Need Help Re: Overspending

[Pooh_Friend#1]

Does anyone have a good worksheet that I could print out to track every thing I spend and how much it cost and examples of budget categories? I do not have a computer at home so I would need to be able to write on it.

 

[Toby'sFriend]

Let's add to the list of Evil

Best Buy - definately
Kohl's
Circuit City
Starbucks
Dunkin Donuts

and for me

Border's = The Den of Satan

STAY AWAY!!!
Do you have online payment for your debt? I used to play a game with myself that when I would see something that I would normally buy, I would force myself to put it back on the shelf. I would then go home and "pay" the amount of money I just saved onto my credit card -- that would make me feel good and virtuous.

 

[agotta]

Let's add to the list of Evil

Best Buy - definately
Kohl's
Circuit City
Starbucks
Dunkin Donuts

and for me

Border's = The Den of Satan

STAY AWAY!!!
Do you have online payment for your debt? I used to play a game with myself that when I would see something that I would normally buy, I would force myself to put it back on the shelf. I would then go home and "pay" the amount of money I just saved onto my credit card -- that would make me feel good and virtuous.

That is a great idea. I was thinking about that the other day. I have been good I have stayed out of Barnes and Noble, but I did go to Target and Michaels this past weekend. Starbucks is also on my new no-no list (been making coffee at home) and so is New York and Company.

After grocery shopping last night I had $5 cash (they missed two of my sales and gave it back to me in cash). I gave dh $3 for milk and put the rest in our change jar along with my Vacation debit card, Victoria's secret and New York & Co. card. I only have my debit card with me from now on.

 

[LauraR]

Boy I can totally relate. I just noticed my credit card has a pretty sizeable balance, and I can't pay it off at the end of the month like I usually do. I think a lot of it has to do with mindset. Instead of thinking, "what's the most I could buy with this dollar?" lately I've been thinking, "It's only a dollar..." When I am really disciplined I don't even want to eat out, because I know how many groceries I could buy with $15. Even getting an ice cream cone at McD's for $1.19 is too much, if I think, "Hey, I can buy a half gallon of ice cream at the store, for $1.99 on sale and get 8 servings for a quarter each." If I multiply $1.19 by 8 it's $9.52. So storebought ice cream vs. fast food ice cream will save me $7.52. Start doing the math between alternatives and it gives you the incentive to go the cheaper route.

 

[branv]

Everything I have to say has pretty much been said, but I thought I'd still put it out there.

NO CREDIT CARDS! Yeah, I know, easier said then done. But it's the "daily living" on credit cards that screws people up so badly. It adds up without you knowing it. And I would tell people who want to put big purchases on their card as a payment plan, only do it if you commit to paying it off in 3-6 months and ONLY if you get a really great interest rate.

This is what we do to keep track and watch our spending. Our big problem was eating out/food. We could buy tons of food at the grocery store and STILL end up spending alot eating out instead...for two people!

Sooo...

We have three accounts: debit, savings, bill pay

We have a spreadsheet...this spreadsheet details each of our monthly bills: cable, mortgage, etc. and when they are due for each month. We generally estimate a little high on things like electric. We know within $20 or so, exactly how much we pay in bills every month. As soon as a bill is paid that month, we put it down in our spreadsheet, and highlight it as paid. That way we can track that it IS getting paid and what it costs us.

We have our finances divided in four ways: certain amount for bills, certain amount for mortgage, certain amount of savings, and an average of what's left for living.

With paycheck #1 of the month, as soon as it goes into our debit account, we put the amount for bills, except mortgage, into our billpay account.

We figured out what we rationally should spend for "living" (can't help the gas prices!) and..

We then transfer a pre-determined amount of savings into our savings account from that check that we do not touch.

We also know that b/c our next check will go to our mortgage, it takes up alot more of the second check then our regular bills do from the first paycheck, so we'll have less to live on for that last 2 weeks of the month. So, we are sure to deposit enough additional money from our first check into savings that we will then add back to our debit account for the last 2 weeks of the month. I know that may be confusing

So that second check is all mortgage and living: no savings, no other bills.


So...you've got bills taken care of, savings taken care of, what is left in the account is all for living. When you divide it that way, you set your priorities early on...plus it's harder to spend vicariously from your debit card, when your money is already in savings. You commit to savings first, not add to savings what is "left." And if your debit card doesn't access your savings account, you have to make a real effort to go home or walk into the bank lobby and transfer those funds.

