New Budget

[tinapbeana]

when to send the extra money is really a personal preference and will be determined by your account's cash flow.

for instance, of all the money i pay on bills and debt, 80% of my outflow is within a 5 day time period at the end of the month. ACK!!! but, it works out OK for me b/c 1) i automatically deposit my savings (retirement, gift fund, etc) at the beginning of the month and 2) i've conditioned myself to ignore the balance in my checking account and simply stick to the budget i've made. the checking account might say i have 2 grand, but i know that the bulk of that is already slotted to pay bills in 2 weeks so i can't touch it.

some people's minds don't work like that, and this is where the automatic bill pay can come in handy. for instance, my DH likes to believe that whatever is listed as the balance of the checking account is there to be used. i've tried explaining that the balance isn't "real" because there are checks that haven't cleared and a BIG chunk of bills coming up at the end of the month to be paid. his mind doesn't work that way so it doesn't sink in. therefore, instead of holding onto the money until the bill is due, i can opt to have the automatic bill-pay send it in ahead of time, or in smaller increments (like the $100 every week mentioned earlier). that way, there's no big chunk of tempting money just sitting there.

[disneysteve]

My other debts are credit cards that have been written off/3 judgments (about 7,000.00 worth)

Student loan is 36,000.00
Car is 24,000.00

Can you (or anyone) explain to me what the deal is with the written off CCs? Does that mean they don't need to be paid or do you still owe that money? If you still owe it, what is the penalty for not paying it? Is interest still accruing?

As for the car and student loans, what are the rates on those?

[autoxer]

your 'magic pill' could be automatic online bill pay.

Absolutely, that is my magic pill. I set up direct deposit to a separate checking account that automatically pays my bills to keep that separate from my daily spending. That way, I never 'see' that money and I only have to worry about the small amount I need for food and gas till next payday. And my savings has increased dramatically without much sacrifice or work.

[disneysteve]

I was thinking of doing an ING account (I've been told here that is the best place to go)

I would vote against ING as their interest rate isn't competitive. There are probably a dozen banks that pay better. There is a list on the Investing and Banking board.

[creditcardfree]

Time to Save, it will feel great to get that car paid off. You may even be able to get it paid off earlier...especially if you get another large refund next year.

If I remember correctly ESA's are a calendar year type of contribution. So for 2006, one had to have contributed by Dec 31 2006. When we started our girls funds we did put $2000 each into their ESA's and then waited a year to start monthly contributions. It feels great to get that started for them.

[sweeps]

No, you can contribute to a 2006 ESA until Tax Day 2007, just like IRAs.

In fact I just made my 2007 ESA contribution at Vanguard. They currently have the 2006 and 2007 side by side so you can contribute to either one or both.

[creditcardfree]

No, you can contribute to a 2006 ESA until Tax Day 2007, just like IRAs.

In fact I just made my 2007 ESA contribution at Vanguard. They currently have the 2006 and 2007 side by side so you can contribute to either one or both.

Thanks for the correction! That is good news!

[timetosave]

Absolutely, that is my magic pill. I set up direct deposit to a separate checking account that automatically pays my bills to keep that separate from my daily spending. That way, I never 'see' that money and I only have to worry about the small amount I need for food and gas till next payday. And my savings has increased dramatically without much sacrifice or work.

This will work for me. This is how I am going to do it...direct pay, that way I don't see the money...in a seperate account that is only for this purpose...very smart...thanks!

Time to Save, it will feel great to get that car paid off. You may even be able to get it paid off earlier...especially if you get another large refund next year.

If I remember correctly ESA's are a calendar year type of contribution. So for 2006, one had to have contributed by Dec 31 2006. When we started our girls funds we did put $2000 each into their ESA's and then waited a year to start monthly contributions. It feels great to get that started for them.

Your right, and I will get a big refund each year (it was the same last year) I will have this car paid off in no time!

No, you can contribute to a 2006 ESA until Tax Day 2007, just like IRAs.

In fact I just made my 2007 ESA contribution at Vanguard. They currently have the 2006 and 2007 side by side so you can contribute to either one or both.

I am looking at Vanguard now.


Thank you so much everybody...the future looks better and better, I am able to pay down debt AND save for dd. I won't feel as if I'm letting her down.

G

[DebbieL]

I don't think your daughter will feel let down by you even if she has to get student loans. You are a good mother, and that's what your daughter will see. The financial responsibility you are learning and paying down your debts will also serve her well in later life. Children learn by example.

[sweeps]

And to add to what Debbie said... If you do end up greatly improving your financial situation by the time she leaves college, you can always help her pay back the student loans.

