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Ashley’s Bloated Budget

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I have to be honest. I’m totally nervous about this post.

When I first started blogging here back in early 2014, I experienced a lot of backlash. It’s tough to put your entire financial world out there on the internet for a bunch of strangers. And tougher, still, to take in the comments and criticism of very personal financial decisions.

But then the tides changed once I started experiencing some success.

Within 3 months of beginning to blog, I paid off over $10,000 in credit card debt. In total, I paid off just over $25,000 of debt in 2014, just over $26,000 of debt in 2015, and over $30,000 of debt in 2016!!!

Once I was winning with money, the criticisms mostly melted away. I felt more support and encouragement. Not as much judgement or negativity.

Then the summer of 2017 occurred. Poor spending decisions have been made. Income has been reduced. Outflow has increased. I’ve been struggling with some personal mental health issues which have prevented me from spending as much time and attention with our family budget as I should have. Things have just spiraled.

There’s no one single “thing.” It’s more like an avalanche of smaller stuff. Death by a thousand cuts. And all the sudden I look up and realize that our minimum monthly debt payments are so out-of-hand that I don’t know what to do. We’re nickel and diming ourselves to death. To the point that we have no money for food. We have to rely on credit to buy our groceries.

I tried to start over from scratch. I’ve been using YNAB, but I haven’t been able to make the money work for several months now. Our expenses exceed our income, no matter what I do or how I try to shuffle things around, there’s just not enough. So I opened a simple Excel spreadsheet. I wrote my monthly take-home pay at the top and started listing expenses in order of importance. Here’s what I got:

We’re down to $1264 to spend on all of our monthly needs in terms of food and clothing, savings, and/or additional debt payments.  It doesn’t feel like enough….especially since the debt figure ($1098) does NOT include any student loan payments, given that they’re in deferment currently.

On my post about increasing student loan payments, many people tried to give me encouragement that we COULD put $1,000/month toward student loans. That it was totally possible.

Well…..not with only $1264 at the end of the month. Not when we don’t have enough money to buy food or gasoline for our cars. Not when there’s zero wiggle-room because we literally don’t have a single penny in any emergency fund. Not when Christmas is coming up and we have no way to buy gifts for friends or families. Not when our property taxes are coming due!

Can we decrease our fixed bills? The “utilities” line item ($650) includes water, electric, HOA, cable, internet and phone. We can try little things to save on energy, but we’re in a contract with the cable/internet company and same with our phones. HOA is also “set.” So not a lot of wiggle room there.

We do have some debt payments that have lower balances – once we knock them out we can reduce the monthly minimum. But we can’t just be paying minimum payments – we have got to be paying as much over minimum as possible in order to make any headway.

I’m preparing a full debt update so you can see a larger financial picture (give me a couple days to get it posted). But it seems pretty clear to me – we have to find ways to increase our income. $4880/month is not enough for us to achieve our financial goals.

My sister recently added me to a Dave Ramsey Facebook group. It’s been a huge motivational boost to see so many stories of sacrifice and determination. So many debt-free success stories, pictures of fully paid homes, etc. I know we will get there. Our path hasn’t been linear and I think that’s okay. Sometimes “life happens.” Sometimes you have to take a step back and focus on yourself or your family. But we don’t want to live in a state of debt like this forever. The only way out is to put our heads down and plow forward. And that’s just what we intend to do.

As always, I welcome and appreciate your constructive criticism. I’m back to square one here. Googling sample budget plans and just trying to figure out how to survive without taking on additional debt. I’m a little nervous and scared of the path ahead. Our first 2 years of debt-reduction were totally bare-bones. I remember the days well. That was back when I was working part-time from home so it was easier to cook from scratch, meticulously research and shop sales, etc. We’re in a totally different situation now.

It wasn’t easy then. It won’t be easy now. But nothing worth having ever is, now is it?

Give me all your tips! Link to web resources, give me book recommendations. Even just a word of encouragement is appreciated. Thank you all, especially those of you who have been around and seen my story evolve over the past nearly 4 years! It’s been quite a journey and we’re only half-way through it!

 

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!

Latest posts by Ashley (see all)


86 Comments

  • Reply Klm |

    Just to clarify: is $1098 the minimum of your debts—students loans, etc. And medical appears to be new—is that correct? Hope all is ok health wise!

  • Reply Lisa |

    Can you possibly reduce any paycheck deductions? I’m not sure how much you contribute to retirement, but could you decrease that temporarily until you get caught back up?

    • Reply Ashley |

      I contribute the minimum required by my university (we have a mandatory 7%, but it’s matched by my employer).
      I do have some FSA deductions that I could reduce for next year. I’m in open enrollment now so I was going to write a post specifically about this issue.

  • Reply Joe |

    Ashley, don’t get discouraged. You’ve made a lot of progress and you have saved yourself a ton of money in avoided interest payments just in what you’ve done to date. Do not get down on yourself on account of not meeting the standard you set for yourself over the last three years for debt payoff. Especially last year, it seems clear that you were too aggressive and paid off debt with money you never actually had due to tax obligations. Coupled with the job transition period for your husband this year, it is completely understandable that the debt payments will slow.

    Number one goal is to first right the ship and make sure that outlays don’t exceed income. So this post is exactly the reset you need. Hang in there!

  • Reply Cory |

    For the income: Is your withholding at the correct level and all benefits at the lowest reasonable level for the highest potential net pay? Do you still contribute to a daycare spending account/flexible health spending accounts?