Then, we take it a step further. We know we spend too much money on eating out, and would find at the end of the month for a while, they we had to transfer some money from savings back into debit. Baaaaaaad.

SO, this is how it works...we decided to start easy...we committed to $20/day for food. This is alot more then many families get, but alot less then what we were spending before! This includes ALL food: grocery store, eating out, coffee, bottle of wine you pick up at the liquor store, etc. For each check, we take $280 out in cash from each paycheck. And that's it.

It's amazing how much you can budget, when you can see the money dwindling from your wallet every time you pull it out. It really works for us! When you hand that debit card over, it's too hard to really grasp how much money it is. Pulling 3 $20's out of your wallet, and realizing how few that leaves you definitely makes you question where you're eating (no matter how good it is!) I've actually started planning meals, making lists, clipping coupons and..shudder...eating leftovers

If eating out isn't your crazy expense, use whatever you want in place of it...using the same budgeted cash only principle.

Then, what is left in your debit account is for the rest of the living stuff we don't have issues overspending on: gas, incidentals like shampoo, toilet paper, animal expenses, entertainment.

It may not work for everyone, but it's working for us. You really begin to visualize your money so much better. I also agree that not going into stores for "entertainment" is helpful. For you, I'd say...no more walking into Best Buy

Good luck! I know it's a bummer to do all of this, but it's gratifying when something happens that might throw others for a loop (big car breakdown for example), but you're okay b/c you've got the money in savings. Not being afraid is so worth it.

 

[agotta]

We are already doing a lot of those things. Our credit cards are in consolidation, therefore are closed. We got the intereste rates lowered and are doing our best to pay them off.

We use the same kind of system for bills. Everyweek when the paycheck comes, there are certain bills that have to be paid. The 15th of the month kills me so I am trying to get some due dates changed. It is tough because our bills are 56% of our income (that includes rent). A big chunk is student loans and there are car bills and DVC and the credit cards. Even still that should leave me a big chunk to pay off bills and put into savings.

 

[HaleyB]

Life is no fun with out a few extras and like a diet, if you are too strict with money you fall off the wagon. I budget a date night and two dinners out per month. Date night never happens, it becomes family goes to the movies money, but that is OK.

Make sure your budget includes all the things it needs to and specify amounts for every type of expense. Gas for my car is in my budget. Haircuts are in there too (with 3 kids we do one a month, that is one haircut every 5 months for each of us).

Pocket money is $20 a week for DH and $40 for me because that includes the kid pocket expenses. This is CASH, so when it is gone it is gone. This is the only way I can control pocket spending I have thought about going to cash for everything except bills and doing the envelope thing....

Now here is where the room for fun comes in. I budget $100 a week for groceries and $10 for household supplies (TP and Windex mostly ). If I spend less than that the left over goes into the mad money fund. So if I spend only $75 we can use the left over in the budget for an extra meal out or a movie. I cut my daughters hair sometimes and my sons often- that frees up enough money for a trip to McDonalds or to go out for ice cream.

I also budget my savings- $200 a month goes into our vacation fund. $200 into medical fund. $400 into long term savings (we already have our 6 month emergancy fund savings fully funded). That helps too because if I am short it comes out of the vacation savings, so that helps me atay on track

 

[Nini]

check into your student loan provider. I know that Sallie Mae allows for a Voluntary Forbearance on your student loans should you have difficulty making payments. It could ease things up a bit to allow you to pay down some debt in in the upcoming year.

If you are an avid reader (dh & I are!!!) you should become familiar with your local public library. Check out Dave Ramsey's books...they are helpful. I found another book about living on less than one income (which I promptly checked out! )...but the title escapes me for the moment...pm me if you want/need it anyone!

Keep in mind that when you "save" money at the grocery store (or anywhere else) that it is not "saved" until you take it physically OUT of your checking and into your savings account. Otherwise, it is just money "not spent". We all can get into the trap of thinking we "saved" when in fact it was just "not spent".

I am going to have a garage/tag sale this weekend and am pricing every item to SELL. Yes, it hurts to put low low prices on some great stuff, but we don't want or need them and are in need of cash flow.

