Nm
I’ve and good luck with LearnVest. Something about their budgeting tool resonates better with me than Mint. I suggest dividing a budget into bigger buckets rather than smaller ones, so that you are more likely to respect it. With smaller buckets, there is more temptation to shuffle money around, which almost always is the start of bad news. Check if daily, even when it is painful to. Just seeing the numbers can make you stay to spend less, even without a lot of conscious effort.
It’s become really gratifying to watch my net worth creep up, however slowly. And it’s really empowering to know exactly what I need to do to reach my goals.
Well my husband would also quite like to spend time with the baby, which is the issue with second jobs.
The 150-180 is our eating out budget. Right now we spend somewhere between 300-400 on groceries but that’s, roughly, let me think. A box of wine and a twelve pack at least a week, often more, so… Yeah holy crap we gotta stop that shit.
It may sound fatuous but I am concerned that, psychologically, we’ll resent cutting things so much that we rebound. Yeah I know the park is free (and my mom pays the zoo membership and I’ve been trying to get out and hike with the baby, which is fun when my husband is on board but impossible without him because I can’t quite figure out getting the baby on my back by myself even though I’ve watched a bazillion YouTube videos.). It’s just, you know, we already don’t DO much. We don’t see many movies in theaters, we don’t go clubbing or whatever people do, we do like to travel but mostly it’s, like, to Charlotte for HeroesCon.
I mean, we’re not giving up Netflix and all that, those are inexpensive and good value for entertainment hour. But I’m not sure cutting all the way down to the bone is sustainable. Like people who go on crash diets.
(Honestly I think we should go the other way and cut home booze, only drink when we go out. At home I think we drink it because it’s there - when you order a good beer at a restaurant it isn’t on autopilot.)
I’m also trying to figure out exactly how to do this budget thing because, for one thing, we’re supposed to be being super specific and giving every single dollar a job - but we get paid biweekly and so many bills are monthly. Which is fine if you’re being rough and approximate but as we all know months are not actually four weeks long.
I know you don’t want to think about it, but your choices are going to be more limited as time goes on. For me, it wasn’t extravagant purchases, but things I thought were essential, birthday presents for nieces and nephews and a $20 blouse to pick me up on a bad day. I tenned and twenty bucked us into serious brokenness. One or two small changes in our income and the walls tumbled down. Now we couldn’t even afford the previous broke ass life and went square into the very possible chance that we might become homeless. Like you, I didn’t want to think about it.
These days, we do a whole lot of making do with what we have. Thrift shops for clothes. We have what I like to call Broke Ass Dinner Night, which is something like grilled cheese and canned soup. The challenge is to keep dinner under $10. You need to challenge yourself and only you get to decide whether that’s awful or not. I wish you the best of luck.
Get the baby sleeping bags. They are brilliant and the kid can’t kick them off.
Just count your 4 week pay as your monthly pay for budgeting. Then put the extra towards the debt?
Nothing wrong with your husband wanting to spend time with the baby, but how much time does he really need before he gets his baby fix?
Don’t know what amount is in a box of wine, maybe ya’ll could work on that a bit, but it doesn’t sound too overly bad though for two people; it could be a lot worse. 
Good you’re not spending it in the bars. I personally like to have two or three beers occasionally. But I can also easily go months without having any, and don’t miss it when I do. I have too many projects and outside activities going on I enjoy doing much more.
Yeah, don’t cut out so much, that you feel miserable. FWIW though, I personally never have had a budget in my life where I accounted for where all the money was going. I just had a good general ideal though. Never spent time balancing my checkbook, I paid cash for almost everything, and what few checks I wrote, I could easily tell if it was correct or not on my checking account. There is no single way to go about this, many things can work. I just know I had a hell of a lot more saved than spent every month (over 50% saved) on most months.
Netflix, yeah, probably the best TV entertainment value, good choice!
It’s good you’re thinking about this more seriously now. I assume with a new baby and all, y’all have many years ahead of you. Start working on getting this right now, both of you will have plenty of free time later in your lives to do pretty much whatever you please.
This is why you need a budget tool. It’s the only way to understand the trade offs and to project the long term effects of what you save.
One of the great things about having a well-tracked budget is that empowers you to spend on what is important to you and to know- to know for sure- that it is okay to. It eliminates that pressure to save every penny and cut everything to the bone. You know- and you know for sure- that if you just stick to the plan your financial situation will reach goal X by time Y. The rest is yours to do what you want with.
And sometimes “the rest” isn’t enough and you want more. That’s ok too- I’m in that situation right now. But I understand that will push my goals off by a couple years.
There are only two “extra” paychecks in a year. I don’t think that’s enough to put towards debt, at least not if you really want to make a dent in it.
But it still solves the specific problem Zsofia was worried about. Putting it towards debt is just a bonus feature.
You are seeing only the negative. With a diet, you have to substitute getting up in the morning and looking in the mirror, or wearing new, smaller clothes, for the thrill of eating a donut.
With a budget, you have to substitute seeing money in your accounts and that zero balance credit card, along with the less expensive, more sustainable activities for things that you can no longer afford. There are plenty of free activities around starting with just talking to each other, and walking around exploring your neighborhood. Manufactured, processed entertainment is not the goal of existence. If you have internet access, you have free access to more reading material and things to think about than ever before in history. I like the idea of Broke-Ass Dinner Night, and there are plenty of other ways you can celebrate doing things in a less expensive, more responsible way. The idea is to make it fun, rather than a burden.
