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Ashley’s Budget

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Okay, I’ve shared the nitty gritty details of our current debts (and assets). I want to sincerely thank everyone for the incredibly insightful and kind comments so far. You’ve given me lots to think about (and lots to talk with my husband about!) As a side-note, I received a few questions about my employment situation. I’ll be sure to write a post about this for next Monday to give you some more information. But for right now, let’s dive into our current budget.

This is our budget, along with our actual expenses from the month of February:

Budget Item

Budgeted Amount

Last Month Actual

Rent 1055 1055
Electricity 100 208!!
Water Bill 75 63
Gas Bill (natural gas) 75 22
Sprint – Cell Phones 150 155
Cable/Internet 85 85
Car Insurance 130 128
Health Insurance 350 348
Waste Management (trash) 35 35
“Miscellaneous” 350 495!!
Groceries 400 431
Baby Purchases 600 630
Gasoline 100 85
Total Expenses Expected: $3505 Actual: $3740

Then there are our debt payments:

Debt Place

Minimum Due

Amount Paid

Capital One CC 43 380
Wells Fargo CC 156 160
Sallie Mae Federal Student Loans 62 62
Carmax Auto Loan 469 469
Bank of America CC 37 37
Sallie Mae Dept of Ed Student Loans 0 100
ACS Student Loans 0 25
Mattress Firm Account 60 100
License Fees 55 55
Medical Expenses 25 25
Total Debt Paid $1413

That takes our monthly expenses (including debt repayment) up to $5153. I also deposited $200 into my Capital One 360 Savings account (better some than none, right?), bringing the total expenditures from the month of February to $5353.

Clearly there are a few areas that need improvement. One big, glaring area is in electricity. I already got our bill due in March and it is significantly lower ($108). I think it was so high because it had been cold and we were using space heaters (our actual heater is total crap and basically doesn’t work). Its warming up here in Tucson, though, so now that we aren’t using space heaters I expect our bill to continue to drop a bit more. It tends to be a bit higher in summer (approx. $150ish), but should be in the $80ish range for the next couple of months while the weather is more temperate.

In terms of our cell phones – I’ve thought that this would be a good area to try to save money….only we’re locked into a 2 year contract that was just renewed maybe 4 months ago??? So we’d have to pay to bail on our contract and switch providers. Plus, it would mean giving up my beloved iphone. I think I’ll table this area of spending for the time being in favor of searching for other areas to cut back.

Regarding the cable/internet….having internet is a 100% necessity for me to work from home. The internet, alone, costs $55. We got a package deal for cable & internet for $85. When we first moved to our house (August 2013), we had not anticipated buying cable (we haven’t had it in years), but we live outside the city limit and we weren’t able to get any local stations at all (like ABC, CBS, FOX, etc.) Those are the only channels I really care about. We went and bought the biggest receiver Target sells and it still wasn’t enough power to get any local stations. So if we cut cable, we literally have NO TV at all (unless we watch DVDs). Since it only costs an extra $30/month, we went with the cable/internet bundle.

Even though I went a little over the budgeted amount for groceries, I feel like the $400 allotted per month is already pretty strict. Included in our groceries are all items you find at the grocery store (including toiletries, personal hygiene products, cleaning supplies, etc.), so its more than “just” food purchases.

Areas I’d like to target for cutting-back:

  • Miscellaneous. This category includes cards and gifts for friends or family, parking costs (its free by our house, but costs money when I go to campus), any eating out or going out with friends, goods (such as shoes, clothing) and services (such as hair cut/color), and anything “extra” (like prescription costs, photo printing costs, etc.). Most of these expenses fall under the “eating out and/or going out with friends” category. This definitely needs to be cut back.
  • Baby Purchases. Our daughters are enrolled in a 3-day-per-week at-home daycare. It costs $25/child/day (so $50/day) = $150/week. So, at a minimum, our baby purchases amount to $600/month. As a result, we almost always go “over” for other miscellaneous baby items – trip to the doctor, prescription costs, etc. I have been seriously considering cutting back to having them in daycare 2 days per week, for a savings of $200/month. It will put a bit more pressure on me to get work tasks done primarily during those 2 days (otherwise I have to work at night when they’ve gone to bed, and I prefer to have that be “grown up” time with my husband). I think this idea has been in the back of my mind for months, but posting on the blog has definitely made me a little more apt to pull the trigger and make this change. I need to talk to our daycare provider. What’s customary here? A two week notice? I have no idea!
  • “Other”:  I know I can make small cuts in various areas. For example, I want to switch to using primarily dish rags (instead of paper towels) to cut down that expense (which would be in our “grocery” budget). I’d love to hear other ideas from you all on ways to cut back. I also have a post planned to give you more examples of “little ways” that I’m trying to cut expenses at home. I think the hardest will be the eating out. Pre-babies, our biggest monthly expense was going out. We went out at least 2-3 times per week and easily spent $100 per night. So we already feel like our going out/eating out has been WAY scaled back. But when I look at my budget from last month I see multiple entries for eating out. The costs may have gone down (averaging about $40 per “night out” as opposed to $100), but there are still several unnecessary outings.
  • Debt Repayment:  Let me explain….I want to “UP” our debt repayment, but only for the credit cards. One of my student loans (Sallie Mae – Dept of Ed) is in deferment, so I owe nothing currently. Part of me is so scared to send nothing, though. Right now the interest, alone, is costing $350/month so even though my measly $100/month doesn’t even dent the interest the loan is accruing, I feel like I have to send something. But this is all a psychological issue of mine. The interest rate on my credit cards is still higher than the student loan’s APR. I have to get over my irrational psychological issue of paying nothing and transfer the $100 I’ve been paying monthly on the student loan over to my credit cards. I can deal with this loan when my credit card journey is complete. (Edited to add: A comment on this morning’s post pointed out the compounding of the interest, which really adds up quickly given the HUGE amount of student loan debt. Any math-minded people out there, give me advice!!! Does it make more sense to send nothing to student loans and more to higher APR CCs or do I really need to be paying at least the interest on my student loans to keep it from accumulating???)

