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Ashley’s Revised Budget

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You may recall that in one of my first posts I shared my budget and asked for opinions on where to cut back. After examining patterns of our spending and listening to reader comments, I’ve made some revisions I wanted to share here:

(Note: I’m new to TablePress so if it cuts off some rows, click to change to showing 25 entries)

BudgetOldNew
Rent10551055
Electricity100100
Water bill7575
Gas bill7540
Sprint phones150150
Cable/Internet8585
Car Insurance13090
Health Insurance: BCBS350350
Waste Management (trash)3535
Debt11001550
Misc.350250
Groceries400400
Baby Purchases600600
Gasoline100100
Savings200190
Total48055020

Let’s talk about some of the changes.

First, you’ll notice the total budget has actually gone UP by a couple hundred dollars. I guess we’re just going to have to make more money : ) This is accounted for by a $450 monthly increase in the amount I will be paying toward debt. I ran the numbers and, after accounting for the minimums due on other debt, if I’m going to make the 1-year goal for paying off my Credit Cards I must increase the overall amount I’m paying toward debt.

I tried to offset this increase by lowering the amount budgeted toward a couple of different categories:

  • Natural gas (not gasoline) fell from $75 down to $40. Wish I could say I’d done something to somehow save, but I just edited this after looking at the past year and realizing that I was simply budgeting too much to that category. Our bill tends to hover around $30, but can be as high as $55ish. $40 was a good average number.
  • Car insurance fell from $130 down to $90. It was even lower, but several comments made me nervous about our precariously low coverage. I increased our coverage back up a little (to $25,000/$50,00/$50,000). It’s still much lower than our original coverage, which is where the savings come into play, but up a bit from what I discussed in this post.
  • I reduced our “Miscellaneous” budget from $350 down to $250.
  • I reduced our “Savings” from $200 down to $190.

Lets talk about the latter two….

Per the recommendation of readers, I decided to break apart my “miscellaneous” category in the budget. Although in the table I posted there is only one line-item for “miscellaneous,” in my excel file at home I actually have it broken down into a separate table where the item totals fill in the “misc” category (does that make sense?) Here it is:

Miscellaneous (was $350/month; reduced to $250/month)

  • Entertainment = $20/month

This includes things like going to a movie, renting a Netflix, going to a fair or carnival, zoo, children’s museum, etc. My goal is to further reduce this category, but I want to start here and see how it goes – I don’t want to set myself up for failure!

  • Eating Out/Going Out = $75/month

I know this is probably an unpopular decision, as many will think we should not eat out AT ALL during this process (or at least much less than $75/month worth). However, this will probably amount to one family “night out” and one time where I eat out with my friends, so we’re talking about twice a month. This is a HUGE cut-back from previously (based on looking at my past eating-out expenses). I’d love to see this budgeted category fall even more, but this is where I feel comfortable starting.

  • Personal Maintenance = $30/month

From looking at the past year, I noted these types of things that will fall into this category:  yoga, nails, eyebrow wax, hair cut/color. Note shampoo/conditioner/makeup will remain in the “grocery” budget, and I will try to further reduce these costs (e.g., coloring my own hair and painting my own nails instead of going to a salon).

  • Other = $125/month

I know some said to split everything apart, but a lot of these items are irregular purchases that didn’t make sense to have their own column. Again, I selected example items from looking at the last year’s worth of purchases, but note that many of these I may try to DIY or do without this year, so hopefully I can further reduce this category in the future, too: Xmas cards/Xmas photos, parking, dog food, itunes purchases, dollar tree, Bookmans, pet sitter, stamps, gifts, doctor’s copays.

 

Savings (was $200/month, reduced to $190/month)

In redoing my budget I realized that I am going to need to redo my savings as well. YES, I am keeping a savings. BUT, instead of just randomly depositing this money into the bank, I made some sub-categories in my CapOne360 account so this money is for a specific purpose. I also reduced the overall amount of savings per month (albeit only by $10/month…every bit helps!).

  • Semi-Annual Fees = $40/month

I think the main item here is car registration ($350 annual for me, $100 annual for Chris, so there’s still a little buffer, too).