    For outgo: If you are contributing to daycare spending account is this the offset? Could you break down the categories (utilities, and debt). The mortgage is fixed (do you not escrow your property taxes?) I didn’t realize that there were contracts for cable tv (I don’t have it) but I do have internet (about $60 a month, ugh). What would be the cost to cut the cable tv. I don’t personally think its reasonable to not have internet so I wouldn’t suggest cutting that. but if there is a cheaper alternative I would explore. Ultimately I think you need to survive while your husband is going back to school. That might require one of you to get an extra job. Its not ideal but a bit more income would solve a lot of the issues. We went through those years earlier in our marriage (extra jobs at night) and sometimes didn’t see each other much. It wasn’t ideal or fun but it also didn’t last for long and the sacrifice was worth it. I would try to figure out who has the best potential to earn extra money for the most $/hr. I know I have seen some people say your husband should get a job. But I think whoever has the best earning potential for a part time job should do it for the few years until he is back with full time work and the income that comes with that. Good luck.

  • Reply Klm |

    Also, as you think of Christmas, if people ask what you or the girls need, think about maybe a gift certificate to a restaurant for you and DH for a future date night and maybe an experience or membership to a kids play place or museum or some sort of class or lessons for your girls. And honestly—we did away with gifts for adults other than our parents, which has cut down on expenses as well.

    • Reply Laura |

      I was going to say the same thing about Christmas. Either don’t exchange with family or ask for practical things you need. Clothes, restaurant or grocery gift cards, etc. I can remember lean years where I asked for bath towels and coffee for Christmas.

  • Reply Laura |

    If the $2440 is your NET Paycheck, then I think you are counting your childcare and medical 2X UNLESS these are over and above what you have coming out of your budget pre-tax which seems high. The way you’ve set up your budget the $518/month for Childcare is $5180 for 10 months OVER what you have taken out of your check and the $400/month for Medical is $4800/year over what you have taken out of your paycheck. I suggest you do a budget with your gross pay at the top, then a line for taxes taken out, then a line for insurance, retirement etc. Your medical deductible/OOP and childcare should be the gross numbers you pay or put aside each month and you ignore the FSA/DCSA. I’ve actually found that doing an annual budget helps with this and all the non-monthly expenses that come up. This gives you an idea of how much money you actually have. THEN you worry about monthly Cash Flow. Also, just to clarify, you are paid 2X/month and not bi-weekly (24 paychecks/year and not 26?).

    • Reply Laura |

      Okay, I just found a post back in January where you thought full time school would be@1000/month because you have to pay extra for more than 1/2 day + extended care. This makes more sense as I was only thinking of just afterschool care which would run more like $680/month for 2 kids where I live. If you have $5000 taken out pre-tax and add the $518/month you get the kind of number that you’ve calculated. Wow lots for childcare.

    • Reply Meg |

      Making a simple annual budget in Excel helped me tremendously. It’s hard to forecast with YNAB (for me, anyway). It made it easier to see where to throw the extra money in those 3 paycheck months – sink funds for car insurance, clothing for the next season, summer childcare, etc. Our finances are also tight (my husband is a graduate student, we have two young daughters, and our monthly income is less than yours) so I feel your pain! Try not to beat yourself up too much re: the student loans – you are doing the best you can. They will be there when you are ready to tackle them again! Best of luck to you.

  • Reply Margann34 |

    Well, you said it yourself, you need more income. Hubs HAS to get a job and contribute ALL of the income to the household. Even $1000/month would make a huge difference. You may need to get a second job. You simply cannot continue to put living expenses on credit. I recently started listening to Dave Ramsey. His baby steps can be extreme, but you NEED extreme. I think you should go on you tube and watch some of the debt free scream videos. So many people have been right where you are. They have made it through, so can you! Yes, it will be difficult for several more years. But it will be sooooo worth it in the end! You can do this!

  • Reply Margann34 |

    By the way, you should only buy Christmas gifts for your girls. NO ONE ELSE. You CANNOT go deeper into debt just to meet social expections. Everyone else will have to get over it. If you really feel the need to give gifts, try baking or home crafts. it will still cost some but you can probably get by with $5/ gift. We give trays of fudge, cookies and home made candy. I have also bought dollar store mugs. I then take a plastic baggie, fill it with hot cocoa mix (from bulk) add some mini marshmallows and tie it with ribbon. Then put the hot coaco kits inside the mugs. Super easy, cute, and you can give to almost anyone!

    • Reply Cheryl |

      I agree, family must understand with your dh at school there isn’t a lot of money. Your girls are young enough that a few things will seem like a lot to them. Good luck. Cheryl

  • Reply Angie |

    1294 Sounds like plenty to live on!

    600 Groceries
    150 auto maintenance
    150 gas/fuel
    80 household
    25 gifts
    100 kids activities
    50 clothing

    Total $1155. $120 to spare. Once the medical or tax debt is gone you can start tackling the student loans again. And here’s the kicker… This is from your January 2017 budget. It’s possible!

    I think you need to stop getting overwhelmed. Focusing just on groceries would do wonders for your budget. And you can focus on tackling one thing at a time. Do it as a partnership to get DH involved too. Freezer meals and prep on Sat or Sunday.

    • Reply Ashley |

      It’s possible, but that leaves me paying bare minimums on all debts. And right now the student loans are in forbearance. Once that ends, the minimum debt payments will increase.

