by Hope
Many have asked for a new budget. My last update was kind of a pie in the sky budget which quickly came to a screeching halt with the advent of the quarantine and resulting business loss.
This budget reflects the money that’s been going out for the past couple of months and the plan going forward while the Pandemic/Quarantine is our reality.
| Line Item | Monthly Amount |
|---|---|
| Household Expenses | |
| Rent | $650 |
| Auto - Gas | $30 |
| Auto/Renters Insurance | $350 |
| Groceries | $600 |
| Netflix | $15 |
| Spotify | $15 |
| Amazon | $12 |
| Allowance | $280 |
| Utilities | $300 |
| House/Yard Maintenance | $25 |
| Household Savings | |
| Auto - Maintenance | $75 |
| Life Insurance | $23 |
| EF Savings | $200 |
| Gifts - birthdays, misc | $50 |
| Christmas | $100 |
| Travel | $50 |
| Princess Senior Year | $150 |
| Debt Payments | |
| Car Payment | $250 |
| Student Loan | $306 |
| Totals | $3,556 |
All monies beyond this are going into savings.
Pandemic Money Updates
Some specific line items updates….
- Line items removed due to tightening our belt: Personal, Prepare for Moving and Family Vacation
- Line items reduce due to Pandemic induced lifestyle changes: Gas, Auto Insurance, House/Yard Maintenance, EF Savings
- Life items increased due to Pandemic induced lifestyle changes: Groceries, Allowance
I believe those are all pretty self-explanatory when you factor in that we have added two additional boys to the household. Our grocery budget has returned to our previously budgeted amount. And since Gymnast is here I have begun giving him an allowance as well.
Line Item Updates and News
Several ongoing money updates…
Princess Senior Tuition
Princess has once again earned a merit scholarship for her hard work and resulting grades. This knocked an additional $1,000 off her senior year tuition. Because I had been saving $500 a month since January and then I picked up a couple of large projects, I now have her tuition saved in full. Yeah! I have greatly reduced the savings toward her senior year, but kept it to have some savings toward extraneous senior year expenses.
Auto Insurance
Our auto insurance is going to go up at the end of next week, but I don’t know how much. Our insurance company has been giving us 20% of our premiums back the last 2 months. However, Princess will begin driving next week. (Thanks to our governor for removing the road test requirement.) I still do not know what her dad is doing about a car or if she will be sharing with me. In addition, History Buff is beginning to look for a car…but not rushing. So we will definitely be adding a new driver and possibly 1 or 2 cars in the next couple of months.
Debt Payments
Car Loan – Until the uncertainty with Princess’ car is cleared up, we are paying a minimal car payment. I did confirm this month that we owe less than it’s worth. But I have no plans to sell it at this point.
Student Loans – I have put the minimum student loan payment in to commit to paying it. But the plan as previously posted is to pay additional monies toward the lower of the two student loans every month.
As many point out, my income is variable. But thankfully, after a really slow 6 weeks as a result of the pandemic, things are booming again. Less than two weeks into May and I’ve earned the income to put us back on “living on last month’s income,” have previous clients returning, have referrals rolling in as people are returning to pursuing their dreams and have picked up several new steady clients.
I may have to work in the dining room with our full house and crazy schedules (Sea Cadet is working overnights at one of his jobs.) But life is good and I am so grateful.
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.
Your budget looks good other than $280 for allowance ($140/month per kid). That seems like quite a lot–especially now when there is no where for them to go to spend money. What is this money for? Additionally, I would shop rates for auto/renters insurance (I have teen drivers, so I know it can be expensive, but that still seems high to me).
That was my question as well. And wasn’t Princess supposed to be paying for her car insurance? Will she still be given money when insurance costs go up?
Speaking of insurance, you said the twins were paying their part. Is that $350 just for you then?
Princess has been looking for a job but between her age and the pandemic has not had any luck.
She’s hoping that since she will be 16 this next week, she can find some sort of part time job.
