Help me get started

**buzz** · 06-06-2007, 02:43 PM

Your numbers don't add up. You should have over $2000 left over every month.

**kidden** · 06-06-2007, 03:27 PM

Exactly, we should have but for instance this week DH got paid, we paid the phone bill and our credit card bill, bought groceries and petrol and now have $30 left for the week, next week when I get paid as well, we pay the car loan, the rent the child care the credit cards and the gas, buy groceries and petrol and again end up with very little left..........what are we doing wrong?????

**tinapbeana** · 06-06-2007, 03:35 PM

only way to know is to track your spending for a month or so. you'd be amazed how much money 'leaks' out over the course of a month.

**buzz** · 06-06-2007, 05:16 PM

Two major issues that face you right now are the lack of a cash reserve to fall back upon, and your fuzzy grasp of your household budget.

Fortunately, if your numbers are even remotely accurate, you should be able to have things under relative control by the end of the month, if you and your DH put your minds to it.

The first order of business would be to construct a neat and *accurate* summation of your monthly expenses. In your original post, you have some expenses bi-monthly, some monthly, some over 3 months.

Bills tend to have heavy and light periods, monthly and annually. That is why you need a cash reserve. It looks like you are just starting to look at your budget and you picked a period with some big bills rolling in. Don't worry, there will be a corresponding light period later in the month. Take advantage of that to build some savings.

If you familiarize yourself with your budget, cut back on unnecessary expenses, and sock away some cash, you'll be fine.

**ajknox** · 06-07-2007, 08:09 AM

This is what I would do. Beginning today, put together a spreadsheet of how every dollar that you bring in gets spent. Like the earlier posts, you will be surprised on how the money gets spent when you dont track it. Update the spreadsheet religiously every night (even if its a $2 coffee because they add up).
Then end of a 30 day period, see the income coming in and the expenses you had. Analyze your spending and you will really know where the money disappears on miscellaneous stuff that you thought would not have an effect. Another suggestion is that start putting some money in savings starting now. Anything is a start, its the emotional effect. I started out with $20 8 months ago and now due to it becoming a habit, have about $6500 accumulated. The way to do it is to put money in savings as soon as you get paid since you will be left to manage until next paycheck with whatever money you have.
Another important thing to consider is the APRs for your 3 CCs and the car loan. What are the % since you dont want to be paying too much in interest?
With all being said, you have taken a good first step by coming to this forum because it shows that you want to start. Good luck!

**jIM_Ohio** · 06-07-2007, 08:55 AM

Originally posted by kidden View Post

Ok heres the budget I've done up, its fairly basic and needs some tweaking so please help us get started:

Income fortnightly:
Me: $1200
DH: $1400
Child support received: $360

Outgoings fortnightly:
Rent $500
Car Pymt: $225
Electricity $50
Telephone/internet: $ 50
Child Care: $290
Food: $230
Petrol: $100
Gas: $20
Insurances: $45
Car Registrations: $47
Credit Cards: $300
Take out: $50

No money in savings, and our total debts are:
Visa card: $7500
Visa card: $4500
Visa card: $2000
Car loan: $22000

We have just started budgeting as we are sick of living week to week, the problem is how to start, I've listed our debts monthly and the due dates, and even though it seems we have enough money to get through, each pay day (DH weekly $700 and mine fortnightly $1200), we have a bill due that eats up our pay so we cant really stick to the budget, the bills listed monthly are:

Credit Card 1 ($7500) due 4th of month: $155
Phone/Internet: due 12th of month: $255
Electricity due 14th of month (3monthly) $280
Gas due 21st of month (3monthly) $150
Credit Card 2 (4500) due 22nd of month $110
Car payment due 24th of month $430
Visa Card 3 ($2000) due 28th of month: $110
Insurances due $28th of month $90

Help us get started please...........

what's a fortnight.

if it's per month, I see $300 left after cc minimums are paid.

Here's some advice- don't pay cash for anything for one month. Don't withdraw cash either. For one month. Start the day you read this (june 7?) and do not take out cash until July 7.

avoid using debit card- same thing.
avoid using cc as well- even worse.

Then when you need to fill up with gas, decide how you will pay, use the debit card and buy gas only. save the receipt...

only buy things listed on budget above.

I have been in your situation 3 different times in my life.

First time I was not making much money, and was waiting until higher paycheck from college graduation kicked in. $10,000 in cc debt paid off in around 6-9 months.

Second time was when my wife and I moved in together (before we got married) and we had to cure her spending habits. 30k of debt paid off in around 20 months, plus all student loans paid off, plus my car, plus bought new house (that was a busy 20 months).

Third time we got hit with 10k of car repair bills in 6 months. Don't buy American. Paid off in 3 months and now we drive (new) hondas.