  • Reply Brooke |

    You are right – you now have an income problem! I think focusing on that will allow you gain some traction again. You can make your other expenses fit that 1,200. It is a good goal to work towards so that the extra income can help further your goals. But I know it is an uphill battle!

    Even some part-time income from your husband will help cover the student loan payments and chipping away at the debts. Given your debt load and the fact that you have so little margin, knocking out the smallest debts regardless of interest rate I think will REALLY help you gain some flexibility and peace of mind.

    You can do this!!

  • Reply Sandra |

    Ashley, as I understand, you started therapy a number of months ago. You seem like a basically happy and well-adjusted person who is just stressed to the max with all of your responsibilities. I sometimes wonder how you and your husband manage as much as you do. Having said that, have you possibly been helped enough by your therapist to discontinue your sessions for a while? You seem to have a loving family and friends who I’m sure would be supportive if you needed to talk. Maybe that would provide a bit more money through the months until the girls are in first grade and child care costs go down more.

    • Reply scarr |

      Mental healthcare is like any other healthcare need – people depend on these services to live, period. You wouldn’t suggest Ashley quit taking diabetic medication to save money every month because that would be detrimental to her health.

        • Reply Laura |

          I agree about the therapy. Friends are great but they can’t and shouldn’t take the place of a therapist.

  • Reply Erin |

    Did your husband finish the personal training course? If so, is he applying for places to work? That would be helpful, even if 2x a week! Anything is good at this point. Dave Ramsey’s baby steps call for any way to contribute to the income, whether it’s a pizza delivery or part time grocery store job. Anything counts at this point! As for Christmas gifts, definitely just worry about the kids – family will understand. And if they don’t, well, that’s a different issue!

  • Reply Meg |

    Have you shared how long you expect your DH to be in school, or his courseload? I don’t remember if he started totally from scratch or how intensive his study is. Or his earning potential once he graduates?

    • Reply Angie |

      I believe he’s going full-time for some type of engineering. So the delay in income is temporary and his salary will more than make up for it.

      This is why I’m saying this is a spending/debt problem NOT an income problem. Almost all of their bills are temporary: daycare, tax repayment, medical… These will all be gone in 12-24 months. And in 48 months they will hopefully get a second high salary. Ashley is making 95k in a very LCOL area. This is not an income problem…

  • Reply Sandra |

    Yes, I wondered that as well about how long it will take to get his degree. I’m frankly more in favor of hubby concentrating on his studies and grades without adding a job to secure the best position if they can SOMEHOW work the numbers.

  • Reply Sandra |

    I’m not suggesting Ashley discontinue her therapy if she feels she still needs it. I was simply suggesting that she critically evaluate where she is at this point stresswise and then decide. If you have a good outside support system in place — friends, relatives, pastor, etc. — it may not still be necessary to see a therapist. Also, Ashley is very positively tackling her problems head on, and there is definitely a positive reward in doing that.

  • Reply Victoria |

    I disagree about stopping therapy. Your mental health is most definitely more important than Christmas presents. Especially if you’re including family who have been less than supportive with your dad’s issues. Girls only for presents and even they don’t have to be expensive. Looking at the budget Angie posted, you can cut into gifts, clothes and kids activities.
    I wonder if it would help to recognise that you didn’t pay off $30k last year, considering your tax issues. You list your debt payments, which are great, but almost as if judging yourself for not achieving that this year. With the tax liability your debt payment last year was much lower and your changed circumstances this year mean you will never achieve those previous levels of debt payments. Maybe recognising that would help.
    Also a couple of previous posts and a comment here imply that your husband didn’t put his full income into the household pot. It’s easy for me to say “make sure he does” when that can be easier said than done if a partner refuses to pull their weight, but if possible this should be addressed.
    I support your husband going back to college, but again, you do need to recognise that this is a payment now as an investment in the future so you cannot expect the same level of debt payment. I’m also not convinced by the personal training thing since it requires you to spend money on gym membership and has no guarantee of income. I don’t what employment opportunities are near you but a real part time job seems like a better bet and would also reduce your outgoings. I’ve just read an article about MLM in the gym industry on Our Next Life that really makes me question the personal training gig.
    On a more positive note, you’re hard working, have proven before that you can achieve and I wish you luck.

  • Reply Christopher |

    You are correct,you need to increase your income level as much as possible or at least $2,000. Since your husband is in school full time and needs to study, perhaps you can get a part-time job on the weekends and drive for Uber a few days a week while he studies and watches the kids.

    Also, do you have tasktabbit in your area? That could be another way to get income. If not, perhaps apply at a catering company to serve.

    Good luck!

    • Reply Angie |

      I’d venture to say these small jobs would make little to no difference in their budget. Most of the reason the spending has been inflated is due to convenience and stress. Adding more commitments is only going to make that harder. At 1k+ on groceries AND more for eating out that’s screaming convenience foods and pre-cooked meals to me. Spending a few hours on Sat/Sunday meal planning,cooking from scratch, and freezing meals would do much more for their grocery budget than doing Uber for a few hours a week (you don’t actually make a ton anyway once you take taxes, maintenance, insurance, etc.).

  • Reply Theresa |

    Aren’t you getting paid every 2 weeks? So there are 2 extra paychecks a year. Right? When is the next one and what would be the best use for that money? We take out grocery money for our 3rd paycheck and with the rest either make a big debt payment or set it aside for savings etc.

