Advice on finances?

**Cakesy** · 02-12-2013, 05:46 PM

Oh and I have tried like hell to talk him into canceling the cable but he's just not ready yet. And because he gets basically no spending money and doesn't buy things basically at all right now, I don't have the heart to force the issue yet.

**scfr** · 02-12-2013, 07:01 PM

Trying to build up your savings a bit before your husband graduates sounds like a good plan. What about continuing on your current debt repayment schedule, and looking for places to trim back your budget and putting anything you save in to savings?

You can tackle one budget category at a time. I'd start with the car insurance. It looks a bit on the high side. When was the last time you comparison shopped? That could be a fairly quick easy save.

Next you can look at other categories. Your spending looks pretty reasonable, but there are always places to cut back a little bit here & there. For example, are you buying generics? Looking for coupons on-line? Could you lower the house temperature one degree in the winter and raise it one degree in the summer? Could you get creative with the entertainment category and trim it to $30-35? Trim the "other" food to $60 or 70? Talk things over with your husband and decide where BOTH of you are willing to give up a little.

Depending on your children's ages, cooking from scratch together as a family can double as entertainment and a way to reduce the food budget.

**jpg7n16** · 02-12-2013, 08:01 PM

I took the liberty of sorting your expenses from largest to smallest, consolidated a few categories, and didn't include your extra payment, as it's technically not a monthly expense, but a choice with the leftover cash each month.

1090 mortgage
520 food
400 gas
350 misc
230 utilities
155 car loan
130 cable/internet
130 car insurance
100 credit card
85 phones
50 student loan
40 entertainment

+ 3500 income
- 3280 expenses
= 220 excess

Whenever I review a budget, I start with the largest expenses and work down the list. In your case:
1) mortgage. What rate are you paying? Is it possible to refi? At 31%, it's a little on the high side, but nothing major.
2) Food. As pointed out above, can you coupon? Cut food costs some other way?
3) Gas. Already discussed that it's due to current job. But are there other ways you can cut there?
4) Misc - this is one that jumped at me. It's one of your top 5 expenses, and it's an unknown mix of random expenses. Going forward if you can identify what your "misc" is, you may be able to find some simple cuts there.

Originally posted by Cakesy View Post

We should be able to pay off our credit card or come damn close with our tax return.

I fully support paying off the CC. But if you're getting that big of a refund, you need to adjust your withholdings. $3600/year refund = $300/month more that should be in your budget. How would having an extra $300/month help out all year?

Use this link when it's up and running for 2013: IRS Withholding Calculator (they're updating for the new tax year)

Then we will be snowballing on our other debt. We have about 1500 in our savings account. We do not currently have other saving.

What do you think of this situation? What should we be doing differently? I was planning to follow basically the Dave Ramsey baby steps. Meaning we would pay off our non mortgage debt,, then build more savings, then get serious about retirement.

For your situation, I think that's a pretty good plan, and that's what you should stick to.

My other big concern is that my husband will graduate from a surgical technology program next May, and I'm TERRIFIED about all the things that are up in the air. What if he doesn't find a job? And if he DOES find a job...

So do not worry about tomorrow; for tomorrow will care for itself. Each day has enough trouble of its own.
-Matthew 6:4

Don't worry about that at this point. If you can make it work with your current arrangement, things will be a breeze if he gets a full time position. Until then, just focus on making it work as is.

**sblatner** · 02-12-2013, 08:19 PM

Is your husband's current job delivering pizzas only? You worry about whether he can find a job once he graduates. Can he keep his current job until something else comes along?

I think I would focus on saving more. $1500 savings isn't much if something were to happen to one of you or your kids.

Keep plugging away at the debt.

Try to refinance your mortgage depending on what the interest rate is.

**Cakesy** · 02-13-2013, 04:00 AM

Thanks for your input!
I think looking for savings on the car insurance is a good idea, we might find some small savings there. But I am much much more comfortable keeping my deductible at $500 for now.

I have just started getting very serious about making sure we're doing our best on those everyday costs of groceries and paper towels and whatever. I'm starting to do more couponing, we already buy generics. We're working on trimming the grocery budget, but, I also don't get home from work until almost six pm and have two little kids, so there's a certain level of how much money my time and sanity is worth.
That said, we really are trying to focus on the little things that save a buck here or there, hopefully we can come in under budget on some of these categories (the budget is petty new.)

The house was bought at a much better time (a few years back is when we started having many unfortunate circumstances beyond our control, layoffs, medical issues, etc.). It is a little high, but we bought literally RIGHT before housing collapsed, so we are staying put.

My husband currently delivers pizza which really is the best fit for our family right now for a variety of reasons, mainly that he can do it while I'm home! But he also gets unemployment right now (his last job was working at a Chrysler plant that got shut down.) so the reason I'm so terrified about the future is that his unemployment will be gone by the time he finishes school, and if he has to take a day job we have to put two kids in daycare, which could cost us 1200 a month. Daycare is no joke folks! And I NEVER see 1200 daycare costs in those example budgets in the books. I'm just hoping and praying every day that he is able to find a job pretty quickly after finishing school! We've fought through so much for years already, it would be awesome to get a chance to relax and have a little stability for a while.

Thanks for the input so far!!

**Tharagleb** · 02-13-2013, 04:15 AM

I would still consider dropping cable. With a fairly inexpensive Roku box you can still get Netflix (10?/mo), Hulu Plus (8 mo) and Amazon Prime (80/yr) for a fraction of what your cable bill probably is. That leaves you plenty to watch. You can also buy an antenna (30-40) and receive local stations over the air, depending on where you live.

