Need Some Budgeting Advice

**Aleta** · 09-16-2008, 07:19 AM

In my budget, I have money that I allocate to bills that could come due in 3 month, 6 months, or 1 year. I divide what the monthly portion of that bill would be and deposit it into my bank account each month. Since it is a bill that won't come due for a while, I put it in my money market fund or high-yielding savings account until it is needed.

The problem is that if it is a 6 month bill; the amount due for the 6 month period will have to be there when you pay it. We had to add to some of our accounts to make sure the total amount due was there.

You don't say anything about if you're married, have children, rent or paying a mortgage. From your post, I would say that you are single and living at home. Are you contributing to a retirement account? Do you have an emergency fund?

You have to set up what your income is and all of your expenses are. We woudl need more information in order to help you.

**TigerFan06** · 09-16-2008, 07:28 AM

Originally posted by Aleta View Post

You don't say anything about if you're married, have children, rent or paying a mortgage. From your post, I would say that you are single and living at home. Are you contributing to a retirement account? Do you have an emergency fund?

You have to set up what your income is and all of your expenses are. We woudl need more information in order to help you.

Boy, that was dumb of me. Sorry for leaving out the details! LOL!

I'm married, 3 kids, I bring home about $4800 a month, mortgage is $1500, CC's add up to about $1000 (again, I'm paying 2-3x more on my snowball), $580 on 2 cars, approx $150 for electricity (will drop in the coming months), about $50 for natural/heating/cooking gas (will go WAY up in the coming months, I'm in Michigan), $123 for cable tv/internet/phones. Those are the big ones... oh, about $85 for 3 cell phones.

Thank you for your input, by the way.

Oh, I've put my 401K on hold, and am rebuilding my EF, so my snowball is on temporary hold. I need about $500 more in my EF. (For a $1000 balance)

**Aleta** · 09-16-2008, 07:48 AM

You say that you pay $1,000 on your credit cards. Is that what the minimum is or is it including extra money from your snowball plan? What is your total debt and when do you expect to pay it off?

**TigerFan06** · 09-16-2008, 07:53 AM

Originally posted by Aleta View Post

You say that you pay $1,000 on your credit cards. Is that what the minimum is or is it including extra money from your snowball plan? What is your total debt and when do you expect to pay it off?

That is 7 cards, paying minimum on 6. About $40k total. I'm 40, I'd like to be done with the debt in about 4 years at the very latest.

**disneysteve** · 09-16-2008, 08:45 AM

Originally posted by TigerFan06 View Post

After adding up all my monthly bills I have a little more than a grand each month for food, gas, and other day-to-day stuff. Seems like a decent amount, but after I'm done paying the bills, it sure doesn't seem like a grand.

I'm just wondering if anyone has any advice on how to split the bills up monthly, even if it's possible.

I'm not clear on what the problem is or what you are asking for help with.

You are paying all bills on time. You are snowballing your debt. You are building an EF. The only important thing you aren't currently doing is contributing to the 401k.

So what's the problem? It kind of sounds like you are saying you aren't sure where that "grand each month" is all going, but not sure if that was your question.

**TigerFan06** · 09-16-2008, 08:57 AM

Basically Steve, that $1000 doesn't "feel like" $1000. I 'think' what I'm asking is, should I pay my bills after payday, and stop when I'm left with $500 for the next 2 weeks and then pay the remainder after the last payday of the month? Seems like I try to stay ahead, and am left with no cash for the next 2 weeks.

**disneysteve** · 09-16-2008, 09:10 AM

Originally posted by TigerFan06 View Post

Basically Steve, that $1000 doesn't "feel like" $1000. I 'think' what I'm asking is, should I pay my bills after payday, and stop when I'm left with $500 for the next 2 weeks and then pay the remainder after the last payday of the month? Seems like I try to stay ahead, and am left with no cash for the next 2 weeks.

Ultimately, it doesn't matter if you pay bills once/month, twice/month or weekly. The total of the bills remains the same. So it sounds like you are just having issues with cash flow.

I'd suggest making a list of all of the monthly bills and their due dates. If they all come due around the same time, see if you can have any of them changed. Many companies let you pick the payment date. Moving a couple of them to 2 weeks later (or earlier) in the month might help smooth out the cash flow crunch that occurs when you pay a bunch of bills at once.