  • Car maintenance = $50/month

Oil change, taking care of any unexpected repairs, and savings toward a new vehicle (Chris’s truck is ancient and has 200,000 miles on it – as discussed here – so I think it’s wise to start a little savings for a just-in-case moment that is inevitably going to happen at some point).

  • Dental & Vision = $50/month

We have no dental coverage, but I usually buy Groupons to go get a teeth cleaning once or twice a year (I actually average about every 9 months). Chris’ teeth are a total mess (and a story for another time), but suffice it to say, we will need this money. Also, I wear glasses/contacts and although my annual eye exam is covered on our insurance, we have no coverage for frames/lenses, so this money can be used for that as well. Regular health care expenses (copay for doctor’s visit) will fall under the “other” category from the “miscellaneous” column.

  • Travel/Christmas = $25/month

Before you jump on me, realize that the total saved is SMALL…only $300/year. We do like to drive back home for Christmas so I’m not talking about “travel” in the sense of an extravagant vacation; I’m talking about extra gas money for a long drive. Also, Chris and I have actually talked about not going back for Christmas this year and staying in Tucson instead (it will be the first time in our lives not to go back for Christmas if this happens). I’ll keep you updated on this one.

  • 3-6 Months Expenses = $25/month

I know this is probably controversial, as many will tell me to eliminate this category and throw the extra $300/year toward debt. This is my “peace of mind” extra money. It’s not going to significantly tip the scale either direction, but it makes me psychologically feel better to save a little every month. Indulge me – I know this is dumb, but it’s rooted deep within me (in my Intro post I even talked about how my family had always instilled in me the importance of saving while I was young!). Some may argue I need to get over my irrational psychological issues, but I would argue that money is HIGHLY psychological. By doing something for “me” (saving money…no crazy spending or anything), I am more likely to be able to stay the course on this journey.

How We Fared in March

I was originally going to give you a big update (broken down by budget category) on how I fared for the month of March, but decided to start those updates next month, given that I have just now revised the budget and we didn’t even start blogging until the second half of March. (You can, however, see my debt update post from this morning!) I will say that we did well for the month (both in terms of lowered spending and extra earnings) and ended up with a surplus of $2225!!!

With this money, my husband and I decided to make some one-time “snowflake” payments toward debt.

  • $1,000 went immediately toward my Wells Fargo CC (with the 13.65% APR – note, this payment was not made until the beginning of April, so it is not included in this morning’s debt update)
  • $1225 went toward outstanding medical debt (note – this payment was made at the end of March, so it WAS included in this morning’s debt update).
  • And we decided to put an additional $1,000 toward Mattress Firm out of our savings (see Savings info in this post. note – this payment was also not reflected in this morning’s debt update).

I alluded to the medical debt snowflake payment in this morning’s post. I took the advice of several readers and called to ask for reduced rates in exchange for paying the bill in-full. In spite of my efforts, I was turned down by every single place (all 8 of the places I called). It was a huge bummer, particularly since it took half a day to make all the calls. I ended up using the $1225 to knock out a bunch of the smaller bills, leaving myself with 3 separate monthly payments (amounting to $150/month), and 1 monthly payment to the Mayo Clinic that is yet to be determined. Apparently, even though they are out-of-network, our insurance pays a flat rate of $100 toward our bill, which Mayo has not yet received. They will not discuss or set up a payment plan with me until that money has been handled so I’m not sure what we’ll owe them yet, but my guess is our medical debt will go up to probably about $200/month.

Charitable Donation Update

Also, as another random update to our discussion about charitable donations, we have decided to forego adding a line to our current budget for charity. In lieu of this, I am beyond thankful to Marie(!!!) for pointing out that in the state of Arizona, you can make charitable donations (up to a certain dollar amount) that give you a tax CREDIT (not deduction)….basically its like picking and choosing where your tax money goes (and if you are owed a refund, you actually get the money BACK at the end of the year). For any Arizona readers interested, HERE is a link to a list of qualifying organizations in the state (note – this may not be an exhaustive list. I’m not sure). This is how we will donate for the time being and if something happens to come up that we would like to donate more toward (generally these are the pay-it-forward/non”charitable” organization things I mentioned – like friends’ Go Fund Me sites), then it will have to come out of our “other” miscellaneous budget. If it doesn’t fit for the month, then we can’t donate. I feel good about this decision because it still allows us to give, but to do so in a way that won’t financially harm my own family.

