Budget help from a pro

[footballmouse]

I get paid bi-weekly. According to my income and expenses, I shouldn't have any problems paying my bills. However, each pay period, I always have to bypass a bill or two b/c I can't pay it. I can't figure out what I'm doing wrong.

We don't eat out, I cook every night. I might take the kids out once on the weekend I get paid but we don't go anywhere expensive, usually $30 for the 3 of us. I use coupons at the grocery. I go to the grocery twice a month, if we run out before then (lunch meat, snacks, cheese, things like that), oh well.

Is there someone that works with people to help them manage their money? I don't make a lot so it's not like I need an accountant. It just baffles me that I can't pay bills on time and I don't have anything left to put in my savings. God help me if I have to replace something in the house or have a major car repair. I'm a nervous wreck every other week when I start paying bills.

 

[AnnaS]

This is what I told my son recently so he does not get hit with big payments and expect to pay them from a weekly check (mortgage, car insurance, etc.). For you, Add your bi-weekly income (w/spouse unless one in the household). Now add all your expenses. Rent/mortgage, homeowners/car insurance, all utilities, any other bills that you know come in during the year - vet insurance, estimate food shopping, gas, traveling and pocket expenses, etc. You don't need to really write every single one down but you get the idea. Divide those bills by 52 weeks or 26 for you. Just using a number now - if your income is $1,000 and your bills equal to $900 - you know you only have $100 to spend/splurge for those two weeks. You actually really don't - because you have so many other expenses throughout the year. Driver's License renewal, car inspection, oil changes, plate registration, clothes, entertainment, etc. You might have money left one pay period and none the next time. Money needs to sit in the account/savings for when other bills pop up. I have told my son - just because you have $200 (example) left from paying your bills this week - you are going to have to let it accumulate so by the end of the month - there is money in the account to pay off your mortgage, etc.

Don't mean to ramble on - wish I could have said it in less words lol. Good luck!!!

 

[SweetieinVT]

Have you actually made a list of ALL of your expenses, both bills and any cash outlays (lunch, coffee, your occasional dinner out)? You should do this for a couple of months to help you figure out where you are spending money beyond your big bills. Make sure to include things that don't happen on a monthly basis like license fees, insurance, etc. And try to figure out which expenses could be reduced or eliminated. Does your cell phone service include more data/minutes than you really need? What about cable? Then, I agree with AnnaS, you need to try to cut back on a few things to build up some savings for the occasional expense that come up as she mentioned.

 

[natfrac]

Something that we found helpful is to use cash for food/gas/misc expenses. It keeps the mindless spending under control.

 

[barkley]

along the same lines as those suggesting adding up ALL expenses to figure out a workable budget-we did that for the regular monthly expenses and got a figure, then we took EVERY non monthly expense we could think of (actually looked through our check registry for a prior year to get an idea) added them together and divided by 12 to get a number for that to include in our budget. we include-homeowners (or renters) insurance which is only paid once or twice per year, car insurance (we pay bi-annually to save $5-$10 per month that the insurance company charges for monthly payments), car registrations, average number of oil changes per year, property taxes (we pay ourselves vs. escrow account), propane, vet visits, and a couple of services we use (pest, weed abatement), and when my kids were younger it included summer camp (daycare) fees as well as an estimate for school clothes (my kids may be the exception but their consumption of new clothing went WAY DOWN as they got to the point of no longer outgrowing stuff). every month the amount for the non monthly expenses gets auto transferred from our checking into a separate savings account we call 'reserve'. if we have one of those expenses during a given month I just transfer into checking the amount I need for that payment. when we were paid bi-weekly we had 50% of the monthly amount transfer in with every check.

I've also found that it helps budget wise if I have yet another account set up that holds the money I budget out for gifts/holidays over the course of a year-these would include Christmas, everyone's birthday (and when the kids were younger and got invited to birthday parties an amount for those gifts), valentines (small amount for the cards the kids gave when younger, candies), easter (those dang baskets and contents add up), and Halloween (candy and a minimal amount for costumes). again-we divided the estimated amount by 12 and it gets auto transferred into that account each month. this way our budget doesn't take a big hit when this stuff rolls around.

if you try doing this on paper you may be initially shocked at how "little" money you end up with in your day to day spending budget BUT when you consider that the amount you are left with no longer has to be stretched to cover everything you're going to be setting aside for it can seem like a much more manageable amount. I also agree with tracking every expense for a couple of months and to try using cash for some day to day expenses-we've been doing both for the last 2 months and it's eye opening when you start seeing on paper how much the occasional starbucks, fast food, or convenience food (for us that's buying frozen stuff that I can make for a fraction of the cost and freeze for quick cooking myself) adds up. it's also more "real" to see the amount of cash declining in your wallet vs. just handing over a debit card.