**Cakesy** · 02-13-2013, 04:18 AM

Oh and our mortgage rate is 4% with my husband not having awesome credit (thank god he met me, he was a MESS! Lol!) refinancing isn't something we're really looking into right now.

So, other than paying off the credit card ASAP, do you guys think it would be wise to build bigger savings before attacking the car and student loans? If we follow the Ramsey advice, we already have our baby emergency fund. But envy situation is different. The other thing is, my car is an '03 with 115,000 miles on, so I was hoping to make sure his is paid off soon because I don't know how many years I can count on mine for.

I'm so stressed all the time about this stuff! We always seem to manage though.

**jpg7n16** · 02-13-2013, 06:53 AM

Originally posted by Cakesy View Post

Oh and our mortgage rate is 4% with my husband not having awesome credit (thank god he met me, he was a MESS! Lol!) refinancing isn't something we're really looking into right now.

Why not? It's free to look and can save you thousands over the life of the loan. Why not at least look into it?

Mortgages and Mortgage Loan Rates in the United States-- Free search for the best mortgage rates

You've said it yourself that you're not moving, I think you should at least check it out. It takes less time than making a post here.

If you had said, "we looked into it, but with our credit and current equity, we cannot refi lower" - I'd understand. It happens. But when you're struggling with your budget and posting online for help, to not even try? I don't understand that.

So, other than paying off the credit card ASAP, do you guys think it would be wise to build bigger savings before attacking the car and student loans? If we follow the Ramsey advice, we already have our baby emergency fund. But envy situation is different.

I would say, after you pay off the CC, build up 1 month expenses EF.
After you pay off the car, build up to 2 months EF.
After the SLs, build up to 3-6 months EF.

The other thing is, my car is an '03 with 115,000 miles on, so I was hoping to make sure his is paid off soon because I don't know how many years I can count on mine for.

I'm so stressed all the time about this stuff! We always seem to manage though.

You're stressed because you're worrying all the time about the future. About things that are not controllable right now. You cannot control when/if your car breaks down, so only focus on making sure you're current on your car maintenance, then stop worrying about it. You cannot control whether companies will hire your husband straight out of college, so focus on making your budget work today with what you have.

Might be worth a read for you:
Don't Sweat the Small Stuff--and it's all small stuff (Don't Sweat the Small Stuff Series): Richard Carlson: 9780733800849: Amazon.com: Books

**scfr** · 02-13-2013, 07:05 AM

It can feel overwhelming, no doubt about it. But try to just keep focusing on what is within your control and you'll be fine. (Saying the Serenity Prayer works pretty well for me.)

For your peace of mind and confidence, I still recommend both paying off debt & building your savings at the same time. Nothing against Dave Ramsey, but each person has to customize their approach to personal finance their individual situation. Put the tax refund towards paying off the cc, and continue the extra $200 per month debt repayment. Any place where you come in under budget, put the extra money in savings. Don't let savings in one category spill over in to spending more in another. Right now, the best way you can "treat" yourself is the peace of mind that will come from having a bigger cash cushion built up for the time when your husband graduates.

Credit Card: You aren't using it are you? You're paying for purchases with cash or a debit card, right? Credit cards are fine for people who pay them off at the end of every month, but not if you are still paying interest on it.

Car Loan: Have you read over the loan agreement to make sure you are allowed to pay it off early? If early payoff is allowed, check to make sure you are allowed to designate extra payments towards principal. (If the loan agreement says it will go to interest first, you may be better off setting up a separate "car payoff" account and paying that sucker off all at once.) If you are allowed to make extra payments to principal, send in a separate check and write on the check that it is for principal. Also send in a letter with the payment, and follow up in person, on-line, or by phone after the payment posts to make sure the principal has been reduced.

Every Day Savings: This may sound a little odd, but because of your ability to imagine scary future scenarios I will share something I do b/c I can tell that you have a good imagination. Imagine that every resource or product that you use has dollar signs on it. A running water faucet equals money pouring down the drain (turn off that faucet when possible while brushing your teeth or rinsing dishes, that shower when soaping up, etc). Every product tossed out that is not used up completely equals money thrown in the trash (can you squeeze an extra couple uses out of that toothpaste, can you add some water to the bottom of the shampoo bottle to get a few extra uses, can you cut open that "empty" lotion bottle and scrape out enough for another application?). That paper towel you are going to use to wipe up a spill - do you really need the entire sheet, or can you tear it in half? Before you buy something at the store imagine a great big $$$ on it and ask yourself if you really need it or if you have something at home already that you can use instead. You get the idea. Put that imagination of yours to positive use!

Book Recommendation: You mentioned frustration at other books you have read. Have you read "Clark Howard's Living Large in Lean Times"? It offers lots of practical savings tips that will have an immediate impact on your finances and are pretty up to date b/c it was published in 2011. (There are other good books like Tightwad Gazette but it's old and somewhat extreme.) My recommendation of how to use the book is to start at the beginning, and stop each time you find a suggestion you can put to use and TAKE ACTION on it. Keep reading only AFTER you have taken action. I think you will be able to save hundreds of dollars if you apply some of his tips. The most frugal way to get the book is to check it out from your local library. If your library doesn't have it, you can buy it used on Half.com

Good luck!

**mgkimsal** · 02-13-2013, 12:30 PM

Originally posted by Cakesy View Post

My other big concern is that my husband will graduate from a surgical technology program next May, and I'm TERRIFIED about all the things that are up in the air. What if he doesn't find a job?

What sort of money will he be making then if he does find a job? What's a 'surgical technology' program? Something in the medical field?

Do you mean May 2013, or May 2014?

Advice on finances?