    • Reply Ashley |

      Next 3-paycheck month isn’t until March. In an ideal world, I’d love to throw the entire extra paycheck toward debt! But right now we’re still underwater every month so something’s gotta change!

  • Reply Scooze |

    You mentioned Dave Ramsey. One of the things he emphasizes is that there is often one person (he calls it the “nerd”) in the relationship that manages the budget, with the other person being the “free spirit”. Clearly you are the “nerd” and you create and manage the budget.

    But Dave Ramsey is very clear that BOTH people in the relationship are ultimately responsible for the finances. You two can figure something out – but it can’t be you telling him what to do. He has to be as responsible for fixing this mess as you are, and I fear that right now, you are taking it all on yourself. That means it is on you to be the bad guy and make unpopular decisions. But once he is equally responsible for the budget, he should be motivated to step up to the plate and stress about all this as much as you do.

    It will take you both – you really can’t do this alone.

  • Reply Laura |

    I’m a different Laura then the above commenter 🙂
    I think you are probably having mote taxes withheld now then necessary, but after the IRS debacle last year I understand your hesitance to change it. There are 2 months left in the year, do taxes as soon as possible next year to see where you are at and if that can be reduced.
    While the student loans are in deferment try to get the other debts paid off as much as possible so you’ve got money to throw at that when they come due again
    Is the cable and internet bundled? I know you are in a contract but call and beg them and say you can not afford this bill and can we cancel the cable.
    Unless husband starts making money personal training soon I advise canceling the gym. I was skeptical when you said he was doing that because I think it is a saturated industry. Gym is a luxery you can’t afford.
    Don’t exchange Christmas gifts with extended family, or if you do do as a previous commenter suggested and do baked goods, coffee mugs, etc. ask for practical things you need in return. Gift cards, food, clothes.

    • Reply Laura |

      One other thought, do you know what your husbands class schedule will look like? Could he take care of the kids before and after school so you can eliminate that expense?

      • Reply Amanda |

        My thoughts exactly. That is a huge childcare expense and even if he’s taking a full 18-21 hours I doubt he’s in class Monday – Friday 8-5.

      • Reply Ashley |

        Hubs does take care of the kids before and after school everyday except Wednesday (based on his class schedule). Our childcare bill is because our state only subsidizes half-day kindergarten and our kids are in full-day kinder, so we’re still left with a pretty hefty monthly bill.

        • Reply Victoria |

          I think what people are saying is to pull the kids out of Kinder for some days or half days, as we’re assuming that hubs isn’t in classes 9-5 every day as that rarely happens. It may be that he doesn’t have time available in big enough chunks to do this but worth looking at.

          • Ashley |

            Oh, I see. Where we’re at, half day kinder is from 8:30-11:30. The “full day” option ends at 3. Right now there’s no way hubs can have all his classes from 9-11 (so he has time to commute each way). That would only be one class and he has a full load. There’s not an option to do some half-days and other full-days. We’re in it with full-day for the rest of the academic year at this point.

  • Reply AS |

    When you do your fuller update, I encourage you to address the following. Some of these are repeat’s of suggestions from above:
    a) Clarify if these are 10 month or 12 month budgets and what / why.
    b) Address the question on property tax and insurance. Included or excluded from escrow? Otherwise consider earmarking your 2 “extra” 26v24 paychecks for these costs first.
    c) Minimum payments – address “IRS tax plan”, “education loan”, “credit cards” and other. Interested in particular in [i] interest rates for the credit cards and [ii] how long you are under the tax debt repayment.

    You said you need to make around $1250 work every single month, plus add in education loan payments. Your next budget will show how big a gap you have, but what is unclear is if there are any items that will improve or worsen cash flow and when (thinking tax plan, education).

  • Reply Isabella |

    Oh dear, things look a little grim now. Ashley, can your husband fit in at least 15 hrs /week working somewhere? That would be a huge help if you could increase your income. If you could harness another $1000/month, it would take this choke hold off that you are experiencing. I really don’t think that $1264 a month to deal with is all that bad, and if you could add another $500-1000 ASAP, it would really take the pressure off.

    Did you take a look a that “Ditching Our Debt” blog that I mentioned? It’s a great example of really working with a tight budget to pay off school loans. (family of 6 with a much smaller income than yours.) And good for you for looking at the Facebook page of debt slayers. Get back on that horse. You can do this!

    • Reply Lucy |

      Thanks for sharing that blog! I would also suggest Ashley take a look at the budget “Ditching our debt” has created (located under the tabs) as it might help give her a better breakdown of making a budget. Another blogger (Bare Budget Guy) also has an interesting post titled “In defense of budgets” that can be located under archives.

  • Reply Marzey doats |

    You actually make 5285 per month, so you should budget for that. So thats 400/month.

    Your husband is not working right now, so why is your childcare so high? The children are in school, so that leaves him time for classes, and you get rid of the extended day. Call that another 400/month?

    You may be in a contract with some utility providers, but often they let you drop down a tier in service while still in the contract. Cut cable down to the basic broadcast channels, drop your phone coverage down. Keep the house cold in the winter and hot in the summer. Call that another 100/month?

    You should be able to forecast a little better what your tax status is this year and adjust your witholding accordingly.

    So you are at close to 1,000/ month for living expenses which should work until the IRS debt is paid and you have a little more wiggle room.

    All of this can be done without your husband picking up part time work, and anything he makes will just make it easier to handle the budget.