p.s. don't know how old your kiddos are, but when ours got around 5 or so we set a monthly budget amount for 'family fun' and told the kids what the amount was and how they had to help decide how to spend it. if they wanted to go see a movie in a given month we looked to how much we had left in the fun budget and how much it would cost to see if we could afford it-and they got pretty good at picking and choosing once they got the hang of what stuff cost (and it was interesting hearing them discuss a potential outing and decide if they wanted to put it off in favor of rolling the budgeted money over to the next month to do a more expensive activity).

 

[disneychrista]

Keep a record of EVERYTHING you spend money on for an entire month. Everything from the rent/mortgage to the $4 latte at the coffee shop. It is usually the little things that get you. The $4 here $10 there all add up.

 

[barkley]

Keep a record of EVERYTHING you spend money on for an entire month. Everything from the rent/mortgage to the $4 latte at the coffee shop. It is usually the little things that get you. The $4 here $10 there all add up.

SO TRUE!!!! and as you start tracking these expenditures you can start looking at the ones that you most want to retain/enjoy and consider if there are cost saving alternatives. we did this with starbucks-dh and I both love one of their blends but every cup w/ tax ran us about $2.50 so instead of putting out an extra $10 every week just for the 2 of us to have 2 cups of it at the drive through we bought a bag of the beans for about $15 (including tax) which makes way more over a much longer period of time (and if you catch it on sale like I did last night at buy 2 get 1 free, an extra code for 10% off, another for free shipping and no tax we end up paying less for a full pound than 4 cups costs).

 

[Jake&IzzyLand]

Make sure you know what your bills are down to the penny. Then track your expenses down to the penny. I would stop eating out, that would give 60 additional dollars right there. If you have cable, cut it immediately. Evaluate your phone plan. It's not easy by any means, but it can be done. Think of spending money as lining someone else's pockets, not your own. It makes saving more appealing.

 

[disneymagicgirl]

I recommend getting yourself set up on YNAB. It is eye opening to keep track of every little thing you spend.

 

[barkley]

Make sure you know what your bills are down to the penny. Then track your expenses down to the penny. I would stop eating out, that would give 60 additional dollars right there. If you have cable, cut it immediately. Evaluate your phone plan. It's not easy by any means, but it can be done. Think of spending money as lining someone else's pockets, not your own. It makes saving more appealing.

I agree that when expenses exceed income then by all means cut everything that's not a necessity, but if that's not the case and there's in fact some money already being 'budgeted' for entertainment (eating out counts as this for us) then I would think about cable usage in a household before I would totally cut it out. a basic cable package can be pretty affordable vs. one with all the premium channels, and in our case (though we have satellite cuz there's no cable where we live) just having access to pay per view movies is a huge savings. when I can do a new movie pay per view for the 3 of us at the cost of $5.99 total that's a big savings as compared to the minimum $24 it costs for 3 of us to go to so much as the bargain matinee, and we can eat the identical popcorn, soda and candy for a fraction of the price.

 

[chris31997]

We use cash for groceries, gas, eating out, personal, house hold, sports, blow it.....

We get paid bi-monthly. We use a cash book.

On one page we put this first half the month pay and list all the bills that will be paid that half.
On the opposite page we do the second half of the month. We give every dollar a name, zero based budget.

Looks something like:

March 1 xxxxx March 15 xxxxxxx
tithe xxx ROTH xxx
Groceries xxx Groceries xxx
etc etc

 

[captainjen]

What worked for me when times were really bad was to put my entire paycheck in my checking account and leave out a small amount of cash that I used to pay for everything during the week. For example you could put your entire bi weekly check in the bank and take out $100 dollars a week in cash. That $100 is then used for all groceries, clothing, gas and entertainment. As the week goes on and you notice that you only have a few dollars left, then that is when you have to become crafty. You no longer buy groceries (you eat rice and beans, peanut butter and english muffins, kraft maccaroni and cheese and whatever else is in your pantry) You drink water from the facet if you run out of soda and you do not buy shampoo, instead you add water to what is left in the shampoo bottle for a day or two. You don't spend what you don't have because if the cash has been spent, then it has been spent. When the week is up, you take another $100 out of the bank in cash and do the same thing. It is not the easiest way to live but it got the bills paid and I survived

 

[pigletto]

I recommend getting yourself set up on YNAB. It is eye opening to keep track of every little thing you spend.