For budgeting, there are a million sources of good information on how to do it. You can use the books I suggested, or the websites mentioned by others, depending on how you work best with information. One more good source to throw into the mix is the personal finance reddit. I read it all the time to get ideas and just to have a sense of camaraderie with all of the other people who are trying to manage their finances.
I agree 100% with even sven. A budget doesn’t make things harder, it makes things easier. Once you know where your money is going, and how much you can spend, you can stop worrying about how to cut back because you know how much money you have to allocate in each category. You won’t be wondering whether buying that booze makes sense; you’ll either have the money available in your budget or you won’t.
What I meant about the month is more the issue of everything having a place to go so, since you’re paying down your debt you’re also living paycheck to paycheck. So if my grocery budget is $300, I can’t take out $300 on November 1, it won’t be there. I can take out $150 per paycheck but thinking in “months” means that it’s always starting at a different spot in relation to our checks. But budgeting per check doesn’t work either because while I’ve actually got the mortgage coming out every two weeks, the other bills are monthly. Am I explaining that right?
The point is right now there is zero wiggle room, if we’re cutting off all use of credit (which we are) and if we’re putting everything towards debt. We’ll have an emergency fund but that needs to be hard to touch.
You know how much money you have coming in each month. If you have monthly bills, you need to split them so that half comes out of check #1 and half comes out of check #2. If you need to use envelopes to set the money aside, you can do that, or you can just literally subtract it out of whatever you’re using to budget. I have set aside half of the rent from my mid-month check every month since I first started living on my own. If you’re very tight, you need to do the same thing for the cable, utilities, etc. The point is to set aside the money for things that you know you’re going to have to pay first. If you have nothing leftover, then you know that means you can’t spend on anything else.
You have to just work out the math per paycheck. I use $550 of my first paycheck on bills, and then I immediately put whatever I’ve planned into other accounts for savings or debt payment. Whatever I have leftover is my budget for food and other discretionary expenses for the next four weeks. All of my second paycheck paycheck goes to housing and childcare. Any “extra” paychecks go to debt, savings or big purchases, depending on the situation.
Budgeting across the month allows me to track my average spending and try to stay within targets. But it’s the amount that is in my checking account that is my actual hard “this is how much you have to spend until your next ‘discretionary’ paycheck” amount. I just think of that in terms of getting through four weeks.
God that Personal Finance subreddit is killing me, all these teenagers alone in the world.
The PF subreddit is very no-nonsense. Those folks do not look favorably on excuses, which it sounds like you’ve got a lot of, Zsofia.
Like, why do you think you have to strap your baby on your back to go on a hike without your husband? Assuming that the park has paved trails, a stroller should work just fine, right?
None of us really know how much debt has snuck up on you. If we’re talking a couple of thousand dollars or so, that sounds like something you can lick down in a couple of years by watching your recreational spending (booze, wine, dining out) and possibly finding a better deal on interest rates. If we’re talking more than that, then you’re in denial if you don’t think a major sacrifice is in order. Selling the third car is the obvious thing that should go.
Even if you don’t owe that much, being in debt puts you in a precarious position. Do you have anything in your savings? What’s your emergency fund look like? If you don’t have much of one, then you guys really are living beyond your means.
From reading your OP, it sounds like you feel bad about being in debt, but not bad enough to actually do what it takes to get out of it. What would it take to light the fire under you?
I wouldn’t call anything you could take a stroller on a “hike”. We go on walks, sure.
Look, we’re doing it, I’m just whining about it.
I wish you good luck, and I hope you share your experiences so that others can learn from you.
I had significant debt (about 14K) about 7 years ago after a divorce, health crisis and job loss in that order. Today I have $0 debt and much more than 14K alone in just my personal savings account (emergency fund) and way more in my long-term accounts. I attacked the problem from lots of different angles but the most useful tool has been www.mint.com.
If you aren’t familiar with it, it is a free personal finance aggregation site. You have to set up your various online accounts with your banks, insurance companies, service providers etc. and let it access those accounts but, done correctly, it gives you your complete financial picture in one place ranging from all your account balances, recent transactions and upcoming bills. It will also tell you your net worth, credit score, show graphs of your financial patterns and let you set up your own budgets. It does take some work to set it up initially but it does almost all the work for you after that. I set it as as part of a greater life automation project and the benefits have been huge. I don’t even have to pay bills manually anymore. Reoccurring payments are set up to be paid automatically and I just track them through mint.com.
I log into it once a day to check my current financial situation including looking at recent activity. It only takes a few seconds but that is all I need to do to manage my day-to-day finances. Even that is probably overkill and I could do almost as well if I only checked it once a week. Getting into that mindset forces you to rethink the daily financial choices you make and adjust them over time. It also makes you analyze whether some choices you make are worth it or if you are just plain getting screwed by some of the charges. I didn’t like the way my Comcast bill kept going up with no extra services so I got a much better competing offer from Verizon and used that to get Comcast to match it for two years. Other providers have slapped bullshit charges on my bank account and those don’t last any longer than it takes me dispute it and I have never lost. My credit score also went from about 650 to >800 because nothing that can hurt it ever slips past without me having it removed right away.
If you take concrete steps like that, you will save money and probably learn to enjoy doing it. You will also get a much better understanding of both your long and short-term financial situation. I was never much of a saver before but I am now. I view my personal savings and investment accounts like a video game and I love seeing my score increase and I am very displeased when something causes me to lose money.