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    How to budget when your expenses exceed your income?

    Hi everyone,

    Recently I was unexpectedly laid off and have had to go from receiving an income that covered all my expenses and then some to an income that doesn't cover everything (unemployment benefits of 281 week). I realize that I'm going to have to do some freelancing while I search for my next job to supplement my income but my question is, every time I get the check for 281, how much of it should go to rent, insurance, car payment, food etc?

    I'm trying to get a handle on my finances and am totally lost on how to do this. Any honest input would be greatly appreciated.

    These are my expenses breakdown vs. unemployment benefit income:

    Current Income:

    281/week

    total/month: 1,124

    Monthly Bills:

    Rent: 700
    Car: 355.16
    Car insurance: 173.80 (due march 10)
    Cell phone: 86.00 (17.20 due March 5, 68.80 due March 19)
    Food: ? (normally 50 a week but that may need adjusting)
    Gas: about 65 a month

    total: 1,579.96

    #2
    Do you have an emergency fund?

    Obviously you need to cut down unnecessary expenses all the while look for another job or supplementary income until you can find one

    good luck
    Gunga galunga...gunga -- gunga galunga.

    Comment


      #3
      Necessities always come first...which is food. Dave Ramsey explains it here. This means you might likely get behind on your car payment for awhile.

      This assumes you have no emergency fund to fall back on.
      My other blog is Your Organized Friend.

      Comment


        #4
        When both my parents lost their jobs within weeks of each other (in the mid 2000s) we relied heavily on food banks in the area to keep a roof over our heads. So, instead of letting bills slip, my parents sucked up their pride and stood in line for food. This may help during this tough time.

        Some of the best places to go for this kind of help are churches and local shelters. If you belong to a church, I'd reach out there for assistance.

        Good luck! <3

        Comment


          #5
          Originally posted by sunshxne View Post
          Recently I was unexpectedly laid off

          Current Income:
          total/month: 1,124

          Monthly Bills:
          total: 1,579.96
          How long have you been out of work? What, if anything, do you have in savings?

          Since losing the job, what have you done to start bringing in income? You need to get in survival mode and get any work you can to balance your budget: delivering pizzas or newspapers, shoveling snow or mowing lawns, driving for Uber, etc. What type of work do you do? Do you have any skills you can easily monetize while you are looking for your next job? Your budget is off by $456. You should be able to earn that much without too much difficulty. $100/week from a side job is not hard to achieve.

          On the expense side, are you in a contract with your cell phone? If not, can you cancel it and get a prepaid for now? And what's the deal with there being 2 different payments due in March? How much do you owe on your car and what is it currently worth? When's the last time you got fresh quotes for auto insurance? Your rent is killing you at 62% of income. Any chance you could rent out a room short term to defray that expense?

          You need to really think outside the box and do everything you possibly can, as unpleasant as it may be, to make this work until you get your income back up.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment


            #6
            Originally posted by disneysteve View Post
            And what's the deal with there being 2 different payments due in March?
            It looks like one is insurance and one is a car loan.

            I'm not sure if loan companies do this anymore, but when we didn't have income we were offered to go without paying the credit cards and mortgage penalty free for 3 months. That was just something the mortgage company and at least 1 credit card offered when I asked if a late fee could be waived once. I didn't take the offers because interest still accrues, but if you are in a hard spot, it might work. Basically, if you have trimmed your budget all that you can and you still short on cash, you need to bring in more cash. There really isn't any way around that. Hoping for the best!

            Comment


              #7
              I suggest being up front with creditors [rental, car loan, phone contractor, insurance] explaining your situation and asking for co operation until you get a job. You need to take action to make up the shortfall between income and expenses, allowable on existing benefits. Do you have anything not used or needed that you can sell? For the short term, seek any work possible. house clean, office cleaner have flexible time to allow focus on job search. Tell everyone you know your need for work as most jobs are accessed by referral.

              Are you signed with a legitimate recruiter? [they are paid by potential employer not unemployed seeker] Do you have access to help with your resume and cover letters? Use the electronic job sites and apply for positions you may not exactly qualify for, large employer often have other openings that better fit your skill sets. Good luck!

