Budget help, please! :-)

**humandraydel** · 06-25-2011, 02:34 AM

well, what is your total monthly outflow? How much do you have left every month? To me, it looks like a pretty bad sign that you aren't aware of your remaining cashflow. According to that "budget" (if the $5200 is net income), you have $2,000 every month not accounted for. Where is that $2,000 going?

**ktmarvels** · 06-25-2011, 06:26 AM

First of all let me say DH is in the Navy, so I know how hard deployments can be. I at least knew (roughly) when he was coming home. I cannot even imagine how hard it would be not even having an idea when he would be getting home.

Also, I just finished pharmacy school, and I think it's a great profession, and one that is always going to be in need. However, depending on the rules of your state do you need to take the pharm tech class? If you are motivated to learn and study for the test on your own I would recommend doing that rather than pay for the class. However, if you need a classroom setting to help you learn than it may be worth it.

Also I would look to see if the test is even required. In Florida (where I live) we don't require the technicians to pass the test and become certified, they just have to register with the board. The added benefit is that you can work and gain on the job experience that can help you take the certification test. So I'd just make sure you've looked into it fully. There are, however plenty of companies offering the test and class, but that just puts money in their pockets.

It's great that you have been able to move in with your parents and hopefully that will allow you to save money. As you are beginning to realize, you have quite a bit of debt and some of it at quite a high rate. I would recommend having a little bit of an emergency fund, even $1000. Then I would recommend putting every extra cent towards debt repayment. Starting with the highest interest rate.

Staying out of the stores is a great first step. You can't be tempted to buy it if you don't know it's there. Also, I would recommend finding people who are going through similar things. I don't know if there is a support group you can meet up with or just a friend with a sympathetic ear. An afternoon at a coffee shop talking can be much less expensive than an afternoon shopping!

**kork13** · 06-25-2011, 07:03 AM

I'll respond more fully later on, but I'll say a couple things right now.

Debt repayment does need to be a priority, because you've amassed a fair amount of consumer debt. Pay off your highest-rate debts first. On that thought, if you have the cash available now to eliminate the Old Navy card, DO IT TODAY. Paying 25% interest is ludicrous!

That said, however, I would STRONGLY recommend that your husband take advantage of the SDP (Savings Deposit Program) while he's deployed. Do this before starting to pay off the credit cards (with the exception of sinking the 'Old Navy' debt as soon as physically possible). He can hand his deployed finance office a check up to the amount of his monthly pay, or have money deducted from his paycheck, and it will go into a savings account in his name. For the entire time that he's deployed (plus 90 days after his return), he will earn an annualized 10% interest (2.5% per quarter) on up to $10k of deposits. You won't ever find that good of a guaranteed rate anywhere. Once he comes back from his deployment, you'll be able to withdraw your (much improved) savings, and call it a solid start to an emergency fund.

Otherwise, just work through your debts as fast as you can. 4%-6.5% isn't terrible, but clearly you want to get rid of it as soon as is practical.

Last thought for now -- make sure that you're not trying to tackle this alone. Many of us here are in (or have ties to) the military, and we understand how stressful deployments can be on both the deployed member and also their families back home. So work with your husband when you have the chance to talk (skype is a great option), and ask the friends and family around you for help if/when you need it.

You've got alot of questions, and we're happy to help get them answered. Stick around and you'll learn alot!

**BMEPhDinCO** · 06-25-2011, 04:56 PM

Fixing your budget...it'll take time

Hi there,

So first things - you are not account for $2,250-$2,500 every month, where is that going??

Second, if you are with USAA - you should be able to defer the CC for deployment, I think, and if your life insurance and truck are with them, they might be able to help lower those as well, or postpone the truck for deployment - won't hurt to call and see what they can do for you.

Third, if your husband is the sole breadwinner right now, you also need to get some kind of life insurance for yourself, that way if he's deployed and you die, your daughter will be ok. I know it sounds bad, but talk to your mother, if she's the one helping to take care, she might appreciate even a small amount from you or it could help your daughter for future expenses - with children, both parents should absolutely be covered. I pay less than $14 a month for USAA for $250k so it's not that much.

You also mentioned shopping and how you like to do it to "feel better" - so my advice, what else makes you happy? A walk? Volunteering with animals? Helping out at the hospital? Taking your daughter to the park? Chatting with friends? Do you have a hobby? Shopping can be great, but you should find out what else you can do to fill your time that you would've gone shopping. For example, you mentioned wanting to work out and eat better - look up some great recipes and try them out! Or make up new exercises for yourself, or try one of your videos.... there are several things besides shopping!

Now, for the details:

1. Your phone bill is too high. Lower it by dropping your husband's phone (they let you put it "on hold" while he's gone), drop the iPad from the plan, and what is the third line for? Your mother? One iPhone shouldn't cost more than about $80 a month and you are paying more than twice that.