My goal is to add approx. $2,000 to our monthly income. That would give us plenty of breathing room and would make life VERY pleasant . With that in mind, I already make $600 and thus only need to add another $1,400 per month. I work part time in an office for the $600. I was a SAHM, but when my dd3.5 went into pre-school I decided it was time to make some extra income.

I had a business, and just closed it. It was a tax writeoff for approx. 3 years. I will open another in a while, but for now I am focused on reducing debt in EVERY way and creating a positive cash flow!

Best of Luck!!

 

[barkley]

look at the big picture-what if something (go forbid) happened and you HAD to cut your expenses massivly? what are the "gray areas" in the so called "fixed expenses" you have each month?

we had a major life changing experience a few years ago-we were double income with 2 young kids, suddenly at just over 40 i had 2 strokes and became permanantly disabled. i was fortunate-i had disability insurance that covered me until i could qualify for retirement benefits through my employer, but my take home income was cut by 60% in the course of less than 30 days. we had to belt tighten-and quick! we looked at all the fixed expenses and found there were alot of ways we could save right there. we bundled our life, home and car insurance with the same carrier to get a multi policy discount, upped the deductable on our homeowners policy to $1000.00 to get a larger discount (we kept our security system on the house because if a loss occured due to theft or damage resulting from a failure in their system to dispatch the police-they pay the policy deductable), cut the cable bill to the bare minimum, got the doctor to write out 90 day perscriptions on all meds so we could use the mail order vs. the pharmacy ($10 vs $30 co-pay for each perscription), checked our w-2's to see if we could change our fileing status to realize more monthly income (too many people want to see a big tax refund each year when they could better use that money each month to meet their expenses), stopped using wherehouse stores (always spent too much, ended up with waste), the list goes on...

i think people try to watch the "pennies" too much-they need to be watching their dollars. we have survived, we now balance out what our incidental expenses are and how we can afford them at greater savings. we still rent movies, but we use a prepaid plan at blockbuster that allows us to rent x number of movies as many times as we want for a flat fee. we bought a sateleite system because the monthly cost worked out to be less than our cable service (tivo has cut down on movie rentals becuase we can record stuff and watch it anytime-i also check for pay per view movies that i can record and not have to stress over late fees on), we do "fast food fridays"-every friday we go through the drive thru on the way home from school (i stopped grabbing a $20 to do these bucause i would just blow the rest of it, even with a 75 cent fee using my debit card saves me at least $8 a week on this), pack lunches for work (unless you have a meeting off site or a birthday luncheon to attend).

in the last few months we have tried something new that seems to be working-we got my husband a credit card with a very low limit (less than $300). he uses this for all gas and spending money purchases-which we consider to be anything not paid for on a monthly basis: haircuts, carwash...this way he is not drawing money i had'nt anticipated from the atm, and we know that all of his expenses will keep within the amount we have budgeted each month.

find what works best for you-and remember, although it is nice to put money into your savings account you are not truly saving if you are paying high interest fees on debt. check out suzy ormon's book (at the library of course) "young, fabuolous and broke".

 

[Nini]

when you take the $1,400 and divide it by 20 working days per month, it is only $70 per day I need to make to hit my $2000 goal.

Break it down it really helps!!!

 

[barkley]

hate to say it, don't mean to be rude (please no flames)-but if you have had to do debt consolidation with your credit cards (which if you went through a debt consolidation agency does show up negativly on a credit report), are having a hard time meeting your student loan obligations...the first thing that would have to go in our budget is dvc (and yes we are members, managed to hold onto it through the budget nighmares of the past few years), but we also are already homeowners and have school savings set up for the kids, retirement funding...

i can't imagine owning dvc prior to buying our home-i would have seen that monthly payment as a big chunk of our down payment set aside. i don't know what housing prices are like where you are, but the norm out here can be (unless you are doing a wierd, interest only deal that applys nothing towards the principle) around 40 or 50 thousand dollars (thank god we bought several years ago . remember that once you buy a home there are alot more expenses than the mortgage-there's the insurance, property taxes, any development assessments, upkeep, increased utilities (we never paid water or garbage when we rented)...add to that if you want to have kids: they are little "money holes", from diapers and formula to orthodontia overnight you also have to ensure that you have sufficient health insurance coverage-one night unplanned surgery for our daughter-hospital bill alone (not surgeon, anesthiaoligist, just the hospital) $45,000.00 we're lucky, medical insurance paid for all but $10.00.

we love our dvc membership-could'nt do vacations without it-but that is the lowest priority item in our "budgetary life".