              Comment


                #8
                Originally posted by sunshxne View Post
                Cell phone: 86.00 (17.20 due March 5, 68.80 due March 19)
                Originally posted by disneysteve View Post
                And what's the deal with there being 2 different payments due in March?
                Originally posted by msomnipotent View Post
                It looks like one is insurance and one is a car loan.
                No, I was talking about the cell phone having 2 payments due as stated above.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                  #9
                  Originally posted by sunshxne View Post
                  Hi everyone,

                  Recently I was unexpectedly laid off and have had to go from receiving an income that covered all my expenses and then some
                  This indicates you should have been saving money while your income was greater than your expenses. Based on your follow on post about charging off student loans, I suspect there is more to this story.

                  Comment


                    #10
                    Originally posted by creditcardfree View Post
                    Necessities always come first...which is food. Dave Ramsey explains it here. This means you might likely get behind on your car payment for awhile.

                    This assumes you have no emergency fund to fall back on.
                    This is an area that you have to be careful with. Some consider rib eye steaks, lobster and shrimp as part of a well balanced diet and won't give them up even without the finances to pay for them.

                    Food is one of the most elastic of budget items. You can always spend more or you can generally spend less. Such as if you want to spend more people buy organic. If your budget is limited, you shop for your produce on the marked down/discount items.

                    Potatoes and eggs are fairly cheap these days and good for you. With Easter in a few weeks, eggs whould be going on sale and they last a long time (much longer than what the stamp says).

                    Shop grocery sales and the Buy One Get One items. And at the risk of sounding silly, you will see that advertised as BOGO. That is not a brand of food, it literally means buy one can and get another can free. Or bottles, box, wahtever. I only bring this up because my lovely DIL one day admitted that she thought when she saw BOGO is was a particular brand on sale, so thought others may have missed it as well.
                    Gailete
                    http://www.MoonwishesSewingandCrafts.com

                    Comment


                      #11
                      Originally posted by sunshxne View Post
                      Hi everyone,

                      Recently I was unexpectedly laid off and have had to go from receiving an income that covered all my expenses and then some to an income that doesn't cover everything (unemployment benefits of 281 week). I realize that I'm going to have to do some freelancing while I search for my next job to supplement my income but my question is, every time I get the check for 281, how much of it should go to rent, insurance, car payment, food etc?

                      I'm trying to get a handle on my finances and am totally lost on how to do this. Any honest input would be greatly appreciated.

                      These are my expenses breakdown vs. unemployment benefit income:

                      Current Income:

                      281/week

                      total/month: 1,124

                      Monthly Bills:

                      Rent: 700
                      Car: 355.16
                      Car insurance: 173.80 (due march 10)
                      Cell phone: 86.00 (17.20 due March 5, 68.80 due March 19)
                      Food: ? (normally 50 a week but that may need adjusting)
                      Gas: about 65 a month

                      total: 1,579.96
                      I think you may have forgotten a few things. Do you not have any utility bills? Electric, gas, water, sewer or do they come with your rent? Healthcare or are you going to go without? Haircuts? Internet?

                      If that car insurance is the price for 12 months a year, that is over $2000/year on car insurance. unless you have had multiple accidents that you were at fault and are insuring a very expensive car, that is way out of sight. Even $1000 is expensive. Get on line immediately and find a cheaper car insurance. I did this year and saved a bunch of money.

                      Don't know why your car payments are so high, but is there a way you can sell the car and use any equity to get one that will tide you over for awhile. I have no idea how old you are, but don't let a fancy car derail your finances.

                      Is there anyway you can take on a room mate to help with expenses?

                      For sure you need to be finding a part tiem or even full time job while you look for another one, even if you work fast food, you can arrange to work evening shift and so have daylight for job hunting. How much time have you put into a secondary job so far? You don't have the luxury to wait around. You have bills to pay plus your student loan.

                      Did you get a payout when laid off at least for unused vacation, sick, personal time? Have you spent that?