And in terms of our earnings this month – we earned a combined total (after taxes) of:  $5465. Since our income is variable we never really know exactly what our monthly income will be until the month is over, but it tends to hoover around the $5,000 range.

Just as an aside – My husband makes most of the money. However, I do not feel comfortable breaking down whom made what and where it came from. I am pretty sure I am not allowed to disclose my exact income (according to contractual obligations). So I’m just going to present a lump sum and that’s it. I think its irrelevant what came from whom, anyway (in relation to debt-paydown). I will post more about my job situation (and potential for me to increase my income) next Monday.

So when we take our February income ($5465) minus our expenses ($5353), we were left with a small excess ($112). What should I do with that money? Keep it in my checking/savings for monthly bills, transfer over to Capital One 360 Savings for more permanent savings, or throw it directly toward debt? Some combination of the three? In the past I’ve just left any excess money in my regular checking/savings account since there are, invariably, months where we come out a little short. I like to have a bit of a buffer in that account, but I suppose I could be more precise (e.g., start a sub-account of Capital One 360 called “month excess” that could be drawn from if we are ever short).

What’s your take on our budget? Where would you target for further expense-cutting and what would you do with any leftover money at the end of the month (keeping in mind our uncertain and variable income)?

Ashley

Texan at heart; Arizonan on paper. Lover of running, cheese, camping, and family (fur-family included!). Blogger, motivated to get out of debt YESTERDAY! Follow along with my journey!

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87 Comments

  • Reply Juhli |

    I’m sorry to say this but if I owed as much money as you do I wouldn’t be going out to eat at all, I’d cut all other expenses to the bare minimum and focus on increasing my income. I realize that doesn’t sound like fun but what if you have to pay your health insurance deductible again this year and next year, etc? What if your car breaks down? I understand that you need internet to work but you don’t need tv. You don’t need the car you have. You don’t need to color your hair. You may choose to do these things but that means your debt (accrued interest on those student loans) continues to grow and you will have other unplanned expenses in the future.

  • Reply Jasmine |

    I was just thinking that you were asking for it with the cable, eating out, and hair coloring…

    While I don’t necessarily believe in being deprived during debt reduction, I’d definitely consider reducing some of these. Maybe color your hair every other month or only if you have a surplus (which is motivating if your income is variable). For cable, have you considered dropping to Netflix, Hulu, or Amazon Instant if you have Prime? If you have a Wii, Playstation or XBox, you can have these and cut your cable costs. Between that and the internet, you should have access to most, if not all, shows you watch.

    As for eating out…I definitely understand this as it is something I try very hard to keep to a minimum. I’ve gone from regularly eating out to maybe once a week (which is a huge deal). Some of the things I do to keep cost low are eat earlier (happy hour specials can be amazing and filling), look for specials (free app/dessert or free entree if you buy one). For restaurants, I regularly frequent, I sign up for their clubs so as to get specials occasionally. If I do feel the need to just get out, I’ll also consider just going for dessert or limiting myself to only an appetizer rather than entree (better for the wallet and waistline). I’ve also heard of discount gift cards, but I’ve never used them. Restaurant.com also has certificates (some as low as $4) for eating out. If it’s more for the social experience, maybe take turns hosting gatherings which would allow you to socialize with other adults while still keeping costs to a minimum.

    • Reply Juhli |

      I didn’t mean to sound harsh but the amount of debt plus variable income plus 4 people to support means that to pay off debt requires sacrifices. That doesn’t mean life can’t be joyful!

      • Reply Jasmine |

        I didn’t think you were harsh. Those were the first 3 that jumped out at me also! I just thought it was funny 🙂

        I think sacrifices are in order and those are probably the best places to start. It’s probably hypocritical of me since I have cable and a gym membership, but since I sacrifice my mental health sometimes by living with the family I nanny in exchange for no rent payments, I have the other two to help keep me sane.

    • Reply Ashley |

      I actually only color my hair three times a year, and I always use a Groupon to do so (generally about $30). We don’t have any gaming consoles and used to do Netflix, but cut it out when we moved to our new place since we added cable. Our netflix bill was $20/month so if you think of it that way, we’re only paying an extra $10/month now compared to then. We could certainly eat out less often, and that’s something we need to implement immediately.

      • Reply Laura |

        Start coloring your own hair. A box of dye is less then $10 and it’s not hard to do. You’ll just have to make sure your husband is home to watch the kids while you do it. I’ve started going grey but can’t stomach salon prices for coloring so I do my own.

        • Reply Shoeaholicnomore |

          I too am trying to work my way out of debt, but going to a box dye is something I WON’T do! I still have to look professional at my job and box dyes have always turned out horrible on my hair…

          • Ashley |

            I actually found a site (back when Emily was blogging about her hair/salon experiences) that advertised professional-grade at-home coloring. You go online and type in all types of information about your hair type/color/etc., and can request the professional-grade dye to be shipped to your home. I need to go back to find the site, but remember it was really reasonable (like $10 I think??) I think this is going to be something I explore in the future – I can definitely let readers know my experience

        • Reply Ashley |

          Yeah, I’m already thinking I’m going to start going this route. I didn’t pay a lot for hair maintenance previously (always used Groupons and only go about 3 times a year), but I can still save more by doing at-home. Plus, the last Groupon experience I had was TERRIBLE! I’d only paid $35 for the Groupon but still ultimately felt ripped off given the terrible hack job the lady did on my hair! Ick!