 

[agotta]

I appreciate the advice. Yes we have our credit cards in consolidation. We are working really hard to pay them off. DH and I bought into DVC on our honeymonn because of the great CM discount I had at the time. The way I look at it, is in the scheme of my bills, $200 a month is not that big a difference. I am learning ways to save in other areas. We feel that DVC is an investment for our family and in 20 years when we have it and rack rates have gone through the roof, we can sit back and smile. I have though on several occasions about selling the DVC but in the long run I think it is worth it to keep. Don't worry, no flames from me! I appreciate all the advice everyone is giving!!

 

[agotta]

Oh, and why does it show up negatively on our credit report? We were told it doesn't (of course that was by the agency.)

 

[barkley]

Oh, and why does it show up negatively on our credit report? We were told it doesn't (of course that was by the agency.)

from what we were told (and what's being reported by several consumer watchdog agencies in our area) your credit report is rated by payment history and usage history. when a debt consolidation agency is used and they do the negotiating with the credit card companies to get a lower interest fee it is reflected on the credit report and can be viewed by many lenders as "an inability to manage funds and expenses". credit reporting is realy weird esp. when it comes to financing a home-alot of folks try to pay off and close all of thier credit cards in anticipation of buying, but it actualy is better to have some open accounts with no or a low balance-it shows up as a better "debt to credit" ratio. it's like they want to see that you have $10,000 in available credit but are only using a very low percentage of whats available to you.

even if buying a house is in the distant future-consider going in now to talk to a local lender. tell them you are considering purchasing in the near future. they will pull up your credit reports, let you know about anything you need to clean up as well as positive steps to build up your rating. it costs nothing and can be some of the best budgeting advise you can get. just use a local company-that way you get face to face advise from an expert vs. emails from the on-line companies.

p.s. we did this when we first wanted to buy-but my mindset was to pay off the credit cards, student loans...after we saw a lender and crunched the numbers on what the tax savings would realize for us each year we ended up buying about a year ahead of planned (and the tax savings paid a major chunk of the debt ).

good luck on the goal of being a stay at home mom-it can be the best thing for you and your children. it can also be a big money saver as well full time daycare for (non potty trained) in our neck of the woods can run $800 a month, add to that whatever money you would spend on commuting, work clothes...you just have to resist the trap of "on-line" shopping (goin to the mall at home ).

 

[dvcgirl]

from what we were told (and what's being reported by several consumer watchdog agencies in our area) your credit report is rated by payment history and usage history. when a debt consolidation agency is used and they do the negotiating with the credit card companies to get a lower interest fee it is reflected on the credit report and can be viewed by many lenders as "an inability to manage funds and expenses". credit reporting is realy weird esp. when it comes to financing a home-alot of folks try to pay off and close all of thier credit cards in anticipation of buying, but it actualy is better to have some open accounts with no or a low balance-it shows up as a better "debt to credit" ratio. it's like they want to see that you have $10,000 in available credit but are only using a very low percentage of whats available to you.

even if buying a house is in the distant future-consider going in now to talk to a local lender. tell them you are considering purchasing in the near future. they will pull up your credit reports, let you know about anything you need to clean up as well as positive steps to build up your rating. it costs nothing and can be some of the best budgeting advise you can get. just use a local company-that way you get face to face advise from an expert vs. emails from the on-line companies.

p.s. we did this when we first wanted to buy-but my mindset was to pay off the credit cards, student loans...after we saw a lender and crunched the numbers on what the tax savings would realize for us each year we ended up buying about a year ahead of planned (and the tax savings paid a major chunk of the debt ).

good luck on the goal of being a stay at home mom-it can be the best thing for you and your children. it can also be a big money saver as well full time daycare for (non potty trained) in our neck of the woods can run $800 a month, add to that whatever money you would spend on commuting, work clothes...you just have to resist the trap of "on-line" shopping (goin to the mall at home ).

