by Hope
I have settled on a Winter budget. I anticipate sticking to this budget for the first quarter of the new year.
I really appreciate your comments and suggestions when I posted my first draft. And I really considered them all.
Without further ado, here is my budget for the beginning of 2019.
Hope's Winter 2019 Monthly Budget
| Description | Monthly Budget |
|---|---|
| Rent | $650 |
| Groceries | $600 |
| Household (hygiene, cleaning, etc.) | $10 |
| Auto - Gas | $120 |
| Health Insurance | medicaid ($305) |
| Auto/Rent Insurance | $100 |
| Utilities (gas, electric, water, trash) | $290 |
| Life Insurance | $23 (paid quarterly) |
| Buffer | |
| Kids Activities | $50 |
| Entertainment/Clothing | $150 |
| Auto - Maintenance/Fees | $30 |
| Debt Payments - minimum payments | |
| Car Payment | $400 |
| Collections #2 | $246 |
| Credit Card | $0 |
| Collections #3 | $0 |
| Student Loans | $100 |
| Total Personal | $2,769 |
Things to Note
- I’ve cut my personal hygiene budget after reviewing my numbers from this past year.
- I left my Kids’ Activities and Entertainment and Clothing budgets as they were. I looked at the numbers, what is coming for us all in this coming year and feel they are reasonable.
- I cut the Auto Maintenance numbers after reviewing this past year, and with continued hopes that my car will hold up with minimal expenses this next year.
- I removed the budgeted money toward my credit card debt as I continue to use it as a revolving line of credit.
- BIGGEST CHANGE – I have decided NOT to payoff the tax debt (Collections #2) this month. Instead, I am adding that $1,000 to my existing EF, bringing the total to $2,000. This means, I will have to continue to pay the $246 for 4 months (unless I have a fantastic month during the first quarter.)
- Finally, I am going to pay a $100 towards my student loan debt. It just doesn’t make sense to me to be decreasing all my debts, but this one grows by $70+ per month. It seems counter-productive.
Hopes
My hope is that as my business continues to grow in the new year, I can stick to this budget and pour any additional income to paying off my debts. But worse case, I will have Collections #2 paid off before my full payments for my student loans kick in. And will hopefully, also have Collections #3 settled and paid.
So my debt priorities as we start the new year are as follows:
- Grow EF by $1,000 – done
- Pay off Collections #2 – no later than April, possibly sooner.
- Pay off Collection #3 – as soon as Collections #2 is closed out.
- Credit Card.
- Car.
- Student Loans.
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 5 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
Looks good. Couple of questions. Does the Medicaid go on indefinitely or do you have to requalify? Just curious. Also, $10 for hygiene sounds low, especially if it includes the other family members. I would also add about $100 per month in a category called Misc. All manor of things will normally come up within a month that you cant never anticipate. Good job paying down many of your debts especially your credit card.
On your last debt update, you said the minimum payment to the credit card is $60 and the collections #3 is $246. Don’t you think you should make the minimum payment? I’m not sure what collections #3 is but a credit card should be paid each month to avoid late fees. Unless I’m missing something.
I like seeing the extra cash in the emergency fund. I would still be in favor of a 50/50 split on any extra income for building your emergency fund and your top priority debt. Getting the emergency fund back up to 10k over the next year or two would be phenomenal!
Have you paid off the credit card? Or does it still have a balance and you are just paying off what you are charging each month? Your last debt update it had a pretty big balance.
Things I am happy to see – You adding some money to savings and you paying interest on student loan
Things I have concerns and confusion over – If you carry collections 2 there will be at least one month where your budget is not $100 for the student loan but $300. In addition to having a $246 collections payment. I agree with Walnut. Split your $1000 in half. Go ahead and pay $500 to the ef and then send $500 to collections. Do the same in January paying off collections before IBR comes due that ensures in March you don’t have to add $200 to cover additional student loan cost while shelling out $246 for collections. Your collections could even be snowballed into that student loan when complete(246 + 100 = $346 payment to loan with $250 a month going towards principle.
Additionally even if the credit card is largely being used as a revolving account in order to get rid of the balance you need to make interest payments on the balance you already built up. $3500 at 17% is around $50 a month in interest. I r you just do pay go your balance will go up thanks to compounded interest. You need to make $50 a month in payments for your $3500 balance to remain at $3500. Ideally you would budget $75 to $100 each month so your balance would go down in increments of $25 to $50.
Hope,
I would like to see you paying some money towards the student loan and use Dave Ramsey’s principles of snowballing payments to the lowest amount on your debt first. It’s a bit frustrating to continue to read for learning purposes when the budget keeps changing and varies so much from previous postings.