by Hope
Here’s my first take on a $2,500 budget. This was so hard and I cannot reasonably get it down below the $2,500 at all.
| Spending Category | Monthly Amount |
|---|---|
| Mortgage | 1013 |
| Utilities - Water, Gas, Electric, Trash | 350 |
| Auto - Gas | 80 |
| Auto Insurance | 650 |
| Groceries | 100 |
| Pet Food | 140 |
| Internet | 70 |
| Cell Phone | 55 |
| Health | 100 |
| Annual/Quarterly Payments | |
| Life Insurance (Qtr) | 67 |
| Total | 2,581 |
This budget doesn’t include everything. I kept eliminating line items and reducing budgeted amounts. But ugh, I can’t. I have to make more money.
And this does not include a single dollar of debt payments. This is terrible.
It’s a great exercise, I get that. But not realistic at all.
Mortgage Modification
You will notice that my mortgage is higher. I signed the paperwork for a modification I applied for back in early November yesterday. It was to increase my payments beginning in January. I had applied back in early November when I wasn’t sure how I was going to make October, November or December payments. And I got approved after I paid the $1,300 to cover October and part of November. I’m not sure yet how that is going to play out. It may apply the payment I made in the between time to January or ? So I’m in a waiting period to see how the modification affects future payments.
Health
You will see a new line item for health. Over the last few months, I have put this last and let the things I had begun doing for my health over the last couple of years slide. This primarily consists of daily 10K steps and an assortment of supplements. As a result, my mental and physical health has suffered greatly. And I have realized that even in the worst of times, I have to prioritize my health. So this is now a non-negotiable to me, I have to be able to purchase the supplements that have greatly improved my health and over all well-being. While I have come off all but one prescription, I do take a variety of holistic supplements. And I can’t just skip them. I’ve tried that on a few of them over the last couple of months in an effort to save money and it is not good.
Car Maintenance Needed
My biggest concern outside of just covering minimum payments is that my car is about to hit 100,000 in miles and needs an assortment of maintenance. For sure, it needs new front brakes. The dealership gave me a list of things and prices when I last got my oil changed along with pricing so I could plan. In total, it needs about $1,600 in work. I believe the brakes are the most urgent. But I’m going to have to find someone to review the list and advise on what to prioritize. And, of course, none of that cost is even kind of reflected in this budget. Nor is the cost of registration, which although nominal in the state of Georgia, is due this month.
Car Insurance
When the kids are here at Christmas, we are going to sit down and compare costs for getting Princess and Gymnast onto their own plans. I think that will end up being higher, but we need to do the research and they are struggling to do it on their own. Beauty shares my car so no reason for her to be on her own plan, but starting in the new year, I will be asking her to contribute more.
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.
Why on earth would you voluntarily increase your mortgage payment? You were having trouble paying $650, how do you expect to pay $1,013? Your only hope is to get your income up by any means necessary before that higher mortgage payment hits.
I’m also super confused by this. Can you undo whatever you did??
writing it down is a good start! I see a few spots to massage. First-Beauty should be paying the difference in your car insurance with her on it as opposed to her not being on it. Second, Princess is likely legally allowed to be on your insurance since she is a student, she can also pay the difference rather than her own plan, until she graduates college. Gymnast is likely not legally supposed to be on your insurance since he does not live in your home, nor attend school. But if he is allowed to be, he should also be paying the difference. You can use a premium planner and determine what your cost it alone and adding each child and charge them accordingly. Next place I see is pet food, any pet that is not your own (ie a child’s etc) should be cared for financially by that person. You should shift to a generic pet food (slowly to not upset their stomach) You should not get another pet, and honestly should look for good homes for your youngest pets and only have 1 max. Supplements-speak to your physician (actual MD or DO, not someone online) and determine if there are prescriptions that can be written for any of them that would cover cost. If any of them are part of an MLM run fast and far and look for a non MLM version. Whole Foods has a 25% off supplement sale a few times a year. I assume they ship and it would be a great time to stock up. Car-dealerships are notorious for being the most expensive for work. I suggest asking around your church community or friend group for a local mechanic. That could also lead to a barter for websites, etc versus you paying it all out of pocket. I think you can knock $500 off this budget by doing the above things. And, if you have not, I implore you to reread from your first post. Your patterns are so glaring and obvious, it may be the kick start you need to really, really take this seriously for the long term. I am rooting for you, but it is hard to watch the same avoidable thing play out over and over.
