My finances, need help with budget

**Slandgie** · 02-02-2010, 03:39 PM

You list $1809 in expenses, not including groceries. Other items to consider are auto upkeep (oil changes, tires, belts, other), clothing, gas for the two cars. Auto upkeep should be around $100/mo for two cars, clothing you can probably get by on $50 (Goodwill, Salvation Army shopping) and gas for the two cars depends on your driving habits. How far does your hubby drive to work and back? Where do you drive? If you aren't joy riding every day, you can get by on $125/month, assuming gas at $3/gal. That brings your total up to $2084/month.

Your husband has a job that pays about $22/hr I am guessing? What kind of job does he have? Does he have a 401(k) through his employer and if so, is he contributing to it? His employer doesn't offer HI, but you have HI for your daughter for $65? Wow, what kind of insurance is that at such a low price?

Anyways, if he is clearing $702 a week, that works out to $3042 a month (4 months have an extra week), but this assumes not missing any work. Your mortgage is at 28.8% of your net income, which is a bit high. It should be around 25% of your net or 31% of your gross. Thankfully, your credit card debt is almost negligible. You list one car payment, I am assuming the other is paid off?

Another question, when you finish school, what will your total student loan end up being and what will the monthly payment be?

I do commend you on not having television, or if you do, are you using rabbit ears? lol How old is your daughter and does she have an opinion on the relative lack of television?

So with net income at $3042 and expenses (excluding groceries, savings, paying off debt and student loan) of $2084, this leaves you with $958.

You can get by on $100/week on groceries (Walmart, Aldis, clipping coupons come to mind), so thats $430 a month. As Dave Ramsey says, the only time you should see the inside of a restaurant is if you are working there! So no eating out!

That leaves you with $528 for savings, future student loan and additional credit card payment. This raises yet another question, what is the interest rate on your card? If it is above 10%, I would consider doubling your payment to it to get it paid off sooner. Also, do you have an EF (emergency fund) set up? It is a good rule of thumb to have at least $1K in a liquid savings account should something come up (unexpected car repair for example).

With the remaining $528, you could double your credit card payment to $60 (more if the interest rate is higher). You also may want to consider calling the credit card company to negotiate a lower rate.

This leaves you with $468 for savings and student loan. I would then set aside $150 for savings, another $150 for retirement (set up your own Roth IRA) and the remainder for miscellaneous.

This is a pretty tight budget, but it is doable. Life may seem a little boring as you see your friends going out to dinner or on vacations, but while you are in school, you will need to stick to a budget.

By the way, what are you going to school for and when do you expect to graduate?

**disneysteve** · 02-02-2010, 05:35 PM

I think if you actually have over $500/month free after all expenses, you should get rid of that CC debt between now and the end of March. Since you can knock it out so quickly, I'd forget about any other savings or EF until that is taken care of.

At that point, you need to make health insurance a priority. One relatively minor illness could trash your whole financial life. You are insuring your stuff - your car and your belongings - and yet you aren't insuring the single most important asset you have - your body. I would find out how much insurance will cost through your husband's job and come back to us with that info to see how it fits into the budget.

**hausfrau** · 02-02-2010, 07:37 PM

Originally posted by Slandgie View Post

You list $1809 in expenses, not including groceries. Other items to consider are auto upkeep (oil changes, tires, belts, other), clothing, gas for the two cars. Auto upkeep should be around $100/mo for two cars, clothing you can probably get by on $50 (Goodwill, Salvation Army shopping) and gas for the two cars depends on your driving habits. How far does your hubby drive to work and back? Where do you drive? If you aren't joy riding every day, you can get by on $125/month, assuming gas at $3/gal. That brings your total up to $2084/month.

Your husband has a job that pays about $22/hr I am guessing?
About 20/hr currently.
What kind of job does he have? He is a machinist, works for a small company with probably less than 10 employees. Does he have a 401(k) through his employer and if so, is he contributing to it? Unfortunately, no. His employer doesn't offer HI, but you have HI for your daughter for $65? Wow, what kind of insurance is that at such a low price?
It's through AETNA. The deductable is $5k but its pretty decent coverage and co-pays.