 

Current Debt Monthly Payments

 

Debts Amount
WF(13.65%); 800
Sallie-Federal(8.25%) 62
Carmax (7.75%) 470
BoA (7.24%) 35
Sallie-DeptofEd (6.8%) 0
ACS student loans (7.24%) 25
MattressFirm (0%)  100
CJ License (0%)       55
Medical Debt 150
Total 1697

For those astute readers, you will notice we are paying nearly $1700 toward debt per month at this point. Yet, our budget only allots for $1550 per month. Clearly there will need to be other places where we cut back to allow for this ballooning debt payment (and hopefully Mattress Firm will fall off the list in another month or two). I’d also like to note that this budget is a work-in-progress. My hope is to continue reducing our expenses across the board in various categories, while simultaneously increasing our debt-payments. It’s a process (and I talked about some of the changes I’ve already made earlier today), so stick with me!

Anyone have Sprint as a wireless provider??? Want to do a Framily Plan?? (just kidding……but not really!) I think our phone bill (at $150/month) is SCREAMING to be slashed! The childcare expense has been another one weighing heavily on my mind. Perhaps it deserves its own post soon. Changes are on the horizon, folks!

Any big, glaring areas where you think I could cut back more??? What have you done to cut costs in your budget?

 


19 Comments

  • Reply Theresa |

    You have been busy! I think you are right that your cell phone and child care are up for some scrutiny. I am glad the mattress bill received 1k from your savings. I think that was smart. Please pay it off before the end of July! Anything you can get rid of via Craigslist? Any odd jobs your husband can pick up?

  • Reply Georgie |

    I got my PhD in RCTE from UA, so I think we have a lot in common! I use Virgin mobile, $35/month for unlimited text and data. I get 300 minutes/month which I never use anyway. I think that if you use Skype on your phone that’s data, not minutes, so you can cut back that way.

  • Reply Joe |

    Ashley,

    You are kicking a** and taking names! I am rooting for you to make this budget work.

    I still think that you should be saving money by just paying off debt, but ultimately I acknowledge the psychological aspect of making any plan “work”. So if this is what helps you, then it is worth it!

  • Reply Ashley |

    I think that’s exactly where we’re headed! I have a TON of old baby clothes already boxed up, waiting to be taken to the Children’s Resale shop. But honestly, I think I could get a much better margin by selling online (there are lots of Facebook “garage sale” groups). I’ve shied away from this in the past just for convenience’s sake, but I think it’s worth the extra effort. I’ll report back! : )

  • Reply Mary from SC |

    Ashley – I am impressed with how well you are attacking your debt and also being open to suggestions and not getting defensive when sticky subjects are broached. I have utilized the online Facebook selling sites and have made decent on these. I am careful (just like in Craigslist) to always meet in public places. There was one month I made over $800.00 between these, Craigslist and Ebay. Of course, lots of months won’t be like that, every bit helps make that budget go further. I actually set up another Facebook account just for buying/selling. I didn’t like having too much information out there for all to see. I was always honest with the person via message why I had set this up the way I did (family issues but that’s another story) and never had any problems and got to know many great people that would become repeat “customers”. Hope you find success there as well.

  • Reply scarr |

    Thanks for all the details! Good job making small cuts where you could, they certainly do add up! I agree that you should be saving some money because the practice of saving money is important and because when you are in debt expensive crap always happens or pops up. With that said, I wonder if you could alter the amount? What if while you were paying down your credit cards and medical debt, you only saved $100/month until it was knocked out then increase it to $200/month while you bust your student loans? I understand that it may not be something you are comfortable with, but you certainly are finding other ways to slash that budget.

  • Reply Rachel |

    This budget looks awesome!! It looks manageable and clear, now you just have the challenge of meeting the numbers!

    I understand wanting to keep 25 dollars for long-term savings…You still keep in the habit of saving, and based on your savings accounts, you can occasionally make one time debt payments as your savings account grows beyond what you need for a 3-6 month emergency fund.

