Need help with setting up a personal budget for my disabled friend

[TexasHusker]

My good friend of many years had a stroke at age 48, which has been about 18 months ago now. The stroke messed him up pretty good - cognitively he's still not all there, and his eyesight is way messed up.

He was a teacher/coach but had leave his job and is being paid $1800 per month from his disability policy from Dearborn National Insurance Co.

He really wants to go back to work but I don't see any way it can happen. He can apply - and will probably get - "Disability Retirement" from the state of Texas which will pay him $2400 per month from now on. He could still work part time at some point and draw that $2400 per month, but once he starts getting the state disability retirement of $2400, that will replace and supercede the $1800 per month from Dearborn (that sucks!).

So $2400 per month is going to be it. His wife has said she wants a divorce so he is going to have to find somewhere to live. I told him that I will help him - we can find a place he likes and I will buy it and rent it to him affordably, or I will just carry the note for him and allow him to buy it affordably.

The question is, WHAT is affordable on $2400 per month? His truck is paid for and he has no debt. I don't want him to get into a rent/payment situation that stretches him too thin.

Can you guys help me determine a reasonable budget for him? I'm thinking the following monthly expenses:

$300 utilities
$75 cable TV
$250 groceries
$120 gas (1 tank a week, which is probably overkill)
$200 clothing and spending money
$200 savings
$100 healthcare
$900-ish rent


ALSO...when they divorce, he will likely get $30,000 to $35,000 from his part of the house sale.

What do you guys think about all this? Suggestions?

[disneysteve]

cognitively he's still not all there, and his eyesight is way messed up.

He was a teacher/coach but had leave his job and is being paid $1800 per month from his disability policy from Dearborn National Insurance Co.

So $2400 per month is going to be it.

I told him that I will help him - we can find a place he likes and I will buy it and rent it to him affordably, or I will just carry the note for him and allow him to buy it affordably.

The question is, WHAT is affordable on $2400 per month?

I'm thinking the following monthly expenses:

$300 utilities
$75 cable TV
$250 groceries
$120 gas (1 tank a week, which is probably overkill)
$200 clothing and spending money
$200 savings
$100 healthcare
$900-ish rent


ALSO...when they divorce, he will likely get $30,000 to $35,000 from his part of the house sale.

Sorry to hear of your friend's poor health. Kudos to you for stepping up and helping. The wife leaving him sucks. What happened to "in sickness and in health"?

Anyway, standard rule of thumb is for housing to be less than 28% of income which would be $672. He'd be at 37.5% at $900 which would definitely make him kind of "house poor". He should probably be looking at a small apartment or perhaps a condo rather than house if he wants to buy. The $300 for utilities would probably be less that way, too. I don't know what the market is like in your area.

If he has cognitive issues and impaired vision, is he actually able to drive? If not, he can sell the truck, save on insurance and maintenance, and not have the gas expense. He may just need to spend some money for Uber or public transit when he needs to get around.

Is $100/month for healthcare enough? You need to look at what care he needs going forward and what his copays, deductibles, and out of pocket expenses will likely be. He could blow through $100 in a week if he's getting physical therapy, for example.

Will he have legal expenses for the divorce? If so, that $30,000 from the house may end being considerably less than that. He should probably keep a 6-month EF of 10-15K.

[TexasHusker]

While he can't drive currently, the truck is paid-for and he wouldn't be able to replace it for what he would get for it. It's probably worth $5000.

My best guess is that a single guy making less than $28,000 is going to qualify for basically free healthcare - Medicaid.

No question he's going to be a little house poor, but you can't really get anything sub $900 without living in the slums.

On his savings, he should clear $30-35K after all expenses. My thinking is that he takes $20 of that and buys a few good mutual funds, and keep $10K fairly liquid for emergencies.

[disneysteve]

While he can't drive currently, the truck is paid-for and he wouldn't be able to replace it for what he would get for it.

That's only relevant if he is going to be able to drive it again.

My best guess is that a single guy making less than $28,000 is going to qualify for basically free healthcare - Medicaid.

Probably true.

you can't really get anything sub $900 without living in the slums.

Unless you can get a roommate or rent a shared space.

On his savings, he should clear $30-35K after all expenses. My thinking is that he takes $20 of that and buys a few good mutual funds, and keep $10K fairly liquid for emergencies.

That wouldn't be unreasonable.

[LivingAlmostLarge]

Unless where you live is cheap I am going to say that he should probably share a place to save money because he won't have much give otherwise. Even renting from you.

[sv2007]

texashusker, I've sent you a private message.
It's the first time I used it; so just an FYI.

[scfr]

I would contact the state agencies (Texas Health & Human Services, Department of Aging & Disability Services) to see what sorts of services are available for him. You mentioned that he may be able to start working part-time in the future, and they may offer some assistance helping him get to that point.

Your budget for him did not include insurance (auto & renter's).
If he can get OTA TV with an antenna, he won't need cable.
Utilities seem high but it will depend on age & energy-efficiency of appliances (especially AC here in TX) and space size.

You may be able to help him by educating him on frugal ways to find entertainment. For example, do you have a public library, and are you aware of all they offer?

If his future ability to drive is uncertain, he will probably want to live some place where he can walk or take public transportation (possibly free?) and have easy access to the things that are important to him (work, worship, medical care, entertainment, etc). If he's going to need to sell that truck, that is probably a "the sooner the better" decision as painful as it may be.

What a tough situation he is in. Kudos to you for helping him out.

[GoodSteward]

The advice seen so far I agree with. He may qualify for the free health because of disability, but 28k alone isn't a guarantee for it I don't think. You have to be poorer than that from what I've witnessed.

That's a terrible thing to do to someone, leave them when they need you the most. They must have had a rocky marriage before this.

One change I might look at is dumping TV and just getting internet, plus Netflix or something similar. The internet has a lot more value when you have to choose between things, however, as a coach he may really be into sports in which case TV would possibly be more enjoyable to him to be able to watch all the games. At this point he needs mental and emotional comforts as much as he needs value for money. If the truck holds sentimental value, it will be best to not mention getting rid of it yet. He is being shaken up a lot as it is, no need to make him feel his whole world has to be gotten rid of. Also, if it's at 5k and barely driven it won't be dropping in more value anytime soon.