Both Debt Consolidation and Debt Settlement will show up on your credit report, but Debt Settlement is the one that can hurt you more. With Debt Consolidation, it will show up that you have had debt counseling, and will likely limit the amount of revolving lines of credit (credit cards) you can apply for. Generally, this is a good thing, as the person has had enough issues with credit card debt to seek help, and needs a plan to get out of trouble. Debt Settlement is when a company comes in and negotiates a lower pay-off on the amount owed to the CC companies, and so all of the money has not been paid back. That stays on your report for years and could negatively affect your ability to get a lower interest rate on a mortgage.

 

[agotta]

Mine is debt consolidation. They haven't payed off my cards, just negotiated lower interest rates and monthly payments. They say I will be rid of the cc in 3 years, but I think it will take longer than that. It is nice to only send in one monthly payment and know they are all taken care of. Discover had just recently upped my interest to 25.6%!!!! I have two smaller store credit cards that are almost paid off. We did need help getting the bigger ones paid off and closed.

 

[can'twait]

$800 a month for daycare? I wish! It's more like $1200 around here, for infants anyway.

 

[Mac and Us]

I agree ..... $800 is cheap around here. I pay $854 for full time preschool. She's been going to the same place since she was 6mo/old. For the nursery it was $1120., the toddler room was $985. and preschool is $854.

 

[Lyn5]

DH and I bought into DVC on our honeymonn because of the great CM discount I had at the time. The way I look at it, is in the scheme of my bills, $200 a month is not that big a difference. I am learning ways to save in other areas. We feel that DVC is an investment for our family and in 20 years when we have it and rack rates have gone through the roof, we can sit back and smile. I have though on several occasions about selling the DVC but in the long run I think it is worth it to keep. Don't worry, no flames from me! I appreciate all the advice everyone is giving!!

I would reconsider selling the DVC. If you had gotten a good deal on it, the profits as well as your monthly cost could help pay down some debts.

Just my experience, life will through you some curves. When DS was about 16 months old I had to take him for testing for cystic fibrosis, which was a very stressful time for our family. I can honestly say that this was the darkest time of my life. I was also 7 months pregnant for DD and DH was having undiagnosed heath problems for about a year. THANK THE LORD DS tested negative and he is fine, my pregnancy went well except for the last month or so I had to take it really easy due to early contractions. After DD was born DH tested positive for lupus, but we were told it was a false positive and he had osteoarthritis and rheumatoid arthritis (for him it was a heritable condition). So, from when DH was about 25 he had arthritis. Fortunately, he can control his symptoms with diet and exercise, we are trying really hard not to depend on medication, especially since we are still young. I apologize for ranting about my life, but my point is this: things don’t always turn out perfect. Now, we do live life and we take vacations and do things while DH is able to walk without pain and go park commando. Who knows if we will be able to do this later. But, at the same time I try to prepare for the worse, i.e. I could be the sole provider for my family if DH can’t work down the road, he has disability insurance from before, but that only pays a portion. Getting out of debt and saving for a rainy day won’t prevent a hardship, but at least you can deal with the emotional side better if you’re not worried about paying the medical bills and such. Just my thoughts.

 

[Autumngirl]

My DH and I sometimes get bad with the over-spending. Justifying it is the worst part "Well, we did need it" or "It was on sale and we would eventually need it".

One thing that works best for us (mostly me, I handle the finances). I take a plain calendar (I actually created one in MSExcel) and type in my DH paycheck amount on the days he gets paid and type in the amounts on the days I get paid.

Then I type in what bills get paid from each one of those paychecks based on their due dates. I also put in the weekly food budget and the gasoline/tolls and the money to the savings accounts. We have 3 savings accounts...General, Household (for new furniture, drapes, etc) and Disney/Vacation money. I figure out how much is need for each one per year (or vacation or item) and divide it by 12 and work that into the monthly budget.

The rest is "disposable income". We can go out to dinner, or we can put more into the savings for the Disney trip. It helps when I move it into savings because then I can tell my DH "Ok, but when I get home, I'm transferring the $$$ out of the savings account". It usually makes him think twice.

We were constantly going over our grocery budget... usually with stupid, junk food kind of stuff. So what I started to do was take the monthly budget in cash... once it was gone...it's gone. The end. We aren't going to starve. But, my DH realized I was serious when the grocery budget was gone, and he went without Milk for 4 days. We very rarely overspend on that now...and anything we save (under budget) goes into the Disney fund!