Hey guys. I've been lurking here for a while, and posting occasionally. I really appreciate all the help I've been getting, and am hoping I can get some more. I'm feeling very frustrated today (well most days, but especially today). I'm really working on getting my finances straightened out after getting clobbered more times than I want to think about. The problem is, I just can't seem to make a budget that will allow me to pay anything towards those uglies on my CR that I know are mine, or to save any money for a downpayment on a house (which is my end goal). I'll give you a little background. I'm a single mom with a 7 year old (dad is 3000 miles away and has never paid $$ or attention). I make decent money ($35k a year). Besides rent & utilities, etc the only monthly payments I have are for my student loans ($100), car payment ($325), and daycare/school tuition ($420). It seems like plenty of people make do on less than I have, but I always feel like my head is bareley above water, and everything is behind! I can give you more details if you need it. Can anyone give me some pointers as to how you worked out a budget that allowed you to save some money and/or pay off bills? I just keep hitting walls. My e-mail is on if you would like to contact me directly. And thank you to everyone for listening, and helping if you can.
Here's what helped me tremendously: For the next month, write down EVERY DIME you spend. Don't fool yourself. Include those $5 cafe mochas on the way to work (LOL!), Mickey D's with the kiddo, lunch money for her, etc. etc. snacks at work, etc. etc. You might really be surprised at how much money you "poop" away, because its only a dollar here and a dollar there. It was a real eye opener for me.
That's a good idea jlynn. My company pays for our little Starbucks "fixes" during the week, so on the weekend, I'm lost without it! They really do add up! Anyone else have some ideas?
If you belong to a credit union, you might want to check with them. Some of them offer financial counseling and budget help free of charge. The writing everything down is a good idea. Ask for receipts everywhere you go. I had to do this when I traveled on business. To make sure I didn't miss something I could claim on my expense report, I asked for receipts everywhere I went. Then when I got home I sorted them into things I could claim and things I couldn't. Just looking at all the receipts made me realize how much money I was spending other than for my food, lodging and gas.
Hi kismet, If you are trying to figure where the extra $$ goes, I like using CC's to track purchases online. I know this board is for credit repair and related stuff, but if you are looking for ways to "cut back and save", other than repairing your credit to get the best interest rates, I highly recommend this site: http://mycoupons.com. Like credit repair, learning how to shop for all your household purchases takes time and effort.....know how to build your credit, you will pay less than the next guy for loan, cc's and mortgages. Know how to buy your groceries at 60-90% off and other consumer products, you will pay a lot less than the next guy. With effort and time, the information on this site will teach you how to $ave big time!
I will definitely look at the coupon site for more info, sounds good! My ex isn't paying child support because he plays the system. He's a waiter/stand-up comedian/actor who changes jobs as soon as he's served with a garnishment order. He left when I was 3 months pregnant, and has never spoke to me since (needless to say he's never met his child). He currently owes over $40k in back child support, has a warrant out for his arrest and a freeze on his drivers license. Unfortunately because he's in a different state its very hard to enforce anything. But, I'm proud to say that for all my financial problems, I'm still doing okay without the child support. I just try to keep things in perspective. For someone who got pregnant at 19 and has raised a child alone since, I'm doing pretty damn good. I Thanks for the responses guys! I'm feeling invigorated already. I had a brainstorm, and am going to research P/T jobs when I get home. My munchkin sleeps over at grandma's every weekend, so I could put in at least 15 hours Saturday and Sunday. Hey every little bit helps, right? Even $300 a month would be HUGE to me right now. I'm in the Inland Empire of Southern California if anyone has any leads. I've got an awesome resume!
If you can swing a part time job, that would be a great help. If you have free babysitting, then you'll come out ahead. What some people do is get a part time job and then end up paying that entire salary for extra child care, gas, etc. But for you it sounds great. Just take that entire paycheck and pay it on your bills. Don't think that you have a little extra so you can buy a dress, go to dinner, stuff like that. Make yourself pay it on the bills. I couldn't believe how good it felt when I started to see the balances go down. The most effective way to pay off debt is to pay the highest interest rate first, even if it's a larger balance. If you don't think you're making progress because there's still a balance, just make a spreadsheet and track your total debt. I update mine every month, and at the bottom I put the total, then last month's total and subtract. You will see the decrease even though you have a balance. When the highest interest rate is paid off, add what you were paying on that to the payment you're already paying on the next highest, etc. I update mine every month, including interest rate. Then sort by rate. The highest rate gets the extra money. It can change from time to time as interest rates change on various accounts. Then just make sure the extra is always on the highest interest rate. If you can handle the part time job OK, after you get debts paid off, put that paycheck completely in savings and leave it there until you really need it. The compounding effects will help it grow.
Just today, I worked with a client who regularly gets $3,000 tax refund per year. This year (2002) it'll be $4,000. By adjusting their W-4 to a higher number of exemptions we got $2,600 a year added to his monthly pay check, ($216.00 a month). We also applied for ADVANCED EARNED INCOME CREDIT. You do NOT have to wait until you file a return to get this money. You can get it in advance by using a W-5. $1460.00 a year, ($121.00 a month). TOTAL monthly addition to the family income: $337.00 a month. WITHOUT ADDITIONAL CASH OUTLAY. Merely a shuffle in paper work. Now, they also understand that they won't be getting huge tax refunds every year but that's STUPID anyway. Needless to say I invested every penny.
Re: Re: Looking for budgeting help... This is not stupid for people that will not actually invest the money during the year or don't have the self control to save it instead of spending it.