[timetosave]

I would feel as if I let her down...that is just as bad in my book. Her dream school is Cornell University. She has been working VERY hard to achieve this goal...I have every intention of getting her there.

[jIM_Ohio]

Ok, for now I am going to focus ONLY on the current debt and the old stuff can wait.

Incoming:

715.00 biweekly
539.00 monthly
288.00 monthly

2257.00 monthly income


Outgoing: (monthly)

Phone (cell and landline) 187.00
Cable 77.00
Automobile 489.91
Groceries 200.00
Movies/dining out 100.00
Church 20.00
Student loan 186.00
Riding Lessons/Supplies 140.00
Orthodontist 288.00

Outgoing: 1687.91

Leaves 569.09

Best way to use that money?

I'm thinking

489.91 to car payment (making two payments monthly instead of one (I've already figured in my student loan...all other debt is VERY OLD)

79.00 dd's education fund

Discuss.

Thanks
G

Budget looks good. Consider that if you pay off car early, you may want to reduce insurance on it? I did not see insurance in budget above.

Cell, phone and cable look expensive. Is internet thru phone or cable? We pay $45 for satellite and about $80 for landline/internet and $80 for cell phones (2 of them). I think if you wanted to "squeeze" you could. Most phone companies will give you a good deal if you combine everything thru them, same with cable.

I think the amount you save for education should depend on what kind of school you would consider. 80k now gets someone into many reputable schools, 40k right now would cover tuition at many state schools, and community colleges are much cheaper than that. Do you know what you want?

if 40k, I suggest putting close to 400-500/month into college fund (based on your comments in other thread).

If you think your daughter will be eligible for financial aid, DO NOT invest the money in her name (hurts chance for aid). Also know there might be ways to "hide" the asset from the financial aid forms... you need to consider this when she is a freshman to implement before you file taxes at end of her Junior year.


Best bang for the buck is pay off debt, then save.
However if you want 40k saved for college, you may have to pay car "on schedule" and to generate higher initial savings.

[disneysteve]

I have a husband and this is not child support.

As you can see I do not pay much. Mortgage, electric, water/sewer, trash removal, gas, maintenance/repairs, Insurance home/auto/life, and copays are all paid by my husband. What I've listed is what I'm responsible for.

I have kind of an awkward question. Feel free to answer only to the extent that you are comfortable sharing. Where does your husband fit into all of this? Do the two of you lead totally separate lives, at least financially speaking? I know some couples do this but I honestly have trouble understanding how that works. For example, you have debt. Does he also have debt that is considered his or does he have savings and financial assets that could, theoretically, be used to repay your debt? What about college? Is he saving for your daughter's education in any way or is that totally up to you for some reason?

And I would still like someone to explain what the written off credit card balances mean because I'm not understanding where they fit in the big picture.

[timetosave]

I have kind of an awkward question. Feel free to answer only to the extent that you are comfortable sharing. Where does your husband fit into all of this? Do the two of you lead totally separate lives, at least financially speaking? I know some couples do this but I honestly have trouble understanding how that works. For example, you have debt. Does he also have debt that is considered his or does he have savings and financial assets that could, theoretically, be used to repay your debt? What about college? Is he saving for your daughter's education in any way or is that totally up to you for some reason?

And I would still like someone to explain what the written off credit card balances mean because I'm not understanding where they fit in the big picture.

My husband has the mortgage, and his car payment. I created my debt and it is my responsibility. We have never actually had 'shared finances' never. I do not look to him for anymore than he already does. He is disabled. DD receives SSI and after I chewed him out that money is now going into an account for her use (savings). He does more than his share financially around the house...more than his share. An example of dh...he received a settlement for over 100,000.00 a few years ago and spent in in 3 months (the rest of the story can be read in my previous posts).

I wish he would take our daughter's future seriously.

The credit cards are on my credit report...they have been written off. That means I no longer get the annoying calls and they just sit there (I still owe the money) and they hurt my credit but I do not make any payments on the amounts and they just sit there. Right now I want to get the car/education loans paid off then I will concentrate on them.

[myself]

I would feel as if I let her down...that is just as bad in my book. Her dream school is Cornell University. She has been working VERY hard to achieve this goal...I have every intention of getting her there.

Regarding the "Cornell University" degree, I know someone who has 1 BS degree, and 2 Masters degrees (and a paid for house). He is sending his 2 sons to a local community college for the first 2 years, and then on to the Wharton school of business. Notice that I emphasize this man is highly educated, and is sending his sons to a lower level school for the first 2 years to save the expense of sending them for 4 years to the same expensive school.