description of a positive balance on a company's financial statements.

Investopedia Says: The phrase "in the black" is widely used to refer to the condition of companies that have been profitable in their last accounting period. This term is derived from the color of ink used by accountants to enter a positive figure on a company's financial statements.

[PFJournal]

Congratulations! Once you've got that CC debt under control, you should look at using the money you were putting into reducing debt each month into an investment (such as a mutual fund).

Originally Posted by PrincessPerky

So I sortof knew what is was, but I kept changing it and even though lately that was for the better I still hate doing anything twice . So I finally have it where I think it has been the same for a couple months and I wrote it out and everything, first time in my life I had a budget that came up to under my income! which is not to say I have always lived over income (quite the opposite), just that when I had plenty I never wrote it out. (not the best idea to plan for the future)

It leaves me with about 200 to send on the CC each month, which will take 2 years to pay off (according to the wonderful calculator on here .) which is far to long, though we will be getting some bonuses to put torwards it in the spring. Anyway 2 years is too long!

[TBH]

Go, PrincessPerky, go!

I remember that feeling of relief when we were back "in the black". We were spending more than we earned for about six months after DS was born, because I had lost my full time job, the kid's daycare ate up a lot, etc. Luckily we had a very big emergency cushion (and we sure needed it). It just felt like we were hemorraging money. When we finally upped the income and reduced the spending enough that it all balanced out, I felt like I could breathe again.

[PrincessPerky]

Breathing is good . And thanks for all the congrats.

I talked to DH the other day about using the leftover after we have the CC paid for, he suggestied making a bigger EF first. Which since he is training people in India to do half his job makes sense, there isa good chance he will have to train them to do the other half later.