I think I posted some time ago that I made a deal with her that if she would attend college classes this summer (dual enrollment is paid for in Georgia,) I would pay for her car insurance for the summer.
So we are waiting to see how things pan out. She obviously can’t pay anything until she gets a job.
I’m not going to criticize your right to prioritize however it isn’t a “bare bones” budget. You at one point had a bare bones budget back when you were unemployed. Bare bones budgets don’t include hundreds of dollars in things like Christmas, gifts, allowances, spotify, netflix, or other “extras.” It’s smaller than your $ 3800 budget but larger than the budgets you dealt with in 2018 that did not include items like netflix.
In my opinion I’m okay with you saving money specifically for car maintenance or other things however, it is important for YOU to recognize that means these categories take priority over debt repayment since you are designating money specifically for those things instead of using that money for debt.
I think if you are giving Princess $140 a month for an allowance that it’s superfluous to add $150 for senior year stuff since her tuition is paid and she gets a fairly generous allowance. She should be able to cover her own extras with that $140\month. I think once you have $10,500(3 months of expenses) that you should reduce your EF to $100 a month and add that extra $100 to debt as well. An elimination of spotify, reduction of $15 to Christmas, $10 to travel and $5 to gifts would give you $295 to dedicate to student debt. Your interest is not quite $100. Using your minimums you’ll need to pay for 5 months to reduce your debt
around $ 1000. I really think you should be committing $600 a month in your budget to student loans so that you are commiting to knocking $500 a month($6000 per year) to that debt no matter what and reducing your debt by $1000 every 2 months. Make the payments part of your budget instead of saying it’s only optional when you have “extra” money.
At this point I’m sure you are thinking cutting Princess senior year extras is “unfair.” The question for me becomes how fair will it be to her when you hit retirement age with no assets to speak of because you are still piddling around with student loan debt for over another decade?
The $350 is Sea Cadet and I. He has just started working again so it will be a few weeks until he gets on his feet. He will then begin paying his cell phone, auto insurance and rent.
$1,200/year for Christmas? You have got to be kidding me.
I think $250 per child and $200 for my family is perfect for us.
This includes stockings, gifts, food, candy, etc.
Except you’ve INCREASED your Christmas budget since your “pie in the sky” plan in January.
And yet you have INCREASED your Christmas budget since your “pie in the sky” budget you posted at the beginning of the year. I don’t think you understand the concept of a “bare bones” budget.
The $75 per month for auto maintenance also seems high. Isn’t it a Honda that is only a few years old? I rarely spend $75 per month on my much older Honda.
It may be, we haven’t had to use it other than one oil change this year.
But I like to have a buffer in case something happens or we need tires, etc.
That money just builds up in a savings account for now.
First get rid of Spotify and each kid would get $50.00 a month till they were able to get a job. Why keep money just sitting there for car maintenance when you owe so much on student loans? That doesn’t make sense to me. If your daughter isn’t working and can’t help with gas, insurance, and paying on the new car how will she pay for the car her dad might give her,? Just stress neither of you need.
I think I have written before that a broken down car is my worst nightmare, getting stuck somewhere…so thus the buffer. I’ve always been that way. And have had nightmares in the past when I wasn’t flush and had a tire blow out or engine stop. Having the money to fix the car is VERY IMPORTANT to me psychologically.
No doubt, but telling her dad what to do is a no go. Lots of issues there. So we will deal with the car situation as it evolves.
Hi Hope,
I think a broken down car would qualify as an emergency and thus justify tapping your +$10k emergency fund if needed. A car maintenance fund should just be for routine maintenance fund.
Leave a few hundred dollars in there and take the rest to make an additional payment on your student loan.
The allowance money is based on lots of things. It gives them plenty to take care of their personal care/hygiene needs. I never knew how much bi-racial hair could cost to keep healthy, but it does.
And some spending money for hanging out with friends, birthday gifts, etc.