  • Reply scarr |

    I replaced paper towels with cloth rags about 6 months ago and it saves us a lot more than I ever expected. I still buy one roll of paper towels to keep handy however that one roll lasts at least 2 months. I also stopped purchasing bleach wipes, I now make a homemade kitchen counter spray with the help of my rags. I also started making homemade laundry detergent, there are many recipes for this online but they are all pretty much the same: washing soda (not to be confused with baking soda), borax, grated bar of soap.

    I know eating out or going out is one thing people hate hearing they have to cut, but you should drastically cut down your eating/drinking/out with friends budget. I would not be such a stickler for this category if it wasn’t something I had to do when I was paying off my huge credit card debt. I know how hard it is to change this habit, it stinks buying beer on sale to drink at home because going out is too expensive. When I did go out with friends, I would eat at home first then order water and one drink and that’s it.

    I got my debt paid off in 18 months, so I know how possible it can be to work hard toward a goal that seems impossible. You can do it!!! I listen to Dave Ramsey too, so you know the saying, “Live like no one else so you can live like no one else” – if you can cut back on going out for 2 – 3 years and get your debt paid off, then you have the rest of your life to do all the things you want to do – with cash 🙂

    • Reply Julene |

      I would be interested in how to effectively replace your paper towels with rags. My family is going through paper towels like they are free these days!

      For your extra money I would apply it directly to the loan with the lowest balance. I agree that the faster you can chunk through the little ones the better it will feel. As for cable I would keep it knowing that you are sacrificing in other ways. And don’t worry about those saying you’ll never make it – you definitely WILL and we’ll all be here to support you!

      • Reply scarr |

        What worked for my family was to just suddenly not have a huge stockpile of paper towels. When we went to Costco to buy TP and other bulk items, I used to always throw in paper towels as well. Not anymore.

        When I made the switch, I busted out all the rags I never used and bought a few more for good measure. I always have fresh rags ready to replace dirty ones. I wash my rags 1-2 times a week, depending on how much I am cleaning that week or how many spills there were 🙂 For me, the hardest part was getting over the fact that I was getting rags “dirty” . . . it’s like HELLO!? That’s what they are for!!!

        • Reply gloria-victoria |

          Buy a 12 pack or two of cheap washcloths. (I think I bought a 12 pack for about 3.00 at big lots. Makes good cleaning rags, wipe up spills and launder easily.

      • Reply Ashley |

        Thanks Julene, that means a lot! For us, we had a TON of baby burp cloths. Now that our girls are toddlers I’m repurposing the “burp cloths” as cleaning cloths. I definitely plan to post more about my money-saving tactics, but that’s one thing we’ve started with. : )

        • Reply Babs |

          Way to go Ashley, you have started the debt fight without it costing you a penny :o)

    • Reply Ashley |

      Wow, that’s incredible! Congratulations on the 18 month debt-payoff!! That’s a good idea to eat first before going out with friends. We’re not big drinkers so alcohol isn’t such a big issue, but it seems like there’s ALWAYS something to celebrate – a friend’s birthday, dissertation defense, etc etc etc. It amounts to at least twice a month! Then it’s a loose-loose because I feel like a jerk not going, but if I go I inevitably spend money. : (

      • Reply Walnut |

        You’ll definitely have to implement backyard potlucks for some of those celebrations. It’s cost effective for everyone involved and really easy to throw some food on grill.

      • Reply scarr |

        I totally get it – you want to be with the people you care about to celebrate their accomplishments or just hang out. I mention that I paid off my debt because I want you to know that I have been where you are and there is hope! I want to leave comments that are helpful and encouraging, I don’t want anyone to feel worse about their debt than they already do. Putting all of your expenses and debt on paper is a huge step in the right direction! What I say or what others comment may help you and it may not be something that works for you and that is okay.

        I will add, once you start this process it is amazing to see how things start falling in place: you get a job or you find other ways to make money, or you find ways to do the things you want while contributing significantly toward your debt.

  • Reply Anon |

    Honestly, it sounds like you’re doing a great job when it comes to keeping your expenses at a minimum, especially with twins. Sure, there’s some fat you can cut, but it’s not like you’re going on pricey trips or eating out every day. You also seem really smart and thoughtful about getting out of debt, and I appreciate your honesty. Really, it seems like the issue you struggle with is fear, which I don’t blame you for! I bet with a little more organization, you’ll be able to figure out the best method to pay it all off. Here are a few suggestions–
    -Download http://www.vertex42.com/Calculators/debt-reduction-calculator.html. It’ll let you put in all your loans and it’ll tell you what order you should be paying them and it lets you see the progress you make with extra snowflake payments. (To that regard I’d make sure you calculate the license fees, because as echoed in the comments, it’s probably costing you more than you realize)
    -I’d absolutely cut out one day a week of daycare. Throw that extra $200 to debt repayment. You can definitely get your work done if you push yourself!
    -Get on an income based repayment plan for your student loans. It’ll give you a clear picture on how much you should be sending each month, instead of a guess out of fear.
    -Any extra money you get each month (including income excess), I’d send half to your highest interest rate loan, the other half to a retirement account.
    -I wouldn’t be saving any money right now (beyond retirement), unless you routinely spend more than you make each month and will need it. Having those loans is “costing” you from your savings anyway.
    -Earmark the remainder of your mattress loan out of your savings so you know you have it and pay it off a few months early.
    -Once you have this all organized, I think you’ll really want to throw some savings into your credit card debt. I think you should at least pay off your Capital One card now. Then take that payment and put it toward the next one, you know the drill. That 400 something amount from your savings won’t break you if there’s an emergency, and it’ll save you TONS of money over the next few months.
    I really hope that helps. I really believe in your journey!