I second this! YNAB (a software program called You Need a Budget) would be perfect for your situation. Once it's all set up it shows you exactly where you are spending. It also helps you plan for what is coming up and how much to set aside for that. It has a bit of a learning curve but is incredibly easy once you get started. There are forums and web lessons as well if you have questions. If you email them they also offer a discount for Disboards members.

 

[leebee]

DH and I have one joint savings account and one joint checking account that we use for everything, and I am the keeper of the accounts; I monitor the balances, write all the bills, allocate pocket money, and although we decide jointly on large expenditures, I am the one who knows what we can afford. 10% of DH's check is auto-deposited to the savings account and the rest of both our checks goes into the checking account. We used to be paid once a month (last day of the month), so I arranged the due date on all the bills to fall on approximately the 12th of the month. That way, as soon as the paycheck hit the checking account I could sit down and pay ALL the bills. This was I knew there'd be no "mid-month" unexpected bill that I'd have to scramble to cover.

One thing that I think makes a big difference is that we don't use auto-payment or electronic billing for anything (wait… car insurance is automatically paid as it saves me 10%). When I have the bill and the check book in front of me, the money is real and I can see how we are spending it and where it's going. When it's auto-deducted, it's like magic or something. I can't "see" it as money, don't see what is in the accounts and how the cash is disappearing; it just happens. I have many friends who use online banking/automatic bill pay and are happy with it, but they never seem to know how much money they actually have at any given moment. I think we spend less and are more responsible about where it's going when I am actually "hands-on" all of our accounts.

Also, take a close look at what you are paying for the little things. Consider whether it's really necessary or if it's just conveniently necessary. A co-worker is now saving $120 a month by not having her kids have smart phones. They have monthly-contract dumb phones with texting ability, and they all know that mom will pay for X number of minutes every 3 months. When those run out, too bad so sad to be you (or they dig into their own pockets for the cash). Are the tweens/teens happy? Not necessarily, but mom has an additional $120 a month for the groceries. Same with cable. Do you really NEED DVR service, or is it just a convenience? We shaved $20 off the monthly bill by dropping the DVR service. Yes, if we want to watch something, we actually have to be in front of the TV when it's broadcast, but that's not so terrible- it's only TV! Coffee at work? DH got a mini-Keurig at Goodwill for $8 and it came with a pack-your-own basket. He makes fresh coffee whenever he wants it by using our regular coffee in his Keurig. If he went down to the union for coffee, it'd be $1.50 every time. It all adds up!

 

[lauradis]

You need a plan. Long time ago we lived paycheck to paycheck shuffling bills around. It was painful and stressful. That's when I decided to take the emotions out of money. Money is only a tool to get me the things I need first to survive and then my wants.

I'm old school and don't like all the software/ spreadsheets computerized. I love paper and adding machines.

1. find your style. paper, mobile app etc.
2. collect all your info, income, bills, other expenses for last 12 months
3. after you have all the info make a list of whats important
mine is this
Needs.
housing, lights, heating, food, transportation, retirement, healthcare, clothing
wants
cell phone, travel, internet
extras
entertainment, cable tv, eating out, Starbucks, etc

Take a good hard look at what you are spending money on and make decisions on what to cut or reduce.

More then likely you are looking at a small 2 week period and not seeing the whole picture.

To get out of the paycheck to paycheck cycle you need to plan for a whole year and build up money. Its not an easy process unless you make a ton of money more then your needs expenses.

Easiest way to break it down is stop thinking of my bills in monthly form but in yearly form. my gas bill is $75 a month nope that is $900 or $34.62 a paycheck.

Most people will tell you to have 1k for emergencies first and then 3- 6 months of monthly expenses. Some ways of doing this is just like the examples of how many posters save for disney trips, cut out all extras, get a second job, tax refunds, sell all unwanted stuff in your house.

You truly will be amazed at what you can do with money when you have a plan and make your mind up to get it done.

 

[MomToOne]

Keep a record of EVERYTHING you spend money on for an entire month. Everything from the rent/mortgage to the $4 latte at the coffee shop. It is usually the little things that get you. The $4 here $10 there all add up.

I second (or third?) this. Right now it sounds like you don't even know where your money is going. While setting up a budget is definitely something you should do, you can't possibly stick to it if it doesn't reflect the reality of your situation - and tracking your expenses is key to figuring out what your reality is.