Hope,
That car insurance is absolutely killing you. It is 1/4 of your income. You absolutely cannot afford it. No matter what you absolutely HAVE to find a solution here. Find out what it would cost for you only. No kids. Then, find out how much each kid is costing you. Add them in individually and write down how much it goes up. Then, each kid needs to cover that portion IF AND ONLY IF you keep them on your policy. Make sure your insurance company is ok with them all being listed. If they are, as much as I most will tell you to get them off regardless, I understand not being willing to let your kids drive illegally and some kids would not fork out this money themselves.
However, some of your kids have made some bad decisions and they are EXPENSIVE to ensure. They need to at minimum cover their costs. You flat out cannot afford this. No wonder you are struggling so much.
You’ve got this.
Cell phone: switch to an MVNO (mint, ting, etc). That should free up $40 or so.
Great job working on your December goals! I know looking at your income vs outgoing was likely very difficult. I do have some questions and thoughts.
Like Laura, I wonder why you would make your payment more? Where did you get that idea from?
Like Shanna, I suggest talking to your church about needing mechanical help! Every church I’ve been a part of has people willing to help in areas they are knowledgable. Brakes don’t even have to be done by a mechanic. My husband changes ours for the price of the brakes. He learned from watching youtube videos.
Like all the previous comments, PLEASE look into insurance changes. You don’t even have to wait for the kids to be there!
Good luck with your job interview!
This isn’t bad! I suggest taking a fresh assessment of income based programs for utilities, groceries and pet food. There’s no shame in using programs you qualify for. Do you have the option to drop off trash at the transfer station instead of curb pickup by chance? Can you borrow a kill-a-watt meter from the library to identify any electricity vampires in your house? Every bit helps and you have time to chase things down.
Next up, cell phone/internet. These prices aren’t bad, but you can definitely optimize a bit more. Take a spin of all the MVNO options for your preferred carrier. Do any of them have robust enough tethering that you can drop home internet entirely? It’s not as crazy at it sounds!
Speaking of, call your internet company and ask for a rate reduction. Do they have any offers for new customers? If so, straight up ask for it. All they can say is no, but maybe they’ll knock $10 off.
On the supplements front, I agree with checking out the whole foods sale and also shopping these around a bit. Do you have a local chiropractor? Give them a call and ask if there are any low income options to explore.
The car insurance in theory is a problem that will get better with time as accidents fall off and kids start rolling off. I know there isn’t much here for extras, but there is peace that comes with simplicity. Definitely utilize your local library system for books and magazines (Libby and Flipster for digital media), lots of free TV streaming (Roku and Tubi are our favs), start one of the ‘get outside’ challenges to continue embracing nature and the peace of mind it brings.
I’m completely confused on what happened with your mortgage. If this is just temporary until you make up back payments and fees, sure, but if your payments are permanently higher then I’m really, really baffled.
You’re closer than you think on this, Hope.
How much have you actually spent on groceries in the past 30 days? I’m guessing it’s well over $100, and that’s not even taking into account what you’re probably going to spend over the holidays on food. Unless you are utilizing a food pantry, I don’t believe for a second your grocery bill is $100.
Budgeting needs to be based on fixed expenses (like your mortgage) and past expenditures, not just numbers you pull out of thin air.
As I mentioned in the first sentence, I was trying to get my basic living expenses under $2,500 so I was playing with numbers.
But yes, actually, I can easily eat for a month on $100 on a regular basis. (Beauty buys most of her own groceries/eats out.)
Now for this month, I have budgeted some additional money for the holiday and all the kids being here. But this was an exercise, not reality. As it doesn’t cover any of my debt.
