Monthly Budget

[nick__45]

You're so lucky that your gas bill is only 150 dollars. I carpool because it would cost me 10 dollars a day if I drive myself with a car that gets about 30-35 mpg. I live 40 miles from work. I think I still pay about 80 dollars in gas a month carpooling. There is a free-ride program from work but their van leaves so early and I can't make it, even though the parking lot is within walking distance from my house. If I don't have to take the baby to daycare, I can get free ride in a van to work every day.

[thefamilyfinanceguide]

The Credit Card expense is at $1,020. I take it that $1,020 is a minimum payment which means you have a large amount of credit card debt. Your goals are not clear here. Through the comments I saw something about lowering the sale price of your rental. I saw some stuff about car insurance, interest rates, etc. etc. But what is your goal? To pay of debt? Then do the following. I won't take credit for all of this because Dave Ramsey (popular dude) is the pioneer is communicating debt free lifestyle.

1) Emergency Fund $1,000 - $2,000
2) Get rid of DEBT (budget necessities then kill the credit card and other non home loans.) The second mortgage (rental) is part of the debt. Sell the house because its too risky to hold on to. With the foster stipend leaving you'll need to get more income. A second job for you, if your Wife does not work then get her a part-time to full-time hourly position.

- Income is power and its hard at first, but once the credit cards and loans are gone the jobs can go away. It's only temporary unless you like it.

3) Build Emergency Fund larger (3-6 months expenses)
4) 15% into retirement
5) Save for college tuition (doesn't need to be Harvard), pay down mortgage
6) Charity Giving and save for things you "want". Pay in cash.

- Good Luck, define your goals first.

- Dave

[nick__45]

I would get an EF up to about $10k while paying off CC debts through some kind of negotiations if they are available. Anyone calling banks and CC companies evil for doing bad unsecured loans are cowards that don't own up to their greed and stupidity. Banks didn't sell you something that cost more than it should. The consumers, which include both you and I, are given essentially interest free money for 30-45 days to cover our expense. If you can't pay off what you own per billing cycle, which isn't the total amount you owe then it is your fault. I find that the people who either pay late or pay just minimum are the same ones that get tricked into paying these protection programs. Don't buy them because you don't need them. These programs, especially the one from Sears Citibank Master Card, will penalize you even if you pay in full each month. You'll be charge up to 10% or 10 cents on a dollar for any amount still in your balance, which you are not obligated to pay for until the next billing cycle. Read the fine print. For example, if you have a $2k balance and your statement has a $1k balance, then you are only obligated to pay for $1k. But under the 'protection scam' you will have to pay for the entire $2k or you will be billed protection fees.

If you have zero CC debt, meaning you pay what you owe each billing cycle, you can treat CC as temporarily EF fund. Just make sure your credit score is good and have a good place to transfer the balance over to avoid paying interest. Many places offer 12 months interest free balance transfer for new cards. They're banking on you not being able to pay off just like furniture and appliance stores banking on your not being to make the payment when free 2-years finance is up. Take advantage of that.

[Bob B.]

Not sure how well pasting an excel spreadsheet is going to translate, but I've developed a plan to pay off my credit card debt. An aggressive payoff would put us out of unsecured debt in July, 2013. If we slowed down the payment on our highest rate card from $285/mo. to $155/mo., that would add 9 mos. to our payoff date and $890 in interest payments. What's going on in the background here is that while we are paying of CC debt, we are also saving up for a new roof and two vehicles - have to weigh paying off debt vs. saving for things we'll need. The third option - paying minimum is not really an option in my mind, but I wanted to use it as a comparison.

Thoughts are appreciated.


Option 1 - pay highest int. card off in 1 yr.
Account Balance Comment Projected Payoff Date
CC4 $700 Paying as scheduled - $175/mo. 3/1/2011
CC2 $3,100 Paying $285/mo. 12/1/2011
CC5 $4,300 Paying as scheduled - $195/mo. 10/1/2012
CC1 $9,300 Paying as scheduled - $195/mo. Then more as above are paid off. 4/1/2013
CC3 $4,330 Paying as scheduled - $140/mo. until 4/13, then more. 7/1/2013
Montly obligation - $995
Montly obligation after 3/1/11 - $820
Approximate Total Spent - $24,745
Option 2 - pay highest int. card off in 2 yrs.
CC4 $700 Paying as scheduled - $175/mo. 3/1/2011
CC2 $3,100 Paying $155/mo. 12/1/2012
CC5 $4,300 Paying as scheduled - $195/mo. 10/1/2012
CC1 $9,300 Paying as scheduled - $195/mo. Then more as above are paid off. 4/1/2014
CC3 $4,330 Paying as scheduled - $140/mo. 8/1/2013
Montly obligation - $860 - Adds 9 months to payoff/$890 in interest
Monthly obligation after 3/1/11 - $685
Option 3 - minimum payments
CC4 $700 Paying as scheduled - $175/mo. 3/1/2011
CC2 $3,100 Paying as scheduled - $86/mo. 2/1/2015
CC5 $4,300 Paying as scheduled - $195/mo. 10/1/2012
CC1 $9,300 Paying as scheduled - $195/mo. 5/1/2016
CC3 $4,330 Paying as scheduled - $140/mo. 8/1/2013
Montly obligation - $791 - Adds 22 months to payoff/$2,220 in interest
Monthly obligation after 3/1/11 - $616