Help/Advice Needed re: budgeting

iVillage Member
Registered: 01-23-2007
Help/Advice Needed re: budgeting
11
Fri, 12-26-2008 - 12:21pm

Hello Everyone!

I'm trying to set up a more realistic budget for 2009 because I generally end up with "surprises" each month. When we were on a cash-only system (with one CC we were paying off), I had a far better handle on what was coming in and what was going out. Now that we actually have decent jobs, a mortgage, savings, etc. it all feels so much more complicated.

Here is my budget so far. This will actually be for February as I've already paid most of my January bills because of pay schedules (we already received our Dec. 30 pay so I paid the first half of January's bills already).

Income:
Take home pay (after taxes, health insurance, flexible spending account, and 403b): $5298.82

Expenses:
Mortgage: $1920.76
Food: $700.00 (includes cleaning products, wine, etc...all the things I buys along with food)
Insurance: $184.66 (includes homeowners and both cars)
Gas/Auto: $200.00
Heat: $350.00
Garbage: $37.00
Phone/internet: $100.00
Electricity: $100.00
Water: $40.00
Savings: $150.00
Charity: $10.00
Personal: $100.00 (hair cuts, clothing, hair color, etc.)
Entertainment: $185 (this includes pizza Fridays, Netflix, books, craft supplies, etc.)
Mad $: $400.00 (we also use this for gifts which we pick up at all times of year)
Debt repayment: $200.00

I think this leaves me with a difference of $621.40, which we typically apply to debt repayment or home repairs. I tried to lump things together to simplify the process for myself; but, I'm wondering if I forgot something really obvious?

The next question, then, is what to budget for first? Dave Ramsey (I think) says to build an efund for 3-6 months first and then focus on debt; but, David Bach talks about doing both at the same time, 50/50.

Just wondering what others think of that. Also, if there are any glaring gaps in my budget, let me know! I'd love to see how others do this. (Not to ramble on here, but I'm also planning to start the envelope system just for the more hard-to-guage items: food, entertainment, gas, personal, and mad $).

Dee



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iVillage Member
Registered: 09-20-2004
Fri, 12-26-2008 - 3:08pm

Dave Ramsey's plan has seven steps:


1. Buikl a $1000 baby emergency fund


2. Pay off all debts except mortgage


3. Build the efund to 3-6 months


4. Fully fund retirement


5. Set aside money for kids' college funds


6. Pay off the mortgage


7. Live like no one else


iVillage Member
Registered: 11-17-2007
Fri, 12-26-2008 - 3:52pm

I admire you Dee. Every year like some people say I am going on a diet this year I try to do a real budget like you did and I can never get it to work. I tried this year again I worked on it for like two days and I went nuts got depressed and finally just stopped the whole thing and went back to my old way of doing things..


These are third things I know budget or not. IF you have pets you need a pet fund If you don't have a pet fund then something like the other day will get you totally messed up One of the dogs started itching a lot and nothing was helping the poor little thing So Raymond had to take her to the vet 173.00 Vets are worse then doctors for breaking the budget. And cost as much these days. Another think is home repair Seems like with the dogs when things are going good and you have a little extra here comes something around the house that breaks or needs fixing. That happen this last month with the other house to fix a roof leak it cost us 250.00 And in the summer the air on this house went out and that was almost 200.00


I found

iVillage Member
Registered: 03-07-2005
Fri, 12-26-2008 - 3:58pm
I didn't see any debts like CC's listed but you metioned debt repayment. It'd probably help to have those numbers if you do have cc debt or
iVillage Member
Registered: 01-23-2007
Fri, 12-26-2008 - 5:27pm

Maryann:

We do have a dog and a cat and do not have pet insurance. I'll have to go through our files to see what we've paid in the past and divide it out. I have no idea. Fortunately, they are pretty healthy, but our Jack Russel does get into mischief (sticks in the eye, cut foot from chasing critters, etc). Thanks for that reminder.

I came across something last night from Dave Ramsey. I'm not a huge fan, but this made sense: entertainment should be around 5% or less of take home. If I remember correctly, housing should be 35% (including all expenses?). Do you know what the other estimates are or did you figure yours out just for information? I do think it's useful to do that, even if it's just to get an idea of where your priorities lie.

I don't see myself spending all my mad $ each month, especially if it's cash. I agree that it's liberating to have cash on hand and thought I'd tuck some of that away each month.

