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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’s July 2015 Budget Update

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Happy August! Despite the terrible heat Tucsonians experience in August, it’s one of my favorite months of the year. My husband and favorite (only) sister both have birthdays this month. My girls’ original due date was this month (I ended up having them 8 weeks early – at the end of June – but they were due in August). And we get the most incredible monsoons in August. I love the sound of an afternoon storm raging on outside the window while the girls nap and I busy myself with work, cleaning, or even a little afternoon reading. : )

Now that it’s a fresh month, let’s see how last month shaped up:

Place Amount Spent
Rent 1055
Electricity 209
Water 68
Natural gas 16
Sprint (2 lines) 115
Cable/Internet 103
Car Insurance 155
Health Insurance 394
Trash 35
Preschool 1378
Gift-Giving 60
Restaurants 109
Entertainment 15
Groceries 537
Gasoline 70
Household Goods 39
Clothing 52
Parking 96
Postage 10
Savings 1209
Debt Payments 2125
Total 7850

 

Explanations:

Most of the budget is in-line with summer spending. Here’s a little commentary on specific categories of spending:

  • Preschool ($1378) went up this month because the girls started going full-time on July 13th.
  • Gift-giving ($60) accounts for $45 worth of gift cards for our preschool teachers for their last day of school ($15 gift card each), + a $15 charitable donation to a children’s nonprofit organization we like to support. This specific organization also qualifies as a tax credit (basically – instead of paying state taxes to Arizona, it’s like directing those taxes directly toward the organization we support). We like to donate $400 (the max allowed), so you’ll see additional donations in the future.
  • Gasoline ($70) is lower than normal (despite increased driving) because I’ve been taking advantage of Fry’s fuel rewards program. In my area Fry’s grocers give points (generally $1 spent = 1 point) that accumulate and can be used for cheaper gas (100 points = 10 cents off per gallon). This summer they’ve been doing double points ($1 = 2 points), and I’ve been racking up the points! My last fill-up I got 70 cents off per gallon!!!
  • Clothing ($52) accounts for a new pair of nice work pants and a work dress both from Banana Republic. Both were on mega-sale earlier in the month (marked down + an additional 50% off!). I needed a couple new work pieces, and these were a killer deal!
  • Parking ($96) is from all my daily parking + the prorated summer parking pass I bought for work.
  • Savings ($1209) is a bit deceptive. $484 went toward car repairs (so…I put it in our car savings account in Capital One 360, and then I withdrew it for some repairs we had to deal with earlier in the month). The rest of the savings were allocated as follows: $500-cruise 2016, $100-annual fees savings account; $100-Roth IRA savings; $25-girls’ college savings*.

*Note: One of my goals this year in respect to “the year of becoming adults” was to open up college savings for our girls. I haven’t actually opened up ESAs yet, but I’ve earmarked that $25 as the first contribution. I hope to set up the accounts this month and start depositing money more regularly (initially in very small quantities) as our debt continues to decrease.

I’m so excited for the coming months as I start to get paid at my new job! I already got one paycheck (albeit a smaller one given I started in the middle of a pay-period), so August will be my first month will full-time regular pay. We live on last month’s income, so it still won’t really impact our budget until September, but I’m already itching to make some really big debt payments! Can’t wait!!!

How did you do with your budget in the month of July?


March Budget Update

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We had a lot less income to work with in the month of March than in our typical months. Because of this, I had to get a bit creative. Some things (like some savings) were eliminated; other things (like debt payments) were reduced.

There’s always room for improvement and this month is no exception. But at the end of the month we had a balanced budget (meaning, we didn’t spend more than we made – using YNAB has really helped me in that regard), so I’ve got to be happy with the end result. April will have a bit more wiggle room, so I’m excited about the new month.

Here’s how March shaped up:

Place Amount Spent
Rent 1055
Electricity 116
Water 69
Natural gas 26
Sprint (2 lines) 114
Cable/Internet 99
Car Insurance 58
Health Insurance 394
Trash 35
Preschool 1030
Gift-Giving 40
Personal Maintenance 62
Restaurants 108
Entertainment 10
Groceries 388
Gasoline 38
Household Goods 7
Toddler purchases 53
Postage 10
Work Stuff 62
Rainy Day Savings 0
Savings Goals 300
Debt Payments 603
Total $4677

 Most of these items are in-line with expectations. But I do have a couple comments…

