Starting at the basics

**Broken Arrow** · 06-03-2009, 10:59 AM

Welcome to the forums!

I think what concerns me the most is that it does not appear that you have a safety net of some sort. An emergency fund in case something worse happens. So, that's what I would work on first.

There are two basic approaches I would like to run by you. The first is to simply save a cash savings. The second is to pay down and pay off the credit card. Paying off the credit card helps to minimize your interest payment on it. The downside is that it's not an ideal safety net, so sooner or later, you'll still want a cash savings. Realistically, you'll probably want to a bit of both, but I think having an emergency fund should among the top on your to-do list.

There's more, but I'm at work and a bit tied-up right now, so I'll pass the baton to others to help you.

**ActYourWage** · 06-03-2009, 12:02 PM

Originally posted by WealthyMe View Post

For starters:
What should I do with my mortgage situation?
How do I create a monthly budget?
Any other steps I should be taking?

Welcome.

Save up $1000 for an emergency fund would be the first thing I'd do.
Make a detailed list of ALL (not some, but ALL) your out going expenses so that you know where the money is going. Then you can create a budget based on knowing where ALL your money is going. Do these first and then we can proceed to creating a budget.

**Radiance** · 06-03-2009, 12:45 PM

Done!
I am really doing 5800 net, not 4200 gross, sorry, I forgot I have my salary split on two accounts.

(big difference, I was having a heart attack)

ok, so 4259 are going in bills, including 560 to pay off debt which should be gone in 2-3 years if I can keep on not using it.

That leaves 1521
Here is the shocker:
I am spending almost 1000 in food and household, including my baby items
about 200 in entertainment (going to parks mainly) and another 200 in health

That is around 1400 so that leaves 141 for gas, books and emergencies and I guess other items I can not think of right now. I do send 650 a month to a savings account, but no wander I end up taking from it almost every month.

I think my next item is reduce food/household expenses.
One adult, one baby, 1000 is too much, right?

**ActYourWage** · 06-03-2009, 01:11 PM

Originally posted by WealthyMe View Post

That is around 1400 so that leaves 141 for gas, books and emergencies and I guess other items I can not think of right now.

Right there is the problem. You need to know where your money is going. "I guess" is not knowing. You have a very good income at around 70K Net, you just need to break down your budget in a more easy to read format.

Example (not necessarily this order, but to give you an idea)

5,800 Net pay

Expenses:
1. Housing
- Mortgage 1,500
- Insurance $$$
- Utilities $$$
2. Food $$$
3. Auto
- Gas $$$
- Insurance $$$
- Maintenance $$$
etc.......

Total Expenses:______
Surplus/Deficit:______

Having a spending plan will help you out very much so. You have the income, you just need to assign every dollar you make a name so YOU KNOW where that money is being spent.

BTW - $1000 is too much for you and a baby.

**snafu** · 06-03-2009, 01:18 PM

Welcome, and congratulations on your decision 'to face the truth and do your best.' The 1st few months are going to be the most difficult as you will be adjusting your thinking and changing well established patterns. Once you get used to it, you'll wonder what you feared.

I didn't notice any amounts listed for utilities like electric, heat, phone [land/cell], cable, internet etc. What are your transportation expenses? How secure is your job? Do you see any way your house expenses could be reduced like bring in a roommate or rent it to cover the expenses?

APR on Credit card[s]? Can anything be sold?
Budget or cash flow or whatever you want to name it is broken down by fixed expenses like mortgage which you have only limited control and discretionary expenses which you have the most control like food including restaurants/take-out, & clothing.

You can dramatically lower food expenditures if you are willing to try ethnic recipes cooked in your crockpot.

**Radiance** · 06-03-2009, 01:46 PM

hi, Thank you so much for the help and encouragment. It is a little scary, but here I go
These are the fixed bills,(I included saving as a bill at the end)

Bills
Mortgage 1920 (includes tax and insurance)
Phone/Internet 80
Water 65
Electricity 100
Car Insurance 90
Cell Phone 88
Car Payment 293
Cable 40
HOA 287
Debt 1 360
Debt Visa 200
School 700
Sponsored child 32
Savings 650
Total 4905

Now I need to watch food, gas and see what else I buy.
With that it should be easy to achieve a 1000 emergency fund, God Willing.

Some things are tough to predict though, like $25 on year end even for son
$30 to print and send pictures for my mom who lives oversees (I had not sent any in 6 months)

I have been thinking about renting a room, in my area that is about $500. I get a little scared about that, but that can be a good idea.

I could also work on Saturdays where my son is with his dad.

I am separated and his dad is in our lives but due to special ciscumtances he can not contribute to the child expenses. So I am financially a single mom.

**Radiance** · 06-03-2009, 01:49 PM

Snafu, why is crockpot a savings?
I have no problem with ethnic food.
I do mostly organic for the baby, which increases the expenses a bit.
But I found a local buying club where the organic fruits and veggies for a family of 4 is $45/month. I think that is very good, I want to try it out. I would need to see what do I do with the extra fruits and veggies... Then there is grains, milk, bread, etc.

**ActYourWage** · 06-03-2009, 01:56 PM

Now your getting on track!

Like you said write down what you spend on gas, food, and anything else over the next month and you will be able to develope a full budget.

What is your debt balance for each debt? List them highest to lowest.

When you have your $1000 dollar emergency fund, you can then attack your CC debt by using the 'snow ball' method. What that means is focus on ONE CC and then once that CC is paid off, use the money you were using on the first CC to pay on the next CC and so forth and before you know it you will have NO CC debt.

**creditcardfree** · 06-03-2009, 02:16 PM

I would consider free entertainment while you are getting your emergency fund in place and credit cards paid off.

**creditcardfree** · 06-03-2009, 02:23 PM

Originally posted by WealthyMe View Post

Bills
Mortgage 1920 (includes tax and insurance)
Phone/Internet 80
Water 65
Electricity 100
Car Insurance 90
Cell Phone 88
Car Payment 293
Cable 40
HOA 287
Debt 1 360
Debt Visa 200
School 700
Sponsored child 32
Savings 650
Total 4905

Haircuts? Oil changes? Car repairs? Gifts?

I would look at cutting or reducing cable.

Check your car insurance. It seems high. Maybe you have a low deductible. Get a quote for insurance with a higher deductible and your monthly premiums will go down. Same applies to homeowners insurance. Consider increasing your deductible.

Do you NEED to sponsor a child?

Good job so far with your evaluation!

**wincrasher** · 06-03-2009, 03:35 PM

Unless the kid's father is in prison or a hospital, he needs to kick in money to support his kid. You can get the court to help you with this issue.

Congrats on getting a reduction in your mortage, that is a fair rate these days considering you are underwater.

**sandrark** · 06-03-2009, 05:32 PM

Get a roommate. Easy way to increase the income and get you some adult companionship.

I'd get on a written budget too. It has been the single biggest way for me to keep control of spending.

Finally, $1K per month is WAY TOO MUCH for groceries, health & beauty aids and diapers. You should be able to cut that in HALF, easily, with a regular grocery list, and shopping sales/generics.

Good luck, the first couple of months are always the hardest.

Sandi

**Radiance** · 06-03-2009, 06:16 PM

Thank you everybody, I have a lot to do, will report back.

I did talked to a lawyer and made research, my ex, due to his economics, doesn't have to pitch in for child support in this case, actually he could get alimony from me if he wanted to.

I cannot do everything at the same time, or I'll go crazy. I'll focus on the groceries that seems to be the highest impact task at the moment.

Thank you all!!

Starting at the basics