Need some advice on budget. Help please!!!

[ham76]

My husband and I are getting very serious now about paying off our student loans. We are huge fans of Dave Ramsey and we want to be debt free. We have two student loans equalling $80,000. I am a SAHM to 3 little boys and my husband has a good paying job.

We are planning on taking his $50,000 a year bring home pay (includes Christmas bonus) and dedicating 18,000 for the year to the student loan debt. That leaves 32,000 for everything else. We added up all of our necessity bills mortgage water electric ect and it comes to $2600 per month or $31,200 for the year. That leaves 800 for everything else gifts, home owner dues, car maintnance, doctor appointments ect. Since many of you are currently paying off your debt or already have paid off your debt is this a good way to handle the budget? Is it realistic to allow only the $800 for all other expenses?

We have gotten better about budgetting and not exceding our envelope amounts. We feel unless we set an anual limit on our spending we will never actually pay off what we want to. Any feed back or encouragment will be greatly appreciated. Thanks!

[CW&M Mom]

personally I don't think it's realistic to just have the $1800 on all other expenses.

I would probably write down every expense you can think of...and what the amount is.

Cause your budget is barely leaving $100 a month. One bad month doctor wise...or car wise...would completely screw the budget up.

Have you included gas? getting car registrations and taxes renewed? How much are you budgeting for clothing and shoes. How would you get the kids birthday or christmas presents. Obviously you don't have to spend a ton. But if you have no money set aside for bdays or Christmas...and have no xtra money for clothing and shoes...how are you going to clothe them?

How about food? Doctor copays and prescription costs. How much does it cost to take one of the children to the ER? How much are you HOA fee's?

[jenrose]

Well your math is off. That only leave you 800 not 1800. And that isn't enough either way for an entire year. I think you need to revamp your monthly budgets and go that way. Even Dave says your budget is a constant work in process and adjustments will need made every month to accomodate things that come up. If you try to budget too far in advance you will end up with more problems than you fix. IMO

[ham76]

Well thanks first off for all the feed back. I appologize for the typo in the first post it was supposed to be 800 not 1800.

We have been doing the every dollar has a name budget every month that includes everything from mortgage to birthday presents but we have not done well with leaving much left to put toward our student loan debt. We are hoping a more drastic cut and more defined speding budget would help kick us in the pants to really question what is a necessity instead of a want. We also have an emergency fund for the unplanned emergencies

In the 32000 amount that covers the following:
mortgage
water
electric
insurance
gas-car
food
memberships

for the 800 it would be
gifts
birthdays
annual dues
doctor appointments
oil changes

Maybe this information will help.

[jenrose]

Sorry if I seemed harsh in my post that wasn't my intent. But lets break this down a little more.

You said you have 3 boys. I don't know how much your copay is per Dr visit but mine is now $25 so just for yearly checkup copays that would be $75 right there. Then if you pay for oil changes every 3 months at lets just say $25 each thats another $100. So those two items alond is $175. How much are your annual dues for your homeowners?

So:
$800
-$75 (and that doesn't count if someone gets sick or noncovered charges)
-$100
- Homeowners dues
-Birthday presents
-Christmas presents
-Other expenses you haven't planned on.

Looking at that it 'could' be doable. But these are with my made up figures and not knowing what your homeowners dues are and how many presents you tend to buy in a year. And I think if you try to plan an entire year in advanced you may get even more discouraged when something comes up that you hadn't thought of before hand. And if you do end up having to take money out of your emergency fund for an unexpected expense they you have to figure in building that back up again so that could take another chunk of money too.

So in my opinion getting more stingy in your monthly budgeting would be a better option then to try to plan an entire year at a time. And as Dave says, sell so much stuff your kids think their next, and try to bring in extra money any way you can to pay down the debt faster. Try to find more rebates, survey sites, babysit, whatever.

OK, I'll get off my box now.

[ashlea729]

Just throwing in my 2 cents... I personally have not bought any of the Dave Ramsey books or information. I have done the envelope method myself and I have done the snowball method. Both worked very well for me. I used the envelope method before I had a house, a husband, kids... it was a lot easier when it was just me! Now I have all of those things (and more) and I feel like snowballing is better for me at this point.

Do I think that $800 a year is reasonable? No. But that doesn't mean that it can't be done. I agree with pp's about the emergency/unplanned expenses. You can definitely get creative about gifts and birthdays, but the other things are pretty much a given amount, and unavoidable.