The other thing that would greatly help (or totally eliminate) the problem would be to keep some savings on hand so that you maintain a cushion in your account. That way, paying the bills wouldn't ever take you down to zero. There would always be some surplus in the account. Even if it means temporarily slowing down the CC repayment, I would work to get at least a few hundred dollar surplus in your checking account.

**TigerFan06** · 09-16-2008, 09:16 AM

2 very helpful ideas. Never thought about the whole due date thing. That would make things a little easier. I appreciate your input. Yours too, Aleta. Thank you.

**anonymous_saver** · 09-16-2008, 10:03 AM

Originally posted by TigerFan06 View Post

Oh, I've put my 401K on hold, and am rebuilding my EF, so my snowball is on temporary hold. I need about $500 more in my EF. (For a $1000 balance)

While Dave Ramsey generally has good advice, I think he is wrong about his advice on 401(k)'s! I would put money into your 401(k) up to your employers match, no matter what! It is free money, I wouldn't turn it down.

I do agree that you should get your EF up to the $1,000 and then start paying off your debt. I also would pay off higher interest debt before the smallest debts. You will pay off your debt more quickly this way.

I was also wondering if your partner works, and if not, if they could find something part time that they could do, to bring just a little more money in?

**disneysteve** · 09-16-2008, 10:07 AM

Originally posted by anonymous_saver View Post

While Dave Ramsey generally has good advice, I think he is wrong about his advice on 401(k)'s! I would put money into your 401(k) up to your employers match, no matter what! It is free money, I wouldn't turn it down.

I agree. I didn't say it earlier because it wasn't the original question, but you are absolutely right (and DR is wrong here). Not only do you get a company match of usually 50 cents on the dollar, you also get the tax deduction, so $1 put in your 401k probably earns you $.75 between the match and tax savings. I'm sure your credit cards are not charging 75% interest.

**jIM_Ohio** · 09-16-2008, 02:17 PM

The technique I use is bills which have value (like house payment, car payment and IRA deposits) go into one account and Bills which are money already spent (utilities, groceries and variable expenses) go into another.

The first account is fixed expenses. The second account has some fixed and some variable expenses.

Maybe divide accounts into needed costs and debt costs. If you know it costs you $1000/month for the bills and the rest to cc, open two accounts.

Every paycheck put $500 into the one account the rest into another account for the cc debt. Only have a debit card attached to one account.

**TigerFan06** · 09-16-2008, 04:36 PM

All great advice. Glad I posted the question.

**maat55** · 09-16-2008, 04:58 PM

As a DR fan, I still agree with the rest that you should fund your 401k to the match. I sat down and wrote my budget starting with the most important to the least.

I would take a good look at what could you sell to speed up your plan. Cut all non essential expenses you can.

In my plan, I cut out golf, beer, extended cable and much more to get my plan moving fast. If your wife is on board, it will be much easier. Seeing your plan move faster makes the sacrifice much easier. After a while, you don't miss the excess junk. Good luck.

**irs** · 09-16-2008, 09:04 PM

Originally posted by TigerFan06 View Post

Hello, everyone. I did a search for the question I'm about to ask, but couldn't find one that specifically addressed what I need info on.

After adding up all my monthly bills (and doing the Dave Ramsey snowball thing with my CC debt) I have a little more than a grand each month for food, gas, and other day-to-day stuff. Seems like a decent amount, but after I'm done paying the bills, it sure doesn't seem like a grand. I don't pay everything at once, but maybe I'm paying some bills too early? I'm not late on anything, but I'm just wondering if anyone has any advice on how to split the bills up monthly, even if it's possible. Just looking for some budgeting ideas. Thanks for taking time to read this (and respond!)

First write down every single bill you have. Once you have an honest view of all your bills, you can implement management techniques.

Remember to always set aside some money for incidentals. You never know if your refrigerator will stop working or your washer and dryer. These are unexpected costs that can happen to any appliance. By having a little money set aside for these types of occurrences, it will help you stay on track with your monthly bills. This way you will not fall behind at all, because once you fall behind it becomes that much more difficult to get caught up.

Household expenses: Your electric, heat, phone, cable bills can vary from month to month sometimes putting you over your monthly budget. There are two things you can do to help keep those in line. 1st, most electric and heating companies offer budget plans. These plans use a monthly average of your prior year’s expenditures. Take advantage of this, they are usually free and many allow for automatic withdrawals for free as well. 2nd, using the same monthly average system for your phone, cable etc.. This allows for a fixed payment rather than a varied payment monthly.

Need Some Budgeting Advice