2. While I understand you are buying special food for yourself, compared to your daughter, $100 a month (or $25 a week) is quite high for a two year old. What does that include? Make sure you are helping her eat healthy as well, perhaps try reducing that amount if it's only food...fruits, veggies, whole grains, milk - she should be eating very well at this age to be the best she can later on physically.

3. Your "one time" expenses should be coming out of a savings account - you need to set one up if you don't have one so you won't be putting them on CC or anything.

For now, since you have almost $2,500 "Extra" in July, use that to pay off:
$1,000 for school (if needed, see the previous post)
$140 for your videos (they have free ones online though, consider that instead)
$1,119 for the Old Navy Card

That'll leave around $240 - start an emergency fund with $200 and start a "savings" fund with the $40.

For your debt, you currently have $57,950.09 in debt - yes, the 0% and deferred amounts are still debt!! Does that number scare you? It should! That's quite high, nearly a year's worth of pay, to be exact. Here's some ideas for it:

Then you can do this with the "Extra" $2,250 every month going forward:
August:
$978 to finish off Best Buy
$1,000 to EF - THIS IS A MUST!
$72 to "savings" - this will help you avoid CC debt in the future for "one time" stuff
$200 to Chase OR the student loan

September-December:
$200 to EF
$50 to "savings"
$1000 to Chase
(Put a little more on Chase if needed but these numbers are in ADDITION to the minimum so you should be done by Dec. 31st)

So you can see that, by the end of December, you'll have gotten rid of THREE credit cards AND started an emergency fund AND started a "I'll need this later" fund - this will be a super motivator...and at that point, you can start snowballing the rest of the CC debt (1st) and the truck/mortgage payoff. You can repost at that point if you'd like for more help. My next goal would probably be the student loans, since they are high at 6.5% and would be done by the end of April. Then the USAA could be done by August and the MGIC by the end of December, 2012. That would leave only the truck and the Star CC - not bad for a year and a half!!

Now, one person mentioned the special military savings account - while I think this would be great to do, consider using it only after you are comfortable with the debt being under control. You could increase the timeline above by adding another $200 into the special account but since the USAA, MGIC, and Star CC are under the 10% you'd earn while he was gone, that would probably be worth it - perhaps another $50 from both of you could be put in as well, since $800 a month in "personal money" is high...and anything he didn't spend beyond that would also be dropped into the account. In general, this is an amazing thing to be able to access, but with that much debt, it would be better to reduce it and keep small savings than to max it and still be in debt.

This is my two cents, but I hope it helps and regardless of what you decide, keep your spirits high and best of luck to your husband to come home safe and quick!

**maat55** · 06-25-2011, 07:33 PM

[QUOTE]

Originally posted by roodiepoo View Post

BG: My husband is currently deployed to Iraq. He has not been gone that long but we are unsure of his return date. It could be a few months from now or it could be a year from now, we just don't know. Based off of this, I am trying to work my budget up until December and pay off as much as possible. We really want to get in the gazelle mode, but I really need help deciding what to do and so forth. I am looking for ways to cut what little I do pay out or active ways to do things.

There are two ways to look at getting out of debt. You can hate it or love it. Those who love it will succeed and build a better lifetime financial plan. Unfortunately, after reading your full post, I do not see someone who is going to love debt reduction and winning financially. I will tell you what I would do.

There are a few things that I refuse to budge on but they are for health reasons.

What exaclty are your physical challenges? This sounds like a luxury posing as a need.

I also stay home full time with my daughter right now. I moved home when my husband deployed so I pay no rent but I do help my mom out with a few bills as a token of my appreciation for watching Lilly when I need to run errands and for letting me stay here rent free.

This is reasonable.

I will be going to pharmacy tech school so this month (July) I will be paying for that class in full.

Another luxury. Going to school now is not a priority.

I also have a really, really bad spending habit. :-( I don't know why but it makes me feel better emotionally to spend. This is a terrible habit so I have decided that since I need nothing else right now, I refuse to go to the stores at all unless I am grocery shopping. (How do I cope with a habit like this? I feel like a spending addict! It is really sad because it has caused a lot of heartache and problems between my husband and I.)

Getting your priorities straight will change your mentality on consumption. Compulsive buying is an addiction those with no priorities or self-control suffer from. It is good that you recognize this, but you have to be honest with yourself as to what a priority and a want are.

I eat organic food as a health decision but I shop at krogers. I buy the veggies and fruit but give my mom an additional $100 every month for groceries for my daughter.

Are these organic foods expensive? I'm willing to bet you will survive just fine on a reasonable diet.

I know I'm probably doing this a bit backwards but I don't want to do an EF until dh is close to coming home. I would rather pay off debt.

Living at home affords you the ability to have less savings. Give serious thought as to your immediate possible emergencies. Having even 500 dollars aside trains you to maintain savings and prepares you for a small emergency.

Good personal finance involves disipline, emergency funds are a way to build savings skills.