    Honestly Ashley, you have been handling this on your own in your marriage. Holding down two jobs, doing the cooking and childcare, planning, paying bills, taking care of your parents. Your husband needs to step up his game here. He can’t *just* be going to school. He has to start meal prepping, taking care of the kid and going to school.

    • Reply Anony |

      Agreed!! And if he won’t work, you need to move to a cheaper house ASAP. You bought too much of a house and when people try pointing it out to you, you compare your principal and interest to your rent. What about home insurance, property taxes, HOA, house maintenance and usually higher utility bills? If I remember right, you did a 15 year mortgage. You need a 30 year fixed mortgage if you still qualify.

      • Reply Been There Done That |

        I don’t think we have the true picture on housing costs. Ashley gave the impression that buying a home was a lateral move from renting. However, now I see that property taxes are due, so are those not escrowed into your mortgage payment? And the HOA? Is that in your mortgage also or is it another budget line item? Might be good to clarify this.

    • Reply Theresa |

      where she lives doesn’t have full day kindergarten she has to pay for the second part of the day x2.

  • Reply Sarah |

    I think Financial Peace University with Dave Ramsey would help you a lot. It is a nine week class usually held at churches but not always. I facilitated a class last January. It is an eye opener and money has been a hobby of mine for years. My husband and I even learned some things.

    • Reply Ashley |

      I’m really thinking of doing this! I never did in the past because I couldn’t find a class with free childcare (and we can’t be paying for a babysitter every week for the class), but our local church just posted that they’d be offering it with free childcare…..but not until February. Might just wait until then since the holiday time is all crazy anyway. I’d really like to do the IN PERSON class (not online). But I agree I think it could be an eye opener and that it’d be very enjoyable. Plus – a great motivator to help get us re-invested in this whole process after falling off the wagon the past few months.

  • Reply drmaddog2020 |

    Your husband either has to work or take over a LOT of the tasks at home that you are paying someone else to do. I agree with others that personal training is not a guarantee and there seems to be one on every corner. And even if he has a physique that would draw clients, there is no telling how quickly his client base would grow. Even a full time college load of 12-15 hours leaves plenty of time to study AND work. College kids do it every day. I had two jobs for a while in college. Get. A. Job. OR drop the day care and he does the meal prep for the week, from scratch at home. Get a crock pot. Look into budget menus, they are all over the internet. Shop for Christmas from the dollar store, or goodwill, or make something. OR ask family to get your kids’ christmas as your gift this year. Have you ever read Donna Freedman @ survivingandthriving.com She lives a very frugal lifestyle and made her name from her early posts back on MSNMoney, including living on $12000 a year. She, or others like her, might inspire you.

    I agree with others that I think the rate at which you paid off debt was inflated because you guys weren’t paying taxes and weren’t prepared entirely for the cut in income. Idon’t know what other debts you have incurred lately, but a solid debt post would outline those. talk to you therapist to see if you can cut back on the price per hour. if not, reduce the number of sessions. (I’d rather see your husband Get. A. Job.)

    We all have setbacks. You’ll make it through this. Hubby needs to help though, you can’t do all this alone. I enjoy your posts and will be reading. Best of luck to you.

  • Reply Walnut |

    $1264 is doable, but it’s going to take serious commitment from you and your husband. You have plenty of money to put food on the table and gas in your cars. You’re far from destitute. Call your cable company tonight and ask to suspend your account through the end of the year. This will push your contract out, but will buy you a couple months. Kids activities have to go. The girls are young and if you substitute activity time with family time, it’ll be fine. Again, doesn’t have to be forever. Just until you right size things. Be ruthless about every penny that passes through your account.

  • Reply Joe |

    OK, I took some time to familiarize yourself with your last debt update (which was April?). And I have to make some guesses because I don’t think the IRS debt was ever quantified for us, besides the payment.
    Overall, it looks like about 60K in student loans at an average interest rate of ~6.5%, and about 10K in IRS debt at an undetermined interest rate (which I’m guessing is 5-6%).

    I guess I’m a little confused — I’m not sure where your $1098 in debt payments is going if not the student loans, which is the only debt you have left, besides the IRS debt which I read you are paying $283/month?

    In any case, I think there is a lot of good advice above, but I think Marzey is spot on with a few places to look for savings. I can personally vouch for the point re: kids’ activities; my kids are a little bit older and honestly unless they are truly prodigies at a specific instrument or something, basically anything goes at that age. They will appreciate FAR more in a few years living in a household that is free of debt and the associated stress.

    Also, please don’t discount the strong possibility raised above that you are still deducting too much from your paycheck for taxes (I know you did do one adjustment). Your overall tax rate will be much lower this year with your husband not working. Try to find someone to help you make an accurate estimate, and make use of those extra dollars to make your budget work and avoid taking on additional debt, rather than giving Uncle Sam an interest-free loan!

    • Reply Ashley |

      I’m writing a post now about my open enrollment (which influences certain withholdings) and tax stuff. You’re very right that a lot of my check is taken out before I ever even see it hit my bank! In terms of the debt (sigh)….there’s more. We’ve basically been living on credit since May (which is when my part-time job ended and hubs’ business shut down). Soooooo, hanging my head in shame, but that’s what is missing from the debt picture. More info to come.

  • Reply Sarah |

    I can’t remember what you have said re refinancing student loans.

