Tweaking My Budget
Sunday January 1, 2006
Well, as you can see from the preliminary budget I posted, my expenses and debt payments are way more than my income, so I need to figure out a way to make this work.
The credit counselor went through the budget and started cutting out some of the expenses, like eliminating entertainment, cutting way back on groceries and household supplies, and cutting out holiday expenses. She also reduced my debt payments to what they'd be if I went into a debt management plan (more about that later).
Even with these changes, I still have a deficit. My expenses are higher than my income. The debt counselor told me about my options. She felt my best option was to declare bankruptcy, but I really don't want to do that unless I absolutely have no other choice. ~ Mary
Comments
I was just wondering how this would work. Drastically cut back on your optional expenses for a six-month period and see if that would give you enough slack to get into a better position; then readjust.Or during this six-month time frame get a second job for this short time. Then readjust.
Hey Mary,
I too am a sinlge mother and understand where you are and how hard it can be. Good for you for making the decision to change your situation and then taking the steps nessary to reach your goals. I just wanted to let you know that I’m rooting for you and will keep you in my prayers. Good luck and God bless!
I am also a single mother and have been where you are – still trying to get out. I did not adjust my spending for 10 years i am glad it has taken you less time. There are several things i would suggest. Find a cosmetology school and get you hair cuts there. By the hair color at a beauty supply place and it is cheaper than the boxed color you can get at the store. I lived without cable tv for many years but i could get pbs and cbs. there is a book called something like the cheapsake monthly or something like that – it lists some things (some pretty radical) that you can do to cut back on household expenses. Don’t completely give up all entertainment but cut way back. Maybe allow one video a month. I know that with effort you can succeed.
good luck
This sounds like my life and debt situation! I went to a finacial counselor-she suggested a get a roommate or buy a house-so I bought a house! still is debt-worse than ever-but I have a house and am hoping to so well on a tax refund this year. I am going to sit down and do a budget tonight!
Hi Mary
,
One thing I found that helped me when I was in a similiar situation….find your creative talent – whatever you enjoy. Doesn’t matter whether it is baking, flower arrangements, photography, singing, sewing, pet/child sitting, etc just to bring extra income in(sell what you love to do). It can actually alleviate stress by feeling that you are taking control of your life and life is not controlling you. Plus, a sense of accomplishment and pride really help.
Best wishes for success in 2006
Wow – your variable expenses are substantial – just some thoughts on where you can trim, but you may already know this, as I am late coming into this:
1. Turn down thermostat
2. Fix your daughter’s lunches instead of buying at school.
3. Coupons and buy off brand items – taste the same.
4. Increase your deductibles on your car insurance.
5. Talk to your doctor about some samples, and call the manufacturers some offer coupons and free samples, as well as assitance with Rx.
6. Change your cell phone plan to include more minutes.
7. Buy the repair manual for your make/model car and learn to do some car repairs yourself.
I am a single mother also, and struggle every day, but I have found that if you allow yourself some small luxery (ours is cable) you do not feel as though you are cut off from the world. We do not go out to movies or rent movies, but watch them on cable when they come out. Saves on treat costs too!
Mary iam sinking fast like you but I think the worse thing is that the advise given to me by professionals is just go bankrupt… I want to pay my debts back… i just know I need to swim faster.
my thoughts are with you There is some great advise on here ,, just read and think..cheers
What about getting a better paying job? Is that possible for you?
I’d look for a better paying job, if possible.
How much do you owe on your car? If it’s more than $3000 or so, I’d get rid of that right away and buy a clunker. You shouldn’t have a car payment.
ALso, cancel cable (off-air reception is probably better than you think!) and sign up for netflix. That’ll be a substantial change.
Can you get rid of your home phone and switch to all cell? That’s more affordable for a lot of people these days….
Here is the deal. Offer to settle with the credit carryid company. I did and it works. Tell them you want to settle. Forget about trying to pay it off. They are still making money off you. Settle. Call them and settle and you can e-mail me. Do it now.
Neal,
Did you have he money to settle the accounts or did you pay them monthly. Sounds like a good way to go. I have looked at debt couseling and also companies that negotiate a settlement for you cannot decide which way to go.
Hi Mary. I too am a single mom of three. I make good money, but until last year, couldn’t figure out why I never had enough to start a savings account. I bought the book “Money for Life, Budgeting Success”, and it has truly helped me. I have paid off old debt, by settling (with Avco, Mervyns and Target)as Neal suggests, now I’m working on my 6 credit cards, the largest of which is only $800.00. I paid off and kept clear my J.C. Penney card and am on my way…I do have some places to still cut back on, and I found a great spreadsheet online, by Googling, ” FreeBudgeting help”. It helps me by using the Envelope theory and the “Pay-Down” method for these nasty credit cards. Well, I will certainly keep looking at this blog, as you guys have some excellent tips. Take care all, and Happy, Healthy, New Years.
I forgot to mention, Mike, I was able to pay off the settlements monthly. I use a Pre-Paid Credit Card to which my paycheck is automatically deposited. So I use this Visa card for lots of things and incur no new debt. I pay all of my bills online through the card. Any billers already in their service is free and any that I need to send a check to, is .45. This way I know exactly what I’m paying to whom, and it’s budgeted on my spreadsheet ahead of time. I’m only paid once per month, so everything gets paid on the 1st. The card I chose was the Wired Plastic card at http://www.wiredplastic.com. This has been a lifesaver for me and my family. Also, I was reading that sometimes when you work with a credit counseling company, they often times will run a credit check on you which in the future could show creditors that you have a problem with handling your finances. Check with the ones your exploring and make sure you will incur no credit report hits. Take care all.