Re: Re: Re: Looking for budgeting help... Sure it is Short. With technology the way it is today you can just as easily set up your investment deduction to happen automatically, just like your IRS deductions do. That way you don't even think about it. This takes "discipline" completely out of the equation. Here's why it's a mistake. Sometimes people tell me what you just did. They call it a "forced savings program". Problem is if one is not disciplined enough to set this up and let it ride, then they're not disciplined enough to invest the money when it comes in, in one lump sum from the IRS. When you get your tax refund what do you do with it? Do you "invest" it then? Of course not. You pay bills, buy something or maybe take a vacation, thus whipping out the entire years "savings". This is hardly "forced savings" it's "forced asset liquidation". If you're smart you'll do as I point out above and charge your retirement fund to the IRS. I brought this up to help the original poster to get "caught up" on expenses. Once that happens though, I would anticipate she will want to start aggresively saving for her future.
Re: Re: Re: Looking for budgeting help... Thanks Butch. Boy do I miss the days of EIC!!! I got a fairly hefty raise this year and it bumped me right out of EIC eligibility. Last year I got over $3k back in taxes, this year... $34... sigh. I'm sure you're right that in the long run the smart thing to do is to invest tax returns, but its very hard to think of the long term benefits when bills are behind. Somehow it always seems that right when tax time comes around, something breaks, or comes due, or something!
Re: Re: Re: Re: Looking for budgeting help... Well ... we tried. Perhaps there's a way to make some money online, while at home with the kid(s). Do follow the advice of the above though and keep track of everything. You'd be surprised.
Re: Re: Re: Re: Looking for budgeting help... Kismet, check your email!!! I forgot to include my yahoo IM - damsbandit
Re: Re: Re: Re: Looking for budgeting help... Can you give me a little more info on this. Can this be done for short term investments. Less than a year?
Hi there! We are a family of 3 with an income of around $17K. (Oh, what I could do with $35K a year...lol) We drive a paid in full 1981 Truck and live in a paid in full trailer with $190 a month lot dues (garbage, water, maintenance). Most of the people that "make do" on less, probably have a lower cost of living or make really economical choices like we did. Most people DO NOT want to give up their apartments and nice cars for a trailer and an old pickup, but hey, one does what one thinks is best in the financial long run... I just "ran the numbers" and it seems like you got bumped above the level for any assistance or anything and right into a higher tax bracket too: here is the EITC calculator link just FYI http://www.connect2jobs.org/connect2cash/ The things you can try are: ask for a free energy audit from your power co. to find out where you can cut energy costs and ask them about budget billing, cut any extras on your phone service, try to refinance your auto loan, and look into different forms of child care: co-op, relatives, neighbors, YMCA, etc. Are you paying private school tuition? If so, see ifyou can negotiate it or if they have a hardship program. Jlynn's idea is excellent - we started tracking (using the cc) and found that we were spending almost $200 a month on sodas, coffee, and other junk at the local gas station!! Gah! That is a whole month of lot dues AND a phone bill! We were eating out once a week for $25 a pop - reasonable right? - but that adds up to $100 a month! That is enough to pay the utilities AND our homeowners insurance for a whole month! Its pretty crazy, but when you start thinking in terms of what that money is worth (for us $6.30 a day can either pay for our lot dues or lunches at McDonalds!) As for investments, we pay $120 a month into the employee stock program and then have Pop's paycheck direct deposited; then our ING account debits it $100 on each payday. We also keep a regular savings, but the ING is for a backup. Anyway, my post is getting long and my child is tearing up the kitchen (lol) but I hope this helps! Good luck!
I would recommend reading Smart Women Finish Rich by David Bach. It is an excellent book that puts things in perspective.. Also, if you have any hobbies or something on the side that you can see yourself doing as a 'business', I would also encourge exploring that route.. let's say for example, you have a collection of dolls.. and that's what you like to do - then why don't you go into the business of trying to sell these dolls? If you can do that, then you have the ability to write off deductions and other such expenses becaus ethey are business related.. any car travel, miles, meals, etc. that relate to the success of your business. I would talk to your CPA or Tax Advisor regarding this.. the good thing is that you can lose money for 2 years straight, then start making money the 3rd year.. I am not encouraging you to 'front' like you have a business by no means - but just stating that the biggest issue with acquiring wealth (whether to pay off debt or save money) is holding onto it.. whether its because of your spending habits or because of the tax man.. think about this, if you are making 35k, then that means 27% + 9% (CA state tax) + 7.65 (SS and medicare) is what is being taken out.. let's say you can find ways to itemize about an additional 10k of money you spend a year, you get to keep approx 3-4k of that money!! Just for money you spend ANYWAY.. much of this may not make sense, so talk to a tax advisor and they should be able to provide you with enough information.. Generally speaking however, I would take a look at that book and maybe even fool.com and 'general' advice of how interest compounds.. goodl uck
The first thing you need to do is get rid of that $325 a month car payment. Ouch!! I don't know what your situation is completely or what you're driving or what kind of financing you got where your payment is that high but get rid of that payment. It does sound like you're 'pooping' a lot of your hard earned money away. Before you do anything on payday, PAY YOURSELF FIRST. Set up a savings account and put $40 a pay check in that account and don't use it. Then make due with the rest. You sound like a very wise woman. You seem to have your head on straight. Get a plan, using the advice you've gotten here, and stick to it. We'd love to hear back from you in a few months with an update. I'd love to hear that you have $240 in a savings account and that you no longer have a $325 car payment. Would love it. Good luck. It ain't going to be easy but I have a funny feeling about you....
Re: Re: Looking for budgeting help... It won't be garbled information if I just post a link AEITC section of the IRS site: http://www.irs.gov/individuals/article/0,,id=96515,00.html