Anyways, if he is clearing $702 a week, that works out to $3042 a month (4 months have an extra week), but this assumes not missing any work. Your mortgage is at 28.8% of your net income, which is a bit high. It should be around 25% of your net or 31% of your gross.
This is the reason I found this board is we want to find a new home (or rent) asap for much cheaper because we know between the mortgage/hoa it's way out of or comfort zone.But.. we need funds to move. Even if we get a $100 down HUD or 0 down USDA we need to pay for all the fees.

Thankfully, your credit card debt is almost negligible. You list one car payment, I am assuming the other is paid off? Yes my husband dries an old truck with no a/c in the Arizona heat!

Another question, when you finish school, what will your total student loan end up being and what will the monthly payment be?

I do commend you on not having television, or if you do, are you using rabbit ears? lol How old is your daughter and does she have an opinion on the relative lack of television? She's 2. We buy her 99 cent VHS tapes from salvation army!

So with net income at $3042 and expenses (excluding groceries, savings, paying off debt and student loan) of $2084, this leaves you with $958.

You can get by on $100/week on groceries (Walmart, Aldis, clipping coupons come to mind), so thats $430 a month. As Dave Ramsey says, the only time you should see the inside of a restaurant is if you are working there! So no eating out!

That leaves you with $528 for savings, future student loan and additional credit card payment. This raises yet another question, what is the interest rate on your card? It's like 23%!
If it is above 10%, I would consider doubling your payment to it to get it paid off sooner. Also, do you have an EF (emergency fund) set up? No. I guess we should tackle that after get get the CC paid off? It is a good rule of thumb to have at least $1K in a liquid savings account should something come up (unexpected car repair for example).

With the remaining $528, you could double your credit card payment to $60 (more if the interest rate is higher). You also may want to consider calling the credit card company to negotiate a lower rate.

This leaves you with $468 for savings and student loan. I would then set aside $150 for savings, another $150 for retirement (set up your own Roth IRA) and the remainder for miscellaneous.

This is a pretty tight budget, but it is doable. Life may seem a little boring as you see your friends going out to dinner or on vacations, but while you are in school, you will need to stick to a budget.

By the way, what are you going to school for and when do you expect to graduate? I am working on pre-reqs for nursing but some of the student loan money I needed when I was younger to pay some bills so that's why it's so high. Nursing school is a 3 year wait so it's 5 years away at least.

I am hoping once we find a cheaper home situation (we bought our townhome for 184k but now there are homes on the market in our area for under 100k) this will give us more wiggle room...

But.. I am offically 100% buckling down now. No more eating out and we're not buying anything that isn't absolutely positively necessary until the CC is paid off and we have house funds!

Thanks so much!

**hausfrau** · 02-02-2010, 07:39 PM

Originally posted by disneysteve View Post

I think if you actually have over $500/month free after all expenses, you should get rid of that CC debt between now and the end of March. Since you can knock it out so quickly, I'd forget about any other savings or EF until that is taken care of.

At that point, you need to make health insurance a priority. One relatively minor illness could trash your whole financial life. You are insuring your stuff - your car and your belongings - and yet you aren't insuring the single most important asset you have - your body. I would find out how much insurance will cost through your husband's job and come back to us with that info to see how it fits into the budget.

That is an excellent plan for the CC.. I am crossing my fingers I can do this.. It's going to be a big lifestyle change. We're pretty frugal but we buy a lot of crap sometimes when we should wait until we're better off financially.

I plan on getting health insurance once we get a cheaper mortgage or rent for cheaper. Thankfully there is a mobile health clinic funded by a church that sees people for free (but i would donate) in my area that I plan to use if I get sick.

**skydivingchic** · 02-02-2010, 08:09 PM

I just wanted to stress the health insurance. DBF had a serious accident this past summer. The medical bills for a 5 day hospital stay were over $80k. We have hit $100k total and there will be more. He is otherwise young and healthy. There is another regular poster on here whose husband recently had to have brain surgery - again otherwise young and healthy. Medical bills will bankrupt you in a heartbeat. Thankfully, we have good insurance, so the out of pocket expenses have not been unreasonable. I can't tell you what a mess I would be if I had had to worry about the medical bills on top of the stress caused by the accident. The stuff the church run health clinic can take care of is not the stuff you need to worry about. Get health insurance ASAP.

My finances, need help with budget