    • Reply Ashley |

      Thanks Anon, I really appreciate your comment and you’ve given some great tips! I’ll definitely download that calculator – great resource!

  • Reply Den |

    My first thought was that you’re doing pretty good with expenses. Yeah, you could trim back a bit on extras….but what I would suggest is that you focus on the debt repayment aspect and FOCUS like crazy on one debt until it is GONE!

    Your Capitol One cc should be gone your next payment, then take all that payment money and knock out your mattress loan in two months….then FOCUS on your Wells Fargo CC and get rid of that fast….then it’s time to consolidate those big students loans and possibly refinance your car (or sell and get something cheaper). Once you start seeing “wins” with each debt gone you will be even more energized to save money by cutting back on expenses.

    I’m not a huge fan of living without some fun in life – cable, tv, hair color, dining out….you just have to budget for them within reason. Plus, once they become luxuries you appreciate them all the more!

    Since you already have a decent emergency fund and savings account I would take any excess income each month and send it to your next targeted bill.

    GREAT start!

    • Reply Ashley |

      Thanks for the advice – the Cap One card is definitely up on the chopping block. I really like the idea of focusing on one debt at a time and working until its GONE!!!

  • Reply Juhli |

    You might consider joining a credit union to get a much lower rate on your car loan. Mine currently has up to 60 month used car loans for less than 4%. I realize you would have to pay the excess over its current value but when you are ready to deal with the car it could save you a lot of money over the term of the loan.

    • Reply Ashley |

      That’s a great idea! We were definitely planning to try to refinance to get a lower interest rate this summer (after we’ve hit a critical level with our debt-to-credit ratio of under 50%…it’s still not at the ideal 20%, but that’s where interest rates start to lower). Of course, many others are making good arguments for selling, so we’ll have to see what happens.

  • Reply Angie |

    Oy. So much work to be done. This is probably an unpopular thought and contrary to “blogging away debt” but have you ever considered bankruptcy? Not that it would help with you student loans (I think?) but I think you’re in a pretty tough spot.

    • Reply JT |

      Shame on you for even suggesting that. To suggest that anyone should run away from their obligations is wrong, wrong, wrong.
      They are not in a tough spot. They have enough to cover their expenses and put money towards getting out of debt. It’s just a matter of focusing energy towards getting out of debt instead of burying their heads in the sand or telling those companies, “Sorry, guys. You lent me money but I don’t think I’ll pay you back”
      It might be a long slog to get this done but it can be done. Starting or even knowing how/where to start is probably the hardest part. I believe they can do it and I would hope you could have something encouraging to contribute other than “give up, it’s hopeless”

    • Reply Mitz |

      Bankruptcy makes sense for very specific situations. I am not suggesting bankruptcy here, but from what little I know about the finances only about 1/4 of this debt could be discharged in bankruptcy and the car could be surrendered with no strings attached. Furthermore, based on income numbers they might not qualify for a Chapter 7. This advice is not meant to constitute legal advice, but I am a bankruptcy and business law attorney. It DOES NOT make sense here.

    • Reply Rachel |

      Even bankruptcy would not get rid of the student loans, and that’s 75K of the debt. Federal student loans (The Sallie Mae loans) aren’t touched in bankruptcy court. They follow you until death.

    • Reply Ashley |

      My husband and I actually talked about it a lot when he was going through his medical issues. But he ended up pulling through, and you are correct that bankruptcy wouldn’t absolve us of the student loans. It might be different if the student loans would disappear but since they aren’t going anywhere, I feel confident that we can pay everything else off in a timely fashion (much sooner than it would take for our credit to recover from bankruptcy). It does suck – I know this. But I have confidence that we can do it.

      • Reply scarr |

        You absolutely can do this without bankruptcy! It is not going to be easy, in fact it might suck a lot for a little while, but you CAN do this! We believe in you!

  • Reply Shoeaholicnomore |

    Personal Finance is very personal. You have to do what is right for you and your family, even if it doesn’t 100% agree with the readers of this blog. As long as you are steadily making progress, even if its small, its progress. 🙂

  • Reply Mitz |

    I agree with other comments that there are places you might cut back-daycare, dining out, etc. Personally, I am not a fan of making is so bare bones (e.g. if cable is only $30 a month and that is your primary source of entertainment) that you suddenly go on a binge to blow off steam from stress, etc. Anything in moderation helps create balance. If the cable makes you happy then keep it and find somewhere else to cut.

  • Reply JT |

    1. You say that your income is variable but by looking at the past year or some of income, you should be able to determine the highs and lows and come up with an average. Use that average in your budget. If your income is above that average, save the excess for a below average month. The same can be said with the variable utilities such as Gas, Water, Electricity. I live in a similar climate where the electricity is really high in the summer and really low in the winter. Water is the same and gas is the exact opposite. But I average the monthly cost from the past couple of years and send a regular monthly payment. If I build up a credit balance, I know it will be used up when my usage is much higher. You shouldn’t be hit with “shocking” bills cause the usage should be the same year after year after year…..

    2. Your #1 goal is to get rid of debt so step #1 is don’t use the credit cards. Hide them, freeze them, cut them up. Whatever it takes. You really you don’t have alot of credit card debt but this starting point will keep you from racking up any more debt. Most of your debt is in student loans.

    3. If you need motivation, you could probably knock out a couple of the small credit cards. Once you get the satisfaction of clearing out some debt, kill that Mattress Firm one. If you don’t, it might come back and bite you in the tush.