It’s enough to cover their needs and most wants if they budget…they are learning to save for larger items and take care of the things they purchase themselves.
I’ve had lots of trial and error with allowance amounts over the last 8 years and this amount works for us.
These are all the things people commented on your last post! You don’t want to cut down on anything at all but can’t understand why you still have student loan debt all these years later… throw all that money you’re saving for Christmas and for allowance and for vacation at your loans and it will be gone in no time. You want the reward of being debt free with none of the “hurt”. And that’s why you are still here 5 years later.
Did you seriously just use their black hair as an excuse for their allowance amount? Unless you’re taking them to get their hair done, it shouldn’t cost you that much to keep their hair natural and healthy. I’m not trying to be rude, but you’re going to tell me that in 16 years, you haven’t found decently priced black hair products? I’m guessing you also didn’t take the time to learn how to tend to their hair so that you don’t have to pay someone else to do it? Let me help you. There’s a product called Pink. It’s a moisturizer that does WONDERS on Natural hair. Anything by Shea Moisture, is good. there’s a company called VIA Natural, they have Argon oils, coconut oil, shea butter, tee tree oil, avocado oil; all amazing. There’s a product called Indian Healing Clay. It’s usually for the face to help with pores, it’s great to use as a hair mask if their hair is damaged in any way or just dry. Neocurly is also a good brand. I could go on an on. you don’t have to buy everything all at once. it’s all trial and error. All black hair is different and what may work for my hair may not work for theirs but there are a ton of natural and inexpensive ways to keep natural hair conditioned and looking great. Please don’t use their hair as an excuse for your poorly thought out plans.
Not an excuse, just a fact. They must use product every day. And it does add up.
And as you stated, all hair is different and requires different products and different care.
We could open a salon with the products we have tried over the years. I’m well versed in ALL of them.
But thanks for your feedback.
So it sounds like you’re not really looking for feedback on your budget. People are asking questions and offering suggestions, and you are not open to considering any other alternatives. I really do want you to get out of debt, but your way isn’t working, and your unwillingness to listen to others isn’t helping either.
I can respect your option; however, I’m balancing raising my 4 kids with getting out of debt.
So no, I’m not going to have no Christmas money and be unprepared for a car emergency, etc.
This is the bare bones budget we are living on right now.
No one is suggesting NO Christmas or NO car emergency fund or NO allowance. What we are all suggesting is that you look at the numbers. You have had these “household savings/sinking funds” in your budget for months–how much money is now in those accounts? How much money is in your car repair fund vs. how much do you realistically need based on the age and condition of the car and number of miles that you drive. What if you lowered the Christmas fund to even $1000 instead of $1200–that another $200 that could go savings or debt. You allowance line item in your January budget was $130/month–it’s now $140/month per kid. How much of that is hair care, which is a necessity, vs. how much of that is for “hanging out with friends”? I have two teenagers who each get $50 per month (and I am debt free other than my house). Beyond that, they work (one has a more traditional job/one mows lawns/cleans houses/etc). As for car insurance…at least, get quotes from other companies!
I agree on the allowance. Give them want they need for true necessities. Any wants, like hanging out with friends, they should earn on their own.
First I have to say I always look forward to your posts, Hope. If you write a book, let me know, you are an excellent writer. My financial situation is opposite of yours but our kids are the same age. At first glance I can see extra things in your budget but you have to live a good life too. Yes, you could cut all the “fat” and I would would personally cut it down a little, but you have to make it generous enough that you actually stick to it. I give my 16 year old daughter $20 a month in allowance but I pay for her phone, clothes, and needs. So if your kids are paying for their own needs like that, then the allowance amount makes sense. My daughter works, cleaning small businesses, so that is an idea for yours. I help her find jobs, work with her the first couple times, to help train her on what the owner wants/expects, then she is her own. She doesn’t enjoy the work but loves the fact she saves 80% of what she makes. Good luck.
Thank you for the kind words, Nancy, I really appreciate them.