I will say that if you are an experienced couponer with a decent stockpile, you should go on a freeze every few months or so. At least till the debt is paid off or down. I am $429 away from paying off my biggest, longest-standing credit card, so I put a shopping freeze on myself for the month of December. I have spent $10 for the month so far, and I have no plans on going shopping for the next week. Even a hard-core couponer can still spend $150-$200 a month, depending on what we're buying. That would free up a little bit to put in the $800/year stash.

That's all I think. lol I look forward to hearing from others too!

[CW&M Mom]

You've got to budget for there clothing. Kids grow...they get bigger...they will need new clothes...even if it's yardsale/thrift stuff. Thing is...I never budget assuming/guaranteeing I can find that. Also they have shoes and coats that generally need to be purchased. Me personally I won't buy used shoes....because it can harm there feet.

You also need to register your cars. I think for me personally I would need to have at least $200 a month of "flexible" money that could be diverted to where it needs to be. If you don't use that all each month...Yay. But I have lived so bare bones for months on end...and it was exhausting and not efficient. Eventually I had put everything off for so long...I had to get those necessary things done and dealt with.

Example: It's better that I buy clothing off season...but spend more that month...then set an allotment for $20 a month. Too many things come up and don't get dealt with as cheap that way.

[kschick96]

I agree with the past posts-there are too many what if's to just go on such a super tight budget. Instead of shorting yourself and having to possibly go with out-does your DH work regular hours (ex: an 8am-5pm, weekends off) type job where you could get a part time job in the evenings or on weekends and have the money that you make from that job go towards your debt along with a good chunk of your DH paycheck, but giving yourself more breathing room, for example $500 a month is coming from you, you can keep an extra $500 from his check for life expenses.

I would worry with a budget that tight- what if your water heater went out, or something like that where you just have to go out and get new, would you be so pinched that someone may not get a birthday gift, new shoes, etc.

I am all about no debt and saving, but you don't want to make life no fun either because every single dime is going to debt.
I am not saying that you need to spend a lot of money or go into debt to have a fun life-sometimes you just need to be able to order a Pizza or go to the movies-break up the day to day ways with something a little fun! :)

[ham76]

Thank you again everyone! I really like some of the suggestions. I really like the idea of a grocery money freeze. I am a pretty good couponer and I was thinking of doing it in January anyway since our stock pile is very full right now.

I recalculated my husbands take home pay and there was an extra $800.00 I missed so we would actually have $1,600 for all the other expenses. I think that seems more realistic.

As far as the kids clothes go I agree that they grow like weeds so I already have a stock pile of clothes for the next few sizes up. I budget 50.00 per month for clothing (that by the way is in the 32,000 necessity budget not the 1,600). I buy things at garage sales and consingment for them in advanced so I don't have to rush around when they out grow their clothes.

The answer to another question was the Dr. appointments. We only pay for sick visits ($20 copay) not Well child check ups. That is something our insurance porvider does. So yes there will be a few sick kid visits I am sure but I have no idea how many.

Does anyone live bare bones and make it with a small amount to spend on things other then necessity? My husband and I were excited about paying of this debt and really cutting back but now I wonder if we will be able to pull it off. I do appreciate all of you taking the time to share your expertise. I knew this would be a good place to get some pointers.

[434Teresa]

It can be done..but its hard! My x hubby had me in debit over my head but when we got a dorvice I work one full time and one part time job every cent of the part time job went on one bill until it was paid off then I would start on another one, my full time check went on living, and bills also. Me and my boys did not go anywhere or do anything that cost money for a long time, if I had $5 extra for that week it went on the bill..I had yard sales to help with paying the bills off, but I did keep $20 put back just incase, I know thats not alot but I wantted out of debit and to show my x that he could not keep me down!
I dont know what the memberships are that you have to pay but I would rethink those a little until this huge bill is off your back. I know those memberships
can add up fast each month.
I also dont know what ages your boys are but if they are in school you may want to look into a part time job and put all that on this bill in oder to get it paid off, if you place that check on that bill it will snowball fast. I am just saying this for at 18,000 a year you are looking at 5 years to pay this off and alot of things happen in 5 years,so if you can do any extra work to help get this paid off I think that would be the way to go.
I guess what I am saying is pay all you can from your hubbies income but if you can work on the side or part time that would really make all the difference in gettting this bill paid off and keep you guys from feeling under the water all the time.