    4. I wouldn’t worry too much about putting money into savings and instead put it towards your debts. Your not doing yourself any favor earning less than 1% in savings when your paying an average of 7 1/2% interest. Save a small amount in case some emergencies happen.

    5. Cut those expenses. Reducing the day care is a good start. Also, you could be nickle and diming yourself to death. Birthday cards and gifts, eating out with family and friends. I don’t know about your relationship with family and friends but would they be hurt if you didn’t give cards and maybe not gifts if they knew your plan to get out of debt? Would they be upset if you turned down an evenings out to dinner and drinks if they knew it wasn’t that you didn’t want to but because your money can be put towards the longer goal of being debt free?
    I think that’s a good starting point. I could probably go on some more but I’m trying not to over do it.

    • Reply Ashley |

      Hi JT, I definitely appreciate all the advice (keep it coming! the more the better!!) : ) In regard to point 5 – the eating out with friends is definitely going to be the hardest. I know the point you’re trying to make (friends/family should be supportive, they don’t need cards, gifts, etc.), but its easier said than done. Also, people (and my guess would be not just my friends, but people in general) can sometimes be critical about staying home to “save money”…especially at the expense of not attending celebratory gatherings (birthday! dissertation defense! etc). I know I’ve seen it in the past and I can only assume I’ll be met with the same smirks and sideways glances from a few of my friends when they are all informed about our debt-payoff journey. Listening to the Dave Ramsey show, this tends to be a common theme I hear from others, too – that one of the hardest parts is being made fun of by their “friends” because they have to stay home instead of going out. Sigh. Perhaps this deserves a post all its own. Bottom line – it definitely does need to be reduced.

      • Reply Juhli |

        It sounds like you are about to find out who your true friends are and who truly wishes you success in securing your family’s financial future. I would suggest that you make some giving decisions. Cards from the Dollar Store. Gifts only for children and then one gift for less than x. You make the rules and stick to them. If someone questions you say gently that you have a lot of medical bills and student loans to pay off and you are sure they can understand the impact that has on your family.

        • Reply Ashley |

          I LOVE the Dollar Store for cards!!! Sometimes (if its family), I’ll also send homemade cards the girls made. I agree (in theory) with the comment that true friends should understand. In practice…..(lets be real), I don’t have a lot of friends in Arizona (my husband and I are both from Texas and many of my grad school friends graduate and move away)….so even if they aren’t “real” friends I feel its important to have SOME social interactions outside of my family. It’s going to be a hard change to make. : /

  • Reply TPol |

    I do not want to sound judgmental so here is what I think I would do if I were in your shoes:
    1. Cut back on dining out to once a month. So, it would feel like a real treat and I wouldl enjoy it much more. Give myself and my husband a small fun allowance each month like USD 20-30 or so in order not to feel deprived.
    2. Get rid of the car and use the proceeds for debt payment. Buy an older but reliable car.
    3. Just like JT suggested I would figure out an average expenditure number and plan my budget around it. (I have variable income too and I plan my spending around the fixed portion of it).
    4. Color my own hair ( I do this every 6-8 weeks and I have my hair cut may be twice a year. I keep a very simple cut so when it grows out, it is still simple and does not require trimming. I do this not because I do not have the funds but, rather because I hate going to a saloon)
    5. Keep the savings untouched but do not try to fund them any further. (You seem to have a good EF there.)
    6. Get rid of the cc debt a.s.a.p.
    7. I would give up TV and stick to basic Internet. (I did that when I had to study for a certificate exam because TV was distracting me and lived without a TV for two years. Never missed it. I now have basic cable because mom stays with me for long periods of time and she needs entertainment.)
    8. I would try to talk to the cell phone company and ask them to help out? Sometimes they can offer a better deal without affecting the contract. Asking nicely would not hurt. After all, the worst thing would be declining your request.
    9. I would freeze “wants”. I would project an image in my mind how wonderful it will be when I am finally debt free, what nice vacations I can take, how much money I can put in my retirement funds and all that fun stuff to stay focused. I am sure anyone around us can get by for a whole year without purchasing clothing items. This would be a great opportunity to wear those things stuffed at the back of the closet and rotating clothes wisely. It could actually be a fun challenge.
    OK, I think, I will shut up now. It is past 1.a.m. in this country:)

    • Reply Ashley |

      Thanks so much for the advice! I never even thought about #8 (calling my cell phone company and just asking them about it) – that’s a really great idea!

  • Reply Kathryn |

    I think it’d be beneficial to you to breakdown the “miscellaneous” category into their own categories, so you really know where your money is going. That way you know just how much you have to spend every month on going out to eat, entertainment, personal maintenance (hair coloring, cuts, etc). Once you do this you can decide if you want to lessen that budget or if all those things are nonnegotiables.
    I think it’s always best to break your budget down into exact categories. Why have the kids’ doctor visits and prescriptions into the kid category and yours in the misc category? Make a medical category and put them all together! I like to set aside a little money every month, around $80, for things like car registration, doctor copays, prescriptions, etc. things I know I’ll have to pay later in the year. Something to consider!

    • Reply Ashley |

      That’s a really good idea! I know its a lot to ask, but I would love if you gave me your sample budget categories (or could point me to a website or web resource??) I just started making mine on my own without any pointers/professional advice and these are the categories I came up with but I’m definitely open to revising!! I also like that you set aside some money every month for the annual/semi-annual bills. You’ll see in my next debt update that I was really dinged this month when our car registration was due (wiping out our entire “miscellaneous” budget in one fell swoop!)

      • Reply Rachel |

        We had a huge problem with the “Misc” category in Mint. We’d constantly go over every month because we hadn’t accounted for regular irregular expenses.