Once Princess begins working, her allowance will go away. But we will have to see how the job search goes with the Pandemic AND I am not sure she will be able to work more than 1 shift per week when school starts back up since she takes a very heavy academic load and is a 3 sport athlete. So we are just taking it as it comes. She is well aware of the items the twins had to start paying once they got a job. But I am also balancing that with her much heavier school/extra curricular load.
And yes, perhaps bare bones wasn’t the right description as we do have some “extra” in there. However, with us all stuck at home with two of the kids with limited things to keep them occupied, the Netflix and Spotify subscriptions have been lifesivers. Especially with Gymnast…I just need him to be occupied when I need to work. And school work and chores and crafts only take up so much time.
Agree! Very often, suggestions for reduction are countered with ‘I won’t do NO xyz’
Hope,
I know balancing rasing four children and trying to get out of debt is hard. You are trying to get out of debt but you posted two days ago that you have student loans from 2004 with the amount of 33,893 and stil bearing interest monthly.
In January you stated that you were going to pay a little over 833 dollars a month. Two days ago you stated that you would need to pay 1,178 on the loan every month and felt that based on your average income from last year that you could do it but it would be a stretch.
Your current summer budget shows that you are planning on making the minimun payment for the student loans.
You had this student loan since 2004 and it’s May of 2020 with little progress made on this huge debt. It’s been 16 years and still owe what you did in the beginning.
How does this show that you are trying to get out of debt? You have categories in your budget that you can adjust to make additional prinicple payments on your loans. I am not trying to be harsh in any way. I want you to be abe to succeed in your debt payoff.
1. I would offer to cut the kids allowence to 100 dollars each a month. You are very generous with this. This would free up 80 dollars a month or 960 dollars a year to go towards your student loan.
2. Drop your EF each month from 200 to 150 dollars. This would give you an additional 50 dollars a month or 600 a year to put towards your student loan.
3. Drop senior year from 150 a month to 100 a month and this would give you another 50 dollars a month or 600 a year to put towards principle on your student loan.
At the end of the year you would have put an additional 2,160 dollars towards principle payments on your student loan. I want to see you succeed in paying these loans off and not have them still in another 16 years.
I would really encourage you to visit saving.org and play with the numbers. $50 per month invested and earning a 7% average over 15 years equals $15,848. Increase that to $200/mo and it goes up to $63,395.76. These are the kinds of numbers most of us see when we see ‘travel, holidays, allowance’ etc. $50. here and there adds up to student loan payoff, retirement etc.
I personally budget out retirement savings, kids college fund, normal bills etc. and then what’s left goes to holidays, vacations etc. ‘Fun’ items always come last. Future financial security and keeping debt minimal always come first. Sometimes there’s a lot left for fun, sometimes there’s not. It’s just a matter of changing perspective if you are willing to do so.
Excellent advice, and a wonderful tip to put it in perspective. I used this same mental trick back when I was newly divorced, paying off debt, and rebuilding my savings and retirement. If you make sacrifices today for tomorrow, you can get to a point where you can realistically afford to choose when a luxury in front of you is worth the trade off of long-term growth. It is very freeing.
This is where Hope continues to struggle. She doesn’t see it as “necessities of life + paying off the debt” coming first, and then, IF and only if there is money left over, consider Spotify, Netflix, Christmas gifts, etc. She continues to treat it all as of the same importance.
At first I thought this $150 for Princess’ senior year was to cover the cost of cap and gown and somesuch, but now I see — $150 / MONTH for her senior year? For what??
Your first thought was correct…the $150 for her senior year is for unexpected costs that I know nothing about yet. It’s not to give to her, but to be prepared for cap/gown, etc. Maybe college applications. Again, I’m not sure as we’ve never had a traditional senior year.
Don’t forget Prom….that can be really expensive.
Maybe I missed this in an older post but $250 per kid at Christmas seems high. Does that include non-present type stuff as well because I can understand that. I have 3 kids and I spend $100 on each of them, they get 1 item of their choosing, a new piece of clothing and some junk food plus a couple of odds and ends if there’s any of their $100 left over.