I think that mindset is part of the problem. This is your reality. If you want to stop taking on debt, this is what you need to live on. If you can make the changes to make this budget work, it’ll allow you so much more money to throw at your debt once your income increases. The sad truth is, your kids have significantly more time to recover from debt than you do. If Princess takes out a small student loan to cover insurance/living expenses, she should have that paid off quickly. Unfortunately with the debt load you’re carrying now, every additional dollar (with interest) puts you in a worse and worse space.
So your inability to answer the question tells me you either a) have no idea what you’re spending or b) it is way higher than $100 and you don’t want to admit it.
This isn’t an exercise. This IS your reality. At this moment, you bring in $2500/mo. That is the amount of money you have to spend.
This is a great start. But, as you note it isn’t based on actual numbers, and you still can’t get it under $2500. And remember right now your debt is costing you >$500/month just in interest and none of that is accounted for, let alone principal payments.
So, if those basic facts don’t convince you that something really major has to change…
Oh, I know that something has to change. But really, the only option to resolve it is for me to bring in more money on a regular basis.
That is my #1 focus.
so is your mortgage permanently higher? I don’t quite understand why that happened. And have you switched your cell to a cheaper plan? Are the supplements equaling $100 each month? That seems incredibly high.
$100 for groceries for an entire month for two people?
Beauty buys most of her own food, ie eats out. But it is the area where I have the most control. And one or two homecooked meals provide leftovers for the week. I also eat mostly sandwiches so a loaf of bread, some meat and cheese and I’m good.
PS also, do you have health insurance?
I have applied through Healthcare.gov site and have options but frankly, it just confuses me. I don’t understand the “discount” I’m given or how it will affect taxes or even if the coverage is decent. They all have super high deductibles which is fine, but I can’t tell if they provide preventative coverage. It’s a work in progress and I have until the 15th of this month to choose a plan.
Definitely agree with the other commenter that the dealership is NOT the place to be having car maintenance done. Any local mom and pop shop with good Google reviews is a much better choice. Dealerships here are 25-100% more than other mechanics! Not sure about where you are.
I know you’re remaining steadfast in supporting your kids as you have been for but what happens if (God forbid!!) something happened to Addie and she needed to go to the vet? Or worse, what if you got sick? You need every spare penny for survival right now. Please reconsider… and in the meantime, I am sending all of my good energy your way. Stay positive and healthy! You got this!
I’ve had a terrible time finding a reputable mechanic here. TERRIBLE. And always feel like I’m getting ripped off. That is why we reverted to only going to the dealership.
I’m thinking even harder now that you need to check out cash stuffing on YouTube. (I watch it as a fan of personal finance content, same reason I’m here.) They budget to the penny, sometimes on very low income, and it’s based on real spending and not estimates.
They also make money from people watching their videos AND from designing savings challenges to sell on Etsy as digital downloads. That could be your digital offering and your videos could promote that. I think it would be so helpful for you.
I’ve seen cash stuffing envelopes. I just don’t have any “extra” left to stuff anything after I pay bills.
$100 for groceries seems unrealistically low. If you can get out of paying auto insurance for your children you would need to “beef up” that category. USDA suggests eve a thrifty plan is $224.40
I’m actually pretty comfortable with the $100. I make a smoothie in the mornings and then a sandwich in the afternoons. Maybe cook a big meal once a week and then reheat the leftovers.
Beauty buys her own groceries/meals for the most part. She eats out alot. And is really creative in the kitchen.
Whatever the motivation behind raising your mortgage payment was – you need to sit with that, because that is the mindset that I thiink contributes to some of the decisions that do not end up working for you. Paying more when you weren’t making payments at the lower rate has me flummoxed. I hope you do get the part time job and more money flows in.
She called it a modification so hopefully it is what she has agreed to pay for a month or two to catch herself up. I can’t imagine paying over $1000 a month for housing on her income in her location( requires transportation).