        Things that we’ve broken out of the “Misc” category:
        – Medical (Prescriptions, Doctor Copays)
        – Gifts (save a little every month to pull out for birthdays and Christmas)
        – Books/School Supplies (I’m a student)
        – “Amazon” – This is where we need to work on it. We order household supplies, books, electronics from here, but some times this is too big.
        – Entertainment – We need to work on this as well, but its definitely still a category for us (We’re working on it!)

        So, the “misc” category definitely hides excess spending for us sometimes!

        • Reply Julene McGregor |

          I would split out your Amazon category even further. Amazon is just the store – not the category. Put those expenses where they belong so you can really tell what needs to be cut.
          Any expense that has a grouping (school expenses, medical, restaurants, housing, groceries, car expenses, beauty/hair, etc) gets a separate category in my budget. That way I can tell where my money is going and can’t hide it. My husband has comic subscriptions and they are their own category so that it can be easily seen exactly what we are spending and can’t be hidden. In my opinion when you are watching your expenses more categories can help.

        • Reply Ashley |

          Yeah, I’m sure our “misc” category mostly hides our eating out expenses, and I really need to break it apart into separate categories. Thanks for giving me your sample categories!

          • Juhli |

            We use very detailed categories. For example: food, cleaning supplies, paper goods, alcohol for weekly shopping. Insurance, fees, prescriptions, over the counter, parking, wellness/gym for medical expenses. Once you break it all out you may see that using generic cleaning supplies or making your own will really help. Or you may decide to spend more on health insurance to reduce your ongoing deductible, etc.

          • Ashley |

            Thanks for the example – it definitely helps me to see what others have done that they find successful! I think I tend to be a “grouper” rather than a “splitter” (for budget purposes), but it will definitely help to break things apart and really see where my money is going!

      • Reply kathryn |

        My budget is just a simple excel sheet for now, but here’s my categories:
        Rent
        Utilities (water, sewer/trash, electric)
        Phone
        Car (includes loan payment)
        Student Loans (all lumped into one category)
        Groceries
        Personal (haircut, drug store things like shampoo/cond, shoes or clothes) **This is a revolving category, so if I don’t spend everything one month it gets added to the next one
        Gas
        Savings (I have money automatically transferred each pay day)
        —This breaks down into two categories:
        —– Emergency Fund savings
        —– Year-Long Expenses (dr appts, prescriptions, car reg, gifts)
        **This is a great way to save up for Christmas gifts too!
        Entertainment (going out to eat, drinks with friends, movies, etc)
        Charity

        I think that’s about it! Hope it helps you refine your budget 🙂 They’re always a work in progress, so if one month you notice you’re left with a bunch of charges that don’t really fit in any of your categories, add a new one! Try and get everything accounted for so that you truly know where your money is going.
        & yes, I totally understand! I got rid of a car last year and didn’t realize I still had to pay taxes on it (since I owned it 1/1/13), so I was left with a ~$120 bill I wasn’t expecting. Luckily, I had that money I set aside that I could pull from. I call it my “short term” savings, because I’ve already earmarked it for certain expenditures, so it’ll only be sticking around for a little bit!

        • Reply Ashley |

          Thanks I really appreciate seeing an example. I’m sure my next budget/debt update will include a revised budget per many commenter’s suggestions. I’m still working through it at this point but it certainly helps to see what has worked for others!

      • Reply Slinky |

        My general rule for misc expenses it that they are one off, unexpected expenses. A speeding ticket or some sort of fee, for instance. If the expense is a regular or ongoing occurrence, it gets put into a regular category. I also split things out into subcategories any time that it’s unclear where my money is going.

        My budget is pretty granular with subcategories, but here’s what I generally work with:

        Taxes (income, property)
        Long Term Savings (401k, eFund…)
        Insurance (Dental, health, home, auto…)
        Debt (Student loan, auto, mortgage…)
        Short Term Savings (Vacation, house improvements/purchases, car replacement…)
        Food (groceries, restaurant…)
        Utilities (gas, electric, internet, phone…)
        Automobile (registration, gas, maintenance…)
        Personal Care (hair, clothing, medical, yoga…)
        House Expenses (contractors, hardware stores, other purchases…)
        Discretionary Spending (books, knitting….)
        Gift Giving (birthday, christmas, charity….)
        Misc

  • Reply Walnut |

    Have you looked into Straight Talk or Page Plus Wireless for your cell phones? If you can drop your $150/month down to about $80/month, then it’s worth paying the fee to break your contract. Also, think very carefully about how and where you use your iPhone. I have been paring down my apps and it’s amazing how much time you can waste on the phone that you could instead be using to interact with your husband and kids.

    I’m SO excited to watch your story unfold. As soon as you pay off a couple debts and free up some cash flow, I have no doubt you’re going to kill your debt. My best suggestion is to download an amortization table format, drop it into a spreadsheet and create a tab for each debt. It’s very motivating to play with your payments and see how much optimize. Plus, it’ll make you hate the debt that much more.

    • Reply Ashley |

      whoa, whoa, whoa – whaaat??? Can I be honest and say I had no idea what that was and just had to google it??? Wow, I can’t believe how much I’m learning already and it’s only day #1! Woo!! Can’t wait to enact some reader tips and really hit the ground running!

      • Reply Walnut |

        Your enthusiasm is awesome. The BAD community will share all of our best tips – especially to an eager learner. Since 2010 I’ve paid off about 10k grad school student loans, 15k in 0% interest credit cards from a crazy year of travel/house renovations, and about 45k of vehicle debt. I’ve done this by working like crazy to get pay raises at work (I’ve about doubled my starting salary, but trust me that I’ve put in the hours and earned every penny), selling all of my extras, watching every purchase and coming to terms with my Target problem.

