Help me make a budget and save. Please!

[bionicsquirrel]

Hi, I just found out DH is soon to leave his job and we are quickly crossing into the poverty level.

Our problems are that we have no idea how to create a working budget (not to mention that dh won't ever do anything about money if I am the one coming up with the suggestion) and we just don't know how to save money. The only money that ever seems to accumulate easily is the change jar coins that we cash and deposit straight into ds's college fund account.


Any mama's out there who have experience with budgeting, creating a plan? Any good books I could find at the library? We already buy in bulk, eat at home mostly and don't spend much on leisure things, but we have a good amount of debt and a lot of medical bills we are still paying off from when I had meningitis. It just is so overwhelming.

Any help is appreciated.
thanks
bianca

[milk_maker]

We just wrote up the bills and the amount for each bill then figured in expenses and stuff like that:

Mortgage/rent - $
Car #1 - $
Car #2 - $
Revolving debt (credit cards) - $
Utilities (water, electric, etc) - $
Groceries - $
Investments - $
Life Insurance - $
Gas/car maintenance - $
Entertainment (going out to eat/movies/fun fluff money) - $

That's pretty much it. We were very surprised when we figured up what we make and what we spend...we should have had a LOT left over, but we were going out to eat a lot. We've been sticking to the budget pretty well...it just takes a lot discipline. One thing to remember...budget a generous amount (as much as you can) to entertainment or your budget won't succeed.

Good luck and I HTH.

[Throkmorton]

also, go to www.ihatefinancialplanning.com where they will explain the basics and have some pretty good calculators on how long it will take you to pay down debt, save money, etc.

[Empress]

The best way I have found to save money and not overspend in general is deal with cash only. Take out however much you expect to need for the week and go from there. When the money is gone, its gone until the next week (unless you have an emergency). Get rid of debit and checks so you have to go to the bank to withdraw money. You'd be suprised on how many things you will make do without because you are too lazy to run to the bank. Bills can be paid with money orders, in fact they are sometimes cheaper than using a checking account!

Keep a record of spending. For every.little.thing. Its a pain in the butt, but it will give you an idea on how much you spend on food, gas, household stuff that you don't have a bill to pay for. You work a budget off of that, and see if you can go lower from there.

Also, can you settle on any of your debts? Contact the people you owe and find out if they will accept a lower payment. They really can't do much if all you can pay is $5 month. You do what you have to do.

Good luck!

[Irishmommy]

Moving this to Personal Growth...

[bionicsquirrel]

Originally Posted by Empress

Keep a record of spending. For every.little.thing. Its a pain in the butt, but it will give you an idea on how much you spend on food, gas, household stuff that you don't have a bill to pay for. You work a budget off of that, and see if you can go lower from there.

Here, I think, lies the true problem. I cannot get DH to keep track of anything. He has never written down one check or debit, he refuses to keep receipts because he says they clutter up his pockets and such. (this is going to turn into a parents as partners issue ) I really have to work on him.





Thank you all for the suggestions. That website is great and Shyly, I will definitely use your list as a starting point.


Now, how to get through to dh?

[heatherdeg]

This will sound ancient, but it works: switch to a cash system.

Once you have your budget set up--remove the checks and debit cards. Checks stay in the desk for paying the monthly bills that get mailed out, but for everything else, you take the cash out and stick it in an envelope. When you need something, you take the cash out of that envelope.

It sounds like you would carry alot of cash around, but really you don't. We got a gas card for our gas (we always buy at the same place) and the only cash we have to carry is food money (groceries and spending). For us, we do it by the month because we don't spend the same amount every week--but some people do it by the week. Or they keep the month's worth of cash in a drawer at home and pick at it week by week.

DH & I are actually VERY responsible people and this helped us fine-tune. I can only imagine what wonders it would work for you!!!

[bionicsquirrel]

Wow Heatherdeg, I was reading your post and it actually seemed like something that would definitely work. I will definitely bring this up tomorrow and see how it flies with dh. I can definitely seeing myself doing this easily.
Thanks!

[bamboogrrrl]

Tracking expenses is crucial to creating a budget so that you can predict your future needs. I track mine on Microsoft Money. Once you track expenses, the money leaks become glaring and you can plug 'em up. Even if you track only a few months of expenses, you'll have a good idea.

BTW, check out a book called "Your Money or Your Life." It has many good suggestions about blackbelt frugality with an ultimate goal of financial independence...