    First Republic Bank has a student loan program with rates starting at 1.95% fixed rate…I think that is for a 5 year loan. It might be 3.95% for a fifteen year loan…the only downside is that the payments are fixed like a car so you have to pay it. No IBR, no postponing, etc. I have a banker there who could help you if you are interested.

    • Reply Ashley |

      I tried to refi awhile back and couldn’t find anyone who could give me a better rate on a fixed plan. I hadn’t looked at First Republic, so that might be an avenue worth exploring. But, honestly, I think I’ve got to get our financial house in better order first. I’d love nothing more than to rid ourselves of Navient, but right now I’m depending on the forbearance in order to pay our other bills (and we’re still in the negative at the end of the month). Soooo, something to look into, but maybe not until things have stabilized a bit more.

      • Reply Sarah |

        Totally agree. You don’t want to go with a bank and lose all the options you have with a student loan.

  • Reply Christopher |

    You are clearly living above your means.

    You are investing in your future by supporting your husbands education and you are making excellent long-term decisions.

    In the meantime, you should consider getting a part-time job. Have you thought about:
    1.) Driving for uber/lyft
    2.) Becoming a Rabbit for Taskrabbit
    3.) Working for a catering company as a part-time server
    4.) Babysitting for money

    The holidays are a time when it’s easy to spend money. some options to save money:

    1.) Rather than buy anyone gifts, make gifts and send people beautiful notes.
    2.) Cut alcohol and any caffeinated drinks, I did this last year and saved a ton of money.
    3.) Request gift cards for groceries and essentials, no more luxury items.
    4.) Sell some items in your home on Craigslist or EBay.
    5.) Cut all non-essential travel including, driving.

    In a few years, you will be out of debt, saving for retirement and will be much more comfortable.

    • Reply Isabella |

      I really don’t think that Ashley can take on any more in her life! A demanding job and two young children is enough for now. Were you suggesting these jobs for her husband to consider?

  • Reply Katie |

    Can your husband take over the childcare hours? That would save you money. Could he even watch another child in addition to your two and make a little money? If scheduling is an issue, can you try and find another family or two to swap childcare with? Maybe each take 2 days after school and hire a sitter for one? Adding up your pre-tax and post-tax expenses here, and it’s a big drain.

  • Reply Jayp |

    I disagree with some of the posters. I do think it’s basically an income problem- given your current debts. There doesn’t seem to be too much crazy spending in what you outlined. Your husband just needs to get some income there, and in the meantime structure classes around the kids to avoid daycare. Longer term you’ll be fine. Just get a good plan- not just a budget. These student loans will eat you alive if you don’t get back on track. You’ll be fine- pat yourself on the back once in a while- it’s not easy!

  • Reply Vesta |

    As Dave Ramsey says, personal finance is “personal”. You are under a lot of stress with your father’s illness alone – life happens and you have dealt with it as best you could at the time. Now you are facing the debts and that is as it should be. I lost a very special brother and also a dear friend in the same week last year and I have not been paying attention since then. Coming out of it now, so we will soldier on together. No judgement, no suggestions, just hugs and support. {{HUGS}}

    • Reply Ashley |

      Thank you! Hugs and support right back at you! It’s definitely been a life-altering experience for me. The emotional toll has been substantial – not at all what I’d expected. I’ve always been a pretty laid back/happy person. The feeling of having a dark storm cloud basically ever-present over my head is very foreign and I don’t think I had the proper coping skills in place to deal with it. Therapy has been helping. Sending lots of love your way!

  • Reply Shauna |

    I’m certain you can get through this. Some of this financial squeeze will be temporary, eventually the IRS debt will be gone and childcare expenses will go away. So you aren’t looking at bare bones living for 2-3 years, maybe 6 months to a year. Focus on what you can, often this time of year you can get great deals on Turkey’s and baking supplies. Instead of kid’s paid for activities have them help you bake something over the weekend, roast a turkey that can be used all week, and make some Christmas presents. Those are the things that they will remember forever, and give them the skills later in life.

    • Reply Ashley |

      Thank you for the perspective – some of these expenses will go away so you are totally right that the FULLY bare-bones shouldn’t be a full 2-3 years (gulp!) The perspective helps!

  • Reply SKB |

    I don’t think Ashley can take on any side jobs. I believe she signed a contract with her work. Maybe her husband could take on a job on the weekends.

    • Reply Margann34 |

      I think she just can’t work in the education field because it directly competes with the university.

    • Reply Ashley |

      yeah, this budget was a little knee-jerky. It was based on expenses last month (October), so there will be some fluctuation in terms of utilities, etc. But I purposely budget with just the 2 paychecks/month because I want to live on that amount. Then when we have a 3 paycheck month, ideally, the entire third paycheck could go straight toward debt.

  • Reply Chantal |

    Drmaddog 202r gives really sound advice.

    I have read your blog for a long time now and am left with an impression that you seek magic solutions and not advice.. Unfortunately there aren’t any and your thinking needs a turnaround.
    I belong to a much older generation, I know, but therapy is not going to help and this is part of a lot of unnecessary expense in your generous salary.

    I am also more and more bothered by the way you carry your husband. If any help is to be sought from others it should be marriage counseling not expensive personal therapies, to hold your hands. You are adults and have a big need to act like them.

    • Reply scarr |

      What do you mean therapy is not going to help? Help with what? It’s not that your older, it’s more that you are rude so don’t try blaming your age for your smugness.

