Learning to budget and save.

**wrk4lvg** · 01-09-2011, 04:35 PM

Whew. I'm 32 and let me tell you how well I'd be doing with 125k/yr....

I'm sure you're going to be told you can certainly pay off your 10k debt this year. That's less than 10% of your income.

I'm sure they are going to ask how much you have left on your car.

Then they are going to tell you that you should be able to do a lot better with your share builder (ING direct?)

I would definitely start out by keeping receipt for every single transaction you make over the next month so you can take an honest look at just where 100k/yr is going. However, at that income, the pros may have a different approach.

Either way. Welcome, I'm just as new, and best of luck to getting to that level of financial freedom that I'm sure most us aspire to reach.

**disneysteve** · 01-09-2011, 04:45 PM

Welcome. You've both taken the huge first step of acknowledging that there is a problem. You guys earn way too much to be broke.

First you have to know where your money goes. Keep a spending log for 30 days. Write down every penny you spend on absolutely anything. Add to that list the monthly portion of expenses that are not paid on a regular basis like auto registration, insurance premiums, taxes, etc. Then sit down together and review the list. Separate the Wants from the Needs. A good goal is a 50-30-20 budget: 50% of income for needs, 30% for wants and 20% for savings. You may not be able to do that right from the start but you earn enough that you can get the debt cleaned up pretty quick (how much is the car loan and mortgage?) and get on that breakdown soon.

I would keep $1,000 in a money market account for emergencies and be putting everything else toward the debt. Stop the $50/week to sharebuilder and put it toward the debt instead. The car may or may not be a problem. Tell us how much you owe and what the car is worth today (check kbb.com to find out). The mortgage also may or may not be a problem but it is harder to fix that one. What did you pay for your home and how much do you still owe? What is the monthly payment?

**kork13** · 01-10-2011, 03:53 AM

Originally posted by disneysteve View Post

I would keep $1,000 in a money market account for emergencies and be putting everything else toward the debt. Stop the $50/week to sharebuilder and put it toward the debt instead. The car may or may not be a problem. Tell us how much you owe and what the car is worth today (check kbb.com to find out). The mortgage also may or may not be a problem but it is harder to fix that one. What did you pay for your home and how much do you still owe? What is the monthly payment?

Agreed. The fastest road to building your savings is to pay off your debts. If you can focus $2k/mo (or more?) to the credit cards, it'll be gone in just over 5 months. You can then send all of that money to savings (or further reduce your other debts). Once you get the ball rolling like that, it's remarkable how quickly things can happen.

Budget-wise, the 50/30/20 that DS brought up is a great way to go as an initial hack at it--the hardest part is often in realizing what is truly a need vs. a want.

**littleroc02us** · 01-10-2011, 06:24 AM

Originally posted by smileyboy View Post

I'm 30 year old electrician and my wife a nurse. We've never really have been concerned about saving until the other day we started talking and realized that we really have no savings and live paycheck to paycheck.

I own my own electrical service business and typically do 80-100k a year. she is a nurse and makes $25k after taxes and another $10k dropped in a IRA by her company.

Where is all of your money going, you make enough income? Try writing it down to start with. One column in Excel could be income and the other is itemized outgo. (Electricity, clothing, mortgage, etc.) It would be interesting to see the breakdown.

**sweetness** · 01-10-2011, 09:01 PM

I totally recommend that you guys read The Total Money Makeover by Dave Ramsey. It has helped us so much!

**buildmybudget** · 01-11-2011, 04:39 AM

Smiley, my website is dedicated to helping individuals like yourself see where they are heading financially, dollar-for-dollar, so that they can make better financial decisions about how to get out of debt and establish a financial foundation. I'm testing a new budgeting service whereby I create a weekly budget for the client for an entire year. If you'd like to help me test this service, it would be free to you and require none of your personal information other than a few numbers.

**smileyboy** · 01-12-2011, 11:50 AM

What really brought all this up is that I'm a big car guy. Every 2 years I usually sell my car and by another car. I usually buy BMW's (cause they cost too much new IMHO) I put my SUV a (toyota landcruiser... it gets 13.5 mpg on a good day) up for sale found the car I ( a 2001-2003 BMW X5) wanted which is only $1-3K more than my current car..... Well I got a little bummed when I was was talking to a friend of mine who does the exact same thing.... he bought his car cash.. Meaning he had the $2k in the bank to buy the car. He actually planned unlike myself.

So I put the car on hold for a few months to find out where I am going and what I am doing.
Out mortgage is $590 (we bought a foreclosure and there is $68k left on our house) Our car is a 2006 VW Jetta TDI we are paying $320 a month and there is $13k left on the loan.

I just downloaded the book. I have some credits left on my Audible membership which will be canceled at the end of the month.

**smileyboy** · 01-12-2011, 12:17 PM

I know this may sound like a pyramid scheme But a friend pitched the ACN idea to me ASCINC dot com. It seems tempting except for the part about me having to pay $499 to start. But, I want to try everything I can.

Thoughts?

**bjl584** · 01-12-2011, 12:43 PM

Originally posted by smileyboy View Post

What really brought all this up is that I'm a big car guy. Every 2 years I usually sell my car and by another car. I usually buy BMW's (cause they cost too much new IMHO) I put my SUV a (toyota landcruiser... it gets 13.5 mpg on a good day) up for sale found the car I ( a 2001-2003 BMW X5) wanted which is only $1-3K more than my current car..... Well I got a little bummed when I was was talking to a friend of mine who does the exact same thing.... he bought his car cash.. Meaning he had the $2k in the bank to buy the car. He actually planned unlike myself.

So I put the car on hold for a few months to find out where I am going and what I am doing.
Out mortgage is $590 (we bought a foreclosure and there is $68k left on our house) Our car is a 2006 VW Jetta TDI we are paying $320 a month and there is $13k left on the loan.

I just downloaded the book. I have some credits left on my Audible membership which will be canceled at the end of the month.

Keep the TDI. That diesel will keep running long after you are sick of driving it. Rolling auto loans every couple years will hold you back financially more than almost anything else.

**smileyboy** · 01-12-2011, 01:00 PM

Its not a loan, I've paid cash in the past. This time I was going to finance the 1-3k. I'm not going to do that now.

**smileyboy** · 01-12-2011, 04:03 PM

Originally posted by buildmybudget View Post

Smiley, my website is dedicated to helping individuals like yourself see where they are heading financially, dollar-for-dollar, so that they can make better financial decisions about how to get out of debt and establish a financial foundation. I'm testing a new budgeting service whereby I create a weekly budget for the client for an entire year. If you'd like to help me test this service, it would be free to you and require none of your personal information other than a few numbers.

I'd like to try it.

**kork13** · 01-12-2011, 04:06 PM

Originally posted by smileyboy View Post

I know this may sound like a pyramid scheme But a friend pitched the ACN idea to me ASCINC dot com. It seems tempting except for the part about me having to pay $499 to start. But, I want to try everything I can.

Thoughts?

If it looks like a duck, quacks like a duck, and walks like a duck...

Run. Run away. You've already identified it, that is a classic pyramid scheme, which have a better tendency to trap the participating individuals than to actually be a decently profitable venture.

**smileyboy** · 01-12-2011, 04:08 PM

Thanks!!! I already canceled.

**buildmybudget** · 01-12-2011, 07:32 PM

Smiley, thanks for helping me out. If you can send me your email(currently it's not possible to email you through this site) I can start the process of creating the budget.

Learning to budget and save.