Hope, You’re really into the planning portion of debt reduction, I get it. It’s the easy, self-empowering part. But it’s the follow through that needs work which is why you’re getting some pushback.
I recommend you download a simple loan payoff excel sheet. Fill it in with your one goal. Save it. Look at it weekly or monthly. Send in mini payments as much and as often as you can daily, weekly, whenever the cash frees up. There is no penalty for multiple payments on a student loan in a month. Did you save $10 on groceries this week? Send a $10 payment directly to the loan that day and log it in your spreadsheet. Maybe you had to cancel a trip or summer camp that you already saved money for due to COVID. Take that money, and send it as a payment to your student loan! Did your car insurance come in lower than you saved for? Send in the extra money. Don’t let it sit in your account waiting. It doesn’t seem like much, but it will add up. And your loan payment spreadsheet will show you how much you’re saving. You can’t spend money that you’ve already sent off as a payment!
If you really want to make any significant progress on your loan this is how you need to start. It seems you get really stifled with these unrealistic statements of “I want to pay off the loan in 12 months and it will take $1,200 a month”. Then first month you don’t make it for whatever reason you just stop making payments or drop back down to the minimums. And then nothing gets sent in as extra and you’re back to square one.
If you really want to pay off your student loans as your #1 goal. Stop planning and going back and forth about exact budget numbers, payoff timelines and what you think they should be. Instead, use that mental energy for what actually matters. Making sacrifices and sending in payments. No matter how big or little they may be. I say this with encouragement….. Just do it and stop talking about it! Actions are what matters.
So are you backing away from the previous posts about paying student loans more aggressively? Was that the “pie in the sky”? You mention putting extra income into savings. How much do you have across your savings accounts—EF and other? What’s your goal for them?
“Bare bones” means NO frills or extras. Why are you paying for Spotify when you can get it for free (with ads, but still…) Netflix to me seems unnecessary, but I appreciate that a lot of folks might feel differently. I understand the fear of car issues, but how much is enough? As others stated, replacing a tire could easily come out of your EF without sinking money into a special account each month. Is there a cap on the car repair account (I.e. $300 or $500) after which point many that would have gone into this account gets diverted towards debt?
And nobody is suggesting your children not have Christmas. Folks here are trying to help you “blog away debt” giving you advice that presumably you want given your participation on this site and based on the often incomplete information we receive and your constantly evolving plans which often feel more like whims. One thing that has struck me several times when reading your posts is how defensive you get over well intentioned advice from folks here. When someone tells you that you can’t AFFORD to buy a house, take a trip, give your children an excessive allowance or whatever the thing is, I think what you “hear” or internalize is that you or your children don’t DESERVE it which absolutely is not the case. It often seems like people here want you out of debt more than you want it for yourself. Readers want you and your children to have stability and the options that come with financial freedom. If you don’t genuinely want it, that’s your right, but it begs the question of why you choose to blog here as opposed to a personal blog.
Well said.
It’s nice to see a budget with different line items and amounts, but part of a budget is showing the INCOME. According to this, we have to assume you are bringing home at least $3,556? And you state “All monies beyond this are going into savings.” How much is that?
Meanwhile you recently posted that it would take almost $1,200/month to get your student loan down…and obviously that is not the case. Are you bringing home 1200 more than the 3556 and that will go to the student loan or savings?
It’s really frustrating that this is supposed to be a blog about paying off debt, but you don’t do that. You just post very vague things based off feelings (which I understand) and basically want to make life comfortable for your kids regardless of what it does to your debt. I’ve been following this blog for years and it’s always the same smoke screen approach with you :-/
My income varies greatly…from week to week, let alone month to month.
So having a budget that captures it, well, I would have to modify it every month. And typically a month behind, since I can put it bids on project months ago and then get them overnight unexpectedly. It’s just the life of a freelancer.