      • Reply Laura |

        I agree. Therapy is a lot more then “hand holding” and that attitude is dismissive and condescending. Also not sure why you would discount individual therapy then recommend marriage counseling.

    • Reply scarr |

      What do you mean therapy is not going to help? Help with what? It’s not that you’re older, it’s more that you are rude so don’t try blaming your age for your smugness.

    • Reply Kili |

      Mental health is a priority.
      It’s definitely better to take good care of mental health early on .

  • Reply Been There Done That |

    I’m sure a lot of people reading this would like an income like yours! If you can’t pay the bills on this, then you must generate more income, while slashing living expenses to the bone. As an example, my husband went to school full time on the GI bill and always worked at least 20 hours/week. I stayed home with four young children, but I also did some childcare in the home and worked in a church nursery, too, on Wednesday evenings and Sunday mornings. In the summers, my husband worked full time and took classes in the evenings. Then when he earned his MBA, he worked full time and went to school too. It can be done! ( And when he was finished, I went back to finish up my degree).

    My advice to you and your husband would be for him to schedule classes while the girls are in school so that he can do the after school care.. He would also be available for starting the evening meal prep too.

    To me, this is the best way for your family to save money. Just him getting a job at Home Depot is not that helpful in the big picture. By slashing childcare costs and grocery costs (with more careful planning and ALL meals at home), you could easily realize a net gain of $500-800 (or more) each month.

    Does your husband feel that childcare and meal prep are just not a male domain? Do you, Ashley, have a problem letting go of some things? You can’t think that way in a family! You have to look at what is in front of you and who is best suited AT THE TIME to handle the responsibilities. It might be different in two years. If your husband is available now to tend to the home fires, there is nothing wrong with that.. Families need to roll with the punches and adapt. Someone said above that you are making this way too complicated, and I have to agree. Sometimes, an easy solution is right in front of us.

    • Reply Ashley |

      My husband actually already does all the before and after-school childcare (except for Wednesdays, when he’s in class late). The childcare cost is because our state only subsidizes half-day kindergarten and we have to pay for full-day kindergarten.
      BUT, you have a lot of great tips here I will take to heart! I totally agree that roles change and evolve across time as needs change!

      • Reply Been There Done That |

        Oh, I see. In our state, many years ago, we moved to subsidized all-day kindergarten with a very reasonably priced after school program too. It was such a boon for working parents in the school district in which I taught. Well, that will be money in your pocket when the girls are in first grade. Now, it is just figuring out the next year or so and how to right the ship.

  • Reply Nicole |

    Ashley, you have always blown me away by what you accomplish and how “together” you are. You seem to have stumbled a bit on that lately, as everyone does. (What? You’re HUMAN and not perfect?! 😉 ) As always, you’re resilient and determined to pick yourself up and turn things around.

    You’ve gotten some great advice, I think all your options are out there. You know what is feasible and how to do it. It’s a matter of choosing what’s best for your family. A few things that stick out to me…

    I would ignore the 3 paycheck month in terms of budgeting. There are only 2 of them per year and you really need to live on the 2 paycheck month amount. There are so many good uses for that 3rd paycheck – straight to the emergency fund (with a house, 2 adults, 2 young kids, distant family…you need a good EF!), straight at debt, annual/irregular expenses (ideally these would be covered in the regular budget though)

    I hope your IRS withholding this year is high so you get a refund or a chunk to pay off the IRS debt. I wouldn’t try to reduce the withholding (and there’s only a couple more paychecks this year anyway. You can revisit after completing your taxes early next year.)

    Some of your higher expenses are probably a response to the “busy-ness” and stress of your life. Don’t make changes that will add to this! Set yourself up so that the expensive convenience options aren’t that helpful (more on this later).

    Cable makes me cringe. Investigate your options with the contract (maybe you’re stuck). We have a simple antenna and have about 20 channels with perfect reception, including one 24 hour kids channel and several mostly movie channels. More than sufficient.

    Just for you to consider: how temporary is your extremely tight budget? How long will your husband be in school? When will the childcare expense drop significantly? How long will you be paying the IRS debt? Other debts? Etc. Don’t make long term decisions to address a short term issue.

    Now is a great time to pick up seasonal work if it’s possible for your husband. Also summer seasonal work if he isn’t taking classes then or can fit it in around childcare. I don’t want to presume anything since he’s not speaking here and I don’t really know what’s best for your family. That’s up to you two 🙂

    Figure out where you can go hardcore frugal like you did in the early days. Some things may not be possible or practical given your current life circumstances and workload. Some things don’t have enough payback to be worth doing.

    Food is my biggest frugal strength. Consider your family’s flexibility and openness to different foods vs. their habits and desire for routine. My husband and kids want to eat mostly the same things, day after day after day. I know which stores have those staples the cheapest, and when/which stores run great deals on them (and I stock up then!) I like variety and eat almost anything, so I grab the cheapest healthy deals I find, and do cleanup duty for the leftovers of everybody else. I’ve talked about some cheap meals before, oatmeal is a biggie. You can switch it up with recipes online for make your own instant packets, cold overnight oats, etc. Meal prep is fantastic, freezer meals are super! One thing I don’t see often is individual freezer meals. I make batches of mac & cheese, other pastas, beans, rice, soups, etc. Freeze them in one (adult or kid) meal size portion. I also freeze individual bowls of burrito fillings – beans, cheese, rice, corn. Heat and put in a tortilla and my son is a happy camper! No need for the drive thru or grocery convenience products if kids (or adult) meals at home are a couple microwave minutes away. When you buy meat (especially ground beef) cook it right away, freeze in meal size packages. Makes mealtime so much easier – sloppy joes, tacos, pasta with meat sauce, chili, etc.

