Finally did a budget spreadsheet.....

[Aurora D]

and came face to face with the ugly truth! No wonder I feel we're always broke and robbing Peter to pay Paul. According to "the numbers" we are -$30 each month. Not much, but enough to have an issue every time there's a holiday, a school trip or an unforeseen expense. I'm currently building an emergency fund. We have $1000 in it so far. We only have about $4000 in consumer debt we are slowly paying down. Major expenses include 2 car payments and about $550 a month for gas and tolls to go to work. I'm a teacher and work a second job waitressing. DH works for the county. We both took a pay cut this year due to budgetcuts.
Soooo, I don't really have a question. I have to lay it out for DH tonight. We need to cut back on food(currently about $600 a mo for 4 of us). Be careful with utilities, etc. Unfortunately I think the fridge is on it's last leg! I reeeaaally don't want to have to spend the emergency money yet!

 

[DawnM]

Good for you for sitting down and calculating out a budget. You don't know what you need to change until you do that.

Do you have fuel efficient cars? $550 is high, but I know our gas bills were much higher before the train/light rail was installed for DH's work commute and when I was working.

I don't know what your 2 car payments are, but DR suggests transportation costs to not exceed 10% of your annual income if at all possible and never to exceed 15%. That includes car payments, gas, insurance, and any additional transportation like train/bus passes.

These are guidelines only of course.

Do you have other things to cut? Cable, cell plans, home phone, extra curricular activities, gym memberships, that sort of thing????

 

[Krischaser]

We are in the same boat too. We took a pay cut when our jobs got switched with new owners and we lost our health insurance so now we are going to be paying for it. We are $126 over a month and that is with cutting everything down. We are looking at taking a cleaning job at night. It totally stinks . I have worked all my life--- and never get ahead. Always looking for ideas on how to cut back more

 

[Mrs.Reese]

It's never fun to sit down and have an honest look at your budget. Good for you

 

[mrodgers]

I don't know what your 2 car payments are, but DR suggests transportation costs to not exceed 10% of your annual income if at all possible and never to exceed 15%. That includes car payments, gas, insurance, and any additional transportation like train/bus passes.

Ha, that's a good one. Just insurance and gas a month is 22% for me. That does not include car payment(s). Not much you can do about that when you have specific needs for a vehicle more than just going to work.

I'm in the same boat. Though I did just go negative because I had to increase the gas budget, but gas prices have finally dropped a bit, but then groceries are continuously going up. Its a never ending situation.

 

[tweeter]

Making a spreadsheet is a great start. It's taken a few years, but we should be debt free, excluding the mortgage, in twelve months. We couldn't do it without that spreadsheet.

Replacing your refrigerator may pay off sooner than you think. We replaced ours in January and saw an immediate drop in our electric bill of close to $100 a month. That alone means the purchase will pay for itself by next month.

 

[johde]

It's never fun to sit down and have an honest look at your budget. Good for you

It may not be fun but it can be liberating. I started in 2007, so almost 5 years. Since then, I've cut my credit card debt from $24,000 to $13,000 (6% interest), Increased my IRA by $6,000, bought a new (used) car after my car was hit by a deer, and taken 2 trips to Disney (Paid with cash). Yes, I know the experts say pay off credit card first. But I knew for me, a more balanced approach would be better. For example, I've been getting a 50% tax credit for money I put into my IRA, so $6,000 into my IRA would only be $3,000 off of the credit cards. Since my credit cards are low interest rate, the IRA is the better decision.

 

[piperdown]

Kudos to you for analyzing the situation. The reality can be scary, but now you have a beginning point. Now that you know where the money is going, you can start to find ways of cutting back.

We eliminated the cable, and almost completely eliminated eating out. That saved about $300 a month for us. I've been cooking and freezing meals on the weekends, so there's no excuse for fast food.

Best of luck to you!!

 

[DawnM]

Well, it has to come from somewhere.....so if your auto budget is over 22% of your income, another areas has to be adjusted. You only have 100% take home income no matter how you look at it.

Dawn

Ha, that's a good one. Just insurance and gas a month is 22% for me. That does not include car payment(s). Not much you can do about that when you have specific needs for a vehicle more than just going to work.

I'm in the same boat. Though I did just go negative because I had to increase the gas budget, but gas prices have finally dropped a bit, but then groceries are continuously going up. Its a never ending situation.