  • Preschool ($1030 spent): This month was a normal charge, but I referred a friend to our preschool facility, so I’m excited that next month I should have a referral credit. I’m not sure how much of a discount I get, but any amount saved will be great!
  • Gift Giving ($40 spent): This was a $20 gift for two separate people (both baby presents).
  • Personal Maintenance ($62 spent): This was $35 for a hair cut and eyebrow wax, $12 for attending a yoga class, and $15 for new eye cream and face lotion (I got cheap grocery store stuff…not sure if more expensive stuff works better? I’d love to hear others’ opinions on quality versus budget eye cream and face lotion – that stuff is $$$!)
  • Gasoline ($38 spent): Gas was so cheap this month because my husband ended up filling up the car for me while I was on my not-an-interview trip. I generally only have to fill up twice per month, but this month I only filled up once!
  • Work Stuff ($62 spent): I made a new category called “work stuff” for expenses that are related to work and can be 100% tax deductible. This month these expenses stem from my not-an-interview trip, including food the night I got into town, gasoline in the rental car, and parking costs. I’ve saved all the receipts for everything, but having work expenses as their own category in my budget will make things easier for tracking and tax purposes, too.
  • Rainy Day Savings ($0 spent): With the tighter month, I didn’t put any money aside for any of our rainy day funds (which include: 3-6 month expenses, car repairs, toddler birthday, travel/Christmas, dental/vision, annual expenses, and vet expenses). This is not ideal since many of these categories are non-negotiable anticipated expenses (like my annual expenses for car registration), but skipping one month won’t kill us either.
  • Savings Goals ($300 spent): I put $100 toward my Roth IRA fund (and then I promptly withdrew all the money I’d saved to actually open a Roth), and $200 toward my Cruise 2016 fund.
  • Debt Payments ($603 spent): Discussed more in my latest debt post. This figure represents $50 toward my car payment, $453 toward student loans, $75 toward license fees, and $25 toward medical debt. One side-note about medical debt (and the reason for the discrepancy between this figure and the one I reported in my debt update)…I was supposed to also have a $50 medical bill to pay, but I never received the bill this month. When I called the office to inquire about it, it turns out they’d processed my last payment late, so it looked like I’d skipped a February payment and already paid the March payment. It was a clerical error on their end so nothing negative was reported to my credit and no late fines or fees were assessed, but it means that my next bill is not due until April (also…my April bill will be my LAST bill for the $50/month payment! Eeeeek!!!!)

Overall thoughts on March budget

Honestly, March was tough on me psychologically. I feel like I’ve just been making tiny little baby steps lately, where I’m used to the “rush’ that I felt when I first started the debt repayment process and was making huge strides monthly. I still stand by my previous statements that I think having a lean month from time-to-time can be good for us, force us to examine how every single penny is being spent and use the opportunity to try to reflect on true necessities versus extras.

That being said….I’m ready to have some more income to toss at debt. I’m not going to lie. It hurt to only put $603 toward debt when I’m used to paying between $1500-$2500/month!! Six hundred dollars doesn’t even move the needle of what I owe – its like just treading water because it only covers interest without any extra! It made the month feel long as it draaaaagged on with its relentless 31 days (and coming on the heels of a 28-day month!)

And I wish I could say that April was going to be an awesome month, but it won’t be (we live on last month’s income, so the money we have to spend in April is from income earned in March). It will be better than last month, as we have almost an extra $1500 in the budget, but it’s not as high as I’d like (for comparison’s sake, our income this March is down nearly $2,500 compared to March of last year). Oh the joys of small business ownership. The good news is that the business has, overall, been flourishing and even when there are leaner months, we can be sure that fatter months are ahead. (Fingers crossed!)

How did you do with your budget last month? Do you have any areas you’re working on improving?


Ashley’s Revised Budget

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

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

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

Let’s talk about some of the changes.

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

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

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

Lets talk about the latter two….

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

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

  • Entertainment = $20/month

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

  • Eating Out/Going Out = $75/month

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

  • Personal Maintenance = $30/month

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

  • Other = $125/month

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

 

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

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

  • Semi-Annual Fees = $40/month

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

  • Car maintenance = $50/month

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

  • Dental & Vision = $50/month

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

  • Travel/Christmas = $25/month

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

  • 3-6 Months Expenses = $25/month

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

How We Fared in March

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

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

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

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

Charitable Donation Update

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

 

Current Debt Monthly Payments

 

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

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

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

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

 


Myopic Finances…

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I’m pretty focused when it comes to finances. I have my debts, my monthly bills, my charitable giving, and my cash spending. It’s all fairly organized in my ‘perfect’ little world.

I didn’t care to think outside the box… until this morning.

I’ve been whining lately about my inability to run as a form of exercise. While out walking, a marathon group ran by and I was tempted to join. I watched as they gleefully jogged down the street, smiling and enjoying the beautiful sunshine day. Sigh. I trudged at my slow pace and frowned.

When doing my yoga routine, I am angered because, even though my stomach isn’t huge, it gets in the way of a really great bending stretch. My balance is also thrown off and my ‘Standing Trees’ look more like ‘Standing Trees in a Hurricane’.

Even though I’m overjoyed about the wonderful growing baby, I get frustrated when my body doesn’t move like it used to. The only thing keeping me sane is the fact that I’ll have a bouncing baby soon and my body (hopefully) will return to normal.

I was watching the news this morning and it featured a new sports center for the disabled. Only 1 out of 10 people with disabilities exercise since their bodies limit the amount they can do. Often, they don’t know how to work out with bodies that refuse to cooperate. This sports center works to train people how to exercise while working within their limits. The news anchor interviewed one of the employees who suffers from muscular dystrophy. His athletic body was slowly turning into one that didn’t work and he was helping others overcome their difficulties while dealing with his own.

My whining suddenly seems sooo… um.. wow. There isn’t a word mean enough to describe my whining.

The news station was taking donations to help buy some much needed equipment for the facility. No, I couldn’t pigeonhole this expense into my very strict spreadsheet of spending, but I guess I learned to be a little more fluid.

I may not be able to ‘give like no one else’, but I can still give.

Think outside the finance box.