        I’ll be more than happy to share every tip and idea that crosses my mind!

        • Reply Ashley |

          Wow, that’s incredible! Congrats on all the debt-payment! I totally get the “Target problem” thing. I swear, one of my biggest expenses is mindless grocery shopping. I’ve gotten it under better control in recent months (ONLY shopping with a list and being strict about pre-planning meals/shopping sales/etc.), but in the past I could blow TONS of $ on random foods just because I thought they fell under the category of “necessary” spending (ha! hardly! especially when food goes bad and gets thrown away! literally like throwing $ down the drain!!!)

      • Reply Kristina |

        I think the catch with PushtoTalk is you have to buy their phones at full price. Just something to keep in mind.

  • Reply Carrie |

    Keep in mind, though, that if take out cable, you’ll likely lose the bundle deal and your internet will go up. At least, mine would. Also, you’re more likely to go out and spend $$ if you can’t entertain yourself at home. Enjoyed reading; good luck!

  • Reply mjane |

    Hi Ashley!

    First off, CONGRATULATIONS for taking the biggest and hardest step to becoming debt free!
    Acknowledging your debt, making a plan and taking back control of your life. I am so very proud of you!
    Congratulations also for receiving your Doctorate! Thats a huge accomplishment that I’m sure seemed impossible at times?
    I want to second visiting Frugalqueens blog. She has been there and done that.
    Also please, please check out debtisdum on you tube. They are about 32, just had their third child and have vlogged their debt free story. They are a wonderful family and you will get so inspired especially because they have a young family like you.

    debtisdum vlog talks about the envelope system, saving for date night, gifts etc..

    You have gotten lots of advise. I wanted first to say hello and you go girl! You are going to have a bright future ahead!

    • Reply Ashley |

      Hi MJane! Thanks so much! Your whole comment made me smile (I feel like I can *hear* your friendly tone). Thanks for the resources, I’ll be sure to check them out!

  • Reply m |

    Instead of going out to celebrate with friends invite them over for a potluck or desert at your place.

  • Reply Alexandria |

    Cell phone tip: Check out Ting

    They use the sprint network and you might be able to take over your existing phones. It’s dirt cheap. We switched from Sprint to Ting in November and have yet to pay them a single cent. I think we get our first bill in May. I used a referral credit to sign up, earned one referral credit, won a $50 credit and they also reimburse 25% of early termination fees (up to a cap). Our two-household/family plan bill went from $200/month to $50/month for 4 smart phones. (We haven’t paid anything because we just have a giant credit in our account, from all of the above. & we can still earn referral credits by referring others to Ting).

    We left our Sprint contract about 6 months early because we came out way ahead on the deal. Run the numbers. What does the early termination cost versus how much will you save monthly if you switch now versus at the end of contract?

    • Reply Alexandria |

      P.S. My spouse is pretty picky and this was the only small cell company he would consider. We have been very pleased and their customer service is incredible.

      • Reply Slinky |

        Seconding Ting! Only took a couple of months to recoup the ETF in savings. Last month I didn’t use my phone much and it was only $19!

  • Reply Theresa |

    I think you should set aside the $112 for your tax bill.

    While I think you should use some of your savings to pay down debt I understand your hesitation. However I definitely think you need to FOCUS. You gave yourself a year deadline to pay your cc off and looking at your numbers you need to make changes to make that happen. While it is a good idea to have a savings account and to put something towards the student loans you need to pull back on savings and the student loans to dump money on the credit cards. Once those are behind you then review things and prioritize. At $55 a month you guys will be paying that license fee for another 8 years! And those medical bills are going to require some payment soon as well.

    As far as the pressure from friends- remember your number #1 priority is you and your family and your future. If their feelings are hurt so be it. And if they make snide comments and are aware of your financial situation then maybe they aren’t such good friends after all.

    Take a deep breath too! You can do this.

    • Reply Ashley |

      Such good advice (on all 3 points). I am absolutely bound and determined to pay off the CCs in a year (or less). It will certainly be “uncomfortable”, but I think it will also be “doable” – there will definitely be some sacrifices (and additional avenues for income will need to be explored), but I’m really excited to get going.

  • Reply Jessica |

    Hi Ashley!

    I understand your feelings about eating out. Honestly, it was one of the hardest areas for me to cut back in on my debt pay off journey (just finished 25k in credit card debt last month! YAY! Still have 115k student loans! BOO!). I started limiting my eating out expenses to extra money I could earn from survey sites. There are some pros and cons to the survey sites, but there are a lot of them, and lots of resources out there about which ones are good and not so good. Some give cash, some give points for gift cards. I just do the surveys while I’m watching TV. It’s not a way to earn a ton of money, but I made it my “blow money.” If I didn’t do any surveys for a while, then I didn’t have any money to blow on eating out with friends. I could take it out of my budget completely, without giving it up.

    It seems like you have a great attitude and I know you’re going to do well!

    • Reply Ashley |

      That’s a great idea! I like that type of system. Congrats on all the money paid off already!!!

