so...what budget format ?

iVillage Member
Registered: 01-22-2004
so...what budget format ?
6
Sun, 07-05-2009 - 10:18pm

Hi all, Thanks again to everyone who replied to my intro. I've been reading all these books, articles and tips on budgeting. There's a lot of different approaches and I still haven't written out a budget yet. I just wondered about which formats work best for you all.?

Plus...

Do you have your utilities on the monthly budget plan so that it's the same amount each month? I could do that and at least know what to keep available each month all year long - I know it leaves me less money for 'more than the minimum' payments on the cc debts and lets the utility companies earn interest on some of my money throughout the year (down sides), but it also give a clearer view of routine monthly costs and eliminates any guesswork or worry about huge gas bills in winter or electric in summer.

Which of these is better in the big picture: to pay down the highest interest debts first while still trying to pay a little more than monthly minimum to the others, or to try to get all the cards down to less than 50% of the total limit available on the card?... My ultimate goal is to do well enough for long enough that a bank or mortgage company will be able to allow me to refinance and use my equity (estimated at about $25,000) to pay down/off my cc debt and possibly do some repairs to the house. The 'new' mortgage would still be less than the total amount I financed 13 years ago and be the same or less than my current monthly payment because the current loan was 15years and the new one could be 30, but nobody will go for it. I think the items that they use to say 'no' to me are my credit score #'s, debt to credit ratio on the cards and frequency and recentness of any late payments. I'm already taking steps to make sure I'm not late anymore but I don't know what path to concentrate on next.

Thanks again for any help!
Lissa

Oh, I knew I was going to have to buy new cleats for DS 12 no matter what this season. I'm just scared to go into the store for fear of impulse spending. I'm really good at convincing myself that something is a justified household expense - so for the past few months I only go to the cheap grocery store that doesn't have anything else but groceries and I buy everything else at the dollar store. Going into a real store like WalMart or KMart (where we got cleats last time) makes me extremely anxious.

iVillage Member
Registered: 12-04-2006
Sun, 07-05-2009 - 11:19pm

Lissa,
First thing is unless you know with absolute certainty that you will not charge up the cards again do not use refinancing as a method to pay off the remainder of your cards. I know from experience that it can be easy to consolidate the debt payments with good intentions of not creating new debt, but you can still end up using those cards.
Personally, my focus would be on paying off the credit cards rather than paying them down enough that the mortgage company will allow you to refinance.

When it comes to budget plans for utility payments, its a personal choice. Some people are able to look at what their highest bills each year are and budget that amount every month (this creates a snowflake in the months that aren't as high). On the other hand, while I know that my electric company makes interest off my payments, I prefer the peace of mind that the budget plan gives me since I pay the same each month.

Lyn

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Lyn

iVillage Member
Registered: 04-10-2003
Mon, 07-06-2009 - 8:23am

Hi Lissa,


I totally agree with PP. Using the equity in your home to pay down debt is not a wise choice. It turns an unsecured debt into a secured debt and puts you at risk. Using it for repairs may be a different story, especially if it increases the value of your home.


In terms of budgets, I used budgeted billing so that all my utilities are the same. It makes it so much easier to budget. It works out great if you've been living at the same place for a while (the company can get a better idea of what to budget). When I moved to my place, the monthly amount went up a few times while they figured out what my consumption would be.


In terms of cleats, how about bringing that max amount you want to spend in cash and then leaving the debit and CC home. That way you can't buy anything else. Just a thought!


Bex -


"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."


Bex -

iVillage Member
Registered: 03-27-2005
Mon, 07-06-2009 - 8:27am

The first step to making any budget is to get real with the numbers. You have list all your bills, minimum payments on debt etc.. and really know exactly what it is that you have coming and going out dollar wise.

iVillage Member
Registered: 11-17-2007
Mon, 07-06-2009 - 11:31am

Lissa


This is what I do. But everyone is different and has

iVillage Member
Registered: 08-04-2008
Mon, 07-06-2009 - 11:06pm

First of all, I don't call it a budget as much as a spending plan, a way to tell my money where to go.


I have an Excel spreadsheet with all the pay periods and amounts across the top row, with dates.




iVillage Member
Registered: 01-22-2004
Tue, 07-07-2009 - 1:16am

Thanks everyone for relating your stories, advice and ideas!

When I snapped out of my 'funk' during the Christmas holidays this year I realized that during the past few years when I felt like I could only cope with the life/death stuff (literally in DS's case) I screwed everything else up royally. Now my cc debt is triple what it was just 2yrs ago and mostly at 29.9% due to simply not getting the money sent. There were months and months of being too overwhelmed to do any tasks other than care for the kids and keep my job so I'd end up putting stupid things on whatever card was handy. For example my kids now each own probably 40 pairs of socks because there were times that the cost of a pack was worth me not having to round up, wash/dry, sort and match socks. Also, I went through a phase where I couldn't say 'no' to the constant 'Mommy please can I have...". I know how that sounds but it was the situation at the time.

Then the last week in December, DS's blood work came back pretty good for the third time in a row, his Rx's decreased and they moved the checks to every six months instead of three. I seemed to finally 'get' for the first time that DS was actually going to be okay and I could go back to concentrating on managing all those things I had let go. (I can't explain it any better - sorry) I listed out all my debt and regular expenses complete with interest rates (cc, car loan, mortgage, monthly household bills, daycare, student loans - EVERYTHING) and vowed to be on top of my chores and organized enough to pay on time, purchase only 'needs' not 'wants', not use any credit cards, and send every dime left after paying the 'needs' to the cards. Since I had developed such rotten habits during my 'funk', that's all I concentrated on.

I managed to not charge anything new to any card at all. Seriously, literally my statements only show payments with no purchases. Medical costs have decreased a lot and I now have enough money to pay on everything else - in part because I've also done fairly well at the 'wants vs needs' thing (it's artificial though because I simply avoid stores at almost all costs!). I did have a couple late payments in May when my purse was stolen with my checkbook, cc's and bills in them - along with pretty much the rest of my waking existence! Everything was canceled right away but by the time I got over a minor slip back into 'funk-dom' I was late on two cards.

I really have been wiping out my accounts to send as much as possible to the cc with the highest interest and it's stressing me out almost as much as knowing I'm wasting a fortune on the interest. I'm always afraid that I've forgotten to account for an upcoming autopay or that something that does qualify as a genuine 'need' will occur and have to be dealt with before my next pay. I think that's why I'm looking to develop a structured budget or spending plan. I think I need to build in something that gives me some money available that doesn't have a domino effect on payments and yet still shows that I am sending substantial 'extra' payments to the debt. It's like I'm on a tightrope and can't decide which is a worse way to fall: the idea that I might not be doing everything within my power to cut the cc debt down ASAP or this current feeling of constant deprivation and nervousness.

I'm going to try Marie's spreadsheet template and see if I feel any clearer once I plug my numbers into it.

Thanks for letting me ramble this out this way.

Lissa