To answer your question, yes, on average, I bring home more than enough to cover our budget + some. There are certainly months, I don’t which is why I cushion so much these days.
As I mentioned in this post, it took me the first two weeks of May to recoup the “loss” of the last 6 weeks in regards to being able to live on last month’s income again.
What that means, is I’ve made enough now to pay all the bills for June. Everything else I earn this month is “extra” outside of the budgeted amount.
But it does vary…some weeks/months I’ll pick up web design projects worth 1000s of extra and other months I don’t have any of those more lucrative projects and stick with regular client work.
I used to work for a real estate agent, and regardless of her monthly income, she paid herself the minimum amount needed to cover her monthly expenses and only took money out of the business after she met her annual income and savings goals or for planned purchases. It was a way to keep herself from overspending during the high income months, and to insure there was money in reserve for the low income months.
Do you have a certain income that you receive each month based on contracts with your clients? If so, that’s your bare bones spending budget. Do you have a “pipeline” spreadsheet where you estimate future income based on additional projects you receive? It may help to track when extra income is expected over the next quarter or longer instead of only looking one month ahead.
Now that you have a personal EF, maybe it’s time to start a business EF to help smooth out the income variation and cashflow to be able to pay yourself the same amount each month. Starting with a lower baseline will allow you more time to make plans for additional income when it’s confirmed.
If you have an income that varies from month to month, you then use whatever is a typical “low month” as your starting point, and work off that. If a particular month runs high, then, great – you’ve got extra money, with which to pay off the debt and/or build more savings. (Hint – NOT to blow on silly things)
Plenty of people have incomes that vary from month to month – people in sales, small business owners, realtors, etc. They don’t just throw up their hands like you do.
As others have said, bare-bones does not include extras. It is ‘i’ve lost my job, how much do I need to keep us house, fed, and getting to work/school’. That’s it. When you were homeless and living in a generous friend’s trailer, was there $140 per kid for allowance, in addition to several hundred a month for a new car, christmas, travel, and school frivolities?
But, I think it is telling that Hope refers to this as a ‘bare-bones’ budget. I think that means one of a few things. One, Hope hasn’t learned the difference between a want and a need. Two, Hope knows the difference but is signaling that she doesn’t care – that she knows these items are not, in fact, all needs but she is unwilling to sacrifice any of them. Which leads to three, maybe to Hope, she is just fine with living with this debt the rest of her life (e.g., her prior post about the option of dying with her student debt) if she can have the other things that she wants. She did pay of some debt before, but then erased that progress by purchasing a new $20K car, erasing any gains.
Also, as I and others have made note of un so many previous posts – still no savings for health care or retirement. Lack of retirement savings was the last time she wrote a fear-based post. Nothing has changed there either, it seems.
It’s really a shame. I grew up with parents like this, and I really feel for her kids. It’s not necessary to live like this, if you have some self-control and discipline. I hope they learn how to manage money much better.
hi, Im so glad you are getting more business again. That is great news! And I do not argue your Christmas budget, I think we all spend differently at the holiday and you are planning for it. Nor do I think a “bare bones” budget is necessary since your comfort level with some debt seems to be fairly high (that is not a dig, just what I have gleaned from following you) Where I am a bit confused is allowance and Princess’s car contributions. My understanding from earlier posts was that she would have a job to contribute to car payments by this time. You were aware of her schedule/academic commitments, sports, etc at that time. I think I even commented to that effect. So to let her off the hook for the car now is not flying with me, even with her dad possibly giving her a car. I totally understand that it may be a hard time to get a job, so then you cut the allowance down to bare bones to go towards her part of the car. You said yourself you have to entertain the kids since they can’t see friends right now so they don’t need that kind of spending money. You could give them a very small amount and then pay for the hair products etc out of the household budget, you can put the remainder of Gymnasts in a savings for him to use once this opens and put Princess’ directly to paying off the car she agreed to help pay for. If the car from her dad pans out, who is paying the additional insurance, etc. She should at least be saving to pay that since it will be an additional cost. She sounds like a really smart, talented kid-but I think it is time for some responsibility towards the car, etc, so she has a better grasp of the consequences of financial decisions. Also, it is a good idea for her to be required to have a savings account in at least the amount of her car deductible. Cheers!