All 3 times we did the following
1) stopped eating out
2) did not buy gifts for adults
3) followed our budget strictly (if it's not on the budget it's not needed)
4) paid cash/withdrew cash 2X per month. When cash was spent, we were done with gas and groceries for the 15 day period in question.
5) now we use 5 bank accounts to pay bills and accumulate money in.

One account is for mortgages and IRAs. Money goes in, one month later it comes out (there is always one month of IRA payments and mortgage payments in account, right before payment there is actually enough for two payments in account)

One account is an electronic account only. Pay electric, phone (monthly bills for house) from this, and we have no checks or debit card for this.

One account is a savings account. Gets $20/month right now.

Another account is our cash account. This is where groceries, gas and eating out comes from.

We have a second savings account for 2 car payments and cell phone payment.

The last two accounts are old accounts I have with an old bank. The first 3 are joint accounts we both have access too... I like 5 small buckets because we divide our checks up and have them deposited automatically.

You need to stop spending money for 2-3 months and you will see the problem is spending.

**disneysteve** · 06-07-2007, 09:09 AM

Originally posted by jIM_Ohio View Post

what's a fortnight

LOL. That was my first question too. A fortnight is 2 weeks (14 days).

I don't have time to run your numbers right now but I'll probably check back in later with my thoughts.

**disneysteve** · 06-07-2007, 09:26 AM

I'm back.

Some of your numbers don't seem to make sense.

You say credit cards are $300/fortnight but then you list the 3 credit card bills which total $375/month. Which is it?

Also, when you say fortnightly, do you mean every 2 weeks or do you actually mean twice a month. That makes a difference. For example, you list income of $2960/fortnight. If that is 2 weeks, that is $76,960/year. If, however, you mean twice a month, that is only $71,040/year.

**jIM_Ohio** · 06-07-2007, 10:00 AM

Originally posted by kidden View Post

Ok heres the budget I've done up, its fairly basic and needs some tweaking so please help us get started:

Income fortnightly:
Me: $1200
DH: $1400
Child support received: $360

Outgoings fortnightly:
Rent $500
Car Pymt: $225
Electricity $50
Telephone/internet: $ 50
Child Care: $290
Food: $230
Petrol: $100
Gas: $20
Insurances: $45
Car Registrations: $47
Credit Cards: $300
Take out: $50

No money in savings, and our total debts are:
Visa card: $7500
Visa card: $4500
Visa card: $2000
Car loan: $22000

We have just started budgeting as we are sick of living week to week, the problem is how to start, I've listed our debts monthly and the due dates, and even though it seems we have enough money to get through, each pay day (DH weekly $700 and mine fortnightly $1200), we have a bill due that eats up our pay so we cant really stick to the budget, the bills listed monthly are:

Credit Card 1 ($7500) due 4th of month: $155
Phone/Internet: due 12th of month: $255
Electricity due 14th of month (3monthly) $280
Gas due 21st of month (3monthly) $150
Credit Card 2 (4500) due 22nd of month $110
Car payment due 24th of month $430
Visa Card 3 ($2000) due 28th of month: $110
Insurances due $28th of month $90

Help us get started please...........

here's budget I came up with:

Income (2*1200+2*1400+2*360)=$5920

Expenses Using what's listed all are assumed PER MONTH- I think that is confusion from most people responding. The OP needs to list all expenses on a monthly basis (that is what most bill collectors use as the period of payment).

cc1 155
cc2 110
cc3 110
car 1 430 (is this late- payment above is 225)
car 2??
gas $50 month (bill is $150 per quarter)
rent $500/month
electric $50
Telephone/internet: $ 50
Child Care: $290
Food: $230
Petrol: $100
Gas: $20
Insurances: $45
Car Registrations: $47
Take out: $50

added up this is $2237 if this is truly doubled (3572 for most things, I am guessing cc are per month and car is per month already).

Both situations are cash flow positive 2237<<5920 and 3572<5920

There is somewhere between 3600/mo and 1400/mo available to pay down 14000 in cc debt and another 22000 in car debt.

suggestions:

1) Set aside $500 from next 4 paychecks. Then pay off CC #3. This frees up $110/month within one month. Take the $110 and create a savings account.

2) pay extra on next cc- pay off within 4-7 months. Take the $110/month from this cc and add this each month to savings account.
3) pay extra on 3rd cc- pay off within 4-7 months. Take the $155 from this and add each month to savings account.

all 3 cc should be paid in full, worst case, in 10 months. In same 10 months, there should be around $1000 in a savings account.

Then take the $1400 paying towards cc and put inside a savings account until savings has 2X the expenses listed (either the 2237 or 3572 number). Because cc are paid off, either should be less than 2237 or 3572 anyway.

Then start looking into funding IRAs for self and spouse.

The issue is probably a spending problem, so the key is to get money working for you (and then you do not have to work for money).

Help me get started