Great start at writing down your more ‘fixed’ expenses.
some thoughts:
1) As others mentioned, your kids need to pick up some of the car insurance. If they absolutely cannot pay all of it – maybe half or a quarter to start off. My parents paid for mine, and in the end, I was not prepared to manage the bill when I was kicked off. It helps your kids learn how to budget and manage their money with support; it is not a disservice for children of driving age and driving privileges have responsibilities related.
2) Check-in with local organizations that may be able to help with utility payments. In my city there are several non-profits that help with short-term needs; maybe your area has some resources too. (Low-Income Emergency Assistance)
3) Check with your local animal shelter for food. The shelter I foster for also had a ‘pet food pantry’ for those who need assistance.
4) Does your cell phone plan include unlimited Hot Spotting? I used hot spotting at my home for 4+ years and had no issues streaming TV or using my computer for web usage.
Rooting for ya Hope !
Hope, this is not going to be a popular opinion, considering this is a “blogging away debt” blog, but have you considered talking to a bankruptcy attorney? The best time to file is when your income is low. You can get rid of all your consumer debt. I am not sure what the exemption rules are in GA, but most people keep the equity in their home. Now, car loans can be a problem, but would be an option to “give the car back” without owing depreciation (if financed through a bank) and have Gymnast go find a new car to him. Personal loans are also a bit more complicated…as it wipes out an obligation to pay but there is the moral obligation associated with them. You also get the benefit of that Automatic Stay to protect you from foreclosure, etc. while you are in Ch. 7 bankruptcy (not sure if you qualify for Ch. 7-there is an income qualification test).
I am a former bankruptcy attorney (corporate lawyer now), but most good bankruptcy attorneys will give you a free consultation to see if this is a good fit. I think you are at that point.
It sounds like Beauty needs a reality check on eating out all the time. She can be helping you more if she can afford to eat out all the time.
Agree – if she is working and living with you she should contribute something. Even $100 rent would make a difference. Of course, I’d have the other kids contributing as well so things are relatively fair.
Ma’am. If Beauty has money to eat out, she has money to pay her way a bit more. You can’t be the hero forever. Swooping in to do all the things. You’re going to have to take care of you. Get these kids paying their own ways. Rip the bandaid.
Im going to chime in again, I totally agree with those commenting that if B can eat out all the time, she can certainly be paying her part of the car insurance and helping with household expenses. She is extremely lucky to have your support during this time in her life and while everyone makes mistakes, her mistake should not impact you financially.
You have been tracking instead of budgeting for so long that I am not sure you understand what a budget is supposed to be. A budget reflects all your anticipated costs and goals and it is based on your actual money coming in. It does you zero good to stay within the allotted $2500 but not include your debt unless your plan is to have that debt discharged in bankruptcy. I, like the others, am very confused by the $1013 mortgage. Your house was under $100,000 when you bought it and had a $650 payment. In short it was extremely affordable living and well under the 30% the government suggests you use as the base of housing costs. Staying in the house is a no brained with it being less than 30%. The new payment has you paying above 30%. Considering your debts this is going to be problematic. You need to re sit down and figure out a budget based on actual costs, not costs you aspire to. You may not hit $2500 but instead hit $3000. In that case that means you need to figure out how to pull in $500 more each month with your contract jobs, your Burger King jobs or cost sharing items like the insurance costs with the kids. For example if Princess, Gymnast and Beauty all agreed to pay $100 a month that’s $300 in income coming in( not withstanding that Gymnast might have problems if he actually has an accident and they find he is not a student and not living at home since the insurance usually apply to households). Have you watched Dollar Tree Dinners Tik tok. She may be able to help you with food budgeting. However, I suspect $100 may be low considering you have dietary needs based on diabetes if I remember correctly( you diet needs to be low carb and proteins cost more). Once you have health issues you need to be careful with cutting back in areas like nutrition. I also do not see an emergency fund. What happens to this budget when the tire on the car blows or you end up missing work because you are sick or the hot water heater goes out? This was a decent try for a first start but this should not be tracking it should not be based on hypotheticals it should be based on real money going in and coming out.