  • Reply debtor |

    okay, your fixed costs are quite high which definitely supports the notion that you need to find a way to increase your income.

    The one thing that jumped out at me is the medical at $400. Doesn’t your employer have health insurance? What is that for. If for some reason you are paying health insurance on your own, does your employer have an FSA option? might be more beneficial to do that so you at least get the tax break.

    Seems like the daycare timing won’t work for you to cut out. What is your credit card obligation right now? Is it low enough that you could look around the house to try and sell some stuff to pay it off?

    I hundred percent agree with some comments above that gifts for christmas are out of the question. Say it with me, “you can not afford it”. No one will die or be mortally offended if they don’t receive a gift one year. Right a nice card or something. Don’t get caught up in consumerism and it’ll even help teach the girls that material things are not the whole world.

    Is your hubby in school over the break too? Like will he have time off for the christmas break? Hopefully, that will help with some costs. Also, make sure you are using his student status for every single discount available – spotify premium is 4.99 for students and it includes hulu for free (tmobile also has netflix free for 2+ lines for everybody). Amazon prime is $49 for students which can save in shipping costs if you order online a lot. make sure you have him register on studentuniverse for cheap tickets too.

    Finally, i think you’ll have to overhaul your grocery strategy. You have kids and a husband so you’ll be a bit different but in comparison, I spend $80 a MONTH on groceries (just me) and I’m not eating just processed foods. Just plan your meals around sales and utilize your freezer (i make a lot of smoothies and i buy a lot of fruits on sale and then freeze myself)..

    To the other blog readers – just wanted to remind folks that this is not a tell-all novel. Ashley doesn’t write about every single detail of her life – i see all these assumptions made about what her husband does and does not do and I’m quite confused. She hardly mentions much so I’m wondering how someone can go as far as saying that they need marriage counseling :/. It would be different if she put up lots of posts complaining or something but that hasn’t been the case. Let’s try to remember that we are only getting 20% of the picture at best.

    • Reply Ashley |

      Thank you for all the tips and suggestions, they are much appreciated! Thanks, also, for your last paragraph. I started to reply to that one poster and decided against it because I was pretty offended, but realized it’s not worth getting into and – as you say – blogging a couple times a week hardly gives a complete picture of my entire life. I appreciate you realizing that and taking the time to comment about it!
      I just commented above, but the budget was a little knee-jerky, based off last month’s expenses that may or may not be consistent year-round. The medical is a relatively recent thing and should not be around forever. I’m in the process of writing a post about open enrollment/health insurance options so check back because I’d love advice once its posted!

  • Reply Anonymous |

    I don’t remember what your husband is studying, but would it be possible to just delay his school for a year? Once the girls are in first grade, then the child care cost goes away, correct? That’s $500 you just don’t have right now. Also, I’m not clear on what the $400 for the medical is? If that’s for the therapy, I would probably be inclined to cut that out as well. Again, if that could be delayed for another 6 months or a year that would be helpful. I don’t know what other medical expenses that you have but I’m just looking at ways to cut the budget. I would be in favor of hubs getting an extra job at night to add to the income. If he added a thousand a month and you cut out your child care you’d be up 1500 for the month. In terms of budgets overall, when money is tight I always look at things that can be delayed. The delay doesn’t mean forever but even delaying things 6 months or 1 year can help out. Also as others have said, more clarity with the mortgage. The mortgage should include principal, interest, taxes and insurance. If it’s more than what you can afford, then you may need to move.

    • Reply Ashley |

      Some of your questions I’ll be addressing in a future debt post so I’ll hold off on answering them for now.
      The mortgage ($950) is only the principal and interest. Our property taxes are not escrowed and our bill just came in for $2500/year (roughly $200/month). Our insurance also isn’t included. I don’t have that specific number in front of me, but I think it was about $600 or $650ish/year (roughly $50/month).
      All combined, that’s $1200/month, which is exactly what we were paying for rent previously (in a much smaller home, NOT one of comparable size. A comparably sized home would likely rent for closer to $1400-$1500/month). So I think we’re coming out ahead when you consider we’re gaining equity with our mortgage payments.

      • Reply Sarah |

        Definitely coming out ahead. Not only with equity but with tax right offs with the mortgage deduction and property tax deduction. With the tax plan on the table, that may go away but right now, your problem is not the mortgage. Now, you did put money down on the house that could have gone for debt but in the end, I think the house purchase was an okay decision. Don’t regret it.

  • Reply Sarah |

    Ashley, I’m sure this is not kosher but I think I can help you…I have a hobby of helping people get out of debt. I was the one to suggest Financial Peace University. I think you have my e-mail so if you want someone to go over the numbers with you, I can do that. I helped a guy get $30k of debt paid off in six months – I didn’t do anything except show him how to do it and then he was the one who actually found the funds to do it. Right now, I’m advising another couple with student loans. So, you are interested, e-mail me.

  • Reply Sarah |

    Also, I think you mentioned the FSA somewhere in these posts. Having funds withheld for an FSA is a good thing…pretax – that is if you use the funds. If you don’t, then it is a waste. Don’t change it if you are using the funds.

    Things will get better next fall when the kids are in school full time.

So, what do you think ?