  • Reply Kerstin |

    I’m so excited to have you blogging Ashley! We have so much in common, it unbelievable and a little bit uncanny. I love all the great tips an feedback you have gotten. My husband and I just finished paying off 14 K in credit card debt 2 weeks ago! We paid it off in a year by snowballing our payments once my car was paid off and transferring the most we could to a 0% interest card after figuring our what we could pay and when it had to be paid off and then that was our priority. It was amazingly freeing. We had a narrow window to pay it off before my husband’s student loans came out of forbearance and I’m so glad we did. I too have almost 60K in student loans, and my husband has about that much as well. You are motivating me to think about tackling that debt. Previously my priority was just the credit card debt, but I see our journey is not over. The hardest part about paying off debt is staying out of it once it’s gone, so you have a lot of time to practice learning great new habits. Once suggestion I have that works really well for my husband and I is to each have a separate amount of “fun” money. Whether that’s $20 a month or $200 (I wish!) a month that you and your spouse can each spend on whatever you want, no discussion needed. Clothes, books, beer brewing supplies (hubby), whatever…just so you don’t feel so constrained by your “budget” and have some autonomy as well. You can save up your fun money over a series of months for a big ticket item or spend it each month. That way we each feel like we can be spontaneous sometimes and have a little “fun” and not affect our budget. It makes you really think about how you want to use your “fun” money and amazingly your priorities shift. So excited to be along for the ride with you! Another resource out there…we have had great success using the YNAB budgeting software. It’s pretty fun.

    • Reply Ashley |

      Thanks for the comment and advice! It’s definitely daunting to have so much student loan debt (though this seems to be the “norm” these days). I think it helps to break up the goals into smaller chunks (first = credit cards, second = car loan, third = student loans). Makes it easier to stay focused!

  • Reply AS |

    On your debt payments, can I suggest that you add in a few more columns to the table:
    – Interest Rate
    – Prior Month Ending Balance
    – Interest Accrued Current Month
    – Principal Paid Down Current Month (and percentage of outstanding balance paid)
    – Current Month Ending Balance
    – Projected Months to Pay off at current interest rate and payment level

    Some of these are in your earlier post but having them all in one place will I think make you think twice. You will see where you are getting ahead (eg capital one) and where you are falling behind (such as the license fees and sallie mae loans).

    • Reply Ashley |

      That’s a really great idea! Feels like a lot of work to do each month, but I’m sure once I’m in the habit it will be no-big-deal, and I think you’re right that it will really make me do a double-take and perhaps making everything a little more “real”

  • Reply AY |

    Hi Ashley! First of all I want to say CONGRATULATIONS on being selected for the blog (I was rooting for you) and THANK YOU for being so up front and honest with everything! I have really enjoyed reading the blogs you’ve posted so far. I love your attitude and think that you have responded graciously to some tough, direct and not-fun-to-hear comments. Kudos to you and I’m excited to be part of this community supporting you in your debt payoff journey. My husband is a MA level college adjunct and about to get his first full-time job and is working on his PhD so I know what the job market is like!! Not easy at all and they pay adjuncts next to nothing for all the work they do! Hoping you can find a full-time job this next hiring season. Congrats on your PhD and I am trusting it will pay off in a job situation soon 🙂 I’m excited to watch your journey unfold!

    • Reply Ashley |

      Thanks, I really appreciate the encouragement! Congratulations to your husband!

  • Reply Mary |

    Hi Ashley – Congratulations!!! It does seem funny to be congratulating someone on being in enough debt to warrent a blog, but the congratulations is for being ready to do something about it and being willing to share your experience. Your attitude will serve you well in this process. Much like a diet, you have to purpose in your mind and heart that this is more important than having that “piece of pie” (or whatever is your weakness). We are on our own debt reduction journey (the vast majority being parent student loans – three children in college and years of poor planning). I have found this community to be very helpful with their suggestions, comments, etc. Several suggestions I would make…take every single bill you have and go over them line item, by line item. You may be surprised to find a way to cut these even further. Shop around on your insurance policies. Just one call to our insurance provider saved us several hundred dollars a year as they re-wrote our auto and home policies. I track everything in Quicken and what really shook me was seeing that in 2012 we spent over 10,000 eating out – ridiculous. That, and a serious reduction in our salary, got us serious fast. We now enjoy our dinners out much more because they are a rare treat – instead of the norm. Wishing you the best and as far as immediate advice – do everything you can to knock out one or two of the bills (especially the mattress one) within the next month or so and experience the rush of crossing things off the list. It does provide motivation to see those numbers drop and will encourage you on to the next one. I look forward to your next post on your debt free journey!!! If it were easy, you wouldn’t be here. Good luck!!!

  • Reply KLM |

    Have you guys thought about moving? Your budgeted expenses related to your home are about $1425. If you moved, you might find an apartment with cheaper rent that included some of the additional costs (utilities/cable). It could be my East Coast bias, but $1055 for rent in Tucson sounds high, especially since the daycare costs you’ve listed are incredibly cheap, which implies to me that the cost of living there isn’t thaaaat high (summer A/C aside). This might be the best way to free up a couple hundred dollars a month.

    • Reply Ashley |

      You are correct that the cost of living is relatively low in Tucson. Don’t be fooled about our daycare costs though – those are VERY low (compared to norm) because of our in-home provider (we’re friends). Prior to that, I was paying $1100 per month for only 2 days a week (compared to our current situation of $600 month for 3 days a week). Childcare is expensive! In terms of moving, I don’t think I’m “there” right now (not that I’m 100% opposed to it, but just not wanting to consider it at this time). Until August we lived in a MUCH MUCH cheaper place – $595/month. But, we lived in the GHETTO. Seriously. I could write a book about the things I witnessed and activities taking place in the area. Where we moved, we still live in a humble residence, but are in a much nicer, more family-oriented area. I cannot even explain the difference it has made psychologically in all aspects of life (general happiness, safety, peace of mind, etc etc etc). It also provides lots of cheap or free family activities (lots of free parks, free activities like “movie-in-the-park”, and others). We are very happy here, haven’t even been here a year yet, and I really don’t want to uproot my family again right now. Plus, we have a large dog (and he’s a Rottweiler, at that), so moving isn’t as easy as it seems because not many places (especially apartments) are “ok” with that. Like I said, I’m not 100% against it, so we’ll see what the future holds.

So, what do you think ?