I just cut my phone bill down to $20 a month for just the basics. You can DEF cut those expenses down to cut back. You don’t say where you’re staying at — could you get a room mate to help with expenses?
Mary,
Like everyone else, see what you can do to cut down on food and household expenses. Definitely see how you can cut down on gas. It looks like your spending about $55/week for gas. Is there anyway you can commute to work for cheaper? If you are able to find a better paying job or work a little overtime that could help. I read someone’s suggestion about adjusting your tax deductions, be very careful with that. I know from experience you could end up owing at the end of the year and owing the IRS is even worse than owing credit cards. Reduce your house phone bill to the very basic and eliminate long distance. You could use your cell phone to make any long distance calls. Or better yet, my family knows I’m trying to get out of debt and they just call me. Finally, I think cutting out the cable and video rentals and getting Netflix or Blockbuster Home Delivery (about $20)or better yet, getting videos and books from the library for free is better. How much are you paying for internet access? There are a lot of options out there for less than $15/month. Or use the libraries computer for free while you are there picking up free videos and books. :0)
Good luck.
To me, it’s very obvious why you’re in debt. What a lot of splurging! I did the single-parent thing from the time my daughter was 2 1/2 until she graduated college in 2004, without ever receiving child support or having a credit card. From 1992 on, I lived 1,500 miles from my nearest family memeber, as well.
Your expenses for cable tv and videos should be $0!! Get a book from the library.
Hair cuts/color should be $0! That’s a spoiled-rotten indulgence for someone who is in debt! Go with your natural color, and wear a simple hairstyle you can cut yourself.
Telephone should be just the home phone, cell phone should be $0! People survived without them for years.
Your grocery bill is too high, as well. I currently spend about $385 per month for two adults, and I have multiple allergies requiring a special diet, as well as six cats to feed. Don’t buy packaged junk, learn to cook from scratch.
There, I just saved you about $400 per month.
I also didn’t have a car – I walked or rode a bicycle everywhere. Yes, even in extreme weather. It is possible to buy groceries on a bike. It ain’t easy, but it’s possible. Your current income is more than I had while I was putting my daughter through college – and by the way, she did not qualify for any grants or scholarships and we did not take out any loans.
You just need to accept the fact that YOU ARE POOR, and live accordingly. It ain’t right, but unless you have a plan for increasing your income, you need to work within your reality.
Hair color/cuts are not a necessity. learn to cut hair or wear a pony tail. cut down to either land phone or cell phone not both. Pack your daughters lunch its cheaper. cable and renting movies, excessive, turn it off. do ramen a nad mac a nd cheese for a while, or lots of hamburger helper. get a part time job if you have someone like a parent to watch your kid for you.
Go to the library and get Dave Ramsey’s book “Financial Peace Revisited”. He’ll tell you what to do. It’s not gonna be nice to hear, but his plan works. And you actually pay off the debts, not bankruptcy.
are you kidding me with keeping the cable ???? Cutout all the extra expenses, this is your credit you are talking about.
Your daughter may be a little put out, but uh you are the adult and you need to take the guff of your bad spending decisions.
Do you really need to get a haircut and color, is vanity at the expense of your credit history a trait which you would like to pass on to your daughter?? And you only have $13 dollars if something happens to your car. Put your priorities in order already and get your self out of this situation right away. You have a $300 car payment?? ?Are you kidding me? You are complaining about almost going into bankruptcy and you have a $300 car payment. Get real and make some sacrifices for your benefit and your daughters benefit.
Susan
Don’t mean to sound harsh, but I have ot agree that your spending is ridiculous for someone in your situation. The hair, cable, car payment, ‘entertainment’ — these are all way too high. Make some sacrifices! $100 for your daughter’s lunches? Start making lunch for her AND yourself every day, that will save you a lot of money? Look into carpooling for work. My girlfriend has a bankrupcy and she can’t do anything, it will really hurt you. Do anything you can to avoid, but you can’t complain at this point, you haven’t even made one iota of a step torward making a sacrifice here. Take responsibility for yourself, set a good example for your daughter, make some sacrifices, talk to your credit companies and get through this.
Wow. Sure we are all shooting off solutions to your problems, but the fact of the matter is, you may have to go into credit counseling to get your credit cards under control.
I think that if you threaten to file bankruptcy, the cards will work with you. Why? Because if they don’t they will lose your monthly payment to them. If they take you to court by the time the administration fees eat up what you have left if you are not declared a no asset case and they get nothing, they will get a penny on the dollar if they are lucky. So they may cut your interest rate to lower your payment. You will have to tell them (get a manager) that you have talked to the CCC and they are recommmending that you file bankruptcy. I am more than positive they will not risk losing you to bankruptcy.
Realistically, you may have to file because your living expenses alone put you close to the edge.
even if you dropped cable and movies ($160), took a $100 off groceries , made your kids lunches ($100), dropped the entertainment ($50), halve the gass you spend per month ($110), Cut your own hair ($50), and found a phone plan that was $50 less) that is saving $620 a month, so the other $400 would have to come from card minimums which is possible.
You can also turn to selling some of your knick knacks on Ebay. Sure they may not all fetch a high dollar but $30 profit is better than none
Good Luck
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