I am here for constructive criticism as well as to create and maintain a plan and goals. I'm looking for the right tools to be able to do this and keep it going for the rest of our lives! We feel bad enough about the stupid decisions that we have made but we are ready to correct them.

I've been where you are. Like with a drug addict you have to want to change. I gave up my golf membership among many other things to get debt free and disipline myself to prioritize properly. Until you want it more than anything else, you will never really achieve it. The fact that you are here says you are close to this point.

Here is our budget and bills for July:

Vehicle loan - ford truck $765.27 / $31,376.16 - 0% ( worth $20k) - we are currently thinking about trading this for a hybrid vehicle due to the huge cost of gas, any ideas? Should we wait and pay it down a bit more, just go trade it in for new (bc no one will trade it for used bc of the amount of negative equity), or look for used and try to get a personal loan for the negative equity amount? When should we start looking? Wait one month, two months?

I would sell(not trade)the truck and borrow just enough to cover a 2k car and the remaining balance. I would then take the current car payment and apply any extra funds towards debt reduction under the snowball(lowest debt to largest or highest interest to lowest, which ever motivates you more). This should reduce your debt by 8 to 10k, possibly more. You need to check the value of the truck at kellybluebook.com, do not take trade in value.

Insurance - $70.72 - This varies monthly but includes vehicle and personal property. Right now we have our truck listed as being stored w deployment bc we can't really see the benefit in driving it while he is gone. We only have one vehicle but I drive my moms focus when I have to go somewhere, cheaper on gas.

This makes selling that much more better.

Life insurance - $76.24 - This is a plan on my husband only. He is deployed so that is why the rate is so high but I won't cancel this because you just never know what will happen over there.

Keep this insurance.

Storage Unit - $227 monthly - Everything we own is in that unit.

Be honest, are you storing things worth this expense. I would sell most everything and eliminate or downsize the storage expense.

AT&T. - $200 a month give or take - We have 3 lines on a family plan. My husband is gone so we could cancel his I suppose saving $10 a month. I also have an iPhone and an iPad connected to the plan. I have been contemplating getting rid of my iPhone, taking the iPad off the plan, and lowering the minutes. I'm thinking that would save us about $55 a month? I am also contemplating wiping my Iphone and Ipad and selling them. I figure I can get $1k for them (together) and add that to the snowball. Any ideas on that?

I would completely get rid of them.

Best Buy CC. - $50.00 / $978.03 - 0%

Chase CC. - $138.00 / $4123.21 - 6%

Old Navy CC - $50.00 / $1119.00 - 25%

Star CC. - $0.00 / $8128.80 - 6% deferred for deployment

USAA CC. - $200.00 / $4003.41 - 4%

Student loan. - $70.00 / 3521.48 - 6.5%

MGIC - $100.00 / $4700.00 - 0% (This is from a short sale agreement with the bank.)

I would take all extra funds and start knocking these out smallest to largest.

Pharm Tech Program - $1000.00 (I probably didnt explain this right but it is a one time payment of $1000.00 that will come out of the July budget, I will never have to make another payment like this in any amount again. I'm taking this course to get my certificate to be able to get a job in this field after my 11 week course and test. This is not a normal payment from the budget, it is a one time thing only but I need my certificate to be able to get the job.)

I would postpone this till you are debtfree and your husband is back.

Shakeology. - $90.00 month - This shake is a meal replacement but has done wonders for my health so I will not compromise on this. It has made my life a better life to live with y medical stuff that I have going on and has had many, many benefits. This is a monthly occurance.

Eliminate this for now. This is a priority killer.

Workout video. - $140.00 - this is a one time thing this month only. I won't pay for a gym membership but I will use these videos and this is something I need.

Eliminate this as well.

Wow. I think that pretty much covers everything. So help away and feel free to ask any questions you have! I will do my best to answer them quickly and as honestly as possible! Help me make a plan of attack!

As noted by others, you have not listed all of your expenses. There is no reason for you not to get out of debt reasonable quick if you prioritize correctly.

If you really want to get on the right track you have the ability to. Things you think you have to have now will not be that important later once you reorganize your priorities. Good luck and I pray for your husbands safe return.

**pfguru** · 06-26-2011, 01:01 AM

OK so i will make it very simple for you here ,what you need is professional help here ,now dont be shy about getting it eaither ,yes we can give you pointers here but remeber ,we use plumbers,auto techs ,doctors,so why not use pro here ,your best bet is call Dave ramsy.google his name he is the best ,you have to follow his plan like you are following your diet may be even better ,look him up .......good luck.

**DKAS** · 06-27-2011, 01:13 PM

I see you metnioned that you do not want to have an Emergency fund currently. From my personal experience, you must have an EF before you tackle your debt because if something comes up, having no EF will just send you into further debt.
I believe you will be fine long as you follow a plan, maybe Dave Ramsey is it. Best of luck

Budget help, please! :-)