                      From what I can tell you need a cheaper cell phone plan as well as cheaper car insurance immediately.
                      Gailete
                      http://www.MoonwishesSewingandCrafts.com

                      Comment


                        #12
                        Originally posted by Gailete View Post
                        If that car insurance is the price for 12 months a year, that is over $2000/year on car insurance. unless you have had multiple accidents that you were at fault and are insuring a very expensive car, that is way out of sight. Even $1000 is expensive. Get on line immediately and find a cheaper car insurance.
                        This comment comes up from time to time so let me give my usual response.

                        The cost of auto insurance is primarily determined by where you live, down to the actual zip code. Regardless of what you are driving and what your driving record is, what matters most is your address. You might pay $500/year in central PA but if you move 100 miles east into NJ, your rate will jump to $1,500. If instead you stay 10 miles to the west and relocate to Philadelphia, your rate may be $2,000 or more - for the same driver with the same car.

                        I live in NJ. I don't think twice when I see someone post that their insurance is $2,000 or more. That is totally normal around here.

                        That said, it still pays to re-shop your coverage periodically. I actually need to do that myself. It's been a while.
                        Steve

                        * Despite the high cost of living, it remains very popular.
                        * Why should I pay for my daughter's education when she already knows everything?
                        * There are no shortcuts to anywhere worth going.

                        Comment


                          #13
                          Originally posted by disneysteve View Post
                          This comment comes up from time to time so let me give my usual response.

                          The cost of auto insurance is primarily determined by where you live, down to the actual zip code. Regardless of what you are driving and what your driving record is, what matters most is your address. You might pay $500/year in central PA but if you move 100 miles east into NJ, your rate will jump to $1,500. If instead you stay 10 miles to the west and relocate to Philadelphia, your rate may be $2,000 or more - for the same driver with the same car.

                          I live in NJ. I don't think twice when I see someone post that their insurance is $2,000 or more. That is totally normal around here.

                          That said, it still pays to re-shop your coverage periodically. I actually need to do that myself. It's been a while.

                          I understand that Steve, but at the same time, not knowing where she/he is from, and as they appear to be single, it sure won't hurt to shop around. I was shocked at the savings I got when I stopped procrastinating and checked around (my son had been telling me to for years!). I saved almost $500 this year and it is more of savings than just the money. With it paid for at ~ $200/every 6 months, the other $300 plus payment fees of $5/month didn't need to be paid so it freed up money for paying other bills. If I had called around a couple of years ago I would have saved even more. It would have been great to pocket the savings, or invest it, or put it into a stock, but for the OP as well as us, we didn't have the money to be paying that amount. Even a hundred or two might help.

                          As she went to college, she might be able to get a discount as well depending on which insurance as some give a discount if you go to particular alma maters. Since she isn't driving to a job daily, she might even get her rate temporarily lower because she will have less miles/year on her car. When we hit about 4000 miles/year, or former insurance company knocked about $200 off the total bill. Or she could just insure the minimum that is required, other than the medical if she doesn't have health insure for a while, so any accidents can be covered. I don't suppose that as a doctor you see the billing end of things as much, but early in my nursing career, I knew that just an ambulance ride as well as an ER visit, can pretty much eat up a $10K car insurance money, so until hubby got Obamacare, I had the medical on our insurance at $100K. Once he got insurance, that went back to the required minimum amount.

                          With a tight budget, nothing should be skimmed over as not being able to change. I would suggest changing where she lives, but if she has a lease that makes her liable for big fees to move out before the lease is up, she couldn't do that with her current finances. As it is, she doesn't seem to be accounting for a lot of things that most find necessary currently. Perhaps she has been frugal all along, but I suspect not.

                          It just dawned on me that other than the student loan that has gone to collections, she hasn't mentioned a credit card at all. Not having one or at least not having bills from one is very unusual.
                          Gailete
                          http://www.MoonwishesSewingandCrafts.com

                          Comment


                            #14
                            Originally posted by Gailete View Post
                            I understand that Steve, but at the same time, not knowing where she/he is from, and as they appear to be single, it sure won't hurt to shop around
                            Absolutely.
                            Steve

                            * Despite the high cost of living, it remains very popular.
                            * Why should I pay for my daughter's education when she already knows everything?
                            * There are no shortcuts to anywhere worth going.

                            Comment

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