These are all very good points. If she can’t or won’t work the allowance should be cut to go toward car expenses. If the deal was she had to get a job to pay for the car then maybe she should drop one of the three activities so she has time to work. That would be a good lesson in having to make sacrifices for the things we want.
What are Princess and Gymnasts doing to eat their allowance? When the twins were teens, you made them do odd jobs for neighbors to pay for hygiene products and fun stuff. Princess and Gymnasts should be healed to the same standard as your adoptive children.
They all do odd jobs when available. Unfortunately we live is a very different place then we did when the twins were teens. This area is very impoverished and our neighborhood…well, lets just say its a whole different world here with very different type of neighbors.
In addition, Gymnast and Princess have always been involved in extra curricular activities. and such where as the twins never chose to do that…so they had a lot more time on their hands. Each child is treated and has been fairly and equally, but differently for sure. All have different needs, drives and such.
When the twins were paying for their own toiletries, were they getting an allowance?
Everyone got an allowance until 1) they were working or 2) I just couldn’t afford it. The twins allowance was more than the little when they first moved in for obvious reasons. They were 12 when the moved in the the littles were 5 and 6 or 6 and 7.
They have all paid for their own toiletries, etc. and spending money out of that allowance.
Hope, you continue to think like a poor person. A poor person rationalizes money by “waaah, I want a nice Christmas and I need to splurge on my kids.” So they spend $250 per kid, and get absolutely nowhere on resolving their debt. There is no reason you couldn’t take that Christmas number way down. I think you seem not to understand – there are plenty of people who make well into the six figures, who have no debt beyond a house, who pay cash for cars, who don’t spend $250 per kid at Christmas. But you’re poor, and you’re doing so. You really seem to have trouble with the idea that you might have to sacrifice wants to chip away your debt. Look at how you piddled away money on junk souvenirs when you were all in Chicago. That is how a poor person manages money.
Stephanie,
I agree with your post regarding the “poor person rationale” because at one time my husband and I had that rationale. It was a hard lesson for the two of us and yes we spent tons of money that we didn’t have when the kids were younger for holidays because we felt “that they deserved it” when in reality they deserved to have food, shelter, utilities, and the potential for their parents to pay for any emergencies that would have to be attended to.
Over the years the kids grew into young adults and were able to understand that they were not going to recieve an allowence. We ended up telling them if they wanted money that they were going to have to get a job. My thought process was and continues to be that I have to work to earn money to support the household and make sure that our debt is paid. The kids now understand that they are to work and even contribute to the household now in the form of buying groceries, helping with gas for vehicles, assist with utility papayments, and if needed contribute to any large repairs that need to be done.
It’s not easy to change the “poor person rationale” and it took years of work on my part to change my thinking. I don’t want to be in debt for the rest of my life and would prefer to have retirement savings, a mortgage free home, and have zero debt when I get to retirement age. I don’t want to put that stress on my family. We changed our life plan and are working towards retirement savings and being debt free. I am 48 and my husband is turning 50. It’s time to condier how our lives will be if we resorted to not paying off debt and struggling in old age. My mom is 65 years old, retired, and continues to have a large mortgage and debt. She is my example of what happens when you don’t have a good financial plan that you implement.
Maybe Hope will eventually get to that point or maybe she won’t. She has been blogging here for quite sometime and it’s just the same thing of having plans to pay off debt, go on trips that she can’t afford, and continue down the same path for years to come.
Hi Hope!
I think this is a good budget. I really like your dedicated savings. I do think the allowance is a little high, but that’s your call. I’m looking forward to watching your student loan debt get tackled – you will feel so wonderful when that is gone!