[sandsprite]

I am all for keeping track of every penny. Did you know most millionaires know exactly how much money is coming in and how much they spend on everthing. Right down to how much they spend on lattes. and Everyone with budget problems only have a vague sense of what groceries cost every month.

Whatever system you use, whether it is writing everything down or a cash system, or keeping all the reciepts and dumping it into an envelope at the end of the day, do it. Then take a close look at what you spent, and see what you can minimize. There was a friend of mine who had lattes every day. that is $5 a day 5 days a week. she was complaining that she didn't have money for something and I pointed out that she spends $100 a month on Lattes. :

I'm still trying to convince dh that we don't need cable. we did get rid of all the extra channels though. when the TV finally dies, I'm cancelling the cable.

look at that, every month bills and get rid of stuff you don't need. magazine subsciptions, cell phones, unpaid credit cards. if you have credit card debt. go to the bank, get a loan for 5% and pay off the credit card that is charging you 23%. on a 1000 dollar debt you would save $180 dollars. and put away the credit card until the loan is paid off. oh yes, and only have 1 credit card (including all those store credit cards. they usually have higher interest charges than credit cards, when you consider that, those silly rewards aren't worth that much after all.)

another thing millionaires do is live on less than what they make, and 70% of them NEVER buy a new car. NEVER. being wealthy has a lot more to do with how you manage money than how much you make.

[heatherdeg]

Make no mistake--even with a cash system, we track everything. It took some time, but we're now in the habit of coming in the door and dumping all our receipts in a basket.

And with the cash system, it's a little easier because you actually have to sit down and "work" at spending the rest (by writing out a check/online bill pay) so keeping track is a little easier in that respect... a little harder in other respects.

No matter what system you use, you need to track. Using the cash system went like this for us:

* We set up our budget for EVERYthing and decided what made sense to go "cash" with... which was food/groceries and any "spending" money.

* We initially weren't tracking what the "cash" stuff was spent on. We knew what category it was used for and that's how we used that cash--i.e. we had cash for food/groceries and when we needed a food/grocery item we took money from that envelope; but we didn't track exactly what food/grocery it was used on. So we didn't initially know if it was a lunch out here or there or whatever.

* When we were running out of money on the cash categories, we drilled down to see exactly why. THAT'S when we started tracking what the cash was used for. We realized it wasn't just a discipline problem, now it was a spending problem. Turned out that DH was eating lunch at work more often than he let on. He wasn't lying about it--he really just didn't realize how often he was doing it.

So tracking is necessary no matter what!! Didn't mean to allude otherwise!

--Heather

[bionicsquirrel]

This is all great insight for me. I *Know* that we need to track everything...it is getting into the habit that has proven very difficult for us...especially dh. He just doesn't even want to look at the bills and spending when he is broke. Not the best thing.


Can you really get a loan to pay off a credit card? Is this the way to go? I worry about the number of credit checks you get when you open any new account, doesn't this affect your overall credit rating?

[sandsprite]

Originally Posted by bionicsquirrel

Can you really get a loan to pay off a credit card? Is this the way to go? I worry about the number of credit checks you get when you open any new account, doesn't this affect your overall credit rating?

Yes you can. Infact getting a loan, and paying off the credit card on time will actually preserve your credit rating, cuz that credit card is paid off, and ofcourse you have to be disciplined with the loan but if you pay off the loan on time, you save money (one) and show to the credit bureau that you are reliable at paying back loans. Ask your bank manager about how this will affect your credit rating. They will know and be able to advise you better than anyone, cuz that is what they deal with every day.

What I do is I have a savings account that is separate from everything, and I put a little money aside every month, whatever is in that goes to a RRSP at the end of the year, and I have a line of credit too so if I have a big expense (which in life happens) A line of credit is good, cuz you don't have to go to the bank every time you need emergency cash, you prearrange the maximum balance alloud, the interest rate (often a rate that varies with the prime) and the minimum payments is a precentage of the total owed. When you don't need it, just ignore it and when you need it it is there, with no extra paperwork. I take it out of my line of credit instead of maxing out the credit card. Then I only pay prime plus .5% rather than 23%. Its a huge savings and when stuff happens like the refrigerator dying, Its not as big a stress on us. This way I never carry a balance on the credit card, but if I have to I have access to emergency cash.

I strongly urge you to talk to your bank manager or financial advisor (if you don't have one get one). Sometimes these small things you can do to change the way you pay off your debt can payoff big in the end. And with interest rates as low as they are these days, its really a worth while thing to do. Even if you only carry a credit card balance every once in a while.