Dee



iVillage Member
Registered: 01-23-2007
Fri, 12-26-2008 - 6:03pm

No problem. I think I didn't explain myself thoroughly. I wasn't really asking for advice on where to make cuts in order to pay down debt. My goal right now is to create a budget that I can live with and knew that some others on the board were in this process right now too. I'm thinking that if I make big categories, i.e.: personal that it will encompass lots of things that I don't want to feel constrained by. Just like diets, budgeting does not work for me if I feel too constrained. So by personal, I'm talking about anything that might come up that is more personal in nature: haircuts for 4 people, hair coloring that we buy OTC, vitamins and other supplements, clothing for 4 people as we aren't big shoppers but do need to replenish underwear, socks, jeans, and shoes. Food includes all grocery items, including food, pet supplies, cleaning supplies, beer and wine. We also eat a lot of organic.


We have been completely debt free a few times now. I guess that's why I'm not overly concerned. My financial life ebbs and flows; needs come and go. We have no car payments and put away 15% in our retirement account. Soon our children will be out on their own and the mortgage will be paid. I want to enjoy my time with them without fretting over every penny. The reason I need a budget, though, is to plan ahead. That is definitely what gets me into trouble and that's why I once again have some debt.


Thank you for your ideas. I do appreciate them. And, after all, this is a debt support group so you'd assume my debts are my greatest worry; but, right now, I just need to plan better and pay off the debts slowly and surely.


Dee



iVillage Member
Registered: 06-01-2006
Fri, 12-26-2008 - 6:43pm

I think that there is a specific budgeting board in the same category as this board. It might be hard for some posters here to give a "laid-back" recommendation because most of us are in dedicated debt-reduction mode. At any rate, your budget looks fairly comprehensive to me.

Marissa

iVillage Member
Registered: 11-17-2007
Fri, 12-26-2008 - 9:43pm

Yes I know the percentages. What my problem is the percentages just never work out or something. We did think about getting pet insurance my son has it on his dog but with two it was just a little much for us a month. But like I said I do try to put money away So most of the time it all works out.


Just recently we have been coming up short it seems on every pay check. And I hate that. I think some of what I was doing wrong is trying to get the payments down to fast on the income we do have. So this coming year I am going to have

iVillage Member
Registered: 03-07-2005
Sat, 12-27-2008 - 1:41pm
I was a little worried that I might offend you by saying what I did. I think I did understand your post in that you were specifically asking about budgeting advice. I guess I was coming from the standpoint that you said you were paying off debt and for me that influences the budget. KWIM? It sounds like you are doing well already. I totally understand budgeting in for extras that most people don't really account for such as the haircuts and personal stuff which adds up quickly. For us, there's 5 of us, even cheap haircuts run us $60 total at Great Clips or whatever. So I get that. I didn't mean to sound preachy but I guess at least for me, ditching the debt is a huge part of the budgeting process. BTW--thanks for replying nicely~sometimes people get all defensive if what they want to hear isn't said, KWIM? Again, I think you are doing well already......but any debt makes me nervous in this economy.


Edited 12/27/2008 1:45 pm ET by sweetjumps
iVillage Member
Registered: 01-23-2007
Sun, 12-28-2008 - 9:11am

Agreed. Any debt is making me nervous too. I'll probably use any extra to pay down debt and add to a cash cushion, 50/50. We never seem to have much left over at the end of the pay period and I think switching to cash will make me more conscious of what I'm doing. I'm thinking a lot about what my grandparents said they did back in the depression. I don't think we'll end up in that kind of predicament (hopefully our leaders have learned what to do since then) but, we're definitely reining it in and just trying to be more thoughtful in general. One of things they always had was cash on hand.

Haircuts...no one needs one until I need one, then everyone needs one. We do go to someone we really like, and it's never cheaper than $25/person, but I no longer get my hair professionally colored. I actually like the more intense colors I've been getting with the $4.00 boxes at Rite Aid and they don't last as long, so it's actually kind of fun.

Thanks for writing. I'm still refining the budget, but you've given me things to think about and I appreciate that. I have yet to develop a budget that I can stick to so will need to keep looking at this.

Dee



Avatar for sullengurl
iVillage Member
Registered: 02-16-2004
Sun, 12-28-2008 - 9:37am

I just wanted to pass along something that has really been working for me as far as budgeting goes. I've been using the crown mvelopes system. It's basically the envelope system but with virtual dollars, meaning I can use my debit/credit cards and take it from the envelope for groceries or gasoline or the cable bill...or whatever.


I've found it so helpful, especially for sinking funds like new car tires or whatnot. I just sock

 


 



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