  • Reply Lynn |

    Great job – I am so impressed that you are showing such commitment to your fight against debt. I am a big proponent of eating at home but I think that having a night out once or twice a month makes it much less burdensome. Sometimes you just don’t have it in you to cook one more meal. I think this shows a real positive step forward for you. Congratulations!!

    • Reply Ashley |

      Thanks Lynn! I do the majority of cooking at our house, so its definitely a challenge to commit to cooking at home more (mostly because by the end of the day I’m exhausted!), but I’m trying to plan ahead to make rollover meals, crockpot meals, and freezer meals, so I always have some “easy” options on hand. I would love to continue cutting down our “eating out” budget, but I didn’t want to slash it to zero because I’m trying to be honest with myself and I don’t think that’s really realistic right now. But maybe I could cut it down to $50/month (instead of $75). Like I said, the budget is a work in progress so we’ll see how it goes! Thanks for your encouragment!

  • Reply Katie -DC |

    Looks great! Can you switch the car loan to a credit union? That interest rate looks high. Maybe I missed an explanation on that one.

    I do almost all the cooking at our house too, and what helps me is to put our meals onto our google calendar. Then I can visualize how to use leftovers, etc. It also eliminates those times when we wouldn’t have any ideas and order a pizza.

    • Reply Ashley |

      That’s exactly what I hope to do with the car loan! When we bought it we had a really high debt-to-credit ratio (which impacted our credit), so that was the best interest rate we qualified for. My plan is to wait another month or two while paying down more debt (we just barely hit below the 50% debt-to-credit ratio threshold), then go over the summer to try to refinance at a lower APR.

      That’s a great idea to use google calendar to track meals! I used to be more fluid in my menu planning (I’d plan about 4 meals per week that I’d specifically shop for and then piece together another couple meals, and/or eat out). I’m finding I have to spend a little more time up-front for planning but then I’m more likely to stick with it because I can prep things throughout the week and/or reuse meal components.

      • Reply Walnut |

        When you are piecing together odds and ends, always think breakfast for supper! Bread+eggs makes french toast, eggs+random veggie ends make great omelets. I also like making my omelet mix, spooning it into mini muffin tins and making to-go options. 30 seconds in the microwave is perfect to reheat these.

  • Reply Chellie @ DebtandtheGirl |

    You have a good budgeting skills, Ashley! It’s amazing how you handle all the expenses and able to cut back the unnecessary payments. I hope you continue to reduce your expenses over the next years. Well, good luck! 🙂

  • Reply Jessica |

    The budget looks great. I don’t think the eating out spending is crazy- it’s limited to one or two meals, and you’ll probably get so much enjoyment from looking forward to those meals. Sometimes you need that light at the end of the tunnel when you’re having leftovers for lunch everyday and making dinner every night 🙂

  • Reply Slinky |

    Nice! Definitely the phone bill is up for slashing. I’m pretty sure I already recommended Ting. I was telling a bunch of people about them recently, so I’m losing track of who I told what. If I haven’t mentioned them, check them out.

    I would still suggest splitting up or recategorizing the misc stuff some more. Often, misc is a really good place to cut out spending because it’s easy to “hide” stuff there – like iTunes purchases! The first three categories are a good start. Here’s how I would categorize the other stuff you mentioned at a high level –

    Xmas cards/Xmas photos – Gift Giving/Charity
    parking – Auto/Transportation
    dog food – Groceries or Pet
    itunes purchases – Entertainment
    dollar tree – This is a store, not a category. What are you buying?
    Bookmans – Not familiar with this, but a quick internet search says, probably Entertainment
    pet sitter – Pet or Vacation
    stamps – For me this is misc, because I almost never buy any. For others I’d say, Household
    gifts – Make a gifts category! Put your christmas savings budget and cards and stuff here.
    doctor’s copays – Medical or Personal Care

  • Reply creditcardfree |

    Since you are already on Sprint’s network, look into Ting and Republic Wireless phone plans that you can use your Sprint phone on in most cases. Big savings! And if you choose Ting look for referral credits on Ebay, ect. If you refer others to Ting it reduces your bill.

    • Reply Ashley |

      Thanks for the suggestion! I’ll (sheepishly) admit, one of the big reasons I’ve been reluctant to change providers is because I LOVE my phone!!! If I’m able to keep it then that’s a huge bonus in my opinion!

So, what do you think ?