 

[footballmouse]

Thanks for the suggestions. I do some of the things that were suggested already. I have 2 bank accounts that my check gets split to, one for bills, groceries & gas; the other is for the mortgage & car payment. Mortgage is automatically deducted, no debit card for this account.
Don't drink coffee so that's not an issue.
Our McDonald's stopped the $1 drinks recently so those trips have stopped.
We don't have a computer, if I need a computer for something then I wait until I get to work or go to the library.
We have basic cable, no movie channels.
My kids (14 & 16) don't have cell phones.
I do have a cell phone but we don't carry that much for the data plan. I definately need to keep this, my oldest son is stationed in Alaska so I need to be able to talk to him. I split the bill with him (for his 1/2) so mine isn't that terribly expensive.
My property taxes and home owner's insurance are paid w/mortgage.
I pay car insurance monthly.
My kids don't get an allowance. DS 14 will be taking the test for a soccer referee for the spring & fall seasons so that will be his spending money; and DS 16 is looking for a part time job but no luck so far.

I'll start keeping track of each dollar I spend for March. Hopefully for April I can come up with a budget. I've tried doing a budget once before but I could never get an exact amount. Every month, never failed, something out of the ordinary came up so then my whole budget was thrown off.

One of my biggest expense is the damn grocery store. I make out my menu for 2 weeks, based on what's on sale at the store, so then I'm able to make my grocery list. I stick to my list but my big buy is always meat & chicken. I try to schedule a few meatless meals (we don't like beans so it's kinda hard) but I'm still left buying meat. It's so flippin expensive!

I am getting a tax refund but that's going towards a new (refurbished) washing machine. I'm praying I can hold out until next year for a dryer. And also to pay off my 2 credit cards ($500 each). Both of my boys need new gym shoes so some will go for those and the rest will go in the savings.

I work about 56 hrs a week. I will be starting a 2nd job in the spring at our city's baseball stadium so that will be for the baseball season.

 

[dakotix]

I use a great spreadsheet that lets me plug in all my expenses as well as my income. It tells me what percentage of my money is going to what. It also tells me what I can pay myself for spending money per week. I track everything from savings, mortgage, insurance, the utilities and credit card payments. Its a great tool and really helps keep me from going overboard on the credit card debt. Message me and I can email you a blank copy of the spreadsheet.

 

[disneychrista]

I'll start keeping track of each dollar I spend for March. Hopefully for April I can come up with a budget. I've tried doing a budget once before but I could never get an exact amount. Every month, never failed, something out of the ordinary came up so then my whole budget was thrown off.

The biggest (and hardest) thing is to NOT change how you are spending money. Don't stop buying the quick lunch out or that extra special treat at the grocery store. This is the only way to get a TRUE idea of where you are spending money.

You also have to budget for the ordinary expenses that pop up. Really take a look at what you spend on these often overlooked items. It is usually these one time, occasional items that throw a budget off. Once you have this list 1/12 of this should be part of your budget and saved toward these expenses.

 

[mickeys4]

I make out my menu for 2 weeks, based on what's on sale at the store, so then I'm able to make my grocery list. I stick to my list but my big buy is always meat & chicken. I try to schedule a few meatless meals (we don't like beans so it's kinda hard) but I'm still left buying meat. It's so flippin expensive!

I am getting a tax refund but that's going towards a new (refurbished) washing machine. I'm praying I can hold out until next year for a dryer. And also to pay off my 2 credit cards ($500 each). Both of my boys need new gym shoes so some will go for those and the rest will go in the savings.

Just some other advice, if it matters. have you tried planning a menu for every week? We tried the 2 week thing and found that most of "sale" items were unnecessary crap and we would waste a lot going into the second half of the second week. Going weekly is tougher (time, planning, etc) but you buy the things you need, use them and do it all over again. It's like you're micromanaging your groceries instead of predicting the future. But it's worth it...Oh and we cut out meat. Plain and simple. I get it when I go out to eat, but other than that, it doesn't come in the house. It's taken us 5-6 years to become completely meat free, so if you're going that route, take it slow but quantify they cost of meat every week x 52 and you'll want to stop eating it.

Second, if you're getting a tax refund you may want to look into adjusting your W-4 to decrease the amount of tax witholding every paycheck. This scares a lot of people because of the fear of what they may owe at tax time, but if you go to the IRS website they have a calculator that help you determine how many exemptions to declare without having to owe. It's nice getting that big check at the beginning of the year, but I can do more with that money monthly so that's where I choose to put it.

I get paid once a month. The last day of every month.... budgeting is so hard on that schedule but it's working for us.

Also, we follow Dave Ramsey's baby steps from Total Money Makeover